Aflac Incorporated Announces Third Quarter Results, Reports Third Quarter Net Earnings of $777 Million, Upwardly Revises Adjusted EPS Outlook, Declares Fourth Quarter Cash Dividend
Total revenues were
Net earnings in the third quarter of 2019 included pretax net realized investment losses of
The average yen/dollar exchange rate* in the third quarter of 2019 was 107.31, or 3.9% stronger than the average rate of 111.48 in the third quarter of 2018. For the first nine months, the average exchange rate was 109.16, or 0.3% stronger than the rate of 109.54 a year ago.
Adjusted earnings* in the third quarter were
For the first nine months of 2019, total revenues were up 0.4% to $16.7 billion, compared with $16.6 billion in the first nine months of 2018. Net earnings were
Total investments and cash at the end of
Shareholders' equity was
Shareholders' equity excluding AOCI* was
AFLAC JAPAN
In yen terms, Aflac Japan's net premium income was ¥347.9 billion for the quarter, or 1.2% lower than a year ago, mainly due to limited-pay products reaching paid-up status. Net investment income, net of amortized hedge costs, increased 4.0% to ¥70.4 billion, primarily driven by call income and increased investments in dollar-denominated floating rate assets. Total revenues in yen declined 0.3% to ¥419.5 billion. Pretax adjusted earnings in yen for the quarter increased 6.1% on a reported basis and 7.8% on a currency-neutral basis. The pretax adjusted profit margin for the
For the first nine months, premium income in yen was ¥1,046.9 billion, or 1.0% lower than a year ago. Net investment income, net of amortized hedge costs, increased 3.4% to ¥204.2 billion. Total revenues in yen were down 0.3% to ¥1,254.8 billion. Pretax adjusted earnings were ¥272.6 billion, or 3.2% higher than a year ago.
In dollar terms, net premium income increased 2.6% to
For the first nine months, premium income in dollars was $9.6 billion, or 0.6% lower than a year ago. Net investment income, net of amortized hedge costs, increased 4.3% to $1.9 billion. Total revenues were up 0.2% to $11.5 billion. Pretax adjusted earnings were $2.5 billion, or 3.9% higher than a year ago.
For the quarter, new annualized premium sales (sales) for protection-type first sector and third sector products decreased 21.5% to ¥18.2 billion, and total sales decreased 21.5% to ¥18.5 billion, or
For the first nine months, sales for protection-type first sector and third sector products decreased 14.5% to ¥60.0 billion, and total sales decreased 14.7% to ¥61.2 billion, or
AFLAC U.S.
Aflac U.S. net premium income rose 1.3% to
For the first nine months, premium income rose 2.0% to
Aflac U.S. sales decreased 4.2% in the quarter to
CORPORATE AND OTHER
For the quarter, total revenue increased 18.3% to
For the first nine months of the year, total revenue increased 17.1% to
DIVIDEND
The board of directors declared the fourth quarter dividend of
OUTLOOK
Commenting on the company's results, Chairman and Chief Executive Officer
"Aflac Japan, our largest earnings contributor, generated strong financial results that were above our expectations for the quarter and the first nine months of the year, primarily reflecting strong investment income and improved benefit ratios. Sales of protection-type first sector and third sector products were down in the first nine months of the year, reflecting reduced sales of our cancer insurance through
"Turning to our U.S. operations, we are pleased with the financial performance of Aflac U.S. in the quarter, which is significant because these results also reflect ongoing investment in our platform, distribution and customer experience. While our sales results were less than we expected for the quarter, keep in mind, our production tends to be skewed toward the fourth quarter. We expect full-year Aflac U.S. sales results to be flat to down slightly, with earned premium growth in the 2% range.
"We remain committed to maintaining strong capital ratios on behalf of our policyholders and balancing our financial strength with reinvesting in our business, increasing the dividend, and repurchasing shares. It goes without saying that we treasure our record of dividend growth. With the fourth quarter's declaration, 2019 will mark the 37th consecutive year of dividend increases. Our dividend track record is supported by the strength of our capital and cash flows. We continue to anticipate that we'll repurchase in the range of
"Having completed the first nine months of the year, I am pleased with the company's overall results, which benefited from timing of expenses, favorable investment results and continued strength in pretax profit margins. We believe those results, combined with our outlook for the remainder of 2019, well position
*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.
