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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 501 added, 196 removed, 2198 unchanged (24% of the section changed)

2 unchanged sentences

Consolidated Statements of Earnings

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions, except for share and per-share amounts - Unaudited) 2024 2023 2024 2023

Net earned premiums, principally supplemental health insurance (1)

$ 3,325 $ 3,573 $ 6,781 $ 7,262

Net investment income 1,095 999 2,095 1,942

24 unchanged sentences

Cash dividends per share $ .50 $ .42 $ 1.00 $ .84

(1) Includes a gain (loss) of $( 2 ) and $( 1 ) for the three-month periods and $( 5 ) and $( 1 ) for the six-month periods ended June 30, 2024 and 2023, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

See the accompanying Notes to the Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions - Unaudited) 2024 2023 2024 2023

19 unchanged sentences

Consolidated Balance Sheets

(In millions, except for share and per-share amounts) March 31,

(In millions, except for share and per-share amounts) June 30,

Investments and cash:

77 unchanged sentences

Balance at March 31, 2024 $ 136 $ 2,806 $ 49,872 $ ( 5,102 ) $ ( 24,175 ) $ 23,537

Net earnings 0 0 1,755 0 0 1,755

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 ( 425 ) 0 ( 425 )

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 ( 691 ) 0 ( 691 )

Unrealized gains (losses) on derivatives

during period, net of income taxes 0 0 0 4 0 4

Effect of changes in discount rate assumptions

during period, net of income taxes 0 0 0 2,920 0 2,920

Pension liability adjustment during period,

net of income taxes 0 0 0 2 0 2

Dividends to shareholders (1)

($ .50 per share)

0 0 ( 282 ) 0 0 ( 282 )

Exercise of stock options 0 2 0 0 0 2

Share-based compensation 0 12 0 0 0 12

Purchases of treasury stock 0 0 0 0 ( 810 ) ( 810 )

Treasury stock reissued 0 15 0 0 8 23

Balance at June 30, 2024 $ 136 $ 2,835 $ 51,345 $ ( 3,292 ) $ ( 24,977 ) $ 26,047

(1) Dividends to shareholders are recorded in the period in which they are declared.

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Statements of Shareholders’ Equity (continued)

(In millions, except for per share amounts - Unaudited) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders'

21 unchanged sentences

Balance at March 31, 2023 $ 135 $ 2,665 $ 45,555 $ ( 7,278 ) $ ( 21,293 ) $ 19,784

Net earnings 0 0 1,634 0 0 1,634

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 ( 631 ) 0 ( 631 )

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 689 0 689

Unrealized gains (losses) on derivatives

during period, net of income taxes 0 0 0 1 0 1

Effect of changes in discount rate assumptions

during period, net of income taxes 0 0 0 ( 165 ) 0 ( 165 )

Pension liability adjustment during period,

net of income taxes 0 0 0 46 0 46

Dividends to shareholders (1)

($ .42 per share)

0 0 ( 252 ) 0 0 ( 252 )

Exercise of stock options 0 5 0 0 0 5

Share-based compensation 1 17 0 0 0 18

Purchases of treasury stock 0 0 0 0 ( 708 ) ( 708 )

Treasury stock reissued 0 10 0 0 8 18

Balance at June 30, 2023 $ 136 $ 2,697 $ 46,937 $ ( 7,338 ) $ ( 21,993 ) $ 20,439

(1) Dividends to shareholders are recorded in the period in which they are declared.

2 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In millions - Unaudited) 2024 2023

14 unchanged sentences

Equity securities 550 244

Held-to-maturity fixed maturity securities 1 2

Commercial mortgage and other loans 952 728

11 unchanged sentences

Proceeds from borrowings 823 0

Principal payments under debt obligations ( 194 ) 0

Dividends paid to shareholders ( 550 ) ( 491 )

55 unchanged sentences

All material intercompany accounts and transactions have been eliminated.

In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the consolidated balance sheets as of June 30, 2024 and December 31, 2023, the consolidated statements of earnings and comprehensive income (loss) for the three- and six-month periods ended June 30, 2024 and 2023, the consolidated statements of shareholders' equity for the three-month periods ended March 31, 2024 and 2023 and June 30, 2024 and 2023, and the consolidated statements of cash flows for the six-month periods ended June 30, 2024 and 2023.

Results of operations for interim periods are not necessarily indicative of results for the entire year.

3 unchanged sentences

These reclassifications had no impact on net earnings or total shareholders' equity.

For the three-month period ended March 31, 2023, immaterial reclassifications were made to the consolidated statement of cash flows related to investments in limited partnerships and the impact of foreign currency on policy liabilities.

The impact of the reclassification related to investments in limited partnerships resulted in an increase to net cash flows provided by operating activities of $ 182 million with a corresponding decrease to net cash flows provided by investing activities.

There was no impact to net cash flows provided by operating activities as a result of the reclassification related

to the impact of foreign currency on policy liabilities between the increase in policy liabilities and other, net line items within operating activities.

For the six-month period ended June 30, 2023, an immaterial reclassification was made to the consolidated statement of cash flows related to investments in limited partnerships resulting in an increase to net cash flows provided by operating activities of $ 245 million with a corresponding decrease to net cash flows provided by investing activities.

New Accounting Pronouncements

29 unchanged sentences

GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company’s underlying business performance.

Aflac Japan's adjusted revenues accounted for 56 % and 61 % of the Company's total adjusted revenues in the three-month periods ended March 31, 2024 and 2023, respectively.

The percentage of the Company's total assets attributable to Aflac Japan was 79 % at March 31, 2024, compared with 80 % at December 31, 2023.

Aflac Japan's adjusted revenues as a percentage of the Company's total adjusted revenues were 56 % in the three- and six-month periods ended June 30, 2024 and 60 % in the three- and six-month periods ended June 30, 2023.

The percentage of the Company's total assets attributable to Aflac Japan was 77 % at June 30, 2024, compared with 80 % at December 31, 2023.

Information regarding operations by reportable segment and Corporate and other follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

Net earned premiums (1)

$ 1,715 $ 2,064 $ 3,531 $ 4,234

Adjusted net investment income 725 637 1,374 1,248

5 unchanged sentences

Total adjusted revenue Aflac U.S.

1,684 1,663 3,384 3,323

Corporate and other (2)

249 140 497 268

Total adjusted revenues 4,380 4,513 8,800 9,091

6 unchanged sentences

Total revenues $ 5,138 $ 5,172 $ 10,575 $ 9,972

(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 32 and $ 51 for the three-month periods ended March 31, 2024, and 2023, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 33 and $ 52 for the three-month periods ended March 31, 2024, and 2023, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings.

(2) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 30 and $ 53 for the three-month periods and $ 62 and $ 105 for the six-month periods ended June 30, 2024, and 2023, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 31 and $ 56 for the three-month periods and $ 64 and $ 108 for the six-month periods ended June 30, 2024, and 2023, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings.

See Note 3 for additional information on these investments.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Aflac Japan (1)

$ 864 $ 822 $ 1,674 $ 1,610

383 369 739 721

Corporate and other (2)

23 ( 52 ) 21 ( 58 )

Pretax adjusted earnings 1,270 1,139 2,434 2,273

8 unchanged sentences

with notes payable

( 9 ) ( 8 ) ( 17 ) ( 22 )

Total earnings before income taxes $ 2,019 $ 1,825 $ 4,190 $ 3,167

2 unchanged sentences

adjusted earnings ( 37 ) ( 25 ) ( 81 ) ( 66 )

See Note 3 for additional information on these investments.

Assets were as follows:

(In millions) March 31,

The Company's total assets were as follows:

(In millions) June 30,

2024 December 31,

5 unchanged sentences

The amortized cost and allowance for credit losses for the Company's investments in fixed maturity securities and the fair values of these investments as well as the fair value of the Company's investments in equity securities are shown in the following tables.

