Aflac Incorporated Announces Fourth Quarter Results, 2012 EPS In Line With Guidance And Objective, Affirms 2013 Operating EPS Target, Declares First Quarter Cash Dividend

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COLUMBUS, Ga., Feb. 5, 2013 /PRNewswire/ -- Aflac Incorporated today reported
its fourth quarter results.

Reflecting the weaker yen/dollar exchange rate, revenues rose 6.6% to $6.4
billion in the fourth quarter of 2012, compared with $6.0 billion in the
fourth quarter of 2011. Net earnings were $581 million, or $1.24 per diluted
share, compared with $538 million, or $1.15 per share, a year ago.

Net earnings in the fourth quarter of 2012 included after-tax realized
investment losses, net of realized investment gains, of $111 million, or $.23
per diluted share, compared with net after-tax losses of $146 million, or $.30
per diluted share, a year ago. After-tax realized investment losses in the
quarter were $217 million, or $.45 per diluted share. These losses primarily
resulted from impairments taken on securities issued by the Republic of Tunisia
and UniCredit SpA (HVB Funding Trusts). After-tax realized investment gains
from securities transactions in the quarter were $76 million, or $.16 per
diluted share. On an after-tax basis, hedge costs related to dollar investments
of Aflac Japan were $3 million in the quarter, or $.01 per diluted share.
Realized after-tax net investment gains from other derivative and hedging
activities in the quarter were $33 million, or $.07 per diluted share.

Aflac believes that an analysis of operating earnings, a non-GAAP financial
measure, is vitally important to an understanding of the company's underlying
profitability drivers. Aflac defines operating earnings as the profits derived
from operations before realized investment gains and losses from securities
transactions, impairments, and derivative and hedging activities, as well as
nonrecurring items. Aflac's derivative activities include: foreign currency,
interest rate and credit default swaps in variable interest entities that are
consolidated; foreign currency swaps associated with the company's senior and
subordinated notes; and foreign currency forwards used in hedging foreign
exchange risk on U.S. dollar-denominated securities. Management uses operating
earnings to evaluate the financial performance of Aflac's insurance operations
because realized gains and losses from securities transactions, impairments, and
derivative and hedging activities, as well as nonrecurring items, tend to be
driven by general economic conditions and events or related to infrequent
activities not directly associated with the company's insurance operations, and
therefore may obscure the underlying fundamentals and trends in Aflac's
insurance operations.

Furthermore, because a significant portion of Aflac's business is in Japan,
where the functional currency is the yen, the company believes it is equally
important to understand the impact on operating earnings from translating yen
into dollars. Aflac Japan's yen-denominated income statement is translated from
yen into dollars using an average exchange rate for the reporting period, and
the balance sheet is translated using the exchange rate at the end of the
period. However, except for a limited number of transactions, which includes the
Aflac Japan dollar investment program, the company does not actually convert yen
into dollars. As a result, Aflac views foreign currency as a financial reporting
issue and not as an economic event for the company or its shareholders. Because
changes in exchange rates distort the growth rates of operations, readers of
Aflac's financial statements are also encouraged to evaluate financial
performance excluding the impact of foreign currency translation. The chart
toward the end of this release presents a comparison of selected income
statement items with and without foreign currency changes to illustrate the
effect of currency.

Operating earnings in the fourth quarter were $697 million, compared with $684
million in the fourth quarter of 2011. Operating earnings per diluted share
rose 2.1% to $1.48 in the quarter, compared with $1.45 a year ago. The
weaker yen/dollar exchange rate decreased operating earnings per diluted share
by $.04 for the fourth quarter. Excluding the impact from the weaker yen,
operating earnings per share increased 4.8%.

For the full year, total revenues were up 14.4% to $25.4 billion, compared with
$22.2 billion a year ago. Net earnings were $2.9 billion, or $6.11 per
diluted share, compared with $1.9 billion, or $4.12 per share, in 2011.
Operating earnings for the full year were $3.1 billion, or $6.60 per diluted
share, compared with $2.9 billion, or $6.27 per diluted share, in 2011.
Operating earnings per diluted share rose 5.3% for the year. For the year, the
yen/dollar exchange rate was relatively flat. Excluding a $.01 per share
benefit from the impact from foreign currency, operating earnings per diluted
share rose 5.1% for the year.

Total investments and cash at the end of December 2012 were $118.2 billion,
compared with $124.2 billion at September 30, 2012. Although negatively
impacted by the weaker yen, total investments and cash continued to benefit from
strong cash flows.