ABOUT
A copy of
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT |
|||||||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) |
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|
|
|
|
|
|||||
THREE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
Total revenues |
|
$ |
5,536 |
|
|
$ |
5,577 |
|
|
(0.7) |
% |
Benefits and claims, net |
|
3,027 |
|
|
3,002 |
|
|
0.8 |
|
||
Total acquisition and operating expenses |
|
1,473 |
|
|
1,429 |
|
|
3.1 |
|
||
Earnings before income taxes |
|
1,036 |
|
|
1,146 |
|
|
(9.6) |
|
||
Income taxes |
|
259 |
|
|
301 |
|
|
|
|||
Net earnings |
|
$ |
777 |
|
|
$ |
845 |
|
|
(8.0) |
% |
Net earnings per share – basic |
|
$ |
1.05 |
|
|
$ |
1.10 |
|
|
(4.5) |
% |
Net earnings per share – diluted |
|
1.04 |
|
|
1.09 |
|
|
(4.6) |
|
||
Shares used to compute earnings per share (000): |
|
|
|
|
|
|
|||||
Basic |
|
739,946 |
|
|
767,049 |
|
|
(3.5) |
% |
||
Diluted |
|
743,842 |
|
|
772,070 |
|
|
(3.7) |
|
||
Dividends paid per share |
|
$ |
0.27 |
|
|
$ |
0.26 |
|
|
3.8 |
% |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT |
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(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) |
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|
|
|
|
|
|
|
|||||
NINE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
Total revenues |
|
$ |
16,704 |
|
|
$ |
16,632 |
|
|
0.4 |
% |
Benefits and claims, net |
|
8,958 |
|
|
9,075 |
|
|
(1.3) |
|
||
Total acquisition and operating expenses |
|
4,358 |
|
|
4,296 |
|
|
1.4 |
|
||
Earnings before income taxes |
|
3,388 |
|
|
3,261 |
|
|
3.9 |
|
||
Income taxes |
|
865 |
|
|
866 |
|
|
|
|||
Net earnings |
|
$ |
2,523 |
|
|
$ |
2,395 |
|
|
5.3 |
% |
Net earnings per share – basic |
|
$ |
3.38 |
|
|
$ |
3.10 |
|
|
9.0 |
% |
Net earnings per share – diluted |
|
3.37 |
|
|
3.08 |
|
|
9.4 |
|
||
Shares used to compute earnings per share (000): |
|
|
|
|
|
|
|||||
Basic |
|
745,465 |
|
|
772,807 |
|
|
(3.5) |
% |
||
Diluted |
|
749,452 |
|
|
777,867 |
|
|
(3.7) |
|
||
Dividends paid per share |
|
$ |
0.81 |
|
|
$ |
0.78 |
|
|
3.8 |
% |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET |
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(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS) |
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|
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SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
Assets: |
|
|
|
|
|
|
|||||
Total investments and cash |
|
$ |
139,510 |
|
|
$ |
124,214 |
|
|
12.3 |
% |
Deferred policy acquisition costs |
|
10,148 |
|
|
9,622 |
|
|
5.5 |
|
||
Other assets |
|
4,479 |
|
|
4,105 |
|
|
9.1 |
|
||
Total assets |
|
$ |
154,137 |
|
|
$ |
137,941 |
|
|
11.7 |
% |
Liabilities and shareholders' equity: |
|
|
|
|
|
|
|||||
Policy liabilities |
|
$ |
107,530 |
|
|
$ |
100,584 |
|
|
6.9 |
% |
Notes payable |
|
6,233 |
|
|
5,279 |
|
|
18.1 |
|
||
Other liabilities |
|
10,936 |
|
|
8,844 |
|
|
23.7 |
|
||
Shareholders' equity |
|
29,438 |
|
|
23,234 |
|
|
26.7 |
|
||
Total liabilities and shareholders' equity |
|
$ |
154,137 |
|
|
$ |
137,941 |
|
|
11.7 |
% |
Shares outstanding at end of period (000) |
|
735,130 |
|
|
763,113 |
|
|
(3.7) |
% |
NON-U.S. GAAP FINANCIAL MEASURES
This earnings release includes references to
Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the company's business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Because foreign exchange rates are outside of management's control,
The company defines the non-U.S. GAAP financial measures included in this earnings release as follows:
- Adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management's control. Adjusted revenues are U.S. GAAP total revenues excluding realized investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the company's insurance operations and that do not reflect the company's underlying business performance. The most comparable U.S. GAAP measure is net earnings.
- Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The most comparable U.S. GAAP measure is net earnings per share.
- Adjusted return on equity excluding foreign currency impact is calculated using adjusted earnings excluding the impact of the yen/dollar exchange rate, as reconciled with total U.S. GAAP net earnings, divided by average shareholders' equity, excluding AOCI. The most comparable U.S. GAAP financial measure is return on average equity (ROE) as determined using net earnings and average total shareholders' equity.
- Amortized hedge costs/income represent costs/income incurred or recognized in using foreign currency forward contracts to hedge certain foreign exchange risks in the company's
Japan segment (costs) or in the Corporate and Other segment (income). These amortized hedge costs/income are derived from the difference between the foreign currency spot rate at time of trade inception and the contractual foreign currency forward rate, recognized on a straight line basis over the term of the hedge. There is no comparable U.S. GAAP financial measure for amortized hedge costs/income. - Adjusted book value is the U.S. GAAP book value (representing total shareholders' equity), less AOCI as recorded on the U.S. GAAP balance sheet. The company considers adjusted book value important as it excludes AOCI, which fluctuates due to market movements that are outside management's control.
- Adjusted book value per share is the adjusted book value at the period end divided by the outstanding common shares at the period end. The most comparable U.S. GAAP measure is total book value per share.
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS 1 |
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(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) |
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THREE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
|
|
|
|
|
|
|
|||||
Net earnings |
|
$ |
777 |
|
|
$ |
845 |
|
|
(8.0) |
% |
|
|
|
|
|
|
|
|||||
Items impacting net earnings: |
|
|
|
|
|
|
|||||
Realized investment (gains) losses |
|
119 |
|
|
(88) |
|
|
|
|||
Other and non-recurring (income) loss |
|
— |
|
|
3 |
|
|
|
|||
Income tax (benefit) expense on items excluded |
|
(33) |
|
|
21 |
|
|
|
|||
Tax reform adjustment 4 |
|
— |
|
|
11 |
|
|
|
|||
|
|
|
|
|
|
|
|||||
Adjusted earnings |
|
863 |
|
|
792 |
|
|
9.0 |
% |
||
Current period foreign currency impact 2 |
|
(15) |
|
|
N/A |
|
|
|
|||
Adjusted earnings excluding current period foreign currency impact 3 |
|
$ |
848 |
|
|
$ |
792 |
|
|
7.1 |
% |
|
|
|
|
|
|
|
|||||
Net earnings per diluted share |
|
$ |
1.04 |
|
|
$ |
1.09 |
|
|
(4.6) |
% |
|
|
|
|
|
|
|
|||||
Items impacting net earnings: |
|
|
|
|
|
|
|||||
Realized investment (gains) losses |
|
0.16 |
|
|
(0.11) |
|
|
|
|||
Other and non-recurring (income) loss |
|
— |
|
|
— |
|
|
|
|||
Income tax (benefit) expense on items excluded |
|
(0.04) |
|
|
0.03 |
|
|
|
|||
Tax reform adjustment 4 |
|
— |
|
|
0.01 |
|
|
|
|||
|
|
|
|
|
|
|
|||||
Adjusted earnings per diluted share |
|
1.16 |
|
|
1.03 |
|
|
12.6 |
% |
||
Current period foreign currency impact 2 |
|
(0.02) |
|
|
N/A |
|
|
|
|||
Adjusted earnings per diluted share excluding current period foreign currency impact 3 |
|
$ |
1.14 |
|
|
$ |
1.03 |
|
|
10.7 |
% |
|
|
1 |
Amounts may not foot due to rounding. |
2 |
Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
3 |
Amounts excluding current period foreign currency impact are computed using the average yen/dollar exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by yen-to-dollar currency rate changes. |