March 31, 2024

June 30, 2024

(In millions)

Cost Allowance for Credit Losses Gross

Cost Allowance

Securities available-for-sale, carried at fair

45 unchanged sentences

Total securities available-for-sale $ 70,689 $ 0 $ 6,050 $ 3,449 $ 73,290

March 31, 2024

June 30, 2024

(In millions)

Cost Allowance for Credit Losses Net Carrying Amount Gross

Cost Allowance

Losses Net Carrying Amount Gross

Securities held-to-maturity, carried at

32 unchanged sentences

The methods of determining the fair values of the Company's investments in fixed maturity securities and equity securities are described in Note 5.

During the first three months of 2024 and 2023, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

During the first six months of 2024 and 2023, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

Contractual and Economic Maturities

The contractual and economic maturities of the Company's investments in fixed maturity securities at March 31, 2024, were as follows:

The contractual and economic maturities of the Company's investments in fixed maturity securities at June 30, 2024, were as follows:

(In millions) Amortized

23 unchanged sentences

Investment exposures that individually exceeded 10% of shareholders' equity were as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Credit

6 unchanged sentences

Information regarding pretax net gains and losses from investments is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

9 unchanged sentences

Equity securities 11

( 9 ) 87 ( 12 )

Credit losses:

10 unchanged sentences

Total net investment gains (losses) $ 696 $ 555 $ 1,647 $ 678

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended March 31, 2024 that relate to equity securities held at the March 31, 2024 reporting date were $ 71 million.

The unrealized holding losses, net of gains, recorded as a component of net investment gains and losses for the three-month period ended March 31, 2023 that relate to equity securities held at the March 31, 2023 reporting date were $ 5 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $ 15 million.

The unrealized holding losses, net of gains, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2023 that relate to equity securities held at the June 30, 2023 reporting date were $ 16 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $ 70 million.

The unrealized holding losses, net of gains, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2023 that relate to equity securities held at the June 30, 2023 reporting date were $ 21 million.

Unrealized Investment Gains and Losses

1 unchanged sentence

The net effect on shareholders’ equity of unrealized gains and losses from fixed maturity securities was as follows:

(In millions) March 31,

(In millions) June 30,

2024 December 31,

3 unchanged sentences

Gross Unrealized Loss Aging

The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

March 31, 2024

The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended June 30, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

June 30, 2024

Total Less than 12 months 12 months or longer

73 unchanged sentences

However, from time to time the Company identifies certain available-for-sale securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit-related factors and as a result, a credit loss allowance will be estimated.

Based on an evaluation of its securities currently in an unrealized loss position, the Company has determined that those securities should not have a credit loss allowance as of March 31, 2024 .

Based on an evaluation of its securities currently in an unrealized loss position, the Company has determined that those securities should not have a credit loss allowance as of June 30, 2024 .

Refer to the Allowance for Credit Losses section below for additional information.

As of March 31, 2024 and December 31, 2023, the Company had an immaterial amount of fixed maturity securities on nonaccrual status.

As of June 30, 2024 and December 31, 2023, the Company had an immaterial amount of fixed maturity securities on nonaccrual status.

Commercial Mortgage and Other Loans

2 unchanged sentences

The following table reflects the composition of the carrying value for commercial mortgage and other loans by property type as of the periods presented.

(In millions) March 31, 2024 December 31, 2023

Amortized Cost % of Total Amortized Cost % of Total

(In millions) June 30, 2024 December 31, 2023

Total Amortized

Commercial Mortgage and other loans:

25 unchanged sentences

These loans provide funding for properties undergoing a change in their physical characteristics and/or economic profile and do not typically require any principal repayment prior to the maturity date.

As of March 31, 2024, the Company had $ 442 million in outstanding commitments to fund TREs.

As of June 30, 2024, the Company had $ 400 million in outstanding commitments to fund TREs.

These commitments are contingent on the final underwriting and due diligence to be performed.

5 unchanged sentences

These loans are generally considered to be below investment grade.

The carrying value for MMLs included $ 24 million for a short-term credit facility that is reflected in other liabilities on the consolidated balance sheets at both March 31, 2024 and December 31, 2023.

As of March 31, 2024, the Company had commitments of approximately $ 787 million to fund future MMLs.

The carrying value for MMLs included $ 25 million and $ 24 million for a short-term credit facility that is reflected in other liabilities on the consolidated balance sheets, as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, the Company had commitments of approximately $ 741 million to fund future MMLs.

These commitments are contingent upon the availability of MMLs that meet the Company's underwriting criteria.

2 unchanged sentences

The infrastructure loan portfolio weighted average rating is investment grade.

As of March 31, 2024, the Company had commitments of approximately $ 5 million to fund future other loans.

As of June 30, 2024, the Company had commitments of approximately $ 5 million to fund future other loans.

These commitments are contingent upon the availability of other loans that meet the Company's underwriting criteria.

11 unchanged sentences

The Company monitors these credit ratings periodically, but not less frequently than quarterly.

The following tables present as of March 31, 2024 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.

The following tables present as of June 30, 2024 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.

Transitional Real Estate Loans

41 unchanged sentences

Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first three months of 2024 and 2023.

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first six months of 2024 and 2023.

The amount, timing, and extent of modifications granted are considered in determining any credit loss allowance recorded.

For the three-month period ended March 31, 2024, 3 % of TREs with an amortized cost of $ 210 million were modified in the form of interest rate reductions and other-than-insignificant payment delays.

The modifications resulted in a reduction in the weighted-average contractual interest rate from 8.3 % to 6.9 %.

Loan modifications for the three-month period ended March 31, 2023 were immaterial.

Of these loans, 2 % of TREs with an amortized cost of $ 121 million and 6 % of TREs with an amortized cost of $ 332 million were modified in the form of interest rate reductions and other-than-insignificant payment delays during the three- and six-month periods ended June 30, 2024, respectively.

The modifications resulted in a reduction in the weighted-average contractual interest rate from 8.1 % to 7.8 % for the three-month period and 8.2 % to 7.3 % for the six-month period ended June 30, 2024, respectively.

Additionally, an immaterial percentage of MMLs were modified in the form of principal forgiveness during each of the three- and six-month periods ended June 30, 2024.

The modifications resulted in forgiveness of principal of $ 15 million, resulting in a remaining amortized cost of $ 2 million as of June 30, 2024.

Loan modifications for the three- and six-month periods ended June 30, 2023 were immaterial.

Past Due and Nonaccrual Loans

The following tables present an aging of past due and nonaccrual loans at amortized cost, before allowance for credit losses, as of the periods presented.

March 31, 2024

(In millions) Current Less Than 90 Days Past Due 90 Days

Total Past Due Total

Loans Nonaccrual Status

June 30, 2024

(In millions) Current Less Than

Past Due 90 Days

Loans Nonaccrual

Transitional real estate loans $ 4,934 $ 217 $ 518 $ 735 $ 5,669 $ 475

3 unchanged sentences

Total $ 11,152 $ 279 $ 602 $ 881 $ 12,033 $ 539

(1) As of March 31, 2024, there were no loans that were 90 days or more past due that continued to accrue interest.

(1) As of June 30, 2024, there were $ 106 of loans that were 90 days or more past due that continued to accrue interest.

December 31, 2023

(In millions) Current Less Than 90 Days Past Due 90 Days

Total Past Due Total

Loans Nonaccrual Status

(In millions) Current Less Than

Past Due 90 Days

Loans Nonaccrual

Transitional real estate loans $ 5,481 $ 108 $ 525 $ 633 $ 6,114 $ 633

4 unchanged sentences

(1) As of December 31, 2023, there were no loans that were 90 days or more past due that continued to accrue interest.

For the three-month periods ended March 31, 2024 and March 31, 2023, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

Of these loans, TREs with an amortized cost of $ 383 million had no credit loss allowance as of March 31, 2024 because these loans are collateral dependent assets for which the estimated fair values of the collateral are in excess of amortized cost.

