Summary
Aflac Incorporated's 2012 10-K filing reveals a company heavily reliant on its Japanese operations, which accounted for 77% of total revenues and 87% of total assets in 2012. Despite a challenging global economic environment, Aflac Japan demonstrated robust sales growth, driven significantly by its banking channel partnerships and the WAYS product. In the U.S., Aflac U.S. saw modest premium income growth and continued to expand its broker and group insurance offerings. The company's financial performance showed a substantial increase in net earnings and diluted EPS in 2012 compared to 2011, partly due to lower net realized investment losses. Aflac continued its commitment to shareholder returns through dividends and share repurchases. Key risks highlighted include exposure to global capital markets, the concentration of business in Japan, and the impact of foreign currency fluctuations, particularly the yen-dollar exchange rate.
Financial Highlights
33 data points| Revenue | $25.36B |
| SG&A Expenses | $2.42B |
| Operating Income | $4.66B |
| Interest Expense | $261.00M |
| Net Income | $2.87B |
| EPS (Basic) | $3.07 |
| EPS (Diluted) | $3.06 |
| Shares Outstanding (Basic) | 933.74M |
| Shares Outstanding (Diluted) | 938.57M |
Key Highlights
- 1Aflac Japan remains the dominant revenue and asset driver, with 77% of revenues and 87% of assets in 2012.
- 2Net earnings increased significantly to $2.9 billion ($6.11/diluted share) in 2012 from $1.9 billion ($4.12/diluted share) in 2011, boosted by lower investment losses and improved operating performance.
- 3Aflac Japan achieved record annual production in 2012, with a 30.8% increase in yen in new annualized premium sales, largely driven by the bank channel and the WAYS product.
- 4U.S. operations showed steady growth, with a 5.1% increase in annualized premiums in force and continued development of broker relationships and group insurance products.
- 5The company repurchased 1.9 million shares of common stock in 2012 and plans to continue share repurchases.
- 6Key risks include exposure to global economic and capital market conditions, significant concentration in Japan, and foreign currency fluctuation (yen/dollar exchange rate).
- 7The company's solvency margin ratio in Japan (Aflac Japan) was strong at 669.1% under new standards as of December 31, 2012.