Welcome to the Aflac’s Third Quarter Earnings Conference Call. Your lines have been placed on listen-only until the question-and-answer session. Please be advised today’s conference is being recorded. I would now like to turn the call over to Ms. Robin Wilkey, Senior Vice President of Aflac Investor and Rating Agency Relations. Ms. Wilkey, you may begin.

Thank you and good morning. Welcome to our third quarter call. Joining us this morning is Dan Amos, Chairman and CEO; Kriss Cloninger, President and CFO; Ken Janke, Executive Vice President and Deputy CFO of Aflac Incorporated, Teresa White, President of Aflac US, Eric Kirsch, Executive Vice President and Global Chief Investment Officer. Also joining us today from Tokyo are Paul Amos, President of Aflac and Tohru Tonoike, President and COO of Aflac, Japan. And before we start, let me remind you that some of the statements in this teleconference are forward-looking within the meaning of Federal Securities laws. Although, we believe these statements are reasonable, we can give no assurance that they will prove to be accurate, because they are prospective in nature. Actual results could differ materially from those that we discussed today. We encourage you to look at our quarterly release for some of the various risk factors that can materially impact our results. Now, I’ll turn the program over to Dan, who will begin this morning with some brief comments about the quarter and our operations in Japan and in US and then Ken will provide further details about our activities in the quarter and our EPS guidance. Dan?

Thank you Robin. Good morning and thank you for joining us. Let me start by saying, I am very pleased with Aflac’s financial performance for the third quarter and for the first nine months of the year. I am even more pleased that our financial strength is allowing us to deploy more capital to our shareholders. We’ve made it in many cases exceeded our financial targets for the third quarter. Notably with nine months under the belt we are well positioned to increase operating earnings per share about 3% to 4% for the year before the effect of currency. At the same time, we continue to anticipate operating return on equity will be strong and exceed 20% excluding currency. Now I’d like to comment on our operations starting with Aflac Japan, our largest earnings contributor. Although third sector sales were down in the quarter. We – like the initial results we’ve seen so far in October which are up 20%. As we’ve previously communicated, we anticipated third sector sales for the full year will come in at the low level of the expectations of 2% to 7% increase. While fourth quarter comparisons will be challenging, we continue to enhance our distribution opportunities and offer in Japan which I believe will benefit our sales. On the distribution side, I am very happy with the expansion of Aflac Japan, allies with Japan Post. The strategic partnership brings together Japan Post, the largest nationwide distribution network in Japan with Aflac Japan, the industry leader in cancer insurance. As many of you heard at the Analyst Meeting in Tokyo last month, Taizo Nishimura, President and CEO of Japan Post Holding announced expansion of the postal outlets selling our cancer products effective October the 1st, we will move from 3000 to 10,000 postal outlets. We…

Thank you, Dan and good morning everybody. I’d like to give you a little more background into our forecast and the assumptions we have used to set our 2015 earnings objective. But first, let me begin with just a brief recap of 2014 and how that relates to the initial guidance we set for this year. You may recall that a year ago, we established 2014 objective of increasing operating earnings per diluted share by 2% to 5% on a currency neutral basis. At that time, we identified several headwinds that influence the establishment of our earnings guidance. Frankly based on those headwinds and other forecasting assumptions which tend to be conservative, we would have not been surprised if this year’s full year earnings would have been toward the lower end of the 2% to 5% range. However, as the year progressed some favorable trends emerged, our benefit ratios in Japan and the United States have been better than expected and in addition our consolidated operating tax rate has been lower than we initially projected. As a result of those favorable developments, we narrowed our earnings objective in July based on the financial performance for the first half of the year, we no longer felt the low end of the range was a reasonable expectation. However, we anticipated that benefit ratios would be higher in the second half of this year for both the U.S. and in Japan and we also expected expenses to be higher for the last six months of the year particularly in the fourth quarter. As a result we reset the full year earnings objective to 3% to 4% in July. Although operating earnings per diluted share excluding currency have increased 5.4% for the first nine months, we continue to believe the 3% to 4% range…

Thank you Ken. Thank you Dan. To be fair to everybody please remember to limit your questions to one initial and one follow up that relates to your initial question. So now we’ll be glad to start taking your questions.