As of March 31, 2024 and December 31, 2023, there were no MMLs on nonaccrual status without an allowance for credit losses.

For the three- and six-month periods ended June 30, 2024 and June 30, 2023, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

Of these loans, TREs with an amortized cost of $ 68 million and $ 160 million had no credit loss allowance as of June 30, 2024 and December 31, 2023, respectively, because these loans are collateral dependent assets for which the estimated fair values of the collateral were in excess of amortized cost.

As of June 30, 2024, MMLs with an amortized cost of $ 4 million were on nonaccrual status without an allowance for credit losses.

As of December 31, 2023, there were no MMLs on nonaccrual status without an allowance for credit losses.

Allowance for Credit Losses

13 unchanged sentences

The Company continuously monitors the estimation methodology, due to changes in portfolio composition, changes in underwriting practices and significant events or conditions and makes adjustments as necessary.

The Company’s held-to-maturity portfolio includes Japan Government and Agency securities of $ 15.9 billion amortized cost as of March 31, 2024 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement.

The Company’s held-to-maturity portfolio includes Japan Government and Agency securities of $ 14.9 billion amortized cost as of June 30, 2024 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement.

An investment in an available-for-sale security may be impaired if the fair value falls below amortized cost.

8 unchanged sentences

The following table presents the roll forward of the allowance for credit losses by portfolio segment for loans and by accounting classification for securities.

(In millions) Transitional Real Estate Loans Commercial Mortgage Loans Middle Market Loans Other Loans and Loan Commitments Held-to-Maturity Securities Available-for-Sale Securities Total

Three Months Ended March 31, 2024:

(In millions) Transitional

Loans Commercial

Mortgage Loans Middle Market

Loans Other Loans

Commitments Held-to-

Securities Available-

Securities Total

Three Months Ended June 30, 2024:

Balance at March 31, 2024

$ ( 114 ) $ ( 19 ) $ ( 99 ) $ ( 15 ) $ ( 5 ) $ 0 $ ( 252 )

(Addition to) release of allowance for credit losses ( 24 ) 2 1 2 0 0 ( 19 )

Writeoffs, net of recoveries 15 0 0 0 0 0 15

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2024

$ ( 123 ) $ ( 17 ) $ ( 98 ) $ ( 13 ) $ ( 5 ) $ 0 $ ( 256 )

Three Months Ended June 30, 2023:

Balance at March 31, 2023

$ ( 65 ) $ ( 9 ) $ ( 149 ) $ ( 21 ) $ ( 6 ) $ 0 $ ( 250 )

(Addition to) release of allowance for credit losses ( 11 ) 0 9 1 0 0 ( 1 )

Writeoffs, net of recoveries 0 0 0 0 0 0 0

Change in foreign exchange 0 0 0 0 1 0 1

Balance at June 30, 2023

$ ( 76 ) $ ( 9 ) $ ( 140 ) $ ( 20 ) $ ( 5 ) $ 0 $ ( 250 )

Six Months Ended June 30, 2024:

Balance at December 31, 2023

4 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at March 31, 2024

Balance at June 30, 2024

$ ( 123 ) $ ( 17 ) $ ( 98 ) $ ( 13 ) $ ( 5 ) $ 0 $ ( 256 )

Three Months Ended March 31, 2023:

Six Months Ended June 30, 2023:

Balance at December 31, 2022

3 unchanged sentences

Change in foreign exchange 0 0 0 0 1 0 1

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 76 ) $ ( 9 ) $ ( 140 ) $ ( 20 ) $ ( 5 ) $ 0 $ ( 250 )

For the three-month period ended March 31, 2024, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $ 31 million.

As a result of the excess of amortized cost over the estimated fair value of the collateral of the TREs, upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net gain of $ 4 million for the three-month period ended March 31, 2024 in net investment gains (losses).

The Company did not complete any foreclosure or deed in lieu of foreclosure transactions in the three-month period ended March 31, 2023.

Refer to the Other Investments section below for additional information.

As of March 31, 2024, the Company identified additional TREs with an amortized cost of $ 601 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of March 31, 2024, the Company established a credit allowance of $ 60 million for $ 598 million of loans for which the fair value of the collateral was below the amortized cost of the loans.

As of June 30, 2024, the Company identified additional TREs with an amortized cost of $ 267 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of June 30, 2024, the Company established a credit allowance of $ 33 million for $ 656 million of loans for which the fair value of the collateral was below the amortized cost of the loans.

Other Investments

The table below reflects the composition of the carrying value for other investments as of the periods presented.

(In millions) March 31,

(In millions) June 30,

2024 December 31, 2023

12 unchanged sentences

Real estate owned (REO) consists of office buildings or other commercial properties obtained through foreclosure or deed in lieu of foreclosure of certain of the Company’s TREs.

As of March 31, 2024, all REO was classified as held-and-used for the production of income and is carried at cost less accumulated depreciation.

As of June 30, 2024, all REO was classified as held-and-used for the production of income and is carried at cost less accumulated depreciation.

As of December 31, 2023, $ 210 million of REO was classified as held-and-used with the remaining $ 17 million classified as held-for-sale, which is carried at the lower of depreciated cost or fair value less cost to sell and is not further depreciated once classified as such.

Depreciation expense was $ 1 million for the three-month period ended March 31, 2024.

Additionally, as of March 31, 2024 and December 31, 2023, accumulated depreciation was $ 2 million and an immaterial amount, respectively.

As of March 31, 2024, the Company had $ 2.2 billion in outstanding commitments to fund investments in limited partnerships.

Depreciation expense was $ 3 million and $ 4 million for the three- and six-month periods ended June 30, 2024, respectively.

Additionally, as of June 30, 2024 and December 31, 2023, accumulated depreciation was $ 4 million and an immaterial amount, respectively.

As of June 30, 2024, the Company had $ 2.1 billion in outstanding commitments to fund investments in limited partnerships.

Variable Interest Entities (VIEs)

12 unchanged sentences

Investments in Consolidated Variable Interest Entities

(In millions) March 31,

(In millions) June 30,

2024 December 31,

25 unchanged sentences

Investments in Variable Interest Entities Not Consolidated

(In millions) March 31,

(In millions) June 30,

2024 December 31,

20 unchanged sentences

The Company lends fixed maturity securities and, from time to time, public equity securities to financial institutions in short-term securities lending transactions.

These short-term securities lending arrangements increase investment income

with minimal risk.

These short-term securities lending arrangements increase investment income with minimal risk.

The Company receives cash or other securities as collateral for such loans.

6 unchanged sentences

Remaining Contractual Maturity of the Agreements

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Overnight

15 unchanged sentences

therefore, they are classified as Overnight and Continuous.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $ 4.5 billion and $ 4.3 billion at March 31, 2024 and December 31, 2023, respectively, which may not be sold or re-pledged, unless the counterparty is in default.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $ 4.0 billion and $ 4.3 billion at June 30, 2024 and December 31, 2023, respectively, which may not be sold or re-pledged, unless the counterparty is in default.

Such securities collateral is not reflected on the consolidated financial statements.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of March 31, 2024, and December 31, 2023, respectively.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of June 30, 2024, and December 31, 2023, respectively.

Certain fixed maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements on certain investment programs.

56 unchanged sentences

The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of exposure or credit risk.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Asset

29 unchanged sentences

The Company has designated foreign currency swaps as a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset (“cash flow” hedge).

The remaining maximum length of time for which these cash flows are hedged is approximately three years .

The remaining maximum length of time for which these cash flows are hedged is approximately two years .

The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the Non-qualifying Strategies section of this note.

11 unchanged sentences

The following table presents the gains and losses on derivatives and the related hedged items in fair value hedges.

The Company had no fair value hedges during the three-month period ending March 31, 2024.

