Aflac 2007 Annual Report Download - page 28

24 There’s Only One Aflac
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 report 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:
•legislative and regulatory developments, including changes
to health care and health insurance delivery
•assessments for insurance company insolvencies
•competitive conditions in the United States and Japan
•new product development and customer response to new
products and new marketing initiatives
•ability to attract and retain qualified sales associates and
employees
•ability to repatriate profits from Japan
•changes in U.S. and/or Japanese tax laws or accounting
requirements
•credit and other risks associated with Aflac’s investment
activities
•significant changes in investment yield rates
•fluctuations in foreign currency exchange rates
•deviations in actual experience from pricing and reserving
assumptions including, but not limited to, morbidity,
mortality, persistency, expenses and investment yields
•level and outcome of litigation
•downgrades in the Company’s credit rating
•changes in rating agency policies or practices
•subsidiary’s ability to pay dividends to the Parent Company
•ineffectiveness of hedging strategies
•catastrophic events
•general economic conditions in the United States and
Japan, including increased uncertainty in the U.S. and
international financial markets
COMPANY OVERVIEW
Aflac Incorporated (the Parent Company) and its subsidiaries
(collectively, the Company) primarily sell supplemental health
and life insurance in the United States and Japan. The
Company’s insurance business is marketed and administered
through American Family Life Assurance Company of
Columbus (Aflac), which operates in the United States (Aflac
U.S.) and as a branch in Japan (Aflac Japan). Most of Aflac’s
policies are individually underwritten and marketed through
independent agents. Our insurance operations in the United
States and our branch in Japan service the two markets for
our insurance business.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (MD&A) is intended to inform the
reader about matters affecting the financial condition and
results of operations of Aflac Incorporated and its subsidiaries
for the three-year period ended December 31, 2007. As a
result, the following discussion should be read in conjunction
with the related consolidated financial statements and notes.
This MD&A is divided into four primary sections. In the first
section, we discuss our critical accounting estimates. We then
follow with a discussion of the results of our operations on a
consolidated basis and by segment. The third section presents
an analysis of our financial condition as well as a discussion of
market risks of financial instruments. We conclude by
addressing the availability of capital and the sources and uses
of cash in the Capital Resources and Liquidity section.
CRITICAL ACCOUNTING ESTIMATES
We prepare our financial statements in accordance with U.S.
generally accepted accounting principles (GAAP). The
preparation of financial statements in conformity with GAAP
Management’s Discussion and Analysis of Financial Condition
and Results of Operations