Thank you. At this time, we will begin the question-and-answer session. (Operator Instructions) Our first question is coming from Mr. Steven Schwartz from Raymond James & Associates. Your question is up at this time. Steven Schwartz – Raymond James & Associates: Hey, good morning everybody. Ken, could you talk about the reinsurance agreement that you announced in this quarter, I think it was 55 billion yen and obviously it’s smaller than last one you did, but how else does it differ from that and from the initial deal?

Steven, it’s actually very similar to the initial transaction that we executed in September of 13th, in fact it’s really an extension of that same agreement. You’ll recall that what we had done is exceeded the premiums and the risk related to a portion of an old block of medical business, a close block that about a third of the hospitalization benefit and with this agreement we simply took the percentage up to 50%. So we added another 17% or so to that on the same block of business. We’re currently in the process as I mentioned is a multi-year capital management plan, reinsurance will clearly be a part of that plan and I think it’s quite possibly. You’ll see another transaction in 2015 perhaps more than one and in looking at that we would be exploring other blocks of business for possible transactions. Steven Schwartz – Raymond James & Associates: Ken, just a follow-up on that then. Is this what the same reinsurers or there is still no statutory benefit?

That’s correct. But as when we go through the RFP process we are taking getting quotes from multiple parties and we’ll continue to do so in the future. Steven Schwartz – Raymond James & Associates: Okay, great. Thanks.

Let me just comment that the statutory treatment is something that we have under consideration and it’s true that in the first agreement we did not take any statutory reserve credit but we’re examining the conditions that would be required for us to qualify for such a reserve credit in the future. Steven Schwartz – Raymond James & Associates: Okay, thanks.

Our next question comes from Nigel Daily. Your question is up at this time. Nigel Daily – Morgan Stanley: Great, thanks and good morning. Just couple more in the reinsurance side. Given there is more of a capital rise and rate reductions are into transactions. Any push back that you’re getting from the FSA on those tough transactions going forward? And also just a commentary on increasing the frequency of the capital transfers. Just hoping to get some additional color there as well as to how about the plans are?

First, with respect to communications with the FSA regarding reinsurance. We made sure that they were fully briefed on the transaction that we executed in ‘13 and the same was true with this transaction as well that’s a fairly straight forward simple transaction and we make sure quite frankly even if it’s not only the FSA that’s briefed but also our lead regulator in Nebraska, the Director of Insurance there as well as the regulator in South Carolina for instance as well. With respect to the capital transferred Nigel remind me what the frequency? Nigel Daily – Morgan Stanley: Just regard to increasing the frequency, what are they trying to say that you kind of moving towards more of a quarterly repatriation plan or kind of what’s planned there?

Well, the starting point is to simply get cash more frequently on a more consistent basis, quarterly would be ideal but working through the final governance for that right now to determine the best way to do it. Historically, what we have done is we have transferred a portion of the profits that were earned in a given fiscal year for Japan and we are investigating the options for moving not only our earnings on an annual basis but also moving a portion of retained earnings as well. But that would be entirely dependent as we’ve said before on our view of our solvency margin ratio and our ability to protect our policyholders and also to maintain that ratio in a manner that provides an adequate buffer for risks that affect the ratio above our minimum requirement of a 500% to 600% range. But we are optimistic, we do believe that we can move forward with more frequent transfers, that will give us a much better ability to smooth out our cash flows better manage our cash at both Aflac and Aflac, Inc. when it comes to deploying capital. Nigel Daily – Morgan Stanley: Great, thanks again.

Nigel, Kriss Cloninger again. I’m sorry to interrupt but I just want to make it clear that the reinsurance we’ve done between Aflac Japan and an outside reinsurer is clearly a risk transfer arrangement even though some of the motivation is capital management is not a financing agreement. It is a risk transfer agreement and there is no question about that. So we don’t anticipate any push back from that perspective from any of our regulators. Nigel Daily – Morgan Stanley: Great, got it. Thanks.

Our next question comes from Yaron Kinar. Your question is up at this time. Yaron Kinar – Deutsche Bank: Good morning everybody and thanks for taking my question. My first question for Ken, I appreciate the color on the year-over-year kind of changes and headwinds with regards to the EPS growth target. But if I strip out the share repurchase impact I think if I look at the lower end of the target range for 2015. Earnings are still would be in negative territory and even when I account for higher benefit ratio in Japan I guess I would have expected maybe a little bit more of abatement of previous through prior headwinds to maybe see a little more earnings growth on dollar basis and just hoping to get a little more color and clarity on that.