The Company had no fair value hedges during the three- and six-month periods ended June 30, 2024.

Fair Value Hedging Relationships

7 unchanged sentences

Net Investment Gains (Losses) Recognized for Fair Value Hedge

Three Months Ended March 31, 2023:

Three Months Ended June 30, 2023:

Foreign currency options Fixed maturity securities $ ( 25 ) $ ( 25 ) $ 0 $ 0 $ 0

Total gains (losses) $ ( 25 ) $ ( 25 ) $ 0 $ 0 $ 0

Six Months Ended June 30, 2023:

Foreign currency options Fixed maturity securities $ ( 64 ) $ ( 64 ) $ 0 $ 0 $ 0

Total gains (losses) $ ( 64 ) $ ( 64 ) $ 0 $ 0 $ 0

(1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statements of earnings as net investment gains (losses).

3 unchanged sentences

The time value gains and losses for interest rate swaptions when the related hedged items are redeemed are reported in net investment gains (losses) consistent with the impact of the hedged item.

For the three-month period ended March 31, 2023, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial.

For the three- and six-month periods ended June 30, 2023, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial.

The following table shows the carrying amounts of assets designated and qualifying as hedged items in fair value hedges of interest rate risk and the related cumulative hedge adjustment included in the carrying amount.

The Company had no fair value hedges of interest rate risk as of March 31, 2024 and December 31, 2023;

The Company had no fair value hedges of interest rate risk as of June 30, 2024 and December 31, 2023;

therefore, the amounts presented in the table below are related to previous fair value hedges of interest rate risk that were discontinued.

(In millions) Carrying Amount of the Hedged Assets/(Liabilities) (1)

Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities)

2024 December 31, 2023 March 31,

(In millions) Carrying Amount of the Hedged

Assets/(Liabilities) (1)

Cumulative Amount of Fair Value

Hedging Adjustment Included in

the Carrying Amount of Hedged

Assets/(Liabilities)

2024 December 31,

2023 June 30,

2024 December 31,

Fixed maturity securities $ 1,452 $ 1,692 $ 153 $ 164

3 unchanged sentences

To mitigate this exposure, the Parent Company's yen-denominated liabilities (see Note 9) have been designated as non-derivative hedges and certain foreign currency forwards and options have been designated as derivative hedges of the foreign currency exposure of the Company's net investment in Aflac Japan.

The Company's net investment hedge was effective during the three-month periods ended March 31, 2024 and 2023, respectively.

The Company's net investment hedge was effective during the three- and six-month periods ended June 30, 2024 and 2023, respectively.

Non-qualifying Strategies

2 unchanged sentences

While the change in value of the swaps is recorded in current period earnings, the change in value of the available-for-sale fixed maturity securities associated with these swaps is recorded in other comprehensive income.

As of March 31, 2024, the Parent Company had $ 1.2 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S.

As of June 30, 2024, the Parent Company had $ 1.2 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S.

dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S.

10 unchanged sentences

The following table summarizes the impact to earnings and other comprehensive income (loss) from all derivatives and hedging instruments.

Three Months Ended March 31,

(In millions) Net Investment Income (1)

Three Months Ended June 30,

(In millions) Net

Net Investment

2 unchanged sentences

Income (Loss) (2)

Net Investment Income (1)

Net Investment

31 unchanged sentences

Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statements of comprehensive income (loss).

(3) Impact of cash flow hedges reported as net investment gains (losses) includes $ 1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended March 31, 2024, and $ 1 of losses during the three-month period ended March 31, 2023.

As of March 31, 2024, $ 5 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months.

(3) Impact of cash flow hedges reported as net investment gains (losses) includes $ 1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended June 30, 2024, and $ 1 of losses during the three-month period ended June 30, 2023.

Six Months Ended June 30,

(In millions) Net

Net Investment

Gains (Losses) Other

Comprehensive

Income (Loss) (2)

Net Investment

Gains (Losses) Other

Comprehensive

Income (Loss) (2)

Qualifying hedges:

Cash flow hedges:

Foreign currency swaps - VIE $ 0 $ ( 2 ) $ 0 $ 0 $ ( 2 ) $ 2

Total cash flow hedges 0 ( 2 ) (3)

0 0 ( 2 ) (3)

Fair value hedges:

Foreign currency options 0 ( 64 )

Total fair value hedges 0 ( 64 )

Net investment hedge:

Non-derivative hedging

instruments 0 501 0 338

Foreign currency forwards 76 300 127 422

Foreign currency options 0 0 ( 8 ) 0

Total net investment hedge 76 801 119 760

Non-qualifying strategies:

Foreign currency swaps 2 3

Foreign currency swaps - VIE ( 216 ) ( 90 )

Foreign currency forwards 17 ( 382 )

Foreign currency options ( 182 ) ( 37 )

Interest rate swaps ( 185 ) ( 120 )

Forward bond purchase

commitment - VIE 0 ( 4 )

Total non-qualifying strategies ( 564 ) ( 630 )

Total $ 0 $ ( 490 ) $ 801 $ 0 $ ( 577 ) $ 762

(1) Interest expense/income on cash flow hedges are recorded in net investment income.

For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term.

If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items.

(2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses).

(3) Impact of cash flow hedges reported as net investment gains (losses) includes $ 2 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the six-month period ended June 30, 2024, and $ 1 of losses during the six-month period ended June 30, 2023.

As of June 30, 2024, $ 5 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months.

Credit Risk Assumed through Derivatives

4 unchanged sentences

The risk of counterparty default for the Company's foreign currency swaps, certain foreign currency forwards, and foreign currency options is mitigated by collateral posting requirements that counterparties to those transactions must meet.

As of March 31, 2024, all of the Company's derivative agreement counterparties were investment grade.

As of June 30, 2024, all of the Company's derivative agreement counterparties were investment grade.

The Company engages in over-the-counter (OTC) bilateral derivative transactions directly with unaffiliated third parties under International Swaps and Derivatives Association, Inc.

7 unchanged sentences

Collateral posted by the Company to third parties for derivative transactions can generally be repledged or resold by the counterparties.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $ 1.0 billion and $ 1.2 billion as of March 31, 2024, and December 31, 2023, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on March 31, 2024, the Company estimates that it would be required to post a maximum of $ 447 million of additional collateral to these derivative counterparties.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $ 1.2 billion as of June 30, 2024 and December 31, 2023, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on June 30, 2024, the Company estimates that it would be required to post a maximum of $ 538 million of additional collateral to these derivative counterparties.

The Company is generally allowed to sell or repledge collateral obtained from its derivative counterparties, although it does not typically exercise such rights.

9 unchanged sentences

Offsetting of Financial Assets and Derivative Assets

March 31, 2024

June 30, 2024

Gross Amounts Not Offset

51 unchanged sentences

Offsetting of Financial Liabilities and Derivative Liabilities

March 31, 2024

June 30, 2024

Gross Amounts Not Offset

60 unchanged sentences

The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis.

March 31, 2024

June 30, 2024

(In millions) Quoted Prices in

61 unchanged sentences

The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value.

March 31, 2024

June 30, 2024

(In millions) Carrying

74 unchanged sentences

The following tables present the pricing sources for the fair values of the Company's fixed maturity and equity securities.

