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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-06 · 247 added, 153 removed, 1086 unchanged (27% of the section changed)

40 unchanged sentences

MD&A OVERVIEW

MD&A is intended to inform the reader about matters affecting the financial condition and results of operations of Aflac Incorporated and its subsidiaries for the three-month periods ended March 31, 2026 and 2025, respectively.

MD&A is intended to inform the reader about matters affecting the financial condition and results of operations of Aflac Incorporated and its subsidiaries for the six-month periods ended June 30, 2026 and 2025, respectively.

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

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Performance Highlights

Total revenues were $4.3 billion in the first quarter of 2026, compared with $3.4 billion in the first quarter of 2025, primarily due to net investment gains of $49 million in the first quarter of 2026 compared with net investment losses of $963 million in the first quarter of 2025.

Net earnings were $1.0 billion, or $1.98 per diluted share, in the first quarter of 2026, compared with $29 million, or $.05 per diluted share, in the first quarter of 2025.

Net earnings in the first quarter of 2026 included net investment gains of $49 million, compared with net investment losses of $963 million in the first quarter of 2025.

Net investment gains in the first quarter of 2026 included $164 million of net gains from certain derivative and foreign currency gains or losses;

offset by an increase in credit loss allowances of $61 million;

Total revenues were $4.1 billion in the second quarter of 2026, compared with $4.2 billion in the second quarter of 2025.

Net earnings were $825 million, or $1.63 per diluted share, in the second quarter of 2026, compared with $599 million, or $1.11 per diluted share, in the second quarter of 2025.

Net earnings in the second quarter of 2026 included net investment losses of $153 million, compared with net investment losses of $421 million in the second quarter of 2025.

Net investment losses in the second quarter of 2026 included $238 million of net losses from sales and redemptions;

an increase in credit loss allowances of $77 million;

$11 million of impairments;

$16 million of net losses from sales and redemptions;

and a $14 million loss from a decrease in the fair value of equity securities.

Adjusted earnings (1) in the first quarter of 2026 were $901 million, or $1.75 per diluted share, compared with $906 million, or $1.66 per diluted share, in the first quarter of 2025.

The average yen/dollar exchange rate (2) for the three-month period ended March 31, 2026 was 156.87, or 2.8% weaker than the average rate of 152.40 for the same period in 2025.

offset by an $87 million gain from an increase in the fair value of equity securities;

and $86 million of net gains from certain derivative and foreign currency gains or losses.

Total revenues were $8.5 billion in the first six months of 2026, compared with $7.6 billion in the first six months of 2025, primarily due to net investment losses of $104 million in the first six months of 2026 compared with net investment losses of $1.4 billion in the first six months of 2025.

Net earnings were $1.8 billion, or $3.61 per diluted share, in the first six months of 2026, compared with $628 million, or $1.16 per diluted share, in the first six months of 2025.

Net earnings in the first six months of 2026 included net investment losses of $104 million, compared with net investment losses of $1.4 billion in the first six months of 2025.

Net investment losses in the first six months of 2026 included $254 million of net losses from sales and redemptions;

an increase in credit loss allowances of $138 million;

$35 million of impairments;

offset by $250 million of net gains from certain derivative and foreign currency gains or losses;

and a $73 million gain from an increase in the fair value of equity securities.

Adjusted earnings (1) in the second quarter of 2026 were $883 million, or $1.75 per diluted share, compared with $957 million, or $1.78 per diluted share, in the second quarter of 2025.

The average yen/dollar exchange rate (2) for the three-month period ended June 30, 2026 was 159.45, or 9.3% weaker than the average rate of 144.60 for the same period in 2025.

The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.05.

Shareholders’ equity was $30.0 billion, or $58.69 per share, at March 31, 2026, compared with $29.5 billion, or $56.85 per share, at December 31, 2025.

Shareholders’ equity at March 31, 2026 included a cumulative increase of $9.5 billion from the effect of changes in discount rate assumptions on insurance reserves, compared with a corresponding cumulative increase of $8.0 billion at December 31, 2025, and a net unrealized loss on investment securities and derivatives of $2.7 billion, compared with a net unrealized loss of $1.8 billion at December 31, 2025.

Shareholders’ equity at March 31, 2026 also included an unrealized foreign currency translation loss of $5.0 billion, compared with an unrealized foreign currency translation loss of $4.8 billion at December 31, 2025.

The annualized return on average shareholders’ equity in the first quarter of 2026 was 13.7%.

Shareholders’ equity excluding accumulated other comprehensive income (adjusted book value (1) ) was $28.1 billion, or $54.96 per share, at March 31, 2026, compared with $28.0 billion, or $54.06 per share, at December 31, 2025.

Adjusted book value excluding foreign currency remeasurement (1) was $21.8 billion, or $42.71 per share, at March 31, 2026, compared with $22.1 billion, or $42.66 per share, at December 31, 2025.

The annualized adjusted return on equity excluding foreign currency remeasurement (1) in the first quarter of 2026 was 16.4%.

In the first three months of 2026, Aflac Incorporated repurchased $1.0 billion, or 9.0 million of its common shares.

At March 31, 2026, the Company had 105.3 million remaining shares authorized for repurchase.

Adjusted earnings (1) in the first six months of 2026 were $1.8 billion, or $3.50 per diluted share, compared with $1.9 billion, or $3.43 per diluted share, in the first six months of 2025.

The average yen/dollar exchange rate (2) for the six-month period ended June 30, 2026 was 158.14, or 6.2% weaker than the average rate of 148.32 for the same period in 2025.

The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.07.

Shareholders’ equity was $30.3 billion, or $60.35 per share, at June 30, 2026, compared with $29.5 billion, or $56.85 per share, at December 31, 2025.

Shareholders’ equity at June 30, 2026 included a cumulative increase of $10.4 billion from the effect of changes in discount rate assumptions on insurance reserves, compared with a corresponding cumulative increase of $8.0 billion at December 31, 2025, and a net unrealized loss on investment securities and derivatives of $2.8 billion, compared with a net unrealized loss of $1.8 billion at December 31, 2025.

Shareholders’ equity at June 30, 2026 also included an unrealized foreign currency translation loss of $5.0 billion, compared with an unrealized foreign currency translation loss of $4.8 billion at December 31, 2025.

The annualized return on average shareholders’ equity in the second quarter of 2026 was 10.9%.

Shareholders’ equity excluding accumulated other comprehensive income (adjusted book value (1) ) was $27.6 billion, or $55.01 per share, at June 30, 2026, compared with $28.0 billion, or $54.06 per share, at December 31, 2025.