4 |
An adjustment of $11 million was made in the three- month period ended September 30, 2018, as a result of return-to-provision adjustments and various amended returns filed by the Company. |
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS 1 |
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(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) |
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|
|
|
|
|
|
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NINE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
|
|
|
|
|
|
|
|||||
Net earnings |
|
$ |
2,523 |
|
|
$ |
2,395 |
|
|
5.3 |
% |
|
|
|
|
|
|
|
|||||
Items impacting net earnings: |
|
|
|
|
|
|
|||||
Realized investment (gains) losses |
|
49 |
|
|
(25) |
|
|
|
|||
Other and non-recurring (income) loss |
|
1 |
|
|
73 |
|
|
|
|||
Income tax (benefit) expense on items excluded |
|
(15) |
|
|
(7) |
|
|
|
|||
Tax reform adjustment 4 |
|
— |
|
|
$ |
11 |
|
|
|
||
|
|
|
|
|
|
|
|||||
Adjusted earnings |
|
2,558 |
|
|
2,447 |
|
|
4.5 |
% |
||
Current period foreign currency impact 2 |
|
(2) |
|
|
N/A |
|
|
|
|||
Adjusted earnings excluding current period foreign currency impact 3 |
|
$ |
2,556 |
|
|
$ |
2,447 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|||||
Net earnings per diluted share |
|
$ |
3.37 |
|
|
$ |
3.08 |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|||||
Items impacting net earnings: |
|
|
|
|
|
|
|||||
Realized investment (gains) losses |
|
0.07 |
|
|
(0.03) |
|
|
|
|||
Other and non-recurring (income) loss |
|
— |
|
|
0.09 |
|
|
|
|||
Income tax (benefit) expense on items excluded |
|
(0.02) |
|
|
(0.01) |
|
|
|
|||
Tax reform adjustment 4 |
|
— |
|
|
$ |
0.01 |
|
|
|
||
|
|
|
|
|
|
|
|||||
Adjusted earnings per diluted share |
|
3.41 |
|
|
3.15 |
|
|
8.3 |
% |
||
Current period foreign currency impact 2 |
|
— |
|
|
N/A |
|
|
|
|||
Adjusted earnings per diluted share excluding current period foreign currency impact 3 |
|
$ |
3.41 |
|
|
$ |
3.15 |
|
|
8.3 |
% |
|
|
1 |
Amounts may not foot due to rounding. |
2 |
Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
3 |
Amounts excluding current period foreign currency impact are computed using the average yen/dollar exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by yen-to-dollar currency rate changes. |
4 |
An adjustment of $11 million was made in the three- month period ended September 30, 2018, as a result of return-to-provision adjustments and various amended returns filed by the Company. |
RECONCILIATION OF U.S. GAAP BOOK VALUE TO ADJUSTED BOOK VALUE 1 |
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(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) |
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|
|
|
|
|
|
|
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SEPTEMBER 30, |
|
2019 |
|
2018 |
|
% Change |
|||||
U.S. GAAP book value |
|
$ |
29,438 |
|
|
$ |
23,234 |
|
|
|
|
Less: |
|
|
|
|
|
|
|||||
Unrealized foreign currency translation gains (losses) |
|
(1,479) |
|
|
(2,113) |
|
|
|
|||
Unrealized gains (losses) on securities and derivatives |
|
8,937 |
|
|
4,216 |
|
|
|
|||
Pension liability adjustment |
|
(207) |
|
|
(194) |
|
|
|
|||
Total AOCI |
|
7,251 |
|
|
1,909 |
|
|
|
|||
Adjusted book value 2 |
|
$ |
22,187 |
|
|
$ |
21,325 |
|
|
|
|
Add: |
|
|
|
|
|
|
|||||
Unrealized foreign currency translation gains (losses) |
|
(1,479) |
|
|
(2,113) |
|
|
|
|||
Adjusted book value including unrealized foreign currency |
|
$ |