March 31, 2024

June 30, 2024

(In millions) Quoted Prices in Active Markets for Identical Assets

42 unchanged sentences

Total equity securities $ 571 $ 0 $ 157 $ 728

March 31, 2024

June 30, 2024

(In millions) Quoted Prices in Active Markets for Identical Assets

109 unchanged sentences

Foreign currency spot rates

Cross foreign currency basis curves

Foreign cross-currency basis curves

Foreign currency volatility (1)

49 unchanged sentences

Three Months Ended

March 31, 2024

June 30, 2024

Fixed Maturity Securities Equity

10 unchanged sentences

other comprehensive income (loss) ( 5 ) ( 1 ) ( 1 ) ( 5 ) ( 5 ) 0 ( 17 )

Purchases, issuances, sales and

Purchases 189 39 0 0 58 0 286

Issuances 0 0 0 0 0 0 0

Sales 0 0 0 0 0 0 0

Settlements ( 21 ) ( 3 ) ( 2 ) 0 0 0 ( 26 )

Transfers into Level 3 190 56 0 0 0 0 246

Transfers out of Level 3 0 ( 233 ) 0 0 ( 119 ) 0 ( 352 )

Balance, end of period $ 1,213 $ 365 $ 25 $ 69 $ 384 $ 157 $ 2,213

Changes in unrealized gains (losses)

relating to Level 3 assets and liabilities

still held at the end of the period

included in earnings $ 1 $ 0 $ 0 $ 0 $ 0 $ ( 3 ) $ ( 2 )

Three Months Ended

June 30, 2023

Fixed Maturity Securities Equity

(In millions) Mortgage-

Securities Public

Utilities Sovereign

Supranational Banks/

Institutions Other

Corporate Total

Balance, beginning of period $ 418 $ 350 $ 37 $ 161 $ 753 $ 221 $ 1,940

Net investment gains (losses) included

in earnings 0 0 0 0 0 ( 8 ) ( 8 )

Unrealized gains (losses) included in

other comprehensive income (loss) ( 13 ) ( 16 ) ( 3 ) 2 ( 22 ) 0 ( 52 )

Purchases, issuances, sales and

Purchases 136 0 0 0 37 0 173

Issuances 0 0 0 0 0 0 0

Sales 0 0 0 0 0 0 0

Settlements ( 13 ) ( 2 ) ( 2 ) ( 7 ) ( 1 ) 0 ( 25 )

Transfers into Level 3 124 0 0 0 0 0 124

Transfers out of Level 3 0 ( 30 ) 0 ( 87 ) ( 195 ) 0 ( 312 )

Balance, end of period $ 652 $ 302 $ 32 $ 69 $ 572 $ 213 $ 1,840

Changes in unrealized gains (losses)

relating to Level 3 assets and liabilities

still held at the end of the period

included in earnings $ 0 $ 0 $ 0 $ 0 $ 0 $ ( 8 ) $ ( 8 )

Six Months Ended

June 30, 2024

Fixed Maturity Securities Equity

(In millions) Mortgage-

Securities Public

Utilities Sovereign

Supranational Banks/

Institutions Other

Corporate Total

Balance, beginning of period $ 772 $ 253 $ 30 $ 78 $ 648 $ 248 $ 2,029

Net investment gains (losses) included

in earnings 2 0 0 0 0 ( 7 ) ( 5 )

Unrealized gains (losses) included in

other comprehensive income (loss) ( 9 ) ( 11 ) ( 3 ) ( 9 ) ( 4 ) 0 ( 36 )

Purchases, issuances, sales

11 unchanged sentences

of the period included in earnings $ 2 $ 0 $ 0 $ 0 $ 0 $ ( 6 ) $ ( 4 )

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2023

Fixed Maturity Securities Equity

26 unchanged sentences

Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

March 31, 2024

June 30, 2024

(In millions) Fair Value Valuation Technique(s) Unobservable Input Range Weighted Average

53 unchanged sentences

The following tables present a rollforward of deferred policy acquisition costs by reporting segment and disaggregated by product type.

March 31, 2024

June 30, 2024

Aflac Japan Aflac U.S.

7 unchanged sentences

other ( 358 ) ( 244 ) ( 58 ) ( 6 ) 0 0 0 0 0 0 0 ( 666 )

Balance at March 31, 2024

Balance at June 30, 2024

$ 2,667 $ 1,802 $ 432 $ 50 $ 913 $ 628 $ 1,340 $ 441 $ 86 $ 189 $ 2 $ 8,550

19 unchanged sentences

Future DAC amortization is impacted by persistency.

There were no changes to the inputs, judgments, assumptions and methods used to determine amortization amounts during the three-month periods ended March 31, 2024 and 2023.

There were no changes to the inputs, judgments, assumptions and methods used to determine amortization amounts during the six-month periods ended June 30, 2024 and 2023.

For additional information on deferred policy acquisition costs, see Notes 1 and 6 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report.

5 unchanged sentences

The present value of expected future net premiums and the present value of expected future policy benefits are presented gross of internal and external ceded reinsurance.

March 31, 2024

June 30, 2024

Aflac Japan Aflac U.S.

16 unchanged sentences

Effect of changes in discount rate assumptions 326 47 64 ( 12 ) ( 197 ) ( 108 ) ( 472 ) ( 109 ) ( 16 ) ( 73 ) 0

Balance at March 31, 2024

Balance at June 30, 2024

$ 14,652 $ 12,119 $ 5,278 $ 891 $ 2,423 $ 1,661 $ 4,005 $ 1,118 $ 208 $ 874 $ 532

14 unchanged sentences

Effect of changes in discount rate assumptions 3,456 ( 1,230 ) ( 1,822 ) ( 500 ) ( 266 ) ( 157 ) ( 1,323 ) ( 188 ) ( 40 ) ( 280 ) ( 2 )

Balance at March 31, 2024

Balance at June 30, 2024

41,548 20,695 24,370 4,244 3,020 2,405 10,847 1,907 468 1,768 1,025

48 unchanged sentences

The following tables present the weighted-average interest rates and weighted-average liability duration (calculated using the original discount rate) by reporting segment and disaggregated by product type.

March 31, 2024

June 30, 2024

Aflac Japan Aflac U.S.

19 unchanged sentences

The deferred profit liability for limited-payment contracts and the deferred reinsurance gain liability are presented together with the liability for future policy benefits in the consolidated balance sheets and have been included as reconciling items in the table below.

(In millions) March 31,

(In millions) June 30,

2024 December 31, 2023

18 unchanged sentences

(1) Elimination entry necessary due to the internal reinsurance transactions with Aflac Re and to recapture a portion of policy liabilities ceded externally as a result of the reinsurance retrocession transaction.

See Note 8 for additional details.

See Note 8 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report.

Discount rates are determined using upper-medium grade (low-credit-risk) fixed-income instrument yields that reflect the duration characteristics of the liability.

21 unchanged sentences

and Japan segments is based on the assumption of long-term global economic convergence.

For the three-month periods ended March 31, 2024 and 2023, the Company recognized $ 1.1 billion and $( 2.8 ) billion in other comprehensive income (loss) net of tax, respectively, due to changes in the future policy benefits estimate from updating the discount rate assumptions.

There were no changes to the methods used to determine the discount rates during the three-month periods ended March 31, 2024 and 2023.

For the three-month periods ended June 30, 2024 and 2023, the Company recognized $ 2.9 billion and $( 165 ) million in other comprehensive income (loss) net of tax, respectively, due to changes in the future policy benefits estimate from updating the discount rate assumptions.

For the six-month periods ended June 30, 2024 and 2023, the Company recognized $ 4.0 billion and $( 3.0 ) billion in other comprehensive income (loss) net of tax, respectively, due to changes in the future policy benefits estimate from updating the discount rate assumptions.

There were no changes to the methods used to determine the discount rates during the six-month periods ended June 30, 2024 and 2023.

For the year ended December 31, 2023, the Company recognized approximately $( 460 ) million in other comprehensive income (loss) net of tax, due to changes in the future policy benefits estimate from updating the discount rate assumptions.

9 unchanged sentences

Policy provisions, such as reaching premium paid-up status, are taken into account when setting assumptions.

During the three-month periods ended March 31, 2024 and 2023, the variance of actual experience from expected experience was primarily due to favorable variances in morbidity assumptions as compared to actual experience.

There were no changes to the inputs, judgments, assumptions and methods used in measuring the liability for future policy benefits during the three-month periods ended March 31, 2024 and 2023.

