EX-99.1 2 aflex991-q42023.htm EX-99.1
News Release
Aflac Incorporated Announces Fourth Quarter Results,
Reports Fourth Quarter Net Earnings of $268 Million,
Reiterates Increase in First Quarter Dividend of 19%
COLUMBUS, Ga. - January 31, 2024 - Aflac Incorporated (NYSE: AFL) today reported its fourth quarter results.
Total revenues were $3.8 billion in the fourth quarter of 2023, compared with $3.9 billion in the fourth quarter of 2022. Net earnings were $268 million, or $0.46 per diluted share, compared with $196 million, or $0.31 per diluted share a year ago. Net earnings included a post-tax loss of $11 9 million, or $0.20 per diluted share, related to novation of a reinsurance treaty with a third party that has been ceded back to the company as of year end.
Net earnings in the fourth quarter of 2023 included net investment losses of $511 million, or $0.87 per diluted share, compared with net investment losses of $521 million, or $0.84 per diluted share a year ago. These net investment losses were driven by net losses on certain derivatives and foreign currency activities of $580 million, largely driven by changes in exchange rates and a $25 million increase in the company's current expected credit losses (CECL) reserves and impairments. Net investment losses included $42 million of net gains from sales and redemptions and a $53 million gain from an increase in the fair value of equity securities.
Adjusted earnings* in the fourth quarter were $732 million, compared with $817 million in the fourth quarter of 2022, reflecting a decrease of 10.4%. Adjusted earnings per diluted share* decreased 4.6% to $1.25 in the quarter. Variable investment income ran $27 million, or $0.04 per share, below the company's long-term return expectations. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per share by $0.02. Adjusted earnings included a post-tax loss of $11 9 million, or $0.20 per diluted share, related to novation of a reinsurance treaty with a third party that has been ceded back to the company as of year end.
The average yen/dollar exchange rate in the fourth quarter of 2023 was 148.11, or 4.2% weaker than the average rate of 141.87 in the fourth quarter of 2022. For the full year, the average exchange rate was 140.57, or 7.4% weaker than the rate of 130.17 a year ago.
Shareholders’ equity was $22.0 billion, or $38.00 per share, at December 31, 2023, compared with $20.1 billion, or $32.73 per share, at December 31, 2022. Shareholders’ equity at the end of the fourth quarter included a cumulative decrease of $2.6 billion for the effect of the change in discount rate assumptions on insurance reserves, compared with a corresponding cumulative decrease of $2.1 billion at December 31, 2022 and a net unrealized gain on investment securities and derivatives of $1.1 billion, compared with a net unrealized loss of $729 million at December 31, 2022. Shareholders’ equity at the end of the fourth quarter also included an unrealized foreign currency translation loss of $4.1 billion, compared with an unrealized foreign currency translation loss of $3.6 billion at December 31, 2022. The annualized return on average shareholders’ equity in the fourth quarter was 4.8%.
For the full year of 2023, total revenues were down 2.3% to $18.7 billion, compared with $19.1 billion in the full year of 2022. Net earnings were $4.7 billion, or $7.78 per diluted share, compared with $4.4 