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pronouncements and the impact, if any, on our financial position or results of operations, see Note 1 of the Notes to the
Consolidated Financial Statements in this report.
Events, including those external to our operations, could damage our reputation.
Because insurance products are intangible, we rely to a large extent on consumer trust in our business. The
perception of financial weakness could create doubt regarding our ability to honor the commitments we have made to our
policyholders. Maintaining our stature as a responsible corporate citizen, which helps support the strength of our unique
brand, is critical to our reputation and the failure or perceived failure to do so could adversely affect us.
Changes in our discount rate, expected rate of return, life expectancy, health care cost and expected
compensation increase assumptions for our pension and other postretirement benefit plans may result in
increased expenses and reduce our profitability.
We determine our pension and other postretirement benefit plan costs based on assumed discount rates, expected
rates of return on plan assets, life expectancy of plan participants and expected increases in compensation levels and
trends in health care costs. Changes in these assumptions, including from the impact of a sustained low interest rate
environment, may result in increased expenses and reduce our profitability.
We face risks related to litigation.
We are a defendant in various lawsuits considered to be in the normal course of business. Members of our senior
legal and financial management teams review litigation on a quarterly and annual basis. The final results of any litigation
cannot be predicted with certainty. Although some of this litigation is pending in states where large punitive damages,
bearing little relation to the actual damages sustained by plaintiffs, have been awarded in recent years, we believe the
outcome of pending litigation will not have a material adverse effect on our financial position, results of operations, or cash
flows. However, litigation could adversely affect us because of the costs of defending these cases, costs of settlement or
judgments against us or because of changes in our operations that could result from litigation.
We also face other risks that could adversely affect our business, results of operations or financial condition,
which include:
•
any requirement to restate financial results in the event of inappropriate application of accounting principles
• failure to appropriately maintain controls over models used to generate significant inputs to the Company’s financial
statements
• a significant failure of internal controls over financial reporting
• failure of our prevention and control systems related to employee compliance with internal policies and regulatory
requirements
• failure of corporate governance policies and procedures
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ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
In the United States, Aflac owns land and buildings that comprise two primary campuses located in Columbus,
Georgia. These campuses include buildings that serve as our worldwide headquarters and house administrative support
and information technology functions for our U.S. operations. Aflac leases office space in Columbia, South Carolina, which
houses our CAIC subsidiary. Aflac leases office space in New York that houses our Global Investment division. Aflac
leases administrative office space in Georgia, South Carolina, New York, Nebraska, and in 39 additional states throughout
the United States, as well as Washington, D.C. and Puerto Rico.
In Tokyo, Japan, Aflac has three primary campuses. The first campus includes a building, owned by Aflac, for the
customer call center, the claims department, information technology departments, and training facility. It also includes a
leased property, which houses our policy administration and customer service departments. The second campus
comprises leased space, which serves as Aflac Japan's headquarters and houses administrative and investment support