For the three- and six-month periods ended June 30, 2024 and 2023, the variance of actual experience from expected experience was primarily due to favorable variances in morbidity assumptions as compared to actual experience.

There were no changes to the inputs, judgments, assumptions and methods used in measuring the liability for future policy benefits during the six-month periods ended June 30, 2024 and 2023.

In 2023, the Company's annual assumption review process resulted in favorable changes to its morbidity and termination assumptions, largely due to reflecting more recent favorable U.S.

1 unchanged sentence

The following table summarizes the amount of net earned premiums recognized in the consolidated statements of earnings by reporting segment and disaggregated by product type.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

3 unchanged sentences

Life insurance 316 390 655 812

Other 35 38 69 77

Accident 316 322 641 652

4 unchanged sentences

Life insurance 141 115 279 228

Other 25 9 45 19

Corporate and other 155 84 320 175

2 unchanged sentences

The following table summarizes the amount of interest expense related to insurance contracts recognized in total benefits and claims, net in the consolidated statements of earnings by reporting segment and disaggregated by product type.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

3 unchanged sentences

Life insurance 114 130 232 263

Other 18 20 37 42

Accident 7 6 13 12

Disability 8 10 16 18

3 unchanged sentences

Life insurance 10 10 20 19

Other 6 6 13 13

Total $ 565 $ 629 $ 1,141 $ 1,270

6 unchanged sentences

These are the primary factors that result in future gross premiums lower than future benefit and expense payments for certain lines of business of the Company.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Gross

14 unchanged sentences

Total $ 142,128 $ 173,563 $ 156,494 $ 193,058

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Gross Premiums Benefits and Expenses Gross Premiums Benefits and Expenses

13 unchanged sentences

Total $ 105,979 $ 112,297 $ 121,753 $ 132,131

Loss expense as a result of NPR capping for the three-month periods ended March 31, 2024 and 2023 was immaterial.

Loss expense as a result of NPR capping for the three- and six-month periods ended June 30, 2024 and 2023 was immaterial.

Other Policyholders' Funds

As of March 31, 2024 and December 31, 2023, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan.

As of June 30, 2024 and December 31, 2023, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan.

The Company's annuities have fixed benefits and premiums.

The following table presents the changes in other policyholders’ funds.

(In millions) March 31,

(In millions) June 30,

2024 December 31,

13 unchanged sentences

The following table presents other policyholders’ funds balances by range of guaranteed crediting rates.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In millions) Range of Guaranteed Minimum Crediting Rates (2)

6 unchanged sentences

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5 % at March 31, 2024 and December 31, 2023.

(2) Weighted-average crediting rate of 1.5 % at June 30, 2024 and December 31, 2023.

Aflac Japan’s fixed annuities have guaranteed fixed crediting rates which results in the policyholders' funds balances being able to cover all guaranteed benefit amounts.

5 unchanged sentences

The following table reconciles direct earned premiums, direct benefits and claims, excluding reserve remeasurement gains and losses, and reserve remeasurement gains and losses to net amounts after the effect of reinsurance.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2024 2023 2024 2023

5 unchanged sentences

Retrocession activities 27 30 56 64

Other 12 23 26 47

Net earned premiums $ 3,325 $ 3,573 $ 6,781 $ 7,262

5 unchanged sentences

Retrocession activities 12 20 25 61

Other 1 18 5 27

Benefits and claims, excluding reserve remeasurement $ 1,972 $ 2,152 $ 4,039 $ 4,354

5 unchanged sentences

The Company has recorded a deferred reinsurance gain liability related to reinsurance transactions which represents ceded reserves in excess of consideration paid, or consideration received in excess of assumed reserves.

The remaining deferred reinsurance gain liability of $ 161 million and $ 175 million as of March 31, 2024 and December 31, 2023, respectively, is included in future policy benefits in the consolidated balance sheets and is being amortized into income over the expected lives of the policies.

The remaining consolidated deferred reinsurance gain liability of $ 148 million and $ 175 million as of June 30, 2024 and December 31, 2023, respectively, is included in future policy benefits in the consolidated balance sheets and is being amortized into income over the expected lives of the policies.

The Company has also recorded a reinsurance recoverable for reinsurance transactions.

The reinsurance recoverable, which is included in other assets in the consolidated balance sheets, is reported net of allowance for credit losses and had a remaining balance of $ 178 million and $ 183 million as of March 31, 2024 and December 31, 2023, respectively.

The allowance for credit losses related to the Company's reinsurance recoverable balance was $ 4 million and $ 10 million as of March 31, 2024 and December 31, 2023, respectively.

The reinsurance recoverable, which is included in other assets in the consolidated balance sheets, is reported net of allowance for credit losses and had a remaining balance of $ 162 million and $ 183 million as of June 30, 2024 and December 31, 2023, respectively.

The allowance for credit losses related to the Company's reinsurance recoverable balance was $ 3 million and $ 10 million as of June 30, 2024 and December 31, 2023, respectively.

The credit allowance for the reinsurance recoverable balance is estimated using a PD / LGD method and the key credit quality indicator is the credit rating of the Company’s reinsurance counterparty.

The Company uses external credit ratings focused on the reinsurer’s financial strength and credit worthiness.

As of March 31, 2024, the Company's reinsurance counterparties were rated A+.

As of June 30, 2024, the Company's reinsurance counterparties were rated A+.

The Company monitors the credit ratings periodically, but not less frequently than quarterly.

6 unchanged sentences

A summary of notes payable and lease obligations follows:

(In millions) March 31,

(In millions) June 30,

2024 December 31,

34 unchanged sentences

2.108 % subordinated debentures due October 2047 (principal amount ¥ 60.0 billion)

.963 % subordinated bonds due April 2049 (principal amount ¥ 30.0 billion) (1)

.963 % subordinated bonds paid April 2024 (principal amount ¥ 30.0 billion)

1.560 % senior notes due April 2051 (principal amount ¥ 20.0 billion)

12 unchanged sentences

Total notes payable and lease obligations $ 7,430 $ 7,364

(1) Redeemed in April 2024

Amounts in the table above are reported net of debt issuance costs and issuance premiums or discounts, if applicable, that are being amortized over the life of the notes.

I n March 2024, the Parent Company issued five series of senior notes totaling ¥ 75.0 billion through a private placement.

In April 2024, ALIJ redeemed ¥ 30.0 billion of its .963 % subordinated bonds due April 2049.

In March 2024, the Parent Company issued five series of senior notes totaling ¥ 75.0 billion through a private placement.

The first series, which totaled ¥ 18.3 billion, bears interest at a fixed rate of 1.600 % per annum, payable semi-annually, and will mature in March 2034.

12 unchanged sentences

In addition, the notes maturing in March 2029, March 2031 and March 2034 are redeemable at the Parent Company's option, in whole or in part from time to time, on or after December 21, 2028, December 31, 2030 and September 21, 2033, respectively, at a redemption price equal to the aggregate principal amount of the applicable series to be redeemed plus accrued and unpaid interest on the principal amount to be redeemed to, but excluding, the date of redemption.

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 46 million and $ 47 million for the three-month periods ended March 31, 2024 and 2023, respectively.

A summary of the Company's lines of credit as of March 31, 2024 follows:

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 49 million and $ 50 million for the three-month periods and $ 96 million for each of the six-month periods ended June 30, 2024 and 2023, respectively.

