Aflac 2014 Annual Report Download - page 11

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YEN
WEAKENING
YEN
STRENGTHENING
Source: Bloomberg ©
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
90
100
80
70
110
120
¥130
Year-End Yen/Dollar Exchange Rates
130.5
119.8
2014 2014
Excluding Yen Impact
05 06 07 08 09 10 11 12 13 14
116.2
121.3
56.4 59.8 65.8
79.3 8 4.1
100.2
131.1
119.8
U.S.
Japan
Impact of Currency on the Balance Sheet
Aflac primarily holds yen-denominated assets to support the
large amount of yen-denominated liabilities in Japan. Except
for certain transactions, Aflac does not convert yen into dollars.
Aflac’s balance sheet is translated using the exchange rate at the
end of the period. Given the recent weakening of the yen, Aflac’s
balance sheet was likewise significantly suppressed in dollar
terms. The year-end exchange rate for 2014 weakened 12.6%
from the prior year to 120.55 yen to the dollar. Total assets at the
end of December 2014 were $119.8 billion. Excluding the negative
impact from the yen at year end, total assets were $130.5 billion.
contribution of Aflac Japan’s operations to overall earnings,
a weaker yen suppresses Aflac Incorporated’s results as
reported in dollars. After several years of strengthening, the
yen weakened dramatically in 2013 and 2014. It is important
to note that as the yen weakened, our sensitivity to the
yen has decreased. Additionally, the portion of our pretax
operating income from dollar-denominated sources has
increased to more than 50% of the total.
TOTAL ASSETS
(Dollars, In Billions)
9
Total assets
declined 1.3% to
$119.8 billion at
the end of 2014.