Aflac Incorporated Announces Third Quarter Results, Declares Fourth Quarter Cas...( COLUMBUS Ga. Oct. 23 /- Aflac Inc...),Health

COLUMBUS, Ga., Oct. 23 /PRNewswire-FirstCall/ -- Aflac Incorporated today reported its third quarter results.

Reflecting a weaker yen to the dollar, total revenues rose 5.1% to $3.9 billion during the third quarter of 2007, compared with $3.7 billion in the third quarter of 2006. Net earnings were $420 million, or $.85 per diluted share, compared with $367 million, or $.73 per share, a year ago. Net earnings included realized investment gains of $1 million, or nil per diluted share, compared with $7 million, or $.01 per diluted share in the third quarter of 2006. Net earnings in the third quarter of 2007 also included a gain of $2 million, or nil per diluted share, from the change in fair value of the interest rate component of the cross-currency swaps related to the company's senior notes, as required by SFAS 133. In the third quarter of 2006, the impact from SFAS 133 reduced net earnings by $3 million, or nil per diluted share.

We believe that an analysis of operating earnings, a non-GAAP financial measure, is vitally important to an understanding of Aflac's underlying profitability drivers. We define operating earnings as the profits we derive from our operations before realized investment gains and losses, the impact from SFAS 133, and nonrecurring items. Management uses operating earnings to evaluate the financial performance of Aflac's insurance operations because realized gains and losses, the impact from SFAS 133, and nonrecurring items tend to be driven by general economic conditions and events, and therefore may obscure the underlying fundamentals and trends in Aflac's insurance operations.

Furthermore, because a significant portion of our business is in Japan, where our functional currency is the Japanese yen, we believe it is equally important to understand the impact on operating earnings from translating yen into dollars. We translate Aflac Japan's yen-denominated income statement from yen into dollars using an average exchange
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