A summary of the Company's lines of credit as of June 30, 2024 follows:

Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose

1 unchanged sentence

and Aflac uncommitted bilateral 364 days December 6, 2024 $ 100 million

The rate quoted by the bank and agreed upon at the time of borrowing Up to 3 months

None General corporate purposes

The rate quoted by the bank and agreed upon at the time of borrowing Up to 3 months None General corporate purposes

Aflac Incorporated unsecured revolving 5 years May 9,

13 unchanged sentences

and Aflac uncommitted bilateral None specified None specified $ 50 million

A rate per annum equal to, at the Parent Company's option, either (a) a rate determined by reference to SOFR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the highest of (1) the lender's USD short-term commercial loan rate and (2) the federal funds rate plus 1/2 of 1% Up to 3 months

None General corporate purposes

uncommitted revolving 364 days December 2, 2024 $ 250 million

9 unchanged sentences

Aflac New York (1)

uncommitted revolving 364 days April 8,

uncommitted revolving 364 days December 2,

2024 $ 25 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum No later than

April 9, 2024 None General corporate purposes

uncommitted revolving 364 days March 21,

December 3, 2024 None General corporate purposes

uncommitted revolving 364 days December 2,

2024 $ 15 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum No later than

March 24, 2025 None General corporate purposes

December 3, 2024 None General corporate purposes

(1) Intercompany credit agreement

(2) Renewed in April 2024 with an expiration date of April 8, 2025

Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose

uncommitted revolving 364 days March 21,

uncommitted revolving 364 days December 2,

2024 $ 0.3 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum No later than

March 24, 2025 None General corporate purposes

Hatch Healthcare

uncommitted revolving 364 days January 2,

2025 ¥ 900 million

A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than January 3, 2025 None General corporate purposes

Aflac Digital Services Co., Ltd.

uncommitted revolving 364 days January 2,

2025 ¥ 600 million

December 3, 2024 None General corporate purposes

Aflac GI Holdings LLC (1)

uncommitted revolving 364 days July 16,

uncommitted revolving 364 days December 2,

2024 $ 30 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum No later than

July 17, 2024 None General corporate purposes

December 3, 2024 None General corporate purposes

Aflac Incorporated (1)

uncommitted revolving 364 days January 2,

uncommitted revolving 364 days December 2,

2024 $ 400 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 97 basis points per annum for U.S.

dollar-denominated borrowings or three-month TIBOR plus 97 basis points per annum for Japanese yen-denominated borrowings No later than January 3, 2025 None General corporate purposes

uncommitted revolving 364 days January 2,

dollar-denominated borrowings or three-month TIBOR plus 97 basis points per annum for Japanese yen-denominated borrowings No later than

December 3, 2024 None General corporate purposes

uncommitted revolving 364 days December 2,

2024 $ 400 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S.

dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings No later than January 3, 2025 None General corporate purposes

dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings No later than

December 3, 2024 None General corporate purposes

Aflac Asset Management LLC (1)

uncommitted revolving 214 days December 2,

2024 $ 25 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S.

dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings No later than

December 3, 2024 None General corporate purposes

Aflac Global Ventures LLC (1)

uncommitted revolving 214 days December 2,

2024 $ 2 million

Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S.

dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings No later than

December 3, 2024 None General corporate purposes

(1) Intercompany credit agreement

The Company was in compliance with all of the covenants of its notes payable and lines of credit at March 31, 2024.

No events of default or defaults occurred during the three-month period ended March 31, 2024.

The Company was in compliance with all of the covenants of its notes payable and lines of credit at June 30, 2024.

No events of default or defaults occurred during the six-month period ended June 30, 2024.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report.

SHAREHOLDERS’ EQUITY

The following table is a reconciliation of the number of shares of the Company's common stock for the three-month periods ended March 31.

The following table is a reconciliation of the number of shares of the Company's common stock for the six-month periods ended June 30.

(In thousands of shares) 2024 2023

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The following table presents the approximate number of share-based awards to purchase shares, on a weighted-average basis, that were considered to be anti-dilutive and were excluded from the calculation of diluted EPS for the following periods.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2024 2023 2024 2023

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Share Repurchase Program

During the first three months of 2024, the Company repurchased 9.3 million shares of its common stock for $ 750 million as part of its share repurchase program.

During the first three months of 2023, the Company repurchased 10.3 million shares of its common stock for $ 700 million as part of its share repurchase program.

As of March 31, 2024, a remaining balance of 68.5 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

During the first six months of 2024, the Company repurchased 18.6 million shares of its common stock for $ 1.6 billion as part of its share repurchase program.

During the first six months of 2023, the Company repurchased 20.8 million shares of its common stock for $ 1.4 billion as part of its share repurchase program.

As of June 30, 2024, a remaining balance of 59.2 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

Reclassifications from Accumulated Other Comprehensive Income

2 unchanged sentences

Three Months Ended

March 31, 2024

June 30, 2024

(In millions) Unrealized Foreign

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Adjustment Total

Balance at December 31, 2023 $ ( 4,069 ) $ 1,139 $ ( 22 ) $ ( 2,560 ) $ ( 8 ) $ ( 5,520 )

Balance at March 31, 2024 $ ( 4,666 ) $ 1,092 $ ( 26 ) $ ( 1,495 ) $ ( 7 ) $ ( 5,102 )

Other comprehensive

8 unchanged sentences

income (loss) ( 425 ) ( 691 ) 4 2,920 2 1,810

Balance at March 31, 2024 $ ( 4,666 ) $ 1,092 $ ( 26 ) $ ( 1,495 ) $ ( 7 ) $ ( 5,102 )

Balance at June 30, 2024 $ ( 5,091 ) $ 401 $ ( 22 ) $ 1,425 $ ( 5 ) $ ( 3,292 )

All amounts in the table above are net of tax.

Three Months Ended

March 31, 2023

June 30, 2023

(In millions) Unrealized Foreign

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on Derivatives Effect of Changes in Discount Rate Assumptions Pension Liability Adjustment Total

Balance at March 31, 2023 $ ( 3,618 ) $ 1,289 $ ( 26 ) $ ( 4,894 ) $ ( 29 ) $ ( 7,278 )

Other comprehensive

income (loss) before

reclassification ( 631 ) 710 0 ( 165 ) 45 ( 41 )

Amounts reclassified from

accumulated other

comprehensive income

(loss) 0 ( 21 ) 1 0 1 ( 19 )

Net current-period other

comprehensive

income (loss) ( 631 ) 689 1 ( 165 ) 46 ( 60 )

Balance at June 30, 2023 $ ( 4,249 ) $ 1,978 $ ( 25 ) $ ( 5,059 ) $ 17 $ ( 7,338 )

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2024

(In millions) Unrealized Foreign

Currency Translation

Gains (Losses) Unrealized

Gains (Losses)

on Fixed Maturity Securities Unrealized

Gains (Losses)

on Derivatives Effect of Changes in Discount Rate Assumptions Pension

Adjustment Total

Balance at December 31, 2023 $ ( 4,069 ) $ 1,139 $ ( 22 ) $ ( 2,560 ) $ ( 8 ) $ ( 5,520 )

9 unchanged sentences

income (loss) ( 1,022 ) ( 738 ) 0 3,985 3 2,228

Balance at March 31, 2023 $ ( 3,618 ) $ 1,289 $ ( 26 ) $ ( 4,894 ) $ ( 29 ) $ ( 7,278 )

Balance at June 30, 2024 $ ( 5,091 ) $ 401 $ ( 22 ) $ 1,425 $ ( 5 ) $ ( 3,292 )

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2023

(In millions) Unrealized Foreign

Currency Translation

Gains (Losses) Unrealized

Gains (Losses)

on Fixed Maturity Securities Unrealized

Gains (Losses)

on Derivatives Effect of Changes in Discount Rate Assumptions Pension Liability Adjustment Total

Balance at December 31, 2022 $ ( 3,564 ) $ ( 702 ) $ ( 27 ) $ ( 2,100 ) $ ( 36 ) $ ( 6,429 )

Other comprehensive

income (loss) before

reclassification ( 685 ) 2,746 1 ( 2,959 ) 52 ( 845 )

Amounts reclassified from

accumulated other

comprehensive income

(loss) 0 ( 66 ) 1 0 1 ( 64 )

Net current-period other

comprehensive

income (loss) ( 685 ) 2,680 2 ( 2,959 ) 53 ( 909 )

Balance at June 30, 2023 $ ( 4,249 ) $ 1,978 $ ( 25 ) $ ( 5,059 ) $ 17 $ ( 7,338 )

All amounts in the table above are net of tax.

