AFLAC — Ask About it at Work

       2001 was full of challenges for most companies. That was also true for us. But in the end, AFLAC had another strong year. AFLAC Japan emerged from a deregulated market as the undisputed leader of "third sector" insurance products. AFLAC U.S. again produced record sales results. And for the 12th consecutive year, we achieved our operating earnings per share target. Like previous years, our success resulted from addressing consumers' needs for affordable insurance coverage that can be conveniently purchased at the worksite.

       Our policies provide consumers in the United States and Japan with valuable protection and peace of mind. As health care costs have escalated, so has the demand for AFLAC's products. To meet that need, we have continued to develop new insurance products and to enhance existing policies. At the same time, we have expanded our distribution system of agencies and sales associates. We have also aggressively promoted the AFLAC brand through effective advertising. Today, AFLAC provides coverage to workers at more than 290,000 payroll accounts in Japan and more than 200,000 accounts in the United States. And with the need for AFLAC's products on the rise, we know that more people will be asking about us at work.

2001 — Producing Strong Results

       We faced continued economic weakness in Japan last year and the deregulation of that country's vast insurance market. But in that challenging market, we actually performed quite well. Although AFLAC Japan's sales did not meet our expectations, the persistency of our business was strong and stable, and our financial performance again met our targets. The challenge for AFLAC U.S. was to extend its tremendous sales momentum in the weakening U.S. economy. We not only extended that momentum, our sales growth actually accelerated, and we again produced record financial results. Due to the resilience of AFLAC Japan and the rapid growth of AFLAC U.S., 2001 was another strong year for AFLAC Incorporated.

       Below are some highlights from last year.

• Excluding the effect of foreign currency translation, operating earnings per share increased 17.5% on a diluted basis, in line with our target of 15% to 17% growth.
  
  
• Operating return on average shareholders' equity was 21.3% for the year.
  
  
• We purchased 12.2 million shares of our stock during the year.
  
  
• Our board of directors increased the quarterly cash dividend by 16.3% in 2001, marking the 19th consecutive year we have increased the dividend.