Aflac 2009 Annual Report Download - page 52

of the annual average investment portfolio of debt and
perpetual securities available for sale during the year ended
December 31, 2009, compared with 4% for the years ended
December 31, 2008, and 2007. This increase in 2009 was
due primarily to a bond-swap program that we executed
to generate investment gains to take advantage of tax loss
carryforwards.
Financing Activities
Consolidated cash provided by nancing activities was
$699 million in 2009, compared with consolidated cash
used by nancing activities of $1.4 billion in 2008 and $655
million in 2007. In April 2009, we redeemed our $450 million
senior notes and settled the related cross-currency, interest
rate swaps that were used to convert the original dollar-
denominated debt obligation into yen. In May 2009, the
Parent Company issued $850 million in senior notes that
are due in May 2019, and in December 2009, also issued
$400 million in senior notes that are due in December 2039.
In July 2009, the Parent Company executed a ¥10 billion
loan that is due in July 2015. In August 2009, the Parent
Company executed a ¥5 billion loan that is due in August
2015. Cash returned to shareholders through dividends
was $524 million in 2009, compared with cash returned
to shareholders through dividends and treasury stock
purchases of $1.9 billion in 2008 and $979 million in 2007.
During 2009, we extinguished portions of our yen-
denominated Uridashi and Samurai debt by buying
the notes on the open market. We paid ¥4.4 billion to
extinguish ¥6.0 billion of debt, yielding a realized gain from
extinguishment of debt of ¥1.6 billion, or $17 million ($11
million after-tax), which we included in other income.
In July 2010, ¥39.4 billion (approximately $428 million using
the December 31, 2009, exchange rate) of our Samurai
notes will mature. We plan to use existing cash to pay off
these notes.
We have no restrictive nancial covenants related to our
notes payable. We were in compliance with all of the
covenants of our notes payable at December 31, 2009.
The following tables present a summary of treasury stock
activity during the years ended December 31.
During 2009, we did not repurchase shares of our common
stock in the open market. In 2008, under share repurchase
authorizations from our board of directors, we purchased
23.2 million shares of our common stock in the open
market, funded with internal capital. The total 23.2 million
shares was comprised of 12.5 million shares purchased
through an afliate of Merrill Lynch, Pierce, Fenner &
Smith Incorporated (Merrill Lynch) and 10.7 million shares
purchased through Goldman, Sachs & Co. (GS&Co.).
See Note 9 of the Notes to the Consolidated Financial
Statements for additional information.
As of December 31, 2009, a remaining balance of 32.4
million shares of our common stock was available for
purchase under share repurchase authorizations by our
board of directors. The 32.4 million shares available for
purchase were comprised of 2.4 million shares remaining
from an authorization from the board of directors in 2006
and 30.0 million shares from a board authorization in
2008. We will closely monitor global nancial markets and
our capital position before we commit to further share
repurchases.
Cash dividends paid to shareholders in 2009 of $1.12 per
share increased 16.7% over 2008. The 2008 dividend paid
of $.96 per share increased 20.0% over 2007. The following
table presents the sources of dividends to shareholders for
the years ended December 31.
In February 2010, the board of directors declared the rst
quarter 2010 cash dividend of $.28 per share. The dividend
is payable on March 1, 2010, to shareholders of record at
the close of business on February 16, 2010.
Regulatory Restrictions
Aac is domiciled in Nebraska and is subject to its
regulations. The Nebraska insurance department imposes
certain limitations and restrictions on payments of dividends,
management fees, loans and advances by Aac to the
Parent Company. The Nebraska insurance statutes require
prior approval for dividend distributions that exceed the
Treasury Stock Issued
(In millions of dollars and thousands of shares) 2009 2008 2007
Stock issued from treasury $ 17 $ 32 $ 47
Number of shares issued 1,043 2,001 2,723
Treasury Stock Purchased
(In millions of dollars and thousands of shares) 2009 2008 2007
Treasury stock purchases $ 10 $ 1,490 $ 606
Number of shares purchased:
Open market – 23,201 11,073
Other 264 146 559
Total shares purchased 264 23,347 11,632
(In millions) 2009 2008 2007
Dividends paid in cash $ 524 $ 434 $ 373
Dividends declared but not paid (131) 131 (91)
Dividends through issuance of treasury shares – 20 19
Total dividends to shareholders $ 393 $ 585 $ 301
We’ve got you under our wing.
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