Well again what I try to get through in kind of that segment commentary related to the ratio, the issue that we have frankly as we’ve got to do a better job at revenue growth. So even you see relatively low rates of revenue growth both in Japan and the United States, the revenue growth is muted a little bit further because of the reinsurance transactions and exceeded premium. But when you look then within the operating ratios that are going to influence our profitability. In Japan, the business mix is pushing the ratio up a bit at Aflac Japan because first sector is a larger portion. The expense ratio again should be a bit lower than next year than it is this year. But it still does pressure earnings. In the United States, we’ve gone since 2011 we’ve had an improved benefit ratio and it’s improved much better than we ever anticipated it would. Actually when we entered into 2014 we didn’t think the improvement would continue and we assume the much higher benefit ratio than we’ve actually experienced. So we still expect it to return to some type of normalcy at some point and again we believe that that could begin to happen in 2015. But there is additional pressure in the U.S. segment in 2015 because of the added expense related to our going from the commission based SSC position to the salary based Market Director position. So when you put all that together and again these are, we deal with fairly conservative assumptions. We rather surprise on the upside and the downside but we would see both segments this year producing slight decline – in 2015, potentially producing slight declines in operating earnings versus where we expect them to fall in 2014. The good news is that we are able because of our capital strength to more than compensate that with very strong capital deployment plans for the latter part of this year and next year as well. And again hopefully as we saw in 2014 we will see some things emerge favorably vis-à-vis our assumptions. And it’ll also depend on what we are in 2014. Yaron Kinar – Deutsche Bank: Okay. I appreciate the color. And then my one follow-up is on third sector sales actually for the fourth quarter. Seems like if I take kind of the run rate from medical over the last three quarter and I take the reiterated guidance for the full year. I get to roughly doubling of cancer sales. If I modeling this correctly and wanted to just get a sense of if that is roughly how we should be thinking about it and if how much of this growth comes from the Japan Post partnership as opposed to the other cancer products that you launched.

Tohru or Paul.

Tohru you want to start and then I’ll comment.

Yes let me start. Yes you’re right. In order to make the 2% growth for the entire year, we will need to basically double the service of the cancer in the fourth quarter. And that’s what we are feeling that we will be able to make it. So based on that numbers we feel pretty good about the prospects we’re making at least 2% of the entire sales for the full year.

Let me just follow up and say we knew third quarter was going to be extremely difficult. We had the August 19, 2013 launch of our ever planned. We had also pre-announced our October 1st launch this year of our new cancer plan, so we faced headwinds in the third quarter for both cancer and medical sales and we are confident that going into the fourth quarter especially given what Dan has already announced that we are up 20% so far this month. We feel very strongly that we’ll finish within the range of 2% to 7%. Yaron Kinar – Deutsche Bank: And how much of that growth in cancer products do you anticipate coming from Japan Post?

We cannot disclose the exact number the sales from the Japan Post, but I can tell you, the largest part of the growth of the cancer comes from the Japan Post. Yaron Kinar – Deutsche Bank: Thank you.

Well I can also say that we are very pleased with what’s going on with Japan Post and excited about the future growth of it.

Thank you. Our next question is coming from [Seth Wise]. Your question is up at this time.

One question. If I could – if we could just get us a little bit of granularity in terms of some of the expenses next year, curious if you could give any commentary on the cost of the reinsurance transaction or how much that effects gross earnings next year. And also I believe on the last quarter, you mentioned that the cost of the US sales initiatives would be $0.02 in the fourth quarter and then you’d give updated guidance on what the impact would be in 2015 perhaps if you could give us a little bit commentary around that that would be helpful as well.

Yeah. First of all, I would say that we really didn’t, we didn’t isolate the expense of the reinsurance of the second tranche of reinsurance for 2015 because we’re currently working on a retro session agreement again it would effectively lower that cost, but what I would say is that was incorporated the cost before retro session was incorporated into the 2% to 7% range we established for next year. So to the extent that we’re able to successfully execute a retro session agreement it will help a bit on the margin of lowering the expense and enhancing earnings in 2015. And I would just add that the cost of the second tranche is proportionate to the cost of the first tranche. The economics are essentially identical and to the extent that we’ve seen the cost will later be proportionate or potentially more favorable than the direct cost.

