What is an accelerated share repurchase?

An accelerated share repurchase (ASR) is a program where a company buys back a large number of its own shares from the open market, often through an intermediary bank. It allows companies to quickly reduce outstanding shares and return capital to shareholders. In this case, Aflac plans to repurchase approximately 12 million shares in the first quarter of 2008.

Why is Aflac increasing its share repurchase authorization and dividend?

Increasing share repurchases and dividends typically indicates that management believes the company's stock is undervalued and that it has sufficient financial strength and confidence in its future earnings to return capital to shareholders. It signals a commitment to enhancing shareholder value.

How will these actions affect Aflac's stock price?

Share repurchases reduce the number of outstanding shares, which can increase earnings per share (EPS) and potentially boost the stock price. An increased dividend makes the stock more attractive to income-seeking investors. Together, these actions are generally viewed positively by the market and can lead to increased investor demand for the stock.

When will the increased dividend be paid?

The increased quarterly dividend of $.24 per share is effective with the first quarter payment and will be payable on March 3, 2008, to shareholders of record as of the close of business on February 20, 2008.

AFL 8-K: Regulation FD — Jan 29, 2008

Summary

Aflac Incorporated announced significant capital allocation actions on January 29, 2008, signaling a commitment to returning value to shareholders. The company intends to conduct an accelerated repurchase of approximately 12 million shares of its common stock in the first quarter of 2008, funded by internal capital. This move suggests management's confidence in the company's financial position and a belief that its stock is undervalued. Furthermore, Aflac's Board of Directors approved a substantial increase in its share repurchase authorization, adding up to 30 million shares to its existing authorization, bringing the total available for future buybacks to 55.6 million shares. Concurrent with these repurchase plans, the Board also approved a notable 17.1% increase in the quarterly cash dividend, raising it to $.24 per share. This dual approach of share buybacks and dividend increases demonstrates a balanced strategy to enhance shareholder returns.

Key Highlights

1Aflac intends to execute an accelerated share repurchase of approximately 12 million shares in Q1 2008.
2The share repurchase program will be funded using Aflac's internal capital.
3The Board of Directors authorized an additional 30 million shares for future repurchases, increasing the total available to 55.6 million shares.
4Aflac's quarterly cash dividend will increase by 17.1%.
5The new quarterly dividend rate will be $.24 per share, payable on March 3, 2008.
6The filing includes a press release dated January 29, 2008, detailing these announcements.

AFLAC INC 8-K Report, Regulation FD Disclosure (Jan 29, 2008)

Summary

Key Highlights

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