AFLAC Inc. (AFL) filed Quarterly Report for the period ended 2009-09-30.
AFLAC Inc. is a general business holding company and acts as a management company overseeing the operations of its subsidiaries by providing management services and making capital available. Its primary business is supplemental health and life insurance which is marketed and administered primarily through its subsidiary American Family Life Assurance Company of Columbus. Aflac Inc. has a market cap of $19.9 billion; its shares were traded at around $42.57 with a P/E ratio of 9.2 and P/S ratio of 1.2. The dividend yield of Aflac Inc. stocks is 2.6%. Aflac Inc. had an annual average earning growth of 17.3% over the past 10 years. GuruFocus rated Aflac Inc. the business predictability rank of 5-star.
Highlight of Business Operations:
During the first nine months of 2009, sales and redemptions of securities resulted in net realized pretax investment gains of $248 million ($161 million after-tax) that were primarily the result of bond swaps. We realized pretax investment losses of $987 million ($642 million after-tax) as a result of the recognition of other-than-temporary impairment losses.
During the nine-month period ended September 30, 2008, we realized pretax investment losses of $225 million ($146 million after-tax) as a result of sales and redemptions. These losses were primarily driven by a decision to sell our investments in Lehman Brothers and Washington Mutual. We realized pretax investment losses of $380 million ($247 million after-tax) as a result of the recognition of other-than-temporary impairment losses for our investments in certain of our perpetual securities and Ford Motor Company.
During the first six months of 2009, we extinguished portions of our yen-denominated Uridashi and Samurai debt by buying the notes on the open market. We realized a total gain from extinguishment of debt of 1.6 billion yen, or $17 million ($11 million after-tax), which we included in other income. We did not extinguish any debt during the third quarter of 2009.
Subject to the preceding assumptions, our objective for 2009 is to increase net earnings per diluted share by 13% to 15% over 2008. If the yen/dollar exchange rate averages 90 to 95 in the last three months of the year, we would expect reported net earnings per diluted share to be in the range of $1.08 to $1.16 in the fourth quarter of 2009. Under that exchange rate scenario and given the year-to-date results, we would expect net earnings per diluted share to be in the range of $4.75 to $4.83 for the year. Based on our stated objective for 2009, the following table shows the likely results for 2009 net earnings per diluted share, including the impact of foreign currency translation using various yen/dollar exchange rate scenarios.
AFL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Ronald Muhlenkamp of Muhlenkamp Fund, Tom Gayner of Markel Gayner Asset Management Corp, Arnold Schneider of Schneider Capital Management, Tom Gayner of Markel Gayner Asset Management Corp, PRIMECAP Management, David Dreman of Dreman Value Management.
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