Yeah and the second question related to the cost of the market director change in particular, it really hasn’t changed its – it may be modestly better than what we had originally anticipated but the estimates that we had communicated in July are really still on. What I will say and I am really proud of the team in the United States because excluding that our expenses were flat year-over-year ‘15 compared with ‘14. And you’ll recall my comments that we wanted to try and find a way to mitigate as much as we could those expenses. And I still think that that’s possible that we could see improved expenses as next year develops but we really haven’t seen any material impact or any material change.

Okay, perhaps I am misremembering and I had thought the commentary was $0.02 for the fourth quarter and then maybe updated guidance this quarter. It’s fair to say then that net-net no headwind from the US sales initiatives.

Maybe a little bit more maybe closer to $0.03 a quarter in ‘15 and it’s not terribly material and it will also depend on how well we do on a sale side because remember that we’ve added fixed costs and we’re taking off variable cost and the amount of variable cost that are removed from the income statement will depend on sales through lower commission expense. The cost in year two will – the offset will be significantly higher in the second 12 months than it would be in the first when it comes to an offset to the increase to fix expense.

Okay thanks and if I could, I’m sorry.

It’s really materially changed.

If I could just sneak one more and just on margins and I understand 2% to 7% gross margins in the context of normalizing margins in both the US and Japan. Is it fair to categorize ‘15 as a normal margin year or it will mix shift continue to cause margins to slightly deteriorate going forward.

No I think again if you look at the expectations that we laid out in May and then for Japan we reiterated in September. The margins should be very stable year-over-year and again really consistent with what we had communicated at prior meetings on our expectations for a three year period.

Okay, thanks for the commentary.

Our next question comes from Mr. Jimmy Bullar. Your next question is up at this time. Jimmy Bullar – JPMorgan: Hi good morning and most of my questions are answered but just on US recruiting. I would have thought that trends would have gotten worse given the changes that you’re making but the recruiting was up and the agent count declined a little bit less than it declined in previous quarters. So just wondering if you could talk a little bit more about how the restructuring is going on and do you expect further improvement from here or would the results get worse before they begin to improve.

Well I’m very pleased with the results so far. I thought that would be more disruption as I said earlier because people just don’t like change, but I have to complement our deal management for understanding that we’ve got to pay for performance and accept in that as being a way of life and moving on with it. Same that what I see is I see the fourth quarter is being easier comps than the first quarter and I see the second quarter of next year being the easiest comp. So I would anticipate us having being up, I would like to be up 5% for the fourth quarter that’s my goal but I wanted to absolutely be up and that’s my goal. And then I think probably the first quarter will be maybe up flat to up 5 and then I expect at the end of the second quarter to be up. So I cannot know at least having 5% growth. I’d like to do better than that if we have a new director of sales who came from being in charge of North and South Dakota which is our highest penetration in the country and he is concentrating on accounts of 100 or less which is what we’ve said we’ve got to do. He has also been working on the expansion of our district and regional level which ultimately will increase recruiting. And I think that’s what’s taking place right now. There could be a little disruption that we’re still unaware of as people are adjusting because it went into effect October 1, but I am in contact with Teresa daily as well as with sales daily about keeping up with how this is going. And this is a major, major change, this is in the last, my 30 years or 25 years as a CEO, this is structurally probably the biggest change we’ve made to the sales force. So I don’t take it lightly that there could be a few more bumps. But I am not seeing them as of today I think it’s all coming together nicely. Jimmy Bullar – JPMorgan: Thank you.

Our next question is coming from Mr. John Nadel. Mr. Nadel your question is up at this time. John Nadel – Sterne Agee: Thank you and good morning everybody. Couple of real quick ones, does maybe for Ken does the buyback assumption for 2015 that $1.3 billion is that assume any benefits from incremental reinsurance transactions and if so how much.

Not in not transactions in ‘15. If that what you’re referring to. When you look at the transaction that we announced that took effect on October 1st that gave us the opportunity to reevaluate the SMR and then reevaluate the capital we feel comfortable deploying for both ‘14 and ‘15. So I would say it’s good starting point. At this point it does not contemplate any additional transactions per se that might occur in ‘15. John Nadel – Sterne Agee: Appreciate that. And then for 2015 you haven’t had any real discussion about what you guys are assuming in terms of new money yields in Japan and in the US. I mean obviously here in the third quarter and I guess pretty, most of 2014 maybe I’m wrong but the investments in Japan have been largely JGBs in this quarter JGBs in US treasuries. I mean what you are thinking about in terms of new money yields for 2015. Can we see some incremental investment and maybe credit related assets.