In the fourth quarter and for the full year, Aflac repurchased 1.9 million
shares of its common stock. At the end of December, the company had 22.4 million
shares available for purchase under its share repurchase authorization.

Shareholders' equity was $16.0 billion at December 31, 2012, which was
unchanged from September 30, 2012. Shareholders' equity at the end of the
fourth quarter included a net unrealized gain on investment securities and
derivatives of $2.6 billion, compared with a net unrealized gain of $2.3
billion at the end of September 2012. Shareholders' equity per share was
$34.16 at December 31, 2012, compared with $34.10 per share at September
30, 2012. The annualized return on average shareholders' equity in the fourth
quarter was 14.5%. On an operating basis (excluding total net realized
gains/losses in net earnings, and unrealized investment and derivative
gains/losses in shareholders' equity), the annualized return on average
shareholders' equity was 20.6% for the fourth quarter.

AFLAC JAPAN

Aflac Japan's total revenues in yen were up 10.5% in the fourth quarter of 2012.
Premium income in yen rose 11.2%, benefiting from strong sales of WAYS, Aflac
Japan's unique hybrid whole-life product. Net investment income increased 5.2%.
The pretax operating profit margin decreased from 18.8% in the fourth quarter of
2011 to 17.7%, and pretax operating earnings in yen increased 4.1%. For the
year, premium income in yen increased 9.9%, and net investment income increased
6.1%. Total revenues in yen were up 9.4%, and pretax operating earnings grew
2.0%.

For the fourth quarter, Aflac Japan's results in dollar terms were suppressed by
the weaker yen/dollar exchange rate. The average yen/dollar exchange rate in the
fourth quarter was 80.93, or 4.4% weaker than the average rate of 77.35 in the
fourth quarter of 2011. For the full year, Aflac Japan's results in dollar terms
were not materially impacted by the exchange rate. For the full year, the
average exchange rate was 79.81, compared with 79.75 in 2011.

Despite the weaker average yen in the fourth quarter, premium income in dollars
rose 6.1% to $4.4 billion. Net investment income in the fourth quarter was
$711 million, or .3% higher than 2011. Total revenues increased 5.4% to $5.1
billion. Pretax operating earnings declined slightly by .5% to $906 million.
For the full year, premium income was $17.2 billion, or 9.8% higher than a year
ago. Net investment income rose 5.8% to $2.8 billion. Total revenues were up
9.3% to $20.1 billion. Pretax operating earnings were $3.9 billion, or 2.0%
higher than a year ago.

In the fourth quarter, new annualized premium sales rose 1.5% to ¥49.3 billion,
or $609 million. During the same period, bank channel sales increased 21.4% to
¥20.0 billion, primarily reflecting the strong sales of WAYS. Sales of WAYS
increased 20.7% in the fourth quarter.

For the full year, total new annualized premium sales were up 30.8% to ¥210.6
billion, or $2.6 billion.

AFLAC U.S.

Aflac U.S. total revenues rose 5.8% to $1.4 billion in the fourth quarter.
Premium income increased 5.5% to $1.3 billion, and net investment income was up
4.4% to $156 million. The pretax operating profit margin was 14.6%, which was
unchanged from a year ago. Pretax operating earnings were $208 million, an
increase of 5.9% for the quarter. For the year, total revenues were up 5.4% to
$5.6 billion and premium income rose 5.4% to $5.0 billion. Net investment
income increased 4.2% to $613 million. Pretax operating earnings were $997
million, an increase of 10.3% from a year ago.

Aflac U.S. total new annualized premium sales decreased .7% to $444 million
for the quarter. For the full year, total new sales increased .8% to $1.5
billion. Persistency improved to 77.1%, compared with 76.2% a year ago.

DIVIDEND

The board of directors declared the first quarter cash dividend. The first
quarter dividend of $.35 per share is payable on March 1, 2013, to
shareholders of record at the close of business on February 15, 2013.

OUTLOOK

Commenting on the company's fourth quarter results, Chairman and Chief Executive
Officer Daniel P. Amos stated: "We are very pleased with Aflac's financial
performance for both the quarter and year. As the year progressed, operating
earnings per diluted share were better than expected, and we finished the year
toward the high end of our objective of a 3% to 6% increase before the impact of
foreign currency. That, in part, reflected the benefits of a deferred coupon
payment in the first quarter, as well as a lower annual effective tax rate. As
we had conveyed in the third quarter, following nine months of restrained
expenditures, we increased spending on IT and marketing initiatives in the
fourth quarter to further enhance our business.

