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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1999
AFLAC INCORPORATED 401(k) SAVINGS
AND PROFIT SHARING PLAN
1932 Wynnton Road
Columbus, Georgia 31999
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
AFLAC INCORPORATED 401(k) SAVINGS AND
PROFIT SHARING PLAN
Date: June 21, 2000 By: /s/ Peter T. Adams, CPA
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Peter T. Adams, CPA
Vice President,
Human Resources - Support
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AFLAC INCORPORATED 401(k) SAVINGS AND PROFIT SHARING PLAN
Table of Contents
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Page
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Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for
Plan Benefits 3
Notes to Financial Statements 4-7
Schedule of Assets Held for Investment Purposes 8
Exhibit 23 - Independent Auditors' Consent 9
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INDEPENDENT AUDITORS' REPORT
The Administrative Committee
AFLAC Incorporated 401(k) Savings
and Profit Sharing Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the AFLAC Incorporated 401(k) Savings and Profit Sharing Plan (the
Plan) as of December 31, 1999 and 1998, and the related statements of changes
in net assets available for plan benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the AFLAC
Incorporated 401(k) Savings and Profit Sharing Plan at December 31, 1999 and
1998, and the changes in net assets available for plan benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements of the AFLAC Incorporated 401(k) Savings and Profit
Sharing Plan taken as a whole. The supplementary information included in
Schedule 1 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's
management. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
June 2, 2000
Atlanta, GA
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AFLAC INCORPORATED 401(k) SAVINGS AND PROFIT SHARING PLAN
Statements of Net Assets Available for Plan Benefits
December 31,
1999 1998
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Assets:
Investments (Note 5) $ 62,249,962 $ 52,118,046
Cash 832,824 591,344
Receivables:
Employer contributions - 126,314
Accrued interest and dividends - 14,269
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Total assets 63,082,786 52,849,973
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Liabilities:
Excess employee contributions payable 20,258 4,627
Other 221,831 80,152
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Total liabilities 242,089 84,779
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Net assets available for
plan benefits $ 62,840,697 $ 52,765,194
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See accompanying Notes to Financial Statements.
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AFLAC INCORPORATED 401(k) SAVINGS AND PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31,
1999 1998
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Contributions:
Participant withholdings $ 4,494,860 $ 3,879,310
Participant transfers
from other plans 636,852 217,499
Employer matching 1,860,937 2,051,943
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Total 6,992,649 6,148,752
Interest and dividend income 2,012,276 1,530,165
Net appreciation in fair value
of investments 4,055,148 11,881,140
Distributions to participants (2,961,928) (2,169,422)
Forfeitures (22,642) (70,676)
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Increase in net assets 10,075,503 17,319,959
Net assets available
for plan benefits:
Beginning of year 52,765,194 35,445,235
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End of year $ 62,840,697 $ 52,765,194
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See accompanying Notes to Financial Statements.
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AFLAC INCORPORATED 401(k) SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) DESCRIPTION OF THE PLAN
The AFLAC Incorporated 401(k) Savings and Profit Sharing Plan (the Plan)
was established for the benefit of the employees of AFLAC Incorporated and
related companies, American Family Life Assurance Company of Columbus
(excluding Japan Branch employees), American Family Life Assurance Company of
New York, AFLAC International, Inc., and Communicorp, Inc.
The following description provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) GENERAL.
The Plan is subject to certain provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Eligible employees may voluntarily participate in the Plan
on the first day of the month which coincides with or next
follows the completion of thirty days of employment.
The Plan is administered by a plan administrator appointed by
the Company's Board of Directors. All Plan expenses are paid
by the Company.
(b) CONTRIBUTIONS.
Contributions to the Plan are made by both participants and the
Company. For the years 1999 and 1998, participants could
contribute through payroll deductions from 1% to 22% of their
aggregate compensation, subject to certain limitations. The first
1% to 6% of participants' compensation contributed may be subject to
a percentage matching contribution by the Company. For the years
ended December 31, 1999 and 1998, the Company's matching
contribution was 50% of the portion of the participants'
contributions, which were not in excess of 6% of the participants'
compensation.
(c) PARTICIPANT ACCOUNTS.
An account is maintained for each participant and is credited
with participant contributions and investment earnings/losses
thereon. Contributions may be invested in one or more of the
investment funds available under the Plan at the direction of
the participant. A separate account is maintained with respect
to each participant's interest in the Company's matching
contributions. Amounts in this account are apportioned and
invested in the same manner as the participant's account.
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(d) VESTING.
Participants are 100% vested in their contributions plus actual
investment earnings/losses thereon.