Hi this is Eric. Couple of comments, Good morning. First as you look year-to-date of our invested cash flows and I mentioned this earlier in the year. Early in the year we did all the way JGBs because of the nature of our cash flow timing, but as you look at overall cash flows now we’ve put about 48% or so of our Japan cash flows and to US dollar assets and of that allocation about 60% 65% were in US credit and the rest in treasury. So the credit investments, we anticipate, it did come online particularly in the second half of the year or second and third quarter. So they were they are but recollects I have said in the investment grade credit space, credits spreads at all-time tight and we did a fair amount of purchasing of credit back in ‘12 and ‘13. So we end up this year on purpose. We’re totally fine with the fundamentals of investment credit, we think those are strong as they’ve ever been but the technical spreads being so tight make them pretty expensive to buy. Having said that as we’re planning for ‘15 first it’s important for me to note let’s help the Fed raises rates then we have higher yields but we are consumer of the macro environment and that’s going to be very challenging. So we assume in our plan, we don’t assume necessarily that rates will go up, we try to be conservative and come up with ranges. But what we certainly want to look at going into next year is a good mixture obviously we’ll have some traditional JGB investments that help with interest rate matching and interest rate risk and duration matching. But to expand not only in investment grade credit but other places as…

John this is Kriss. I will say that the surplus strain effects the regulatory reporting FSA in US stat more heavily than it does US GAAP they were primarily focused on today that just because we’re allowed to differ a significant amount of the acquisition expenses. Actually the strain John on the third sector is almost the significant on the third sector it is as it is on the first sector. One reason is that the cost per policy as opposed to percent of premium are somewhat higher are on the lower premium products and the first sector products have added 10 times of premium that the third sectors products have. So there hasn’t been a lot of relief so to speak on that in percentage terms. Now in absolute terms clearly as the first sector premiums declined the surplus strain in absolute amounts has declined but cannot on the relative basis. I want to go back to previous comment that was made and somebody mentioned a 15% margin is kind of normalized, that’s a pretty low number in my opinion for any kind of normal margin. Once we re-price the first sector products effective April 1, 2013 the margins increased from say unexpected margin over the lifetime of the product given the net investment yields we realized at that time the margins increased from about 10% closer to 20% on the first sector products. Now we weren’t able to sell as much product because they weren’t as competitive versus other financial products into marketplace and that affected us as well as other life companies compared to other financial products issued by other organizations. So while our margins went up or sales went down. And our overall margin is affected by the mix of business and I pointed that out in the Feb guidance materials I sort of said okay here it is for life insurance, here it is for third sector business. You got to look at the mix that you anticipate or what we actually achieve in order to get to kind of a so called normalized margin. But I did want to make the point that the move from about 20% plus profit margin will realized on Japan right now through ‘15 on an aggregate basis would take a heck of a move. And I don’t anticipate margins will decline near that fast.

Really and looking at our plan in formulating guidance to follow up on that we’re looking to maintain roughly at 20% margin both this year and next year, a little bit higher this year perhaps 20 or just a tad lower next year but again, consistent with what we’d expressed and basically very similar to what we’ve seen. John Nadel – Sterne Agee: Thank you very much for the responses.

Okay.

Our next question is coming from Joanne Smith. Ms. Smith your question is up at this time. Joanne Smith – Scotia Capital: Yes just wanted most of my questions have been asked and answered but just as a follow up to John’s question on the first sector product. What is the average duration of those products because if I recall correctly they’ve had a 10 year premium period or that there was a 510 and 7 I believe? But what’s the average duration I’m just wondering when we can expect those to start running off if it’s going to be anytime in the lifetime. The second question is just with respect to the US and that is on now that were about a year into ACA are you seeing things in the market settled down a bit thanks.