Adjusted book value excluding foreign currency remeasurement (1) was $20.7 billion, or $41.22 per share, at June 30, 2026, compared with $22.1 billion, or $42.66 per share, at December 31, 2025.

The annualized adjusted return on equity excluding foreign currency remeasurement (1) in the second quarter of 2026 was 16.6%.

In the first six months of 2026, Aflac Incorporated repurchased $2.0 billion, or 17.5 million of its common shares.

At June 30, 2026, the Company had 96.8 million remaining shares authorized for repurchase.

(1) See the Results of Operations section of this MD&A for a definition of this non-U.S.

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telegraphic transfer middle rate (TTM).

Cyber Incident

Cyber Incidents

As previously disclosed, the Company identified an incident involving unauthorized access to a limited number of its systems in the U.S.

on June 12, 2025.

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

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

The Company is aware of the exfiltration of certain data including claims information, health information, social security numbers and/or other personal information relating to customers, beneficiaries, employees, agents, and other individuals in the Company’s U.S.

In December 2025, the Company completed a detailed review of the potentially impacted files and determined that personal information associated with approximately 22.65 million individuals was involved.

As of the date of this filing, the Company has completed the notification process to impacted individuals and regulatory authorities as required by applicable laws.

Based on the information currently available, as of the date of this report, the Company does not believe that the incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

The Company continues to assess the financial impact of the cybersecurity incident, including how much of the financial impact will be covered by insurance.

As a result of the cybersecurity incident, the Company has incurred certain costs and may, depending on future developments, incur additional costs, including but not limited to:

on June 12, 2025 (the June 2025 U.S.

Cyber Incident).

The Company remains in communication with regulators and other relevant authorities.

Based on the information currently available, as of the date of this report, the Company does not believe that the June 2025 U.S.

Cyber Incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

The Company continues to assess the financial impact of the June 2025 U.S.

Cyber Incident, including how much of the financial impact will be covered by insurance.

As a result of the June 2025 U.S.

Cyber Incident, the Company has incurred certain costs and may, depending on future developments, incur additional costs, including but not limited to:

costs to provide credit monitoring, identity theft protection, and Medical Shield to impacted individuals and maintain a call center related to the provision of such services;

incident response costs;

expenses arising from potential litigation, governmental investigations, or enforcement actions;

expenses arising from litigation, governmental investigations, or potential enforcement actions;

expenses related to compliance, finance, and legal advisory services;

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and costs incurred in meeting evolving legal and regulatory requirements concerning cybersecurity governance, monitoring, and disclosure.

Based on the information currently available, as of the date of this report, the Company believes that the potential amount of loss cannot be reasonably estimated.

As previously disclosed, on June 30, 2026, Aflac Japan issued a press release announcing that, on June 25, 2026, it had detected an unauthorized third-party had accessed certain Aflac Japan systems (the June 2026 Japan Cyber Incident).

Upon identifying the unauthorized access, Aflac Japan promptly took steps designed to contain the incident and prevent further access, including suspending certain systems.

Notwithstanding the suspension of certain systems, Aflac Japan continues to serve its policyholders as it responds to the June 2026 Japan Cyber Incident and there was no indication of ransomware.

Aflac Japan, with assistance from third-party cybersecurity experts, has completed its investigation.

Aflac Japan has determined that certain impacted files contain policy and coverage details, personal information, and bank account information.

Aflac Japan has notified the Japan Financial Services Agency and other relevant authorities.

As of the date of this report, Aflac Japan has completed the notification process to individuals affected by the June 2026 Japan Cyber Incident.

Based on the information currently available, as of the date of this report, the Company believes that the potential amount of loss cannot be reasonably estimated.

The June 2026 Japan Cyber Incident is limited to systems in Japan.

The Company’s systems related to its U.S.

business were not accessed by the unauthorized third-party.

At this time, the full scope and potential ultimate impact of the June 2026 Japan Cyber Incident on the Company are not known.

Based on the information currently available, as of the date of this report, the Company does not believe that the June 2026 Japan Cyber Incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

RESULTS OF OPERATIONS

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GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.

• Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign currency exchange risks in the Company's Japan segment or in Corporate and other.

• Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign currency exchange risks.

These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight-line basis over the contractual term of the derivative.

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• Adjusted earnings excluding current period foreign currency impact are computed using the average foreign exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign exchange rate changes.

Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented.

Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding

diluted shares for the period presented.

The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in Japan and foreign exchange rates are outside management’s control;

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Reconciliation of Net Earnings to Adjusted Earnings

In Millions Per Diluted Share

Three Months Ended March 31,

In Millions Per Diluted Share In Millions Per Diluted Share

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

2026 2025 2026 2025 2026 2025 2026 2025

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Current period foreign currency impact (2)

8 N/A .02 N/A

27 N/A .05 N/A 35 N/A .07 N/A

Adjusted earnings excluding current period foreign currency impact $ 910 $ 957 $ 1.80 $ 1.78 $ 1,819 $ 1,863 $ 3.57 $ 3.43

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Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment (Gains) Losses

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

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Net interest income (expense) from derivatives associated with certain investment strategies

(54) (64) (111) (129)

Impact of interest from derivatives associated with notes payable 0 0 0 4

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The Company's combined U.S.

and Japanese effective income tax rate on pretax earnings was 16.8% for the three-month period ended March 31, 2026, compared with 80.3% for the same period in 2025.

and Japanese effective income tax rate on pretax earnings was 17.0% for the three-month period ended June 30, 2026, compared with 27.0% for the same period in 2025.

The Company's combined U.S.

and Japanese effective income tax rate on pretax earnings was 16.9% for the six-month period ended June 30, 2026, compared with 35.0% for the same period in 2025.

The combined effective tax rate differs from the U.S.

statutory rate primarily due to the exclusion of foreign currency translation gains and losses on certain Aflac Japan U.S.

statutory rate primarily due to the exclusion of foreign currency translation gains and losses on Aflac Japan U.S.

dollar-denominated investments held in the Delaware Statutory Trust.

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GAAP financial measures of book value and book value per common share, respectively.

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

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

2026 December 31,

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GAAP financial measure of return on equity.