20,708 |
|
|
$ |
19,212 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of outstanding shares at end of period (000) |
|
735,130 |
|
|
763,113 |
|
|
|
|||
|
|
|
|
|
|
|
|||||
U.S. GAAP book value per common share |
|
$ |
40.04 |
|
|
$ |
30.45 |
|
|
31.5 |
% |
Less: |
|
|
|
|
|
|
|||||
Unrealized foreign currency translation gains (losses) |
|
(2.01) |
|
|
(2.77) |
|
|
|
|||
Unrealized gains (losses) on securities and derivatives |
|
12.16 |
|
|
5.52 |
|
|
|
|||
Pension liability adjustment per common share |
|
(0.28) |
|
|
(0.25) |
|
|
|
|||
Total AOCI per common share |
|
9.86 |
|
|
2.50 |
|
|
|
|||
Adjusted book value per common share 4 |
|
$ |
30.18 |
|
|
$ |
27.94 |
|
|
8.0 |
% |
Add: |
|
|
|
|
|
|
|||||
Unrealized foreign currency translation gains (losses) |
|
(2.01) |
|
|
(2.77) |
|
|
|
|||
Adjusted book value including foreign currency translation |
|
$ |
28.17 |
|
|
$ |
25.18 |
|
|
11.9 |
% |
|
|
1 |
Amounts may not foot due to rounding. |
2 |
Adjusted book value is the U.S. GAAP book value (representing total shareholder's equity), excluding AOCI (as recorded on the U.S. GAAP balance sheet). |
3 |
Adjusted book value including unrealized foreign currency translation gains (losses) is adjusted book value plus unrealized foreign currency translation gains (losses). |
4 |
Adjusted book value per share is the adjusted book value at the period ended divided by the ending outstanding common shares for the period presented. The most comparable U.S. GAAP measure is total book value per share. |
RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE 1 |
||||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) |
||||||
|
|
|
|
|
||
THREE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
||
Net earnings - U.S. GAAP ROE 2 |
|
10.8 |
% |
|
14.4 |
% |
Impact of excluding unrealized foreign currency translation gains (losses) |
|
(0.7) |
|
|
(1.3) |
|
Impact of excluding unrealized gains (losses) on securities and derivatives |
|
4.1 |
|
|
3.0 |
|
Impact of excluding pension liability adjustment |
|
(0.1) |
|
|
(0.1) |
|
Impact of excluding AOCI |
|
3.3 |
|
|
1.6 |
|
U.S. GAAP ROE - less AOCI |
|
14.1 |
|
|
16.0 |
|
Differences between adjusted earnings and net earnings 3 |
|
1.6 |
|
|
(1.0) |
|
Adjusted ROE - reported |
|
15.7 |
|
|
15.0 |
|
Less: Impact of foreign currency 4 |
|
0.3 |
|
|
N/A |
|
Adjusted ROE, excluding impact of foreign currency |
|
15.4 |
|
|
15.0 |
|
|
|
1 |
Amounts presented may not foot due to rounding. |
2 |
U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity. |
3 |
See separate reconciliation of net income to adjusted earnings. |
4 |
Impact of foreign currency is calculated by restating all yen components of the income statement to the weighted average yen rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE 1 |
||||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) |
||||||
|
|
|
|
|
||
NINE MONTHS ENDED SEPTEMBER 30, |
|
2019 |
|
2018 |
||
Net earnings - U.S. GAAP ROE 2 |
|
12.7 |
% |
|
13.4 |
% |
Impact of excluding unrealized foreign currency translation gains (losses) |
|
(1.0) |
|
|
(1.2) |
|
Impact of excluding unrealized gains (losses) on securities and derivatives |
|
3.8 |
|
|
3.3 |
|
Impact of excluding pension liability adjustment |
|
(0.1) |
|
|
(0.1) |
|
Impact of excluding AOCI |
|
2.7 |
|
|
1.9 |
|
U.S. GAAP ROE - less AOCI |
|
15.5 |
|
|
15.2 |
|
Differences between adjusted earnings and net earnings 3 |
|
0.2 |
|
|
0.3 |
|
Adjusted ROE - reported |
|
15.7 |
|
|
15.6 |
|
Less: Impact of foreign currency 4 |
|
— |
|
|
N/A |