Okay Joanne Kriss here. I’ll take a shot at the first part and then let somebody else comment on ACA. But let me say, I hope we all have long lifetimes and live to see some of the developments in these first sector products. I will point out that the duration as you referred to relates to the premium payment periods and that’s the period for which surrender charges are in effect and we expect very strong persistency during the premium period both because of the surrender charge and because of the fact that a lot of the first sector products we wrote in 2011, 2012 came with the advanced premium deposit arrangement or the people paid most of the premiums upfront. So we’re going to see strong persistency throughout the premium period on those first sector products. At the end of the premium periods, the surrender charge goes away but on the WAYS product the real optionality of the product kicks in not at the end of the premium period but at an age like 60 or 65 that the policyholders elect when they buy the coverage and that’s the point which they have the option to elect to continue the product as life insurance or the claim conversion, do a medical policy or to continue it as an annuity certain type payout or perhaps to convert to a care type product. We have some limited experience emerging on that but it’s not enough yet to be credible I will say that the tendency that I think we’ve seen so far is toward inertia where people allow a coverage to continue as life insurance which is the original form but they do have to make an election a couple of years prior to the optionality day and we do communicate with the policyholders regarding the option they have to elect changes to the form of their coverage. But we haven’t seen any adverse persistency developed at all so far Joanne. In that regards, so we anticipate that the duration of these first sector products will be pretty long. Joanne Smith – Scotia Capital: Okay, so we shouldn’t be expecting them to run off anytime soon?

You shouldn’t, now we’ve talked to you about the impact of the paid up premiums on revenue and we’ll be talking more about that throughout 2015 as we see some of the blocks that are significant start to hit the end of the premium period in 2016, but I will remind you that I’ve told you we recognized profit over the term of the contract, not over the term of the premium period and so what we’re going to see is a continuation of the amount of profit per policy but a significant increase in the profit is a percent of revenue because the revenue is essentially going to go away except for investment income. Joanne Smith – Scotia Capital: And would you say that would kick in some time around year ‘7 or ‘8?

‘16 or ‘17. Joanne Smith – Scotia Capital: Okay, that long. Alright, great thank you Kriss.

Okay, Joanne just to the follow up on that to John before one other things that influencing next year’s benefit ratio is I mentioned was mix towards first sector. The persistency of the first sector products has generally been quite a bit better than third sector even though the third sector is very, very high and it’s actually improved a little bit, year-over-year was the third sector has been modestly lower year-over-year. So that’s also influencing the mix of business in the expected benefit ratios. Joanne Smith – Scotia Capital: Okay, thanks and then just on the ACA.

This is Teresa. You asked about confusion in the market I think right now is the regulations are set. At least for the moment they are set. You still have employers who are having the compliance and then at the end of the year and then in 2015 you have employees that have to comply. So I would not say, I wouldn’t characterize the environment as one where there is no confusion. But I think smaller employers are opting to public exchanges and then it’s creating gaps from a product standpoint as well, as far as the affordable care act. Our opportunity is still a great opportunity from an Aflac perspective and so I think our strategic focus of the market and the less than 100 market to focus our field force there and then grow the broker side of the market. I think our strategy is a win-win strategy go forward. So I feel good about that. Joanne Smith – Scotia Capital: Okay, thank you.

Our next question is coming from Mr. Randy Binner. Your question is up at this time. Randy Binner – FBR Capital Markets: Great, thanks. I guess I’ll just speak up there with the last commentary on Obama care and it’s clearly Aflac has a big opportunity at least in my mind given the brand awareness to capitalize in the exchange environment and so when you all talk about US sales recovering. I feel like those two things aren’t linked. So is the exchange opportunity not something we should expect to help your sales in 2015 or is that part of the recovery in sales as you hope for in ‘15.

I think the exchange is of another tool that we utilized as part of our sales process. I don’t know if you recall earlier or last time we spoke we talked about the enrollment platforms and benefit admin platforms, many of those platforms are now being characterized as exchanges today. So we’ve always been engaged enrollments via the benefit enrollment platforms. Now we have specific strategies to-date to engage in being on specific exchanges with large brokerage houses and those are the activity that we are doing today that we think will help us in sales go forward in 2015.

And I’ll just say we’re not counting on this national health care plan to increase sales. I think there is the potential to do that but I don’t like to count on that. We do know that our enrollments when they take it through our exchange increases from 30% to about 42%. So we have much better enrollment when we do that, interestingly enough though those would be in the accounts of 100 or less and they are going to go and buy on the public exchange which can be routed through us. One other thing I was little worried about was is that our agent will make so much commission on major medical although it’s a small percentage, it’s a large premium but if you buy through the government exchange which comes through ours, it’s a very low commissioned. So that means for them to make money they still got to push our products and services. So I think that will be very beneficial to us and we’ll ultimately give a good return to the policyholders, fill the gaps for them and ultimately increase our sales. Randy Binner – FBR Capital Markets: Okay. Understood let me – just on Japan. Another kind of top down question on sales. Sensibly this new CEO of Japan Post there to turn things around and it seems like a spin-off/IPO process is still realistic. Do you have any update on whether not that’s going to happen? Proposed next year and if so should we think it as potentially be in a tailwind for sales there. Meaning that they would have a motivation to sell more product to get more fees to get their earnings numbers up.

