Table of Contents

Message From Management ...... 2 Selected Financial Data ...... 32 1999 marked the 10th consecutive year in which AFLAC Summary statements of earnings and balance sheets, stock Incorporated achieved its earnings objective. AFLAC price ranges, price/earnings ratios and exchange rates for and AFLAC U.S. both contributed to make 1999 another the past 11 years. record year. Consolidated Financial Statements ...... 34 Interview With the CEO ...... 6 Statements of earnings, shareholders’ equity, cash flows, President and CEO Dan Amos discusses the importance of comprehensive income and balance sheets for AFLAC earnings objectives, deregulation in Japan and the market Incorporated and subsidiaries. for supplemental insurance. Notes to the Consolidated Financial Statements . . 38 AFLAC Japan ...... 8 Additional information about the company’s Consolidated Despite a difficult economy, AFLAC Japan produced record Financial Statements and accounting policies. sales, increased its distribution system and continued preparation for a deregulated market. Glossary ...... 57 Definitions of terms used by AFLAC and the insurance AFLAC U.S...... 14 industry. AFLAC U.S. had its best year ever, with revenues, pretax operating earnings and new sales growing rapidly and Investor Information ...... 58 reaching record levels in 1999. AFLAC’s shares significantly outperformed other insurance stocks, although they did not keep up with the market as a Management’s Discussion and Analysis ...... 19 whole in 1999. An overview of AFLAC’s financial and operational performance in Japan and the United States during the last Directors and Management ...... 60 three years and an analysis of the company’s overall Biographical information on the company’s leadership. financial condition.

AFLAC’s Market in the United States and Japan

What We Sell Who Buys It

JAPAN U.S. JAPAN U.S.

Supplemental insurance products Supplemental insurance products At the worksite: At the worksite: including: including: Employees at 95% of the Employees at more than 150,500 Cancer life Accident/disability companies listed on the payroll accounts, including Care Cancer expense Stock Exchange, including businesses of all sizes, credit Living benefit life Short-term disability workers at , , Kirin unions, hospitals, school districts, Medical Intensive care Brewery, Canon, and and city and state governments. Hospital indemnity Takashimaya as well as Customer groups include the City Supplemental insurance riders Long-term care employees of 214,800 small of Atlanta, U.S. Office Products, including: Specified event businesses Winnebago Industries, United Living benefit life Rentals and Genesis Health Rider MAX Life insurance products including: At the home: Ventures Group term life Individuals seeking specific Life insurance products including: Personal term life insurance coverages At the home: Term life Whole life Individuals seeking specific Whole life insurance coverages Fixed annuity AFLAC’s Mission

AFLAC insures more than 40 million markets. This effort is AFLAC’s way of and is included in the Standard and people in the United States and Japan improving a business that most Poor’s 500 Index. AFLAC is rated ‘AA’ with a variety of supplemental observers would say doesn’t need by Standard & Poor’s and ‘Aa3’ by insurance products. Our mission is to improving. Moody’s for financial strength. Duff & provide the best supplemental Phelps rates AFLAC ‘AA’ in claims- We believe the way to maintain our insurance value in the marketplace. paying ability. A.M. Best, an leadership in the supplemental Although AFLAC is the leading independent rating service that insurance market is to fix it, even if it provider of individual insurance at the analyzes the financial condition and isn’t broken. worksite in the United States and the operating performance of insurance AFLAC Incorporated, a Fortune 500 largest foreign insurance company in companies, gives AFLAC an ‘A+’ or company, is traded on the New York Japan, we continue to look for even superior rating. Stock Exchange under the symbol ‘AFL’ more ways to widen our reach into both

About the Cover This year’s annual report features designed specifically for our television characters for the movies “Jurassic “Duck,” the star of AFLAC’s latest U.S. advertising campaign. Duck is a Park,” “Terminator” and “Interview television commercials. Duck is an creation of Stan Winston Studio, With a Vampire” among others. animatronic waterfowl that was which also made the live action

AFLAC’s Market in the United States and Japan

Who Sells It For Us Who Else Sells It JAPAN U.S. JAPAN U.S.

More than 41,400 licensed sales More than 33,500 licensed sales American International Group Aegon associates, representing associates, including approximately Chiyoda The Allstate Corporation 2,200 affiliated and independent 8,800 who, on average, produce Daido American International Group corporate agencies and 6,050 business every month Fukoku Aon Corporation individual agencies GE Edison Conseco, Inc. Heiwa GE Capital INA Himawari National Travelers ING Protective Life Nicos Torchmark Corporation Nippon Dantai UnumProvident Corporation Orico Several regional carriers Saison Taiyo Zurich