106 / 108
In Millions
Per Diluted Share
2016
2015
2016
2015
Net earnings
$ 2,659
$ 2,533
$ 6.42
$ 5.85
Items impacting net earnings:
Realized investment (gains) losses:
Securities transactions and impairments
(132)
(150)
(.32)
(.35)
Impact of derivative and hedging activities:
Hedge costs related to foreign currency investments
(1)
186
72
.45
.17
Other derivative and hedging activities
(1), (2)
154
23
.37
.05
Other and non-recurring (income) loss
28
266
(3)
.07
.61
Income tax (benefit) expense on items excluded from operating earnings
(1)
(83)
(74)
(.20)
(.17)
Operating earnings
2,812
2,670
6.79
6.16
Current period foreign currency impact
(4)
(141)
N/A
.
(.34)
N/A
Operating earnings excluding current period foreign currency impact
(5)
$ 2,671
$ 2,670
$ 6.45
$ 6.16
(1) Prior year amounts have been reclassified to reflect the change in methodology of calculating the hedge costs related to foreign currency investments.
(2) Excludes a gain of $85 in both 2016 and 2015 related to the interest rate component of the change in fair value of foreign currency swaps on notes payable
which is classified as an operating gain when analyzing segment operations.
(3) Includes a loss of $20 in 2015 related to the change in value of yen repatriation received in advance of settlement of certain foreign currency derivatives.
This loss was offset by derivative gains included in other derivative and hedging activities.
(4) Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.
(5) Amounts excluding current period foreign currency impact are computed using the average yen/dollar exchange rate for the comparable prior-year period,
which eliminates dollar-based fluctuations driven solely from currency rate changes.
The following table is a reconciliation of items impacting operating earnings, net earnings, operating earnings per
diluted share, and net earnings per diluted share to the most directly comparable U.S. GAAP measures for the
year ended December 31, 2016.
RECONCILIATION OF NET EARNINGS TO OPERATING EARNINGS
Appendix C
AFLAC INCORPORATED
2017 PROXY STATEMENT
100