"Aflac Japan generated a solid quarter and another outstanding year. The
tremendous sales we generated in 2012 were again largely driven by the bank
channel. Following five straight record quarters of new annualized premium sales
growth, sales in the fourth quarter slowed, in large part due to extremely
difficult comparisons. Additionally, as we expected, sales were negatively
impacted by the reduction of the discounted advance premium rate that was
effective October 22, 2012. Importantly, Aflac Japan's impressive sales for the
full year were in line with our expectation we communicated in the third
quarter.

"From a financial perspective, Aflac U.S. continued to perform well for the
quarter and for the full year. While new sales growth has been constrained, our
top-line growth has been consistently strong throughout the year, primarily
reflecting an improvement in persistency. With more than 90% of our accounts
coming through the small business market, we continue to see that segment as
particularly vulnerable to economic uncertainty. Given this backdrop, Aflac U.S.
2012 sales results were in line with our most recent guidance of roughly flat
sales for the year.

"We continued to make progress with the transformation of our Global Investment
Division. As I have said before, I strongly believe our derisking activities
have better positioned our portfolio to accommodate market volatility. At the
same time, we've been able to enhance our new money yields, primarily through
our U.S. corporate bond program. Following the success of this program in the
third quarter, our objective was to invest roughly two-thirds of Aflac Japan's
fourth quarter investment cash flow, or about $3.1 billion, in U.S.
dollar-denominated, publicly traded corporate bonds, and then hedge the currency
risk. We remain very pleased with the results this quarter. This strategy
provides greater liquidity, enhances flexibility for our portfolio and increases
the opportunities to diversify the investment of our significant cash flows
beyond Japanese Government Bonds, with the objective of producing higher
returns.

"The strength of our capital ratios demonstrates our commitment to maintaining
financial strength on behalf of our policyholders and bondholders. We previously
conveyed that our goal was to end 2012 with an RBC ratio in the range of 400%
and 500%. While we have not yet completed our statutory financial statements, we
believe our RBC ratio at year-end was significantly higher than our target.
Additionally, we expect that Aflac Japan's solvency margin ratio at year-end
improved over the solvency margin ratio at September 30, 2012, which was 628%,
and was well above the 2012 range we had targeted of 500% to 600%.

"Given the strength of our capital ratios and parent company liquidity, we
resumed our share repurchase activities by buying approximately $100 million
of our shares in the fourth quarter of 2012, and it is our current plan to
purchase $400 to $600 million of our shares in 2013. Understand, unless an
extraordinary event occurs, we intend to purchase a minimum of $400 million of
our shares this year.

"As we look ahead to 2013 sales opportunities, we expect Aflac U.S. sales to be
flat to up 5% for 2013. We also expect Aflac Japan sales of third sector cancer
and medical products to be flat to up 5%.

"I want to reiterate that our objective for 2013 has not changed: To increase
operating earnings per diluted share 4% to 7%, or approximately $6.86 to $7.06
per share, on a currency neutral basis.Therefore, if the yen/dollar exchange
rate averages 90 yen for the full year, it's likely operating earnings per
diluted share will be $6.37 to $6.57 for 2013. I would point out that 2013
earnings comparisons to 2012 will be more difficult because earnings in 2012
were significantly better than we originally anticipated."

ABOUT AFLAC

When a policyholder gets sick or hurt, Aflac pays cash benefits fast. For nearly
six decades, Aflac insurance policies have given policyholders the opportunity
to focus on recovery, not financial stress. In the United States, Aflac is the
number one provider of guaranteed-renewable insurance. In Japan, Aflac is the
number one life insurance company in terms of individual policies in force.
Aflac individual and group insurance products provide protection to more than 50
million people worldwide. For six consecutive years, Aflac has been recognized
by Ethisphere magazine as one of the World's Most Ethical Companies. In 2013,
FORTUNE magazine recognized Aflac as one of the 100 Best Companies to Work For
in America for the 15th consecutive year. Also, FORTUNE magazine included Aflac
on its list of Most Admired Companies for the 11th time in 2012. Aflac
Incorporated is a Fortune 500 company listed on the New York Stock Exchange
under the symbol AFL. To find out more about Aflac, visit aflac.com or
espanol.aflac.com.