Three Months Ended March 31,

Three Months Ended June 30,

GAAP return on equity - net earnings (1)

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In Dollars In Yen

Three Months Ended March 31, Three Months Ended March 31,

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

(In millions of dollars and billions of yen) 2026 2025 2026 2025 2026 2025 2026 2025

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Pretax adjusted earnings (6.2) (8.6) (.8) (9.7) 3.4 (15.0) 5.8 (12.1)

(1) Includes a gain (loss) of an immaterial amount for the three-month periods ended March 31, 2026 and 2025, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

(2) Net interest income/expense from derivatives associated with certain investment strategies of $(53) and $(58) for the three-month periods ended March 31, 2026 and 2025, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended March 31, 2026, operating results in yen terms compared to the same period in the previous year were as follows:

(1) Includes a gain (loss) of an immaterial amount for the three- and six-month periods ended June 30, 2026 and 2025, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

(2) Net interest income/expense from derivatives associated with certain investment strategies of $(49) and $(59) for the three-month periods and $(102) and $(117) for the six-month periods ended June 30, 2026 and 2025, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended June 30, 2026, operating results in yen terms compared to the same period in the previous year were as follows:

• Net earned premiums decreased primarily due to approximately ¥4 billion related to an external reinsurance transaction established in the first quarter of 2026 and approximately ¥3 billion from limited-pay products reaching premium paid-up status.

• Adjusted net investment income increased primarily due to higher fixed rate income from U.S.

dollar-denominated investments and higher variable net investment income.

• Total adjusted revenues decreased primarily due to the decrease in net earned premiums, partially offset by the increase in adjusted net investment income.

• Total benefits and claims decreased primarily reflecting the impact of assumption updates performed in the third quarter of 2025 and higher reserve remeasurement gains.

• Total adjusted expenses decreased primarily due to an increase in the capitalization of deferred policy acquisition costs resulting from higher sales.

• Adjusted net investment income decreased primarily due to lower call income and lower U.S.

dollar-denominated floating rate income, partially offset by higher income on U.S.

dollar-denominated assets due to the weakening of the yen and higher fixed rate income from U.S.

dollar-denominated investments.

• Total adjusted revenues decreased primarily due to the decreases in net earned premiums and adjusted net investment income.

• Total benefits and claims decreased primarily reflecting the impact of annual cash flow assumption updates performed in the third quarter of 2025 and higher reserve remeasurement gains.

• Total adjusted expenses decreased primarily due to an increase in the capitalization of deferred policy acquisition costs.

• Pretax adjusted earnings increased primarily due to the decreases in total benefits and claims and total adjusted expenses, partially offset by the decrease in total adjusted revenues.

Annualized premiums in force decreased 2.5% to ¥1.17 trillion as of March 31, 2026, compared with ¥1.20 trillion as of March 31, 2025.

For the six-month period ended June 30, 2026, operating results in yen terms compared to the same period in the previous year were as follows:

• Net earned premiums decreased primarily due to approximately ¥8 billion related to an external reinsurance transaction established in the first quarter of 2026 and approximately ¥7 billion from limited-pay products reaching premium paid-up status.

• Adjusted net investment income increased slightly primarily due to higher fixed rate income from U.S.

dollar-denominated investments and higher income on U.S.

dollar-denominated assets due to the weakening of the yen, mostly offset by lower U.S.

dollar-denominated floating rate income and lower call income.

• Total adjusted revenues decreased primarily due to the decrease in net earned premiums.

• Total benefits and claims decreased primarily reflecting the impact of annual cash flow assumption updates performed in the third quarter of 2025 and higher reserve remeasurement gains.

• Total adjusted expenses decreased primarily due to an increase in the capitalization of deferred policy acquisition costs.

• Pretax adjusted earnings increased primarily due to the decreases in total benefits and claims and total adjusted expenses, partially offset by the decrease in total adjusted revenues.

Annualized premiums in force decreased 2.7% to ¥1.16 trillion as of June 30, 2026, compared with ¥1.19 trillion as of June 30, 2025.

The decrease in annualized premiums in force in yen was driven primarily by limited-pay products reaching premium paid-up status.

Annualized premiums in force, translated into U.S.

dollars at respective period-end foreign exchange rates, were $7.3 billion at March 31, 2026, compared with $8.0 billion at March 31, 2025.

As of March 31, 2026, Aflac Japan had approximately 22 million individual policies in force in Japan, including approximately 14 million cancer policies in force.

dollars at respective period-end foreign exchange rates, were $7.2 billion at June 30, 2026, compared with $8.2 billion at June 30, 2025.

As of June 30, 2026, Aflac Japan had approximately 22 million individual policies in force in Japan, including approximately 14 million cancer policies in force.

Aflac Japan's investment portfolios include U.S.

12 unchanged sentences

(Japanese Yen Operating Results)

For the Periods Ended March 31,

For the Periods Ended June 30,

Including Foreign

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Currency Changes

Three Months Six Months

2026 2025 2026 2025 2026 2025 2026 2025

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Pretax adjusted earnings 3.4 (15.0) 5.8 (12.1) (2.1) (11.5) 2.2 (10.7)

The following table presents a summary of operating ratios in Japanese yen terms for Aflac Japan followed by a discussion of the significant drivers of changes in operating ratios in Japanese yen compared to the same period in the previous year.

Three Months Ended March 31,

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

Ratios to total adjusted revenues:

2026 2025 2026 2025

Total benefits and claims, net 45.5 % 47.4 % 45.5 % 48.0 %

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Amortization of deferred policy acquisition costs 5.0 4.8 5.0 4.7

• For the three-month period ended March 31, 2026, the total benefits and claims to total premiums ratio decreased primarily due to lower benefits reflecting the impact of assumption updates performed in the third quarter of 2025 and higher reserve remeasurement gains.

• For the three-month period ended March 31, 2026, the total adjusted expense ratio decreased slightly primarily due to the decrease in total adjusted expenses, mostly offset by the decrease in total adjusted revenues.

• In total, the pretax adjusted profit margin increased in the three-month period ended March 31, 2026 primarily due to the lower benefit ratio.

The following table presents Aflac Japan's premium persistency on a 12-month rolling basis as of March 31.

• For the three- and six-month periods ended June 30, 2026, the total benefits and claims to total premiums ratio decreased primarily due to lower benefits reflecting the impact of annual cash flow assumption updates performed in the third quarter of 2025 and higher reserve remeasurement gains.

For the full year of 2026, the Company now expects Aflac Japan to generate a benefit ratio at the high end of the range of 60% to 63%, excluding the annual actuarial assumption review in the third quarter.

• For the three- and six-month periods ended June 30, 2026, the total adjusted expense ratio decreased primarily due to the decrease in total adjusted expenses, mostly offset by the decrease in total adjusted revenues.

• In total, the pretax adjusted profit margin increased in the three- and six-month periods ended June 30, 2026 primarily due to the lower benefit ratio.