I think anyway they can.... any company that it can ultimately increase profits before they go public is going to enhance the shareholder value but you have to understand how private Japan Post is, we don’t get any information in regard to that. Those are decisions that they make but we have a very close relationship with Taizo who is the President and what’s going on there but we’re very cautious in making any comments regarding their particular business. Other than to say what they have done with us and what is going on with slow at first it is now picked up and they are doing very well now and we are excited about 2015 and the future growth there because we think we help to avoid with the products and the services that they offer at Japan Post and this new product will help fill the gaps if they want. They’ll ultimately make it make consumers buy. Randy Binner – FBR Capital Markets: Alright, that’s perfect. Thanks.

Thank you. Our next question comes from Mr. [Eric Beth]. Mr. Beth, your question is open at this time.

Hi, thank you. Just hoping you could provide a little bit more detail on what’s driving the stronger than expected benefits ratio is year-to-date and why you think that those should normalize next year rather than experience potentially continuing.

In Japan we have seen even though there has been a mix shift we have seen just paid emerged at a lower rate than we had expected as we came into the year. So it’s really been driven by slightly lower paid claims than we had expected. We’ve seen a much larger change in the ratio for Aflac U.S. and again this is a trend that we’ve seen since 2011. Paid are increasing slightly. We have made some modifications to IB&R to reflect our program, our initiative of emphasizing the speed of which we take claims because that may stimulate claims to some degree but we’ve also seen in part because of lower volumes from new sales as well the sales at which relaxation has occurred even though overall persistence has been fairly stabled, we’re seeing a smaller increase in this case declines in the change in future policy benefits, so quite simply the additions to US reserves are growing at a slower rate than we had expected. In all in all that this year especially that’s what brought down the US benefit ratio but we do and we don’t expect this to hockey stick into shoot right back up to where it was in 2011 or 12 but we would not be surprised if it came back to a higher level than we’ve experienced in 14.

Got it. So I mean are you saying any differences in kind of consumer behavior in terms of either utilization of benefits or other turns.

Nothing particular but I think we have concluded that utilization and it’s not just with our products and at our company but utilization coming out of the very weak economy for the last few years has been lower than normal, people have not accessed the healthcare system as they did prior to the financial crisis and I think that’s the overall trend that’s really influenced our business in the US for the last few years.

Got it. Thank you.

Alright. We’ve reached the top of the hour, so we have time for one more quick question, please.

Thank you. Our final question will be coming from Mr. [Jake Gild]. Mr. Gild your question is up at this time.

Thank you. Could you give us your updated perspective on whether you expected Japan consumption tax increase to go through in 2015 and if you look at what the impact was on sales in 2014 if you have any views on that that would be helpful as well?

I’ll let perhaps (inaudible) whether they think that it will go through. The proposal is that it could increase from the current level of 8% to 10% in October of 2015 and for budgeting purposes and in our forecasting we have assumed that that will occur effective with the fourth quarter of ‘15. Paul and Tohru can you comment on would you think it will go through.

This is Tohru Tonoike and let me speak first and then Paul may chime in. That issues is now being heavily discussed in the diet and there is no decision made at this point in time and there is no way for us to know which is more likely well some of in favor of the tax increase and some are not, so at this point nobody knows what will be the end result in 2015. And even if just assuming if it happens we do not anticipate a big impact on ourselves, certainly not in the 2014 and not substantial impact on the 2015 either.

I just want to make it clear that it’s expected that Prime Minister Abe will make a final decision in December and we really won’t know anything till then, they’re going through the standard process here but as Tohru said we feel that this is not going to have a form of a major impact.

And based on the increase this year if you evaluate the trends, do you have a sense of how much the headwind on sales may have been with initial consumption tax increase?

We do not see any notable impact on our business coming from the tax, consumption tax increase last time.

That’s right. Thanks very much.

Right. Thank you for joining us this morning. If you want to follow up with any questions please call our office and we’ll be glad to do any follow-ups. Thanks very much. Bye-bye.

And this does conclude today’s conference. You may disconnect your audio lines at this time. Thank you.