A copy of Aflac's Financial Analysts Briefing (FAB) supplement for the quarter
can be found on the "Investors" page at aflac.com. Additionally on the website
is a complete listing of Aflac's investment holdings in the financial sector,
separate listings of the company's global holdings by region, and sovereign and
financial investments in both perpetual and peripheral Eurozone securities.

Aflac Incorporated will webcast its quarterly conference call via the
"Investors" page of aflac.com at 9:00 a.m. (EST) on Wednesday, February 6,
2013.

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)

THREE MONTHS ENDED DECEMBER 31, 2012 2011 % Change

Total revenues $ 6,375 $ 5,979 6.6 %

Benefits and claims 3,989 3,700 7.8

Total acquisition and operating expenses 1,506 1,457 3.4

Earnings before income taxes 880 822 7.0

Income taxes 299 284

Net earnings $ 581 $ 538 8.0 %

Net earnings per share - basic $ 1.24 $ 1.16 6.9 %

Net earnings per share - diluted 1.24 1.15 7.8

Shares used to compute earnings per share (000):
Basic 467,364 465,559 .4 %
Diluted 470,291 467,734 .5

Dividends paid per share $ .35 $ .33 6.1 %

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)

TWELVE MONTHS ENDED DECEMBER 31, 2012 2011 % Change

Total revenues $ 25,364 $ 22,171 14.4 %

Benefits and claims 15,330 13,749 11.5

Total acquisition and operating expenses 5,732 5,472 4.8

Earnings before income taxes 4,302 2,950 45.8

Income taxes 1,436 1,013

Net earnings $ 2,866 $ 1,937 48.0 %

Net earnings per share - basic $ 6.14 $ 4.16 47.6 %

Net earnings per share - diluted 6.11 4.12 48.3

Shares used to compute earnings per share (000):
Basic 466,868 466,519 .1 %
Diluted 469,287 469,370 -

Dividends paid per share $ 1.34 $ 1.23 8.9 %

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidance for accounting for costs associated
with acquiring or renewing insurance contracts (deferred acquisition costs, or
DAC).

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)

DECEMBER 31, 2012 2011 % Change

Assets:

Total investments and cash $ 118,219 $ 103,462 14.3 %

Deferred policy acquisition costs 9,658 9,789 (1.3)

Other assets 3,217 2,986 7.7

Total assets $ 131,094 $ 116,237 12.8 %

Liabilities and shareholders' equity:

Policy liabilities $ 97,949 $ 94,593 3.5 %

Notes payable 4,352 3,285 32.5

Other liabilities 12,815 5,413 136.7

Shareholders' equity 15,978 12,946 23.4

Total liabilities and shareholders' equity $ 131,094 $ 116,237 12.8 %

Shares outstanding at end of period (000) 467,786 466,310 .3 %

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

RECONCILIATION OF OPERATING EARNINGS TO NET EARNINGS
(UNAUDITED - IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)

THREE MONTHS ENDED DECEMBER 31, 2012 2011 % Change

Operating earnings $ 697 $ 684 2.0 %

Reconciling items, net of tax:
Realized investment gains (losses):
Securities transactions and impairments (141) (168)
Hedge costs related to foreign
currency investments (3) -
Impact of other derivative/hedging activities 33 22
Other non-operating income (loss) (5) -

Net earnings $ 581 $ 538 8.0 %

Operating earnings per diluted share $ 1.48 $ 1.45 2.1 %

Reconciling items, net of tax:
Realized investment gains (losses):
Securities transactions and impairments (.29) (.35)
Hedge costs related to foreign
currency investments (.01) -
Impact of other derivative/hedging activities .07 .05
Other non-operating income (loss) (.01) -

Net earnings per diluted share $ 1.24 $ 1.15 7.8 %

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

RECONCILIATION OF OPERATING EARNINGS TO NET EARNINGS
(UNAUDITED - IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)

TWELVE MONTHS ENDED DECEMBER 31, 2012 2011 % Change

Operating earnings $ 3,097 $ 2,946 5.1 %

Reconciling items, net of tax:
Realized investment gains (losses):
Securities transactions and impairments (326) (850)
Hedge costs related to foreign
currency investments (5) -
Impact of other derivative/hedging activities 105 (159)
Other non-operating income (loss) (5) -

Net earnings $ 2,866 $ 1,937 48.0 %

Operating earnings per diluted share $ 6.60 $ 6.27 5.3 %

Reconciling items, net of tax:

Realized investment gains (losses):
Securities transactions and impairments (.69) (1.81)
Hedge costs related to foreign
currency investments (.01) -
Impact of other derivative/hedging activities .22 (.34)
Other non-operating income (loss) (.01) -

Net earnings per diluted share $ 6.11 $ 4.12 48.3 %

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

EFFECT OF FOREIGN CURRENCY ON OPERATING RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)

THREE MONTHS ENDED DECEMBER 31, 2012 Including Excluding

Currency
Currency

Changes
Changes2

Premium income 6.0 % 9.6 %

Net investment income 2.0 4.5

Total benefits and expenses 6.6 10.0

Operating earnings 2.0 5.0

Operating earnings per diluted share 2.1 4.8

1 The numbers in this table are presented on an operating basis, as previously described.
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.

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

EFFECT OF FOREIGN CURRENCY ON OPERATING RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)

TWELVE MONTHS ENDED DECEMBER 31, 2012 Including Excluding

Currency
Currency

Changes
Changes2

Premium income 8.8 % 8.8 %

Net investment income 5.9 5.9

Total benefits and expenses 9.6 9.6

Operating earnings 5.1 4.9

Operating earnings per diluted share 5.3 5.1

1 The numbers in this table are presented on an operating basis, as previously described.
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.

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidancefor accounting for costs associated with
acquiring or renewing insurance contracts (deferred acquisition costs, or DAC).

2013 OPERATING EARNINGS PER SHARE SCENARIOS

Average Exchange Rate Annual % Growth Yen
Operating Over 2012 Impact
EPS

79.81* $ 6.86 - 7.06 3.9 - 7.0 % $ -

85 6.60 - 6.80 0.0 - 3.0 (.26)

90 6.37 - 6.57 (3.5) - (.5) (.49)

95 6.17 - 6.37 (6.5) - (3.5) (.69)

100 5.99 - 6.19 (9.2) - (6.2) (.87)

*Actual 2012 weighted-average exchange rate

Certain prior period numbers have been restated to reflect the retrospective
adoption of revised accounting guidance for accounting for costs associated
with acquiring or renewing insurance contracts (deferred acquisition costs, or
DAC).

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. We desire 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 Securities and Exchange Commission (SEC).

Forward-looking statements are not based on historical information and relate to
future operations, strategies, financial results or other developments.
Furthermore, forward-looking information is subject to numerous assumptions,
risks and uncertainties. In particular, statements containing words such as
"expect," "anticipate," "believe," "goal," "objective," "may," "should,"
"estimate," "intends," "projects," "will," "assumes," "potential," "target" or
similar words as well as specific projections of future results,generally
qualify as forward-looking. Aflac undertakes no obligation to update such
forward-looking statements. We caution 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: difficult conditions in global capital markets and the economy;
governmental actions for the purpose of stabilizing the financial markets;
defaults and credit downgrades of securities in our investment portfolio;
impairment of financial institutions; credit and other risks associated with
Aflac's investment in perpetual securities; differing judgments applied to
investment valuations; significant valuation judgments in determination of
amount of impairments taken on our investments; limited availability of
acceptable yen-denominated investments; concentration of our investments in any
particular single-issuer or sector; concentration of business in Japan; ongoing
changes in our industry; exposure to significant financial and capital markets
risk; fluctuations in foreign currency exchange rates; significant changes in
investment yield rates; deviations in actual experience from pricing and
reserving assumptions; subsidiaries' ability to pay dividends to Aflac
Incorporated; changes in law or regulation by governmental authorities; ability
to attract and retain qualified sales associates and employees; decreases in
our financial strength or debt ratings; ability to continue to develop and
implement improvements in information technology systems; changes in U.S. and/or
Japanese accounting standards; failure to comply with restrictions on patient
privacy and information security; level and outcome of litigation; ability to
effectively manage key executive succession; impact of the recent earthquake and
tsunami natural disaster and related events at the nuclear plant in Japan and
their aftermath; catastrophic events including, but not necessarily limited to,
tornadoes, hurricanes, earthquakes, tsunamis, and damage incidental to such
events; and failure of internal controls or corporate governance policies and
procedures.

(Logo: http://photos.prnewswire.com/prnh/20100423/CL92305LOGO)

Analyst and investor contact - Robin Y. Wilkey, 706.596.3264 or 800.235.2667,
FAX: 706.324.6330 or rwilkey@aflac.com
Media contact - Laura Kane, 706.596.3493, FAX: 706.320.2288, or
lkane@aflac.com

SOURCE Aflac Incorporated