The tables below summarize the amounts reclassified from each component of accumulated other comprehensive income into net earnings for the following periods.

Reclassifications Out of Accumulated Other Comprehensive Income

(In millions) Three Months Ended March 31, 2024

(In millions) Three Months Ended

June 30, 2024

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

7 unchanged sentences

$ ( 1 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ 1 Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ 1 Net of tax

Total reclassifications for the period $ 39 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

(In millions) Three Months Ended

March 31, 2023

June 30, 2023

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

7 unchanged sentences

$ ( 1 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ ( 1 ) Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ ( 1 ) Net of tax

Total reclassifications for the period $ 19 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

(In millions) Six Months Ended

June 30, 2024

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

Statements of Earnings

Unrealized gains (losses) on available-for-sale

securities $ 218 Net investment gains (losses)

( 46 ) Tax (expense) or benefit (1)

$ 172 Net of tax

Unrealized gains (losses) on derivatives $ ( 2 ) Net investment gains (losses)

0 Tax (expense) or benefit (1)

$ ( 2 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ 1 Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ 1 Net of tax

Total reclassifications for the period $ 171 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

(In millions) Six Months Ended

June 30, 2023

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

Statements of Earnings

Unrealized gains (losses) on available-for-sale

securities $ 84 Net investment gains (losses)

( 18 ) Tax (expense) or benefit (1)

$ 66 Net of tax

Unrealized gains (losses) on derivatives $ ( 1 ) Net investment gains (losses)

0 Tax (expense) or benefit (1)

$ ( 1 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ ( 1 ) Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ ( 1 ) Net of tax

Total reclassifications for the period $ 64 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

SHARE-BASED COMPENSATION

As of March 31, 2024, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan).

As of June 30, 2024, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan).

Share-based awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company.

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Non-employee directors are eligible for grants of NQSOs, restricted stock, and stock appreciation rights.

As of March 31, 2024, approximately 33.6 million shares were available for future grants under this plan.

As of June 30, 2024, approximately 33.6 million shares were available for future grants under this plan.

The ISOs and NQSOs have a term of 10 years, and the share-based awards generally vest upon time-based conditions or time and performance-based conditions.

1 unchanged sentence

Performance-based vesting conditions generally include the attainment of goals related to Company financial performance.

As of March 31, 2024, the only performance-based awards issued and outstanding were restricted stock awards and units.

As of June 30, 2024, the only performance-based awards issued and outstanding were restricted stock awards and units.

Stock options and stock appreciation rights granted under the amended Plan have an exercise price of at least the fair market value of the underlying stock on the grant date and have an expiration date no later than 10 years from the grant date.

2 unchanged sentences

Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares.

The following table provides information on stock options outstanding and exercisable at March 31, 2024.

The following table provides information on stock options outstanding and exercisable at June 30, 2024.

Option Shares

6 unchanged sentences

Exercisable 744 2.0 42 33.54

The Company received cash from the exercise of stock options in the amount of $ 5 million and $ 4 million during the first three months of 2024 and 2023, respectively.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 24 million in the first three months of 2024, compared with $ 17 million in the first three months of 2023.

As of March 31, 2024, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 74 million, of which $ 40 million ( 1.8 million shares) was related to restricted stock awards and units with a performance-based vesting condition.

The Company received cash from the exercise of stock options in the amount of $ 9 million and $ 10 million during the first six months of 2024 and 2023, respectively.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 27 million in the first six months of 2024, compared with $ 19 million in the first six months of 2023.

As of June 30, 2024, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 60 million, of which $ 31 million ( 1.8 million shares) was related to restricted stock awards and units with a performance-based vesting condition.

The Company expects to recognize these amounts over a weighted-average period of approximately 1.8 years.

There are no other contractual terms covering restricted stock awards once vested.

The following table summarizes restricted stock activity during the three-month period ended March 31, 2024.

The following table summarizes restricted stock activity during the six-month period ended June 30, 2024.

(In thousands of shares) Shares Weighted-Average

6 unchanged sentences

( 1,421 ) 46.83

Restricted stock at March 31, 2024

Restricted stock at June 30, 2024

2,124 $ 73.04

9 unchanged sentences

however, future benefits under the U.S.

plan were frozen effective January 1, 2024.

plan were frozen effective January 1, 2024, which resulted in the Company recognizing a curtailment gain of $ 49 million in the second quarter of 2023.

employees, including those that participated in the U.S.

13 unchanged sentences

For certain employees and former employees, additional coverage is provided for all medical expenses for life.

Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $ 2 million for both the three-month periods ended March 31, 2024 and 2023.

Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $ 2 million and $( 45 ) million for the three-month periods and $ 4 million and $( 43 ) million for the six-month periods ended June 30, 2024 and 2023, respectively.

Total net periodic benefit cost includes the following components:

Three Months Ended March 31,

Three Months Ended June 30,

Pension Benefits Other

7 unchanged sentences

Amortization of net actuarial loss 0 0 ( 1 ) 0 0 1

Curtailment (gain) loss 0 0 0 ( 49 ) 0 0

Net periodic (benefit) cost $ 4 $ 4 $ 1 $ ( 45 ) $ 0 $ 2

During the three months ended March 31, 2024, Aflac Japan contributed approximately $ 6 million (using the weighted-average yen/dollar exchange rate for the three-month period ended March 31, 2024) to the Japanese funded defined benefit plan, and Aflac U.S.

Six Months Ended June 30,

Pension Benefits Other

Postretirement Benefits

(In millions) 2024 2023 2024 2023 2024 2023

Components of net periodic

benefit cost:

Service cost $ 7 $ 7 $ 0 $ 7 $ 0 $ 0

Interest cost 4 4 19 21 0 1

Expected return on plan assets ( 3 ) ( 3 ) ( 15 ) ( 18 ) 0 0

Amortization of net actuarial loss 0 0 ( 1 ) 0 0 1

Curtailment (gain) loss 0 0 0 ( 49 ) 0 0

Net periodic (benefit) cost $ 8 $ 8 $ 3 $ ( 39 ) $ 0 $ 2

During the six months ended June 30, 2024, Aflac Japan contributed approximately $ 12 million (using the weighted-average yen/dollar exchange rate for the six-month period ended June 30, 2024) to the Japanese funded defined benefit plan, and Aflac U.S.

did not make a contribution to the U.S.

3 unchanged sentences

COMMITMENTS AND CONTINGENT LIABILITIES

In June 2024, the Company entered into an agreement with an information technology and data services company to provide cloud hosting services for the Company.

As of June 30, 2024, the agreement has a remaining term of three years with an aggregate remaining cost of $ 68 million.

In June 2024, the Company renewed an outsourcing agreement with a technology and consulting company that provides for mainframe computer operations, distributed mid-range server computer operations, and related support for Aflac Japan.

As of June 30, 2024, the agreement has a remaining term of five years with an aggregate remaining cost of ¥ 48.2 billion ($ 299 million using the June 30, 2024 exchange rate).

In June 2024, the Company entered into an outsourcing agreement with a management consulting and technology services company to provide policy administration services for Aflac Japan.

As of June 30, 2024, the agreement has a remaining term of six years with an aggregate remaining cost of ¥ 6.8 billion ($ 42 million using the June 30, 2024 exchange rate).

The Company is a defendant in various lawsuits and receives various regulatory inquiries considered to be in the normal course of business.

8 unchanged sentences

Under state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business.

Guaranty fund assessments for the three-month periods ended March 31, 2024 and 2023 were immaterial.

Guaranty fund assessments for the three- and six-month periods ended June 30, 2024 and 2023 were immaterial.

For additional information regarding commitments and contingent liabilities, see Note 15 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements