What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-05 · 285 added, 206 removed, 2577 unchanged (16% of the section changed)

2 unchanged sentences

Consolidated Statements of Earnings

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions, except for share and per-share amounts - Unaudited) 2025 2024 2025 2024

27 unchanged sentences

Cash dividends per share $ .58 $ .50 $ 1.74 $ 1.50

(1) Includes a gain (loss) of an immaterial amount and $( 2 ) for the three-month periods and an immaterial amount and $( 5 ) for the six-month periods ended June 30, 2025 and 2024, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

(1) Includes a gain (loss) of $( 55 ) and $( 75 ) for the three-month periods and $( 55 ) and $( 80 ) for the nine-month periods ended September 30, 2025 and 2024, 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions - Unaudited) 2025 2024 2025 2024

19 unchanged sentences

Consolidated Balance Sheets

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

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

Investments and cash:

103 unchanged sentences

(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'

Balance at December 31, 2023

Balance at June 30, 2025 $ 136 $ 2,958 $ 52,595 $ ( 491 ) $ ( 27,998 ) $ 27,200

Net earnings 0 0 1,639 0 0 1,639

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 ( 222 ) 0 ( 222 )

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 127 0 127

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 1,238 0 1,238

Pension liability adjustment during period,

net of income taxes 0 0 0 0 0 0

Dividends to shareholders (1)

($ .58 per share)

0 0 ( 311 ) 0 0 ( 311 )

Exercise of stock options 0 1 0 0 0 1

Share-based compensation 0 5 0 0 0 5

Purchases of treasury stock 0 0 0 0 ( 1,009 ) ( 1,009 )

Treasury stock reissued 0 13 0 0 6 19

Balance at September 30, 2025 $ 136 $ 2,977 $ 53,923 $ 653 $ ( 29,001 ) $ 28,688

(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'

Balance at December 31, 2023 $ 136 $ 2,771 $ 47,993 $ ( 5,520 ) $ ( 23,395 ) $ 21,985

Net earnings 0 0 1,879 0 0 1,879

42 unchanged sentences

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'

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

Net earnings 0 0 ( 93 ) 0 0 ( 93 )

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 952 0 952

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 156 0 156

Unrealized gains (losses) on derivatives

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

Effect of changes in discount rate assumptions

during period, net of income taxes 0 0 0 ( 1,492 ) 0 ( 1,492 )

Pension liability adjustment during period,

net of income taxes 0 0 0 ( 3 ) 0 ( 3 )

Dividends to shareholders (1)

($ .50 per share)

0 0 ( 280 ) 0 0 ( 280 )

Exercise of stock options 0 1 0 0 0 1

Share-based compensation 0 21 0 0 0 21

Purchases of treasury stock 0 0 0 0 ( 505 ) ( 505 )

Treasury stock reissued 0 19 0 0 5 24

Balance at September 30, 2024 $ 136 $ 2,876 $ 50,972 $ ( 3,677 ) $ ( 25,477 ) $ 24,830

(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 Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions - Unaudited) 2025 2024

85 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, 2025 and December 31, 2024, the consolidated statements of earnings and comprehensive income (loss) for the three- and six-month periods ended June 30, 2025 and 2024, the consolidated statements of shareholders' equity for the three-month periods ended March 31, 2025 and 2024 and June 30, 2025 and 2024, and the consolidated statements of cash flows for the six-month periods ended June 30, 2025 and 2024.

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 September 30, 2025 and December 31, 2024, the consolidated statements of earnings and comprehensive income (loss) for the three- and nine-month periods ended September 30, 2025 and 2024, the consolidated statements of shareholders' equity for the three-month periods ended March 31, 2025 and 2024, June 30, 2025 and 2024, and September 30, 2025 and 2024, and the consolidated statements of cash flows for the nine-month periods ended September 30, 2025 and 2024.

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

26 unchanged sentences

The adoption of this guidance has no impact on the Company’s financial position or results of operations.

The Company is evaluating the impact of adoption on its disclosures.

The Company has developed the required disclosures in accordance with the new guidance, which will be reflected in the notes contained in the Company's 2025 Form 10-K..

Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company's business.

15 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 as a percentage of the Company's total adjusted revenues were 54 % in both the three- and six-month periods ended June 30, 2025 and 56 % in both the three- and six-month periods ended June 30, 2024.

The percentage of the Company's total assets attributable to Aflac Japan was 77 % at both June 30, 2025 and December 31, 2024.

Aflac Japan's adjusted revenues as a percentage of the Company's total adjusted revenues were 53 % and 55 % in the three-month periods and 53 % and 56 % in the nine-month periods ended September 30, 2025 and 2024, respectively.

The percentage of the Company's total assets attributable to Aflac Japan was 77 % at both September 30, 2025 and December 31, 2024.

Information regarding operations by reportable segment and Corporate and other is presented in the following tables.

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

19 unchanged sentences

Total revenues $ 4,740 $ 2,949 $ 12,298 $ 13,524

(2) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 8 and $ 30 for the three-month periods and $ 16 and $ 62 for the six-month periods ended June 30, 2025, and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 9 and $ 31 for the three-month periods and $ 16 and $ 64 for the six-month periods ended June 30, 2025, and 2024, 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 $ 6 and $ 57 for the three-month periods and $ 22 and $ 119 for the nine-month periods ended September 30, 2025, and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 7 and $ 78 for the three-month periods and $ 24 and $ 142 for the nine-month periods ended September 30, 2025, and 2024, 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 June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

43 unchanged sentences

Effect of foreign currency translation on after-tax adjusted earnings 1 ( 16 ) 16 ( 97 )

See Note 3 for additional information on these investments.

2 unchanged sentences

Under these internal reinsurance transactions, Aflac Japan's net earned premiums are reduced by the amount of premiums ceded to Aflac Re.

Aflac Re recorded net earned premiums of $ 178 million and $ 128 million for the three-month periods and $ 356 million and $ 264 million for the six-month periods ended June 30, 2025 and 2024, respectively, related to these reinsurance transactions with Aflac Japan.

Aflac Re recorded net earned premiums of $ 173 million and $ 132 million for the three-month periods and $ 529 million and $ 396 million for the nine-month periods ended September 30, 2025 and 2024, respectively, related to these reinsurance transactions with Aflac Japan.

These internal reinsurance transactions have no financial statement impact on a consolidated basis, except for the effect of foreign currency accounting.

2 unchanged sentences

The Company's total assets were as follows:

(In millions) June 30,

(In millions) September 30,

2025 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.

June 30, 2025

September 30, 2025

(In millions) Amortized

56 unchanged sentences

Total securities available-for-sale $ 64,089 $ 0 $ 5,308 $ 4,128 $ 65,269

June 30, 2025

September 30, 2025

(In millions) Amortized

25 unchanged sentences

Total securities held-to-maturity $ 15,971 $ 5 $ 15,966 $ 815 $ 9 $ 16,772

September 30,

2025 December 31,

6 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 six months of 2025 and 2024, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

During the first nine months of 2025 and 2024, 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 June 30, 2025, were as follows:

The contractual and economic maturities of the Company's investments in fixed maturity securities at September 30, 2025, were as follows:

(In millions) Amortized

23 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Credit

6 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

11 unchanged sentences

Credit losses:

Fixed maturity securities held-to-maturity 0 0 0 0

Commercial mortgage and other loans ( 51 ) ( 85 ) ( 165 ) ( 113 )

Impairment losses 0 ( 55 ) 0 ( 55 )

Loan commitments ( 2 ) ( 1 ) ( 2 ) 2

6 unchanged sentences

Total net investment gains (losses) $ 275 $ ( 1,408 ) $ ( 1,109 ) $ 239

During the second quarter of 2025, the Company recognized an impairment loss of $ 6 million on an office-type real estate owned (REO) property classified as held-and-used for the production of income.

For the nine-month period ended September 30, 2025, the Company recognized an impairment loss of $ 6 million on an office-type real estate owned (REO) property classified as held-and-used for the production of income.

The impairment was based on the Company's evaluation of a material adverse change in occupancy and resulted in an estimated fair value of the REO property of $ 12 million.

The fair value was based on expected future cash flows utilizing inputs classified as Level 3 under the fair value guidance in ASC 820.

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, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $ 101 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 gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $ 47 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 gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended September 30, 2025 that relate to equity securities held at the September 30, 2025 reporting date were $ 11 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended September 30, 2024 that relate to equity securities held at the September 30, 2024 reporting date were $ 34 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the nine-month period ended September 30, 2025 that relate to equity securities held at the September 30, 2025 reporting date were $ 46 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the nine-month period ended September 30, 2024 that relate to equity securities held at the September 30, 2024 reporting date were $ 79 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) June 30,

(In millions) September 30,

2025 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 June 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

June 30, 2025

The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended September 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

September 30, 2025

Total Less than 12 months 12 months or longer

71 unchanged sentences

However, if 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, an allowance for credit losses is recognized.

Based on an evaluation of its securities currently in an unrealized loss position, the Company has determined that those securities should not have an allowance for credit losses as of June 30, 2025 .

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

As of June 30, 2025 and December 31, 2024, the Company had an immaterial amount of fixed maturity securities on nonaccrual status.

As of September 30, 2025 and December 31, 2024, 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.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Amortized

27 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 June 30, 2025, the Company had $ 175 million in outstanding commitments to fund TREs.

As of September 30, 2025, the Company had $ 165 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.

As of June 30, 2025, the Company had commitments of approximately $ 646 million to fund future MMLs.

As of September 30, 2025, the Company had commitments of approximately $ 732 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 June 30, 2025, the Company had commitments of approximately $ 1 million to fund future other loans.

As of September 30, 2025, the Company had commitments of approximately $ 1 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 June 30, 2025 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 September 30, 2025 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.

Transitional Real Estate Loans

36 unchanged sentences

BBB 6 232 69 25 0 0 0 332

BB 0 0 0 0 0 0 0 0

Total $ 6 $ 232 $ 69 $ 103 $ 3 $ 0 $ 0 $ 413

3 unchanged sentences

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.

June 30, 2025

September 30, 2025

(In millions) Current Less Than

6 unchanged sentences

Total $ 10,015 $ 97 $ 447 $ 544 $ 10,559 $ 467

(1) As of June 30, 2025, there were no loans that were 90 days or more past due that continued to accrue interest.

(1) As of September 30, 2025, there were no loans that were 90 days or more past due that continued to accrue interest.

December 31, 2024

8 unchanged sentences

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

For the three-month period ended June 30, 2025, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the six-month period ended June 30, 2025, the Company recognized $ 1 million of interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the three- and six-month periods ended June 30, 2024, 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 $ 45 million and $ 140 million had no credit loss allowance as of June 30, 2025 and December 31, 2024, 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, 2025, no MMLs were on nonaccrual status without an allowance for credit loss.

As of December 31, 2024, MMLs with an amortized cost of $ 5 million were on nonaccrual status without an allowance for credit losses.

For the three-month period ended September 30, 2025, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the nine-month period ended September 30, 2025, the Company recognized $ 1 million of interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the three- and nine-month periods ended September 30, 2024, 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 $ 45 million and $ 140 million had no credit loss allowance as of September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, MMLs with an amortized cost of $ 21 million and $ 5 million, respectively, were on nonaccrual status without an allowance for credit loss.

Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first six months of 2025 and 2024.

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first nine months of 2025 and 2024.

The types of modifications granted may include interest rate reductions, principal forgiveness, other-than-insignificant payment delays, term extensions or a combination of these types of modifications.

3 unchanged sentences

Three Months Ended

June 30, 2025

September 30, 2025

(In millions) Amortized Cost (1)

% of Total Financial Effect

Transitional Real Estate Loans:

Term extension $ 128 3.1 % Term extension of 22 months on average

Term extension and interest rate reduction 152 3.7 Term extension of 26 months on average and reduction in the weighted-average contractual interest rate from 4.8 % to 4.3 %

Middle Market Loans:

Principal forgiveness $ 4 .1 % Reduction in the amortized cost basis of $ 0.3 million

Principal forgiveness and term

extension 25 .6 Reduction in the amortized cost basis of $ 34 million and term extension of 30 months on average

Term extension $ 13 .3 % Term extension of 17 months on average

Principal forgiveness and term extension 9 .2 Reduction in the amortized cost basis of $ 6 million and term extension of 43 months on average

Principal forgiveness, term

extension and interest rate reduction

13 .3 Reduction in the amortized cost basis of $ 5 million, term extension of 45 months on average and reduction in the weighted-average contractual interest rate from 10.5 % to 9.5 %.

(1) Net of allowance for credit losses

Three Months Ended

June 30, 2024

September 30, 2024

(In millions) Amortized Cost (1)

1 unchanged sentence

Transitional Real Estate Loans:

Other-than-insignificant payment delays and interest rate

$ 121 2.2 % Delay in payments of 31 months on average and reduction in the weighted-average contractual interest rate from 8.1 % to 7.8 %

Other-than-insignificant payment

delays $ 123 2.3 % Delay in payments of 24 months on average

(1) Net of allowance for credit losses

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

(In millions) Amortized Cost (1)

5 unchanged sentences

Principal forgiveness $ 6 .1 % Reduction in the amortized cost basis of $ 4 million

Term extension 33 .8 Term extension of six months on average

Term extension 46 1.1 Term extension of 9 months on average

Other-than-insignificant

2 unchanged sentences

extension 35 .8 Reduction in the amortized cost basis of $ 40 million and term extension of 33 months on average

Principal forgiveness, term

extension and interest rate reduction

13 .3 Reduction in the amortized cost basis of $ 5 million, term extension of 45 months on average and reduction in the weighted-average contractual interest rate from 10.5 % to 9.5 %.

(1) Net of allowance for credit losses

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

(In millions) Amortized Cost (1)

1 unchanged sentence

Transitional Real Estate Loans:

Other-than-insignificant payment

delays $ 198 3.8 % Delay in payments of 29 months on average

Other-than-insignificant payment delays and interest rate

1 unchanged sentence

(1) Net of allowance for credit losses

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.

The following table presents an aging of loans that received modifications in the 12 months preceding the period presented, at amortized cost.

June 30, 2025

The following tables present an aging of loans that received modifications in the 12 months preceding the period presented, at amortized cost.

September 30, 2025

(In millions) Current Less Than

4 unchanged sentences

Total $ 632 $ 11 $ 61 $ 61

September 30, 2024

(In millions) Current Less Than

Past Due 90 Days

Past Due Nonaccrual

Transitional real estate loans $ 414 $ 0 $ 0 $ 0

Total $ 414 $ 0 $ 0 $ 0

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

Loans that were granted a modification in the past 12 months, as of June 30, 2025 and 2024, and subsequently defaulted in the three- and six-month periods ended June 30, 2025 and 2024, were immaterial.

As of June 30, 2025, the Company had $ 12 million of outstanding commitments to lend additional funds to borrowers experiencing financial difficulty that were granted a loan modification, compared with $ 14 million as of December 31, 2024.

Loans that were granted a modification in the past 12 months, as of September 30, 2025 and 2024, and subsequently defaulted in the three- and nine-month periods ended September 30, 2025 and 2024, were immaterial.

As of September 30, 2025 and December 31, 2024, the Company had $ 14 million of outstanding commitments to lend additional funds to borrowers experiencing financial difficulty that were granted a loan modification.

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 $ 16.6 billion amortized cost as of June 30, 2025 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 $ 16.1 billion amortized cost as of September 30, 2025 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.

14 unchanged sentences

Securities Total

Three Months Ended June 30, 2025:

Balance at March 31, 2025

Three Months Ended

September 30, 2025:

Balance at June 30, 2025

$ ( 243 ) $ ( 12 ) $ ( 127 ) $ ( 17 ) $ ( 5 ) $ 0 $ ( 404 )

3 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2025

Balance at September 30, 2025

$ ( 271 ) $ ( 10 ) $ ( 139 ) $ ( 19 ) $ ( 5 ) $ 0 $ ( 444 )

Three Months Ended June 30, 2024:

Balance at March 31, 2024

Three Months Ended

September 30, 2024:

Balance at June 30, 2024

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

3 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2024 (2)

Balance at September 30, 2024

$ ( 151 ) $ ( 30 ) $ ( 103 ) $ ( 14 ) $ ( 5 ) $ 0 $ ( 303 )

Six Months Ended June 30, 2025:

Nine Months Ended

September 30, 2025:

Balance at December 31, 2024

$ ( 199 ) $ ( 14 ) $ ( 140 ) $ ( 17 ) $ ( 5 ) $ 0 $ ( 375 )

(Addition to) release of allowance

for credit losses

(Addition to) release of allowance for credit losses

( 101 ) 4 ( 68 ) ( 2 ) 0 0 ( 167 )

1 unchanged sentence

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2025

Balance at September 30, 2025

$ ( 271 ) $ ( 10 ) $ ( 139 ) $ ( 19 ) $ ( 5 ) $ 0 $ ( 444 )

Six Months Ended June 30, 2024:

Nine Months Ended

September 30, 2024:

Balance at December 31, 2023

4 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2024

Balance at September 30, 2024

$ ( 151 ) $ ( 30 ) $ ( 103 ) $ ( 14 ) $ ( 5 ) $ 0 $ ( 303 )

As of June 30, 2025, the Company identified TREs with an amortized cost of $ 136 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of June 30, 2025, the Company established a credit allowance of $ 20 million related to these loans.

As of September 30, 2025, the Company identified TREs with an amortized cost of $ 136 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of September 30, 2025, the Company established a credit allowance of $ 42 million related to these loans.

Other Investments

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

(In millions) June 30,

(In millions) September 30,

2025 December 31,

12 unchanged sentences

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 June 30, 2025 and December 31, 2024, all REO was classified as held-and-used for the production of income, which is carried at cost less accumulated depreciation.

Depreciation expense was $ 8 million and $ 3 million for the three-month periods and $ 14 million and $ 4 million for the six-month periods ended June 30, 2025 and 2024, respectively.

Additionally, as of June 30, 2025 and December 31, 2024, accumulated depreciation was $ 28 million and $ 14 million, respectively.

The Company had $ 2.4 billion and $ 2.8 billion in outstanding commitments to fund investments in limited partnerships, which included $ 2.1 billion and $ 2.1 billion of unfunded commitments related to VIEs that are non-consolidated as of June 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, all REO was classified as held-and-used for the production of income, which is carried at cost less accumulated depreciation.

Depreciation expense was $ 8 million and $ 4 million for the three-month periods and $ 21 million and $ 8 million for the nine-month periods ended September 30, 2025 and 2024, respectively.

Additionally, as of September 30, 2025 and December 31, 2024, accumulated depreciation was $ 35 million and $ 14 million, respectively.

The Company had $ 3.1 billion and $ 2.8 billion in outstanding commitments to fund investments in limited partnerships, which included $ 2.0 billion and $ 2.1 billion of unfunded commitments related to VIEs that are non-consolidated as of September 30, 2025 and December 31, 2024, respectively.

Variable Interest Entities (VIEs)

9 unchanged sentences

Investments in Consolidated Variable Interest Entities

(In millions) June 30,

(In millions) September 30,

2025 December 31,

27 unchanged sentences

Investments in Variable Interest Entities Not Consolidated

(In millions) June 30,

(In millions) September 30,

2025 December 31,

6 unchanged sentences

The Company's involvement in the related VIEs is limited to that of a passive investor in asset-backed securities issued by the VIEs.

The Company also invests in fixed maturity debt securities issued by VIEs that are the

primary financing vehicles used by their corporate sponsors to raise financing in the capital markets.

The Company also invests in fixed maturity debt securities issued by VIEs that are the primary financing vehicles used by their corporate sponsors to raise financing in the capital markets.

The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them.

19 unchanged sentences

Remaining Contractual Maturity of the Agreements

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(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 $ 1.5 billion and $ 3.0 billion at June 30, 2025 and December 31, 2024, 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 $ 1.6 billion and $ 3.0 billion at September 30, 2025 and December 31, 2024, 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 June 30, 2025, and December 31, 2024, respectively.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of September 30, 2025, and December 31, 2024, 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.

5 unchanged sentences

• foreign currency forwards and options used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long term exposure to a weakening yen;

• foreign currency swaps used to hedge the foreign currency exchange risk associated with certain investments denominated in other foreign currencies in Aflac Japan's portfolio;

• cross-currency swaps, also referred to as foreign currency swaps, associated with certain senior notes and subordinated debentures;

30 unchanged sentences

There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts.

Foreign currency swaps are used primarily in the consolidated VIEs in the Company's Aflac Japan portfolio to convert foreign-denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize

cash flow fluctuations.

The Company also uses foreign currency swaps to economically convert certain of its U.S.

The Company also uses foreign currency swaps to economically hedge the foreign exchange rate risk on certain investments denominated in other foreign currencies in Aflac Japan's portfolio, as well as to economically

convert certain of its U.S.

dollar-denominated senior note and subordinated debenture principal and interest obligations into yen-denominated obligations.

15 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.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Asset

18 unchanged sentences

Interest rate swaps 28,600 16 231 17,230 0 329

Forward bond purchase commitment - VIE 28 0 0 0 0 0

Total non-qualifying strategies 57,383 62 920 44,917 55 927

17 unchanged sentences

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 June 30, 2025 and December 31, 2024;

The Company had no fair value hedges of interest rate risk as of September 30, 2025 and December 31, 2024;

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

1 unchanged sentence

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

September 30,

2025 December 31,

2024 June 30,

2024 September 30,

2025 December 31,

4 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- and six-month periods ended June 30, 2025 and 2024, respectively.

The Company's net investment hedge was effective during the three- and nine-month periods ended September 30, 2025 and 2024, 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.

The Company uses foreign currency swaps to hedge the foreign currency exchange risk associated with certain investments denominated in other foreign currencies in the Aflac Japan segment.

The Parent Company had cross-currency swap agreements related to certain of its U.S.

12 unchanged sentences

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

Three Months Ended June 30,

Three Months Ended September 30,

(In millions) Net

16 unchanged sentences

Non-qualifying strategies:

Foreign currency swaps 0 1

Foreign currency swaps - VIE ( 115 ) 44

4 unchanged sentences

Total $ ( 1 ) $ ( 123 ) $ 206 $ ( 1 ) $ 436 $ ( 745 )

(1) 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, 2025, and $ 1 of losses during the three-month period ended June 30, 2024.

Six Months Ended June 30,

(1) 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 September 30, 2025, and $ 1 of losses during the three-month period ended September 30, 2024.

Nine Months Ended September 30,

(In millions) Net

23 unchanged sentences

Total $ ( 1 ) $ ( 145 ) $ ( 395 ) $ ( 1 ) $ ( 54 ) $ 56

(1) 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, 2025, and $ 2 of losses during the six-month period ended June 30, 2024.

(1) Impact of cash flow hedges reported as net investment gains (losses) includes $ 3 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the nine-month period ended September 30, 2025, and $ 3 of losses during the nine-month period ended September 30, 2024.

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

3 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).

As of June 30, 2025, $ 2 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next 12 months.

As of September 30, 2025, $ 1 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next 12 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 June 30, 2025, all of the Company's derivative agreement counterparties were investment grade.

As of September 30, 2025, 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 $ 852 million and $ 804 million as of June 30, 2025 and December 31, 2024, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on June 30, 2025, the Company estimates that it would be required to post a maximum of $ 584 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 $ 851 million and $ 804 million as of September 30, 2025 and December 31, 2024, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on September 30, 2025, the Company estimates that it would be required to post a maximum of $ 629 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

June 30, 2025

September 30, 2025

Gross Amounts Not Offset

51 unchanged sentences

Offsetting of Financial Liabilities and Derivative Liabilities

June 30, 2025

September 30, 2025

Gross Amounts Not Offset

59 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.

June 30, 2025

September 30, 2025

(In millions) Quoted Prices in

59 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.

June 30, 2025

September 30, 2025

(In millions) Carrying

76 unchanged sentences

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

June 30, 2025

September 30, 2025

(In millions) Quoted Prices in

45 unchanged sentences

Total equity securities $ 722 $ 0 $ 163 $ 885

June 30, 2025

September 30, 2025

(In millions) Quoted Prices in

168 unchanged sentences

Three Months Ended

June 30, 2025

September 30, 2025

Fixed Maturity Securities Equity

24 unchanged sentences

Three Months Ended

June 30, 2024

September 30, 2024

Fixed Maturity Securities Equity

23 unchanged sentences

included in earnings $ 1 $ 0 $ 0 $ 0 $ 0 $ 6 $ 7

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

Fixed Maturity Securities Equity

23 unchanged sentences

of the period included in earnings $ 0 $ 0 $ 0 $ 0 $ 0 $ 4 $ 4

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

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.

June 30, 2025

September 30, 2025

(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.

June 30, 2025

September 30, 2025

Aflac Japan Aflac U.S.

11 unchanged sentences

other 172 115 28 2 0 0 0 0 0 0 0 317

Balance at June 30, 2025

Balance at September 30, 2025

$ 3,061 $ 1,940 $ 468 $ 54 $ 906 $ 636 $ 1,348 $ 457 $ 86 $ 260 $ 0 $ 9,216

23 unchanged sentences

Future DAC amortization is impacted by persistency.

There were no changes to the inputs, judgments, assumptions or methods used to determine amortization amounts during the six-month periods ended June 30, 2025 and 2024.

There were no changes to the inputs, judgments or methods used to determine amortization amounts during the nine-month periods ended September 30, 2025 and 2024.

The Company updated the assumptions used to determine amortization using the same assumptions as those used for measuring the liability for future policy benefits during the nine-month periods ended September 30, 2025 and 2024.

The Company recognizes the effects of changes in assumptions prospectively over the remaining contract term as a revision of the future amortization pattern.

For additional information on deferred policy acquisition costs, see Notes 1 and 6 of the Notes to the Consolidated Financial Statements in the 2024 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.

June 30, 2025

September 30, 2025

Aflac Japan Aflac U.S.

20 unchanged sentences

Effect of changes in discount rate assumptions ( 716 ) ( 903 ) ( 156 ) ( 61 ) ( 113 ) ( 44 ) ( 293 ) ( 61 ) ( 6 ) ( 32 ) 116

Balance at June 30, 2025

Balance at September 30, 2025

$ 13,289 $ 11,345 $ 4,919 $ 802 $ 2,564 $ 1,680 $ 3,982 $ 1,184 $ 201 $ 994 $ 1,728

14 unchanged sentences

Effect of changes in discount rate assumptions ( 313 ) ( 3,798 ) ( 4,425 ) ( 1,012 ) ( 165 ) ( 68 ) ( 929 ) ( 114 ) ( 20 ) ( 207 ) 125

Balance at June 30, 2025

Balance at September 30, 2025

38,261 19,391 22,758 4,025 3,235 2,341 10,931 1,972 441 2,032 2,209

52 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.

June 30, 2025

September 30, 2025

Aflac Japan Aflac U.S.

27 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) June 30,

(In millions) September 30,

2025 December 31,

41 unchanged sentences

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

There were no changes to the methods used to determine the discount rates during the six-month periods ended June 30, 2025 and 2024.

There were no changes to the methods used to determine the discount rates during the nine-month periods ended September 30, 2025 and 2024.

Mortality rate assumptions are based on industry tables and adjusted for the Company's actual or expected experience where credible or appropriate.

7 unchanged sentences

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

For the three- and six-month periods ended June 30, 2025 and 2024, 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 or methods used in measuring the liability for future policy benefits during the six-month periods ended June 30, 2025 and 2024.

For the three- and nine-month periods ended September 30, 2025 and 2024, 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 or methods used in measuring the liability for future policy benefits during the nine-month periods ended September 30, 2025 and 2024.

The Company performs an annual review of its assumptions during the third quarter.

In 2025, the Company's annual assumption review process resulted in favorable changes largely due to favorable morbidity assumptions in Japan and favorable morbidity and termination assumptions in the U.S.

In 2024, the Company's annual assumption review process resulted in favorable changes largely due to reflecting more favorable Japan morbidity experience.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

15 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

19 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.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Gross

16 unchanged sentences

Total $ 149,102 $ 180,123 $ 142,653 $ 173,393

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Gross

16 unchanged sentences

Total $ 105,902 $ 107,596 $ 105,686 $ 111,508

Loss expense as a result of NPR capping for the three- and six-month periods ended June 30, 2025 and 2024 was immaterial.

Loss expense as a result of NPR capping for the three- and nine-month periods ended September 30, 2025 and 2024 was immaterial.

Other Policyholders' Funds

As of June 30, 2025 and December 31, 2024, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan.

As of September 30, 2025 and December 31, 2024, 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) June 30,

(In millions) September 30,

2025 December 31,

13 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Range of Guaranteed

7 unchanged sentences

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5 % at June 30, 2025 and December 31, 2024.

(2) Weighted-average crediting rate of 1.5 % at September 30, 2025 and December 31, 2024.

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

6 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

15 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 consolidated deferred reinsurance gain liability of $ 154 million and $ 146 million as of June 30, 2025 and December 31, 2024, 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 $ 146 million as of September 30, 2025 and December 31, 2024, 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 $ 166 million and $ 163 million as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the allowance for credit losses related to the Company's reinsurance recoverable balance was $ 4 million.

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 $ 172 million and $ 163 million as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, the allowance for credit losses related to the Company's reinsurance recoverable balance was $ 4 million.

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 significant reinsurance counterparties.

The Company uses external credit ratings focused on these reinsurers' financial strength and credit worthiness.

As of June 30, 2025, the Company's significant reinsurance counterparties were rated A+.

As of September 30, 2025, the Company's significant reinsurance counterparties were rated A+.

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

4 unchanged sentences

A summary of notes payable and lease obligations follows:

(In millions) June 30,

(In millions) September 30,

2025 December 31,

7 unchanged sentences

Yen-denominated senior notes and subordinated debentures:

.300 % senior notes due September 2025 (principal amount ¥ 12.4 billion)

.300 % senior notes paid September 2025 (principal amount ¥ 12.4 billion)

.932 % senior notes due January 2027 (principal amount ¥ 60.0 billion)

47 unchanged sentences

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.

In September 2025, the Parent Company extinguished ¥ 12.4 billion of .300 % senior notes upon their maturity.

In June 2025, the Parent Company issued four series of senior notes totaling ¥ 74.9 billion through a public debt offering under its U.S.

13 unchanged sentences

These notes are redeemable at the Parent Company's option (i) in whole at any time or (ii) in part from time to time in an amount not less than 5% of the aggregate principal amount then outstanding of the notes to be redeemed.

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 51 million and $ 49 million for the three-month periods and $ 100 million and $ 96 million for the six-month periods ended June 30, 2025 and 2024, respectively.

A summary of the Company's lines of credit as of June 30, 2025 follows:

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 56 million and $ 49 million for the three-month periods and $ 157 million and $ 145 million for the nine-month periods ended September 30, 2025 and 2024, respectively.

Senior Note Facility Agreements

In August 2025, the Parent Company entered into two separate facility agreements:

a 10 -year facility agreement (2035 Facility Agreement) with a Delaware trust (2035 Trust) and a 30 -year facility agreement (2055 Facility Agreement) with a Delaware trust (2055 Trust).

In connection with these transactions, the trusts issued and sold pre-capitalized trust securities in private placements and invested the proceeds in a portfolio of principal and/or interest strips of U.S.

Treasury securities (the Strips).

These trusts are an off-balance sheet funding arrangement.

The 2035 Facility Agreement provides the Parent Company the right to issue and sell to the 2035 Trust from time to time up to $ 1.0 billion of 5.251 % senior notes due August 2035 in exchange for a corresponding amount of the Strips held by the 2035 Trust.

In return, the Parent Company agreed to pay a semi-annual facility fee to the 2035 Trust at a rate of 0.9875 % per annum applied to the unexercised amount of senior notes that the Parent Company could issue and sell to the 2035 Trust.

The 2055 Facility Agreement provides the Parent Company the right to issue and sell to the 2055 Trust from time to time up to $ 1.0 billion of 5.991 % senior notes due August 2055 in exchange for a corresponding amount of the Strips held by the 2055 Trust.

In return, the Parent Company agreed to pay a semi-annual facility fee to the 2055 Trust at a rate of 1.1218 % per annum applied to the unexercised amount of senior notes that the Parent Company could issue and sell to the 2055 Trust.

The Parent Company can redeem the senior notes at any time, in whole or in part, by returning the Strips to the trusts or by delivering cash at a redemption price equal to the greater of the principal amount or a make-whole redemption price, in each case plus accrued and unpaid interest to, but excluding, the date of redemption.

As of September 30, 2025, the Parent Company had no senior note issuances under these facility agreements.

A summary of the Company's lines of credit as of September 30, 2025 follows:

Borrower(s) Type Term Expiration

62 unchanged sentences

(1) Intercompany credit agreement

The Company was in compliance with all of the covenants of its notes payable and lines of credit at June 30, 2025.

No events of default or defaults occurred during the six-month period ended June 30, 2025.

The Company was in compliance with all of the covenants of its notes payable and lines of credit at September 30, 2025.

No events of default or defaults occurred during the nine-month period ended September 30, 2025.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2024 Annual Report.

SHAREHOLDERS’ EQUITY

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.

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

(In thousands of shares) 2025 2024

15 unchanged sentences

Share Repurchase Program:

During the first six months of 2025, the Company repurchased 16.4 million shares of its common stock for $ 1.7 billion as part of its share repurchase program.

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.

As of June 30, 2025, a remaining balance of 30.9 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

During the first nine months of 2025, the Company repurchased 25.7 million shares of its common stock for $ 2.7 billion as part of its share repurchase program.

During the first nine months of 2024, the Company repurchased 23.4 million shares of its common stock for $ 2.1 billion as part of its share repurchase program.

In August 2025, the Company's board of directors authorized the purchase of an additional 100 million shares of its common stock.

As of September 30, 2025, a remaining balance of 121.6 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

Outstanding share-based awards are excluded from the calculation of weighted-average shares used in the computation of basic earnings per share (EPS), but are included in the calculation of weighted-average shares used in the computation of diluted EPS.

1 unchanged sentence

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2025 2024 2025 2024

4 unchanged sentences

Three Months Ended

June 30, 2025

September 30, 2025

(In millions) Unrealized Foreign

6 unchanged sentences

Adjustment Total

Balance at March 31, 2025 $ ( 4,549 ) $ ( 1,233 ) $ ( 18 ) $ 3,899 $ 42 $ ( 1,859 )

Balance at June 30, 2025 $ ( 4,282 ) $ ( 1,828 ) $ ( 17 ) $ 5,594 $ 42 $ ( 491 )

Other comprehensive

8 unchanged sentences

income (loss) ( 222 ) 127 1 1,238 0 1,144

Balance at June 30, 2025 $ ( 4,282 ) $ ( 1,828 ) $ ( 17 ) $ 5,594 $ 42 $ ( 491 )

Balance at September 30, 2025 $ ( 4,504 ) $ ( 1,701 ) $ ( 16 ) $ 6,832 $ 42 $ 653

All amounts in the table above are net of tax.

Three Months Ended

June 30, 2024

September 30, 2024

(In millions) Unrealized Foreign

6 unchanged sentences

Adjustment Total

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 )

Other comprehensive

8 unchanged sentences

income (loss) 952 156 2 ( 1,492 ) ( 3 ) ( 385 )

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

Balance at September 30, 2024 $ ( 4,139 ) $ 557 $ ( 20 ) $ ( 67 ) $ ( 8 ) $ ( 3,677 )

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

(In millions) Unrealized Foreign

17 unchanged sentences

income (loss) 494 ( 1,725 ) 4 4,826 32 3,631

Balance at June 30, 2025 $ ( 4,282 ) $ ( 1,828 ) $ ( 17 ) $ 5,594 $ 42 $ ( 491 )

Balance at September 30, 2025 $ ( 4,504 ) $ ( 1,701 ) $ ( 16 ) $ 6,832 $ 42 $ 653

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2024

Nine Months Ended

September 30, 2024

(In millions) Unrealized Foreign

17 unchanged sentences

income (loss) ( 70 ) ( 582 ) 2 2,493 0 1,843

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

Balance at September 30, 2024 $ ( 4,139 ) $ 557 $ ( 20 ) $ ( 67 ) $ ( 8 ) $ ( 3,677 )

All amounts in the table above are net of tax.

2 unchanged sentences

(In millions) Three Months Ended

June 30, 2025

September 30, 2025

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

16 unchanged sentences

(In millions) Three Months Ended

June 30, 2024

September 30, 2024

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

15 unchanged sentences

(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, 2025

(In millions) Nine Months Ended

September 30, 2025

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

15 unchanged sentences

(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

(In millions) Nine Months Ended

September 30, 2024

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

16 unchanged sentences

SHARE-BASED COMPENSATION

As of June 30, 2025, 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 September 30, 2025, 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.

5 unchanged sentences

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

As of June 30, 2025, approximately 32.6 million shares were available for future grants under this plan.

As of September 30, 2025, approximately 32.6 million shares were available for future grants under this plan.

The ISOs, NQSOs 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

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

As of June 30, 2025, the only performance-based awards issued and outstanding were restricted stock awards and units.

As of September 30, 2025, the only performance-based awards issued and outstanding were restricted stock awards and units.

The Compensation Committee of the Board of Directors has the discretion to determine vesting schedules.

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 June 30, 2025.

The following table provides information on stock options outstanding and exercisable at September 30, 2025.

Option Shares

6 unchanged sentences

Exercisable 392 1.4 30 35.61

The Company received cash from the exercise of stock options in the amount of $ 5 million and $ 9 million during the first six months of 2025 and 2024, respectively.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 30 million in the first six months of 2025, compared with $ 27 million in the first six months of 2024.

As of June 30, 2025, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 44 million, of which $ 22 million ( 1.6 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 $ 7 million and $ 11 million during the first nine months of 2025 and 2024, respectively.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 31 million in the first nine months of 2025, compared with $ 28 million in the first nine months of 2024.

As of September 30, 2025, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 33 million, of which $ 15 million ( 1.6 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 1.7 years.

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

The following table summarizes restricted stock activity during the six-month period ended June 30, 2025.

The following table summarizes restricted stock activity during the nine-month period ended September 30, 2025.

(In thousands of shares) Shares Weighted-Average

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( 1,283 ) 68.67

Restricted stock at June 30, 2025

Restricted stock at September 30, 2025

1,867 $ 86.09

21 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 $ 3 million and $ 2 million for the three-month periods and $ 60 million and $ 4 million for the six-month periods ended June 30, 2025 and 2024, respectively.

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 $ 4 million and $ 3 million for the three-month periods and $ 64 million and $ 7 million for the nine-month periods ended September 30, 2025 and 2024, respectively.

Total net periodic benefit cost includes the following components:

Three Months Ended June 30,

Three Months Ended September 30,

Pension Benefits Other

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Net periodic benefit cost (credit) $ 4 $ 3 $ 3 $ 2 $ 1 $ 1

Six Months Ended June 30,

Nine Months Ended September 30,

Pension Benefits Other

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Net periodic benefit cost (credit) $ 10 $ 11 $ 62 $ 5 $ 2 $ 1

During the six months ended June 30, 2025, Aflac Japan contributed approximately $ 12 million (using the weighted-average yen/dollar exchange rate for the six-month period ended June 30, 2025) to the Japanese funded defined benefit plan, and Aflac U.S.

During the nine months ended September 30, 2025, Aflac Japan contributed approximately $ 19 million (using the weighted-average yen/dollar exchange rate for the nine-month period ended September 30, 2025) to the Japanese funded defined benefit plan, and Aflac U.S.

did not make a contribution to the U.S.

10 unchanged sentences

Cyber Incident

On June 12, 2025, the Company identified an incident involving unauthorized access to its network in the U.S.

The Company promptly initiated its cybersecurity incident response protocols and believes that it contained the intrusion within hours.

The Company’s business remains operational and its systems were not affected by ransomware.

The Company continues to serve its policyholders as it responds to this incident and can underwrite policies, review claims, and otherwise service customers as usual.

The Company has been conducting a review of potentially impacted individuals and data.

The Company is still in the process of validating the extent and nature of the files that were involved and the Company believes that the potential amount of loss cannot be reasonably estimated at this time.

As previously disclosed, the Company identified an incident involving unauthorized access to its network in the U.S.

on June 12, 2025.

The Company promptly initiated its cybersecurity incident response protocols and continues to believe it contained the intrusion within hours.

The Company is still in the process of validating the extent and nature of the files that were involved in the incident and the Company believes that the potential amount of loss cannot be reasonably estimated at this time.

The Company's systems were not affected by ransomware, and the Company continues to serve its policyholders and underwrite policies, review claims, and otherwise service customers as usual.

Outsourcing Agreements and Other Commitments

In May 2025, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan.

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 10.9 billion ($ 75 million using the June 30, 2025 exchange rate).

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 10.1 billion ($ 68 million using the September 30, 2025 exchange rate).

In February 2025, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan.

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 9.4 billion ($ 65 million using the June 30, 2025 exchange rate).

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 8.6 billion ($ 58 million using the September 30, 2025 exchange rate).

See Note 3 for details on certain investment commitments.

4 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- and six-month periods ended June 30, 2025 and 2024 were immaterial.

Guaranty fund assessments for the three- and nine-month periods ended September 30, 2025 and 2024 were immaterial.

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