The following table presents Aflac Japan's premium persistency on a 12-month rolling basis as of June 30.

Premium persistency 92.7 % 93.7 %

Aflac Japan Sales

The following table presents Aflac Japan’s new annualized premium sales for the periods ended March 31.

The following table presents Aflac Japan’s new annualized premium sales for the periods ended June 30.

In Dollars In Yen

Three Months Six Months

(In millions of dollars and billions of yen) 2026 2025 2026 2025 2026 2025 2026 2025

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Increase (decrease) over prior period (14.3) % 32.8 % (.2) % 23.0 % (5.6) % 23.2 % 7.0 % 18.7 %

The increase in new annualized premium sales on a Japanese yen basis in the first quarter of 2026 was driven primarily by strong sales of Anshin Palette, the new medical insurance product launched in December 2025, as well as Miraito and Tsumitasu .

The following table details the contributions to Aflac Japan's new annualized premium sales by major insurance product for the periods ended March 31.

The decrease in new annualized premium sales on a Japanese yen basis in the second quarter of 2026 primarily reflects a high prior-year sales baseline for Miraito cancer insurance following its launch in March 2025, partially offset by strong growth in the refreshed Tsumitasu savings-type life insurance product and Anshin Palette, the new medical insurance product launched in December 2025.

The increase in new annualized premium sales on a Japanese yen basis in the first six months of 2026 was driven primarily by strong sales of Tsumitasu and Anshin Palette.

The following table details the contributions to Aflac Japan's new annualized premium sales by major insurance product for the periods ended June 30.

Three Months Six Months

2026 2025 2026 2025

Cancer 55.2 % 73.0 % 54.7 % 67.6 %

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Ordinary life (1)

3.8 3.4 4.3 4.1

WAYS .5 1.1 .6 1.4

Other .7 .5 .7 .6

Total 100.0 % 100.0 % 100.0 % 100.0 %

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Additionally, the Company believes that sales of first sector products, including Tsumitasu and WAYS, position Aflac Japan for potential future long-term sales opportunities by marketing these products to a younger demographic as well as potential cross-selling opportunities of Aflac Japan's third sector products.

The following table details the contributions to Aflac Japan's new annualized premium sales by agency type for the three-month periods ended March 31.

The following table details the contributions to Aflac Japan's new annualized premium sales by agency type for the three-month periods ended June 30.

Independent corporate and individual 50.0 % 46.8 %

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(1) Includes Japan Post Group, Dai-ichi Life and Daido Life

During the three-month period ended March 31, 2026, Aflac Japan recruited 82 new sales agencies.

At March 31, 2026, Aflac Japan was represented by approximately 6,200 sales agencies, with approximately 111,000 licensed sales associates employed by those agencies.

During the three-month period ended June 30, 2026, Aflac Japan recruited 139 new sales agencies.

At June 30, 2026, Aflac Japan was represented by approximately 6,200 sales agencies, with approximately 111,000 licensed sales associates employed by those agencies.

The number of sales agencies has declined in recent years due to Aflac Japan's focus on supporting agencies with strong management frameworks, high productivity and more producing agents.

At March 31, 2026, Aflac Japan had agreements to sell its products at 357 banks, approximately 90% of the total number of banks in Japan.

At June 30, 2026, Aflac Japan had agreements to sell its products at 356 banks, approximately 90% of the total number of banks in Japan.

Aflac Japan Investments

10 unchanged sentences

The following table details the investment purchases for Aflac Japan.

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

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Infrastructure debt 10 75 20 116

Collateralized loan obligations 0 74 0 74

Commercial mortgage and other loans:

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Infrastructure debt 0 0 0 52

Private placements 0 0 0 1

Other fixed maturity securities 0 66 0 66

Commercial mortgage and other loans:

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See the Investments section of this MD&A for further discussion of these investment programs, and see Notes 3 and 4 of the Notes to the Consolidated Financial Statements and Notes 1, 3 and 4 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report for more information regarding loans and loan receivables.

The following table presents the results of Aflac Japan’s investment yields for the periods ended and as of March 31.

The following table presents the results of Aflac Japan’s investment yields for the periods ended and as of June 30.

Three Months Six Months

2026 2025 2026 2025

Total purchases for the period (in millions) (1)

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Return on average invested assets (3)

3.18 3.38 3.12 3.19

Portfolio book yield, including U.S.

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(3) Net of investment expenses and amortized hedge costs, year-to-date number reflected on a quarterly average basis

The increase in the Aflac Japan new money yield in the three-month period ended March 31, 2026 was primarily due to higher allocations to higher yielding asset classes.

The decrease in the Aflac Japan new money yield in the three-month period ended June 30, 2026 was primarily due to higher allocations to lower yielding asset classes.

The increase in the Aflac Japan new money yield in the six-month period ended June 30, 2026 was primarily due to higher Japanese yen interest rates.

See Notes 3, 4 and 5 of the Notes to the Consolidated Financial Statements and the Investments and Hedging Activities sections of this MD&A for additional information on the Company's investments and hedging strategies.

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Summary of Operating Results

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

1 unchanged sentence

Adjusted net investment income (1)

208 207 409 409

Other income 24 17 47 34

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Pretax adjusted earnings (4.6) 1.3 (1.7) .9

(1) Net interest income/expense from derivatives associated with certain investment strategies of $(5) and $(6) for the three-month periods ended March 31, 2026 and 2025, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended March 31, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to improved sales.

• Adjusted net investment income decreased slightly primarily due to lower floating rate income.

(1) Net interest income/expense from derivatives associated with certain investment strategies of $(5) and $(6) for the three-month periods and $(10) and $(12) for the six-month periods ended June 30, 2026 and 2025, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended June 30, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to improved sales and continued strong persistency.

• Adjusted net investment income was relatively flat.

• Total adjusted revenues increased primarily due to the increase in net earned premiums.

• Total benefits and claims increased primarily due to higher incurred claims for certain group products largely associated with the growth in net earned premiums.

• Total adjusted expenses increased primarily due to higher variable expenses associated with the growth in net earned premiums.

• Pretax adjusted earnings decreased primarily due to the increases in total benefits and claims and total adjusted expenses, partially offset by the increase in total adjusted revenues.

For the six-month period ended June 30, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to improved sales and continued strong persistency.

• Adjusted net investment income was relatively flat.

• Total adjusted revenues increased primarily due to the increase in net earned premiums.

• Total benefits and claims increased primarily due to higher incurred claims for certain group products largely associated with the growth in net earned premiums, partially offset by higher reserve remeasurement gains.

• Total adjusted expenses increased primarily due to higher variable expenses associated with the growth in net earned premiums.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, partially offset by the increases in total adjusted expenses and total benefits and claims.

Annualized premiums in force increased 4.6% to $6.8 billion at March 31, 2026, compared with $6.5 billion at March 31, 2025.

• Pretax adjusted earnings decreased primarily due to the increases in total benefits and claims and total adjusted expenses, partially offset by the increase in total adjusted revenues.

Annualized premiums in force increased 4.5% to $6.8 billion at June 30, 2026, compared with $6.5 billion at June 30, 2025.

The following table presents a summary of operating ratios for Aflac U.S.

followed by a discussion of the significant drivers of changes in operating ratios compared to the same period in the previous year.

Three Months Ended March 31,

followed by a discussion of the significant drivers of changes in operating ratios compared to the same periods in the previous year.

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

Ratios to total adjusted revenues:

2026 2025 2026 2025

Total benefits and claims 43.0 % 41.2 % 42.1 % 41.4 %

9 unchanged sentences

Amortization of deferred policy acquisition costs 9.2 9.0 9.2 9.1

• For the three-month period ended March 31, 2026, the total benefits and claims to total premiums ratio decreased primarily due to higher net earned premiums as well as higher reserve remeasurement gains.

• For the three-month period ended March 31, 2026, the total adjusted expense ratio increased primarily due to higher total adjusted expenses associated with the growth in net earned premiums.

• In total, the pretax adjusted profit margin decreased in the three-month period ended March 31, 2026, primarily due to the higher expense ratio, partially offset by the lower benefit ratio.

• For the three- and six-month periods ended June 30, 2026, the total benefits and claims to total premiums ratio increased primarily due to higher incurred claims for certain group products largely associated with the growth in net earned premiums.

• For the three- and six-month periods ended June 30, 2026, the total adjusted expense ratio remained relatively stable compared with the corresponding prior year periods.

• In total, the pretax adjusted profit margin decreased in the three- and six-month periods ended June 30, 2026, primarily due to the higher benefit ratio.

The following table presents premium persistency for Aflac U.S.

on a 12-month rolling basis as of March 31.

on a 12-month rolling basis as of June 30.

Premium persistency 79.4 % 79.2 %

The following table presents Aflac's U.S.

new annualized premium sales for the periods ended March 31.

new annualized premium sales for the periods ended June 30.

Three Months Six Months

(In millions) 2026 2025 2026 2025

2 unchanged sentences

The increase in new annualized premium sales for Aflac U.S.

in the first quarter of 2026 was primarily driven by sales of group products.

in the second quarter and first six months of 2026 was primarily driven by sales of group products.

The following table details the contributions to Aflac's U.S.

new annualized premium sales by major insurance product category for the periods ended March 31.

new annualized premium sales by major insurance product category for the periods ended June 30.

Three Months Six Months

2026 2025 2026 2025

Accident 18.2 % 19.0 % 19.0 % 20.0 %

1 unchanged sentence

Critical care (1)

17.2 21.8 18.7 21.8

Hospital indemnity 11.8 11.9 12.6 13.3

3 unchanged sentences

(1) Includes cancer, critical illness, and hospital intensive care products

In the first quarter of 2026, the Aflac U.S.

In the second quarter of 2026, the Aflac U.S.

sales force included an average of approximately 5,100 U.S.

6 unchanged sentences

The following table details the investment purchases for Aflac U.S.

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

3 unchanged sentences

Infrastructure debt 103 13 103 25

Collateralized loan obligations 0 25 0 25

Equity securities 0 9 0 15

6 unchanged sentences

Limited partnerships 18 59 60 73

Other 14 0 28 0

dollar-denominated 711 386 1,431 892

6 unchanged sentences

The following table presents the results of Aflac's U.S.

investment yields for the periods ended and as of March 31.

investment yields for the periods ended and as of June 30.

Three Months Six Months

2026 2025 2026 2025

Total purchases for period (in millions) (1)

$ 693 $ 327 $ 1,371 $ 819

New money yield (1),(2)

1 unchanged sentence

Return on average invested assets (3)

4.98 4.94 4.96 4.92

Portfolio book yield, end of period (1),(2)

5 unchanged sentences

The decrease in the Aflac U.S.

new money yield in the three-month period ended March 31, 2026 was primarily due to lower rates on fixed and floating rate assets.

new money yield in the three- and six-month periods ended June 30, 2026 was primarily due to lower rates on fixed rate assets.

See Notes 3 and 5 of the Notes to the Consolidated Financial Statements and the Investments section of this MD&A for additional information on the Company's investments.

CORPORATE AND OTHER

Changes in the pretax adjusted earnings of Corporate and other are primarily affected by reinsurance activity and net investment income.

Changes in the pretax adjusted earnings of Corporate and other are primarily affected by reinsurance activity, adjusted net investment income and impacts from changes in the foreign currency exchange rate.

The following table presents a summary of operating results for Corporate and other.

Corporate and Other Summary of Operating Results

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

1 unchanged sentence

Net investment income (loss) (1)

95 98 186 194

Amortized hedge income 19 30 37 60

19 unchanged sentences

Pretax adjusted earnings (150.0) (13.0) (115.9) 200.0

(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $5 and $8 for the three-month periods ended March 31, 2026 and 2025, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $5 and $7 for the three-month periods ended March 31, 2026 and 2025, respectively, have been reported as an income tax benefit in the consolidated statements of earnings.

(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $6 and $8 for the three-month periods and $11 and $16 for the six-month periods ended June 30, 2026 and 2025, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $5 and $9 for the three-month periods and $10 and $16 for the six-month periods ended June 30, 2026 and 2025, respectively, have been reported as an income tax benefit in the consolidated statements of earnings.

See Note 1 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report for additional information on these investments.

For the three-month period ended March 31, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims decreased primarily due to reinsurance activity.

• Adjusted net investment income decreased primarily due to lower amortized hedge income.

• Total adjusted revenues decreased primarily due to the decreases in adjusted net investment income and net earned premiums.

• Total adjusted expenses increased primarily due to higher interest expense and higher costs pertaining to business operations.

• Pretax adjusted earnings decreased primarily due to lower total adjusted revenues and higher total adjusted expenses, partially offset by lower total benefits and claims.

For the three-month period ended June 30, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims decreased primarily due to reinsurance-related impacts.

• Adjusted net investment income decreased primarily due to lower short-term income and lower amortized hedge income, partially offset by higher fixed rate income.

• Total adjusted revenues decreased primarily due to the decreases in net earned premiums and adjusted net investment income.

• Total adjusted expenses increased primarily due to higher interest expense.

• Pretax adjusted earnings decreased primarily due to lower adjusted net investment income, higher interest expense, and reinsurance-related impacts.

For the six-month period ended June 30, 2026, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims decreased primarily due to reinsurance-related impacts.

• Adjusted net investment income decreased primarily due to lower amortized hedge income and lower short-term income, partially offset by higher fixed rate income.

• Total adjusted revenues decreased primarily due to the decreases in net earned premiums and adjusted net investment income.

• Total adjusted expenses increased primarily due to higher interest expense.

• Pretax adjusted earnings decreased primarily due to lower adjusted net investment income, higher interest expense, and reinsurance-related impacts.

The Parent Company invests in partnerships that specialize in rehabilitating historic structures or the installation of solar equipment in order to receive federal historic rehabilitation and solar tax credits.

These investments are classified as limited partnerships and included in other investments in the consolidated balance sheets.

The change in value of each

investment is reported as a reduction to net investment income.

The change in value of each investment is reported as a reduction to net investment income.

Tax credits generated by these investments are reported as an income tax benefit in the consolidated statements of earnings.

9 unchanged sentences

Investment Securities by Segment

March 31, 2026

June 30, 2026

(In millions) Aflac Japan Aflac U.S.

65 unchanged sentences

Properties acquired by the Company through foreclosure and deed in lieu of foreclosure are reported as real estate owned (REO) in other investments in the Company's consolidated balance sheets.

In the three-month period ended March 31, 2026, the Company did not complete any foreclosure or deed in lieu of foreclosure transactions.

In the three-month period ended March 31, 2025, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $87 million.

As a result of the amortized cost of the TREs exceeding the estimated fair value of the collateral upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net loss of $16 million in net investment gains (losses) for the three-month period ended March 31, 2025.

In the six-month period ended June 30, 2026, the Company did not complete any foreclosure or deed in lieu of foreclosure transactions.

In the six-month period ended June 30, 2025, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $257 million.

As a result of the amortized cost of the TREs exceeding the estimated fair value of the collateral upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net loss of $10 million in net investment gains (losses) for the six-month period ended June 30, 2025.

The Company utilizes third-party asset managers to source, underwrite and manage each loan, as well as any resulting REO.

9 unchanged sentences

Composition of Fixed Maturity Securities by Credit Rating

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Value Amortized

5 unchanged sentences

Total 100.0 % 100.0 % 100.0 % 100.0 %

As of March 31, 2026, the Company's direct and indirect exposure to securities in its investment portfolio that were guaranteed by third parties was immaterial both individually and in the aggregate.

The following table presents the 10 largest unrealized loss positions in the Company's portfolio as of March 31, 2026.

As of June 30, 2026, the Company's direct and indirect exposure to securities in its investment portfolio that were guaranteed by third parties was immaterial both individually and in the aggregate.

The following table presents the 10 largest unrealized loss positions in the Company's portfolio as of June 30, 2026.

(In millions) Credit

5 unchanged sentences

A+ 186 140 (46)

KLM Royal Dutch Airlines B+ 125 84 (41)

Lubrizol Corporation AA 214 174 (40)

Japan Expressway Holding and Debt A+ 222 180 (42)

Mitsubishi Estate Co Ltd.

A 123 84 (39)

Prologis LP A 142 105 (37)

West Japan Railway Company A+ 99 61 (38)

Japan Expressway Holding and Debt A+ 226 189 (37)

Prologis LP A 140 102 (38)

Tokyo Gas Co Ltd A+ 93 55 (38)

KLM Royal Dutch Airlines B+ 123 87 (36)

SNCF Reseau AA- 68 34 (34)

Generally, declines in fair values can be a result of changes in interest rates, yen/dollar exchange rate, and changes in net spreads driven by a broad market move or a change in the issuer's underlying credit quality.

5 unchanged sentences

Below-Investment-Grade Investments

March 31, 2026

June 30, 2026

(In millions) Par

2 unchanged sentences

Investcorp Capital Limited $ 216 $ 216 $ 212 $ (4)

Hella KG Hueck and Co.

138 137 125 (12)

Hella KGAA Hueck & Co Mtn 135 135 132 (3)

Telecom Italia SpA 123 123 153 30

1 unchanged sentence

IKB Deutsche Industriebank AG 80 46 63 17

Anpac Spa (Project Neptune) 37 35 33 (2)

Carbonfree Chile Series A 36 33 30 (3)

Carbonfree Chile Series B 54 50 46 (4)

Anpac Spa (Proeject Neptune) 37 34 33 (1)

Paramount Global 35 26 23 (3)

17 unchanged sentences

The following table shows the distribution of fixed maturities by sector classification.

March 31, 2026

June 30, 2026

(In millions) Amortized

28 unchanged sentences

Investment Securities by Type of Issuance

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(In millions) Amortized

15 unchanged sentences

Reverse Dual-Currency Securities (1)

(Amortized cost, in millions) March 31,

(Amortized cost, in millions) June 30,

2026 December 31,

30 unchanged sentences

dollar terms by hedging foreign currency exchange risk related to dividend payments by Aflac Japan and reduce enterprise-wide hedge costs ( see Enterprise Corporate Hedging Program below ).

The following table presents metrics related to the Company's Foreign Currency Exchange Risk Hedge Program, including associated amortized hedge costs/income, for the periods ended March 31.

The following table presents metrics related to the Company's Foreign Currency Exchange Risk Hedge Program, including associated amortized hedge costs/income, for the periods ended June 30.

See the Results of Operations section of this MD&A for the Company's definition of amortized hedge costs/income.

Three Months Six Months

2026 2025 2026 2025

FX forward notional at end of period (in billions) (1)

$ 1.4 $ 0.6 $ 1.4 $ 0.6

Amortized hedge income (cost) for period (in millions) $ (8) $ (3) $ (15) $ (3)

4 unchanged sentences

FX forward notional at end of period (in billions) (1)

$ 1.6 $ 1.9 $ 1.6 $ 1.9

Amortized hedge income (cost) for period (in millions) $ 19 $ 30 $ 37 $ 60

FX option notional at the end of period (in billions) (1)

$ 0.0 $ 0.0 $ 0.0 $ 0.0

Amortized hedge income (cost) for period (in millions) $ 0 $ 0 $ 0 $ 0

36 unchanged sentences

Dollar Program to mitigate against more extreme moves in foreign exchange rates.

As of March 31, 2026, none of the Company's foreign currency options hedging Aflac Japan's U.S.

As of June 30, 2026, none of the Company's foreign currency options hedging Aflac Japan's U.S.

dollar-denominated assets were in-the-money.

2 unchanged sentences

dollar-denominated investments.

Three Months Ended March 31,

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

(In millions) 2026 2025 2026 2025

2 unchanged sentences

Dollar Program, Aflac Japan utilizes foreign currency forwards to economically hedge the foreign currency exchange risk on certain of its variable-rate investments denominated in other foreign currencies.

As of March 31, 2026, the Company had foreign currency forwards on other foreign currency-denominated investments with a fair value of $130 million.

As of June 30, 2026, the Company had foreign currency forwards on other foreign currency-denominated investments with a fair value of $129 million.

Aflac Japan also utilizes foreign currency swaps to economically hedge the foreign currency exchange risk on certain of its fixed maturity securities denominated in other foreign currencies.

As of March 31, 2026, the Company had foreign currency swaps on other foreign currency-denominated investments with a fair value of $47 million.

As of June 30, 2026, the Company had foreign currency swaps on other foreign currency-denominated investments with a fair value of $46 million.

Enterprise Corporate Hedging Program

The Company has designated certain Japanese yen-denominated liabilities and foreign currency forwards and options of the Parent Company as accounting hedges of its net investment in Aflac Japan.

The Company's consolidated Japanese yen-denominated net asset position was partially hedged at $7.0 billion as of March 31, 2026, with hedging instruments comprised of $4.9 billion of Japanese yen-denominated debt and $2.1 billion of foreign currency forwards, compared with $6.8 billion as of December 31, 2025, with hedging instruments comprised of $5.0 billion of Japanese yen-denominated debt and $1.8 billion of foreign currency forwards .

The Company's consolidated Japanese yen-denominated net asset position was partially hedged at $6.9 billion as of June 30, 2026, with hedging instruments comprised of $5.3 billion of Japanese yen-denominated debt and $1.6 billion of foreign currency forwards, compared with $6.8 billion as of December 31, 2025, with hedging instruments comprised of $5.0 billion of Japanese yen-denominated debt and $1.8 billion of foreign currency forwards .

The Company makes its accounting designation of net investment hedge at the beginning of each quarter.

If the total of the designated Parent Company non-derivative and derivative notional is equal to or less than the Company's net investment in Aflac Japan, the hedge is deemed to be effective, and the foreign currency exchange effect on the Japanese yen-denominated liabilities and the change in estimated fair value of the derivatives are included in unrealized foreign currency translation gains (losses) in the consolidated statements of comprehensive income (loss).

The Company's net investment hedge was effective during the three-month periods ended March 31, 2026 and 2025, respectively.

The Company's net investment hedge was effective during the three- and six-month periods ended June 30, 2026 and 2025, respectively.

For additional information on the Company's net investment hedging strategy, see Note 4 of the Notes to the Consolidated Financial Statements.

17 unchanged sentences

The following table presents policy liabilities by segment and in total.

(In millions) March 31,

(In millions) June 30,

2026 December 31,

6 unchanged sentences

Total $ 64,348 $ 69,583 (7.5) %

(1) Aflac Japan’s policy liabilities decreased 3.5% in yen during the three months ended March 31, 2026.

(1) Aflac Japan’s policy liabilities decreased 6.3% in yen during the six months ended June 30, 2026.

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

13 unchanged sentences

As a result, additional contributions are not expected to be required unless the balance is reduced due to payments made by the LIPPC to the policyholders of insolvent insurers.

Accordingly, Aflac Japan did not recognize an expense for LIPPC assessments for the three-month periods ended March 31, 2026 and March 31, 2025.

Accordingly, Aflac Japan did not recognize an expense for LIPPC assessments for the six-month periods ended June 30, 2026 and June 30, 2025.

Guaranty Fund Assessments

1 unchanged sentence

The amount of the guaranty fund assessment that an insurer is assessed is based on its proportionate share of premiums in that state.

Guaranty fund assessments for the three-month periods ended March 31, 2026 and 2025 were immaterial.

Guaranty fund assessments for the three- and six-month periods ended June 30, 2026 and 2025 were immaterial.

LIQUIDITY AND CAPITAL RESOURCES

15 unchanged sentences

The primary uses of cash by the Parent Company are shareholder dividends, the repurchase of its common stock, interest on its outstanding indebtedness and operating expenses.

The following table presents the amounts provided to the Parent Company for the three-month periods ended March 31.

The following table presents the amounts provided to the Parent Company for the six-month periods ended June 30.

Liquidity Provided by Subsidiaries to Parent Company

2 unchanged sentences

Dividends declared or paid by subsidiaries 1,543 2,567

The following table details Aflac Japan remittances, which are included in the totals above, for the three-month periods ended March 31.

The following table details Aflac Japan remittances, which are included in the totals above, for the six-month periods ended June 30.

Aflac Japan Remittances

13 unchanged sentences

In September 2024, the Parent Company filed a shelf registration statement with the SEC that allows the Company to issue an indefinite amount of debt securities, in one or more series, from time to time until September 2027.

Additionally, in June 2026, the Parent Company filed a shelf registration statement with the SEC that allows the Company to issue various types of securities, in one or more series, from time to time until June 2029.

The Company believes outside sources for additional debt and equity capital, if needed, will continue to be available.

The Company was in compliance with all of the covenants of its notes payable and lines of credit at March 31, 2026.

The Company was in compliance with all of the covenants of its notes payable and lines of credit at June 30, 2026.

For additional information, see Note 9 of the Notes to the Consolidated Financial Statements.

3 unchanged sentences

The Company has not engaged in material intra-period short-term financings during the periods presented that are not otherwise reported in its balance sheet or disclosed therein.

As of March 31, 2026, the Company had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations.

As of June 30, 2026, the Company had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations.

The Company has not entered into transactions involving the transfer of financial assets with an obligation to repurchase financial assets that have been accounted for as a sale under applicable accounting standards, including securities lending transactions.

See Notes 3 and 4 of the Notes to the Consolidated Financial Statements and Notes 1, 3, and 4 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report for additional information on the Company's securities lending and derivative activities.

See Note 9 of the Notes to the Consolidated Financial Statements for information on pre-capitalized trust securities sold in private placements, the proceeds of which are invested in portfolios of principal and/or interest strips of U.S.

Treasury securities, as an off-balance sheet funding arrangement.

See Note 15 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report for information on material unconditional purchase obligations that are not recorded on the Company's balance sheet.

With the exception of disclosed activities in those referenced footnotes and the Risk Factors in the 2025 Annual Report entitled, "The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate" and "Lack of availability of acceptable yen-denominated investments could adversely affect the Company's results of operations, financial position or liquidity," the Company is not aware of any trend, demand, commitment, event or uncertainty that would reasonably result in its liquidity increasing or decreasing by a material amount.

commitment, event or uncertainty that would reasonably result in its liquidity increasing or decreasing by a material amount.

Consolidated Cash Flows

8 unchanged sentences

dollars to be reported.

The following table summarizes consolidated cash flows by activity for the three-month periods ended March 31.

The following table summarizes consolidated cash flows by activity for the six-month periods ended June 30.

(In millions) 2026 2025

17 unchanged sentences

As a result, dispositions before maturity can vary significantly from year to year.

As part of its overall corporate strategy, the Company has committed up to $400 million to Aflac Ventures, LLC (Aflac Ventures) as opportunities emerge, of which approximately $298 million has been deployed as of March 31, 2026.

The deployed amount excludes investments transferred to Aflac Japan that are no longer included in this commitment.

Aflac Ventures is a subsidiary of Aflac Global Ventures, LLC (Aflac Global Ventures) which is reported in Corporate and other.

4 unchanged sentences

obtains low-cost investment funding from FHLB supported by acceptable forms of collateral pledged by Aflac U.S.

In the first three months of 2026, Aflac U.S.

In the first six months of 2026, Aflac U.S.

borrowed and repaid $362 million under this program.

As of March 31, 2026, Aflac U.S.

As of June 30, 2026, Aflac U.S.

had outstanding borrowings of $567 million reported in its balance sheet.

3 unchanged sentences

See Note 9 of the Notes to the Consolidated Financial Statements for information on debt issuances and redemptions.

Cash returned to shareholders through treasury stock purchases and dividends was $1.3 billion during the three-month period ended March 31, 2026, compared with $1.2 billion during the three-month period ended March 31, 2025.

The following tables present a summary of treasury stock activity during the three-month periods ended March 31.

Cash returned to shareholders through treasury stock purchases and dividends was $2.6 billion during the six-month period ended June 30, 2026, compared with $2.3 billion during the six-month period ended June 30, 2025.

The following tables present a summary of treasury stock activity during the six-month periods ended June 30.

Treasury Stock Purchased

12 unchanged sentences

Number of shares issued 537 633

As of March 31, 2026, a remaining balance of 105.3 million shares of the Company's common stock were available for purchase under share repurchase authorizations by its board of directors.

Cash dividends paid to shareholders were $.61 per share in the first quarter of 2026, compared with $.58 per share in the first quarter of 2025.

The following table presents the dividend activity for the three-month periods ended March 31.

As of June 30, 2026, a remaining balance of 96.8 million shares of the Company's common stock were available for purchase under share repurchase authorizations by its board of directors.

Cash dividends paid to shareholders were $.61 per share in the second quarter of 2026, compared with $.58 per share in the second quarter of 2025.

The following table presents the dividend activity for the six-month periods ended June 30.

(In millions) 2026 2025

2 unchanged sentences

Total dividends to shareholders $ 624 $ 629

In April 2026, the board of directors declared the second quarter cash dividend of $.61 per share, an increase of 5.2% compared with the same period in 2025.

The dividend is payable on June 1, 2026 to shareholders of record at the close of business on May 20, 2026.

In August 2026, the board of directors declared the third quarter cash dividend of $.61 per share, an increase of 5.2% compared with the same period in 2025.

The dividend is payable on September 1, 2026 to shareholders of record at the close of business on August 19, 2026.

Regulatory Restrictions

Aflac Japan is required to meet certain financial criteria as governed by the Companies Act of Japan in order to provide dividends to the Parent Company.

Under these criteria, dividend capacity at Aflac Japan is defined as total equity excluding common stock and capital reserves but reduced for net after-tax unrealized losses on available-for-sale securities.

Under these criteria, dividend capacity at Aflac Japan is defined as total equity excluding common stock and capital reserves but reduced by net after-tax unrealized losses on available-for-sale securities.

These dividend capacity requirements are generally aligned with the Economic Solvency Ratio (ESR).

8 unchanged sentences

Under this regulation, assets and liabilities are measured on an economic value basis, and insurers are required to calculate and disclose the ESR as a key indicator of their solvency position.

Aflac Japan plans to make its initial disclosure of the ESR as of March 31, 2026, in accordance with this regulation, with the first disclosure scheduled for the end of July 2026.

In accordance with this regulation, Aflac Japan made its initial disclosure of the ESR as of March 31, 2026 in July 2026.

A life insurance company’s statutory capital and surplus is determined according to rules prescribed by the National Association of Insurance Commissioners (NAIC), as modified by the insurance department in the insurance company’s state of domicile.

5 unchanged sentences

The RBC formula quantifies insurance risk, business risk, asset risk and interest rate risk by weighing the types and mixtures of risks inherent in the insurer’s operations.

As of March 31, 2026, Aflac U.S.'s combined RBC ratio remains high and reflects a strong capital and surplus position.

As of June 30, 2026, Aflac U.S.'s combined RBC ratio remains high and reflects a strong capital and surplus position.

Aflac, CAIC and TOIC are domiciled in Nebraska and are subject to its regulations.

26 unchanged sentences

GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations.

The estimates that the Company deems to be most critical to an understanding of its results of operations and financial condition are those related to the valuation of investments and derivatives, DAC, liabilities for future policy benefits (LFPB), and income taxes.

The estimates that the Company deems to be most critical to an understanding of its results of operations and financial condition are those related to the valuation of investments and derivatives, deferred policy acquisition costs (DAC), liabilities for future policy benefits (LFPB), and income taxes.

The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments.

Calculations of DAC and the LFPB require the use of estimates based on actuarial valuation techniques.

The application of these critical accounting estimates determines the values at which 92% of the Company's assets and 72% of its liabilities are reported as of March 31, 2026, and thus has a direct effect on net earnings and shareholders’ equity.

The application of these critical accounting estimates determines the values at which 92% of the Company's assets and 69% of its liabilities are reported as of June 30, 2026, and thus has a direct effect on net earnings and shareholders’ equity.

Subsequent experience or use of other assumptions could produce significantly different results.

There have been no changes in the items the Company has identified as critical accounting estimates during the three-month period ended March 31, 2026.

There have been no changes in the items the Company has identified as critical accounting estimates during the six-month period ended June 30, 2026.

For additional information, see the Critical Accounting Estimates section of Item 7.

3 unchanged sentences

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 2. Management’s Discussion and Analysis