Participants become vested in the Company's contribution
according to the following schedule.
Years of Service Vested Percentage
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Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
A participant's interest in the Company's contributions is also
vested upon termination either because of death or disability or
after attaining his/her early retirement date or normal
retirement age. Participants forfeit the portion of their
interest which is not vested upon termination of employment.
These forfeitures are available to reduce the Company's future
matching contribution.
(e) DISTRIBUTIONS.
Participants may receive a distribution equal to the vested value
of their account upon death, disability, retirement, or
termination of either the participant's employment or the Plan.
Distributions may only be made in the form of a lump-sum cash
payment and/or AFLAC Incorporated common stock.
The Plan permits in-service withdrawals for a participant who
is 100% vested in the Company's contribution and has attained
age 60.
(f) LOANS
Participants are allowed to borrow from their accounts. The
minimum amount of any loan is $1,000. The maximum amount of any
loan is such that when the amount of the loan is added to the
outstanding balance of all other loans made to the participant
from the Plan (and any other plans maintained by the employer or
any related companies) the total does not exceed the lesser of:
a. 50% of the participant's vested accrued benefit (as
defined in the Plan); or
b. $50,000, reduced by the amount, if any, of the highest
balance of all outstanding loans to the participant
during the one-year period ending on the day prior to
the day on which the loan is made.
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(g) AGREEMENTS WITH TRUSTEE.
The assets of the Plan are held in a trust maintained by Charles
Schwab Trust Company.
(2) SUMMARY OF ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION.
The accompanying statements of net assets and changes in net
assets have been prepared on the accrual basis of accounting.
(b) INVESTMENTS.
Investments are stated at fair value based upon quotations
obtained from national security exchanges or the value as
determined by the managers of the money market and mutual funds.
Securities transactions are accounted for on the trade date (the
date the order to buy or sell is executed). Realized gains and
losses on the sale of investments are calculated based on the
difference between selling price and cost on an average cost
basis.
(3) FEDERAL INCOME TAXES
The Internal Revenue Service has determined and informed the Company by
letter dated August 7, 1997, that the Plan and related trust are in accordance
with applicable sections of the Internal Revenue Code.
Participants in the Plan are not subject to Federal income taxes on their
contributions, on amounts contributed by the employer, or on earnings or
appreciation of investments held by the Plan until withdrawn by the
participant or distributed to the participant's named beneficiary in the event
of death.
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan at any time subject to the provisions of ERISA. In
the event of Plan termination, participants would become 100% vested in their
accounts.
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(5) INVESTMENT FUNDS
The following table presents the fair value of individual investments
which exceed 5% of the Plan's net assets:
1999 1998
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Mutual Funds:
Davis New York Venture Fund $ 5,984,681 $ 4,770,025
Dodge & Cox Balanced Fund 4,348,347 3,520,134
Dodge & Cox Stock Fund 8,083,217 6,662,405
Stein Roe Capital Opportunities Fund - 3,015,186
Alliance Premier Growth Fund 3,516,749 -
AFLAC Incorporated common stock 33,671,538 29,150,111
During 1999 and 1998, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
1999 1998
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Mutual Funds $ 1,921,751 $ (6,367)
Common Stock 2,133,397 11,887,507
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Total Investments $ 4,055,148 $11,881,140
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(6) NEW ACCOUNTING CHANGE ADOPTED
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters (SOP 99-3).
SOP 99-3 simplifies the disclosure for certain investments and is effective
for plan years ending after December 15, 1999. The Plan adopted SOP 99-3
during the Plan year ending December 31, 1999. Accordingly, information
previously required to be disclosed about participant-directed fund investment
programs is not presented in the Plan's 1999 financial statements. The Plan's
1998 financial statements have been reclassified to conform with the current
year's presentation.
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Schedule 1
AFLAC INCORPORATED 401(k) SAVINGS AND PROFIT SHARING PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
Description Current Value
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Money Market Funds
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Schwab Institutional
Advantage Money Fund* $ 2,369,001
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Mutual Funds
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Columbia Fixed Income
Securities Fund 642,197
Davis New York Venture Fund 5,984,681
Dodge & Cox Balanced Fund 4,348,347
Dodge & Cox Stock Fund 8,083,217
Schwab S&P 500* 351,803
Alliance Premier Growth Fund 3,516,749
Templeton Foreign Fund 906,604
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Total Mutual Funds 23,833,598
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AFLAC Incorporated common stock* 33,671,538
Participant notes receivable 2,375,825
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Total Investments $62,249,962
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* Indicates party-in-interest per Erisa Section 406.
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