What is Aflac's earnings guidance for 2007?

Aflac aims to increase net earnings per diluted share by 15% to 16% for the full year 2007, compared to 2006, excluding the effects of realized investment gains/losses, SFAS 133 impacts, and nonrecurring items.

How does the yen/dollar exchange rate impact Aflac's financial results?

As Aflac Japan's functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate significantly affect reported results. A weakening yen generally leads to fewer dollars being reported, while a strengthening yen leads to more dollars. Management views this primarily as a financial reporting issue and evaluates performance excluding these translation effects.

What are the key risks and uncertainties facing Aflac?

Key risks include legislative and regulatory developments, competitive conditions in the US and Japan, new product development and market acceptance, the ability to attract and retain sales associates, currency exchange rate fluctuations, credit and investment yield risks, and changes in tax laws.

What is the current status of Aflac's share repurchase program?

In the first quarter of 2007, Aflac repurchased approximately 5.1 million shares. As of March 31, 2007, approximately 31.6 million shares remained available for purchase under its authorized share repurchase programs.

AFL 10-Q Quarterly Report Q1 FY2007 — Revenue, Net Income, EPS

Summary

Aflac Inc. reported a solid first quarter for 2007, with net earnings of $416 million, an increase from $375 million in the prior year quarter, resulting in diluted earnings per share of $0.84 compared to $0.74. This growth was driven by strong performance in both its Aflac Japan and Aflac U.S. segments. Aflac Japan demonstrated resilience with a 9.3% increase in pretax operating earnings in dollar terms, despite a challenging sales environment and a weaker yen. Aflac U.S. also showed robust growth, with pretax operating earnings up 15.4% and a notable 10.6% increase in total new annualized premium sales. The company reaffirmed its 2007 earnings guidance, targeting a 15-16% increase in diluted EPS over 2006, excluding certain volatile items. Management's focus remains on maintaining strong underwriting and investment income, managing expenses, and navigating currency fluctuations, particularly the yen/dollar exchange rate, which is viewed primarily as a financial reporting consideration rather than an economic one. Key risks include legislative and regulatory changes, competitive pressures, and investment yield fluctuations.

Key Highlights

1Net earnings increased to $416 million ($0.84 per diluted share) in Q1 2007 from $375 million ($0.74 per diluted share) in Q1 2006.
2Aflac Japan's pretax operating earnings grew 9.3% in dollars to $465 million, despite a 12.3% decline in new annualized premium sales.
3Aflac U.S. showed strong growth with pretax operating earnings up 15.4% to $169 million and new annualized premium sales increasing by 10.6%.
4The company maintained its 2007 earnings per diluted share growth target of 15% to 16%, excluding realized investment gains/losses, SFAS 133 impacts, and nonrecurring items.
5Foreign currency translation is identified as a significant factor impacting reported results, with a weaker yen in Q1 2007 suppressing dollar-denominated results.
6Investment portfolio quality remains high, with a significant portion in investment-grade securities and prudent management of credit risk.
7Shareholder returns were supported by a 42.3% increase in dividends per share and continued share repurchases.

AFLAC INC Quarterly Report for Q1 Ended Mar 31, 2007

Summary

Key Highlights

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