|
Adjusted ROE, excluding impact of foreign currency |
|
15.7 |
|
|
15.6 |
|
|
|
1 |
Amounts presented may not foot due to rounding. |
2 |
U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity. |
3 |
See separate reconciliation of net income to adjusted earnings. |
4 |
Impact of foreign currency is calculated by restating all yen components of the income statement to the weighted average yen rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS 1 |
||||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) |
||||||
|
||||||
THREE MONTHS ENDED SEPTEMBER 30, 2019 |
|
Including Currency Changes |
|
Excluding Currency Changes2 |
||
Net premium income 3 |
|
2.2 |
% |
|
(0.5) |
% |
Net investment income 4 |
|
8.1 |
|
|
6.5 |
|
Total benefits and expenses |
|
1.6 |
|
|
(1.0) |
|
Adjusted earnings |
|
9.0 |
|
|
7.1 |
|
Adjusted earnings per diluted share |
|
12.6 |
|
|
10.7 |
|
|
|
1 |
Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 |
Amounts excluding currency changes were determined using the same yen/dollar exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 |
Net of reinsurance |
4 |
Less amortized hedge costs/income on foreign investments |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS 1 |
||||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) |
||||||
|
||||||
NINE MONTHS ENDED SEPTEMBER 30, 2019 |
|
Including Currency Changes |
|
Excluding Currency Changes2 |
||
Net premium income 3 |
|
0.2 |
% |
|
(0.1) |
% |
Net investment income 4 |
|
5.2 |
|
|
5.0 |
|
Total benefits and expenses |
|
0.1 |
|
|
(0.2) |
|
Adjusted earnings |
|
4.5 |
|
|
4.5 |
|
Adjusted earnings per diluted share |
|
8.3 |
|
|
8.3 |
|
|
|
1 |
Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 |
Amounts excluding currency changes were determined using the same yen/dollar exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 |
Net of reinsurance |
4 |
Less amortized hedge costs/income on foreign investments |
|
|
|
2019 ADJUSTED EARNINGS PER SHARE1 SCENARIOS2 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Exchange Rate |
|
|
|
Adjusted Earnings Diluted Share |
|
|
|
Foreign
Currency |
|
||||
|
100 |
|
|
|
$ 4.50 |
- |
$ 4.60 |
|
|
|
|
$ 0.15 |
|
|
|
105 |
|
|
|
4.43 |
- |
4.53 |
|
|
|
|
0.08 |
|
|
|
110.393 |
|
|
|
4.35 |
- |
4.45 |
|
|
|
|
- |
|
|
|
115 |
|
|
|
4.28 |
- |
4.38 |
|
|
|
|
(0.07) |
|
|
|
120 |
|
|
|
4.21 |
- |
4.31 |
|
|
|
|
(0.14) |
|
|
|
|
1 |
A non-U.S. GAAP financial measure, adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. In reliance on the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of SEC Regulation S-K, a quantitative reconciliation to the most comparable U.S. GAAP measure is not provided for this financial measure. Forward-looking information with regard to the most comparable U.S. GAAP financial measure, earnings per share, is not available without unreasonable effort. This is due to the unpredictable and uncontrollable nature of these reconciling items, which would require an unreasonable effort to forecast and we believe would result in such a broad range of projected values that would not be meaningful to investors. For this reason, we believe that the probable significance of such information is low. |
2 |
Table recasts all quarters to the average exchange rate. |
3 |
Actual 2018 weighted-average exchange rate |
FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the
The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:
|
|
Analyst and investor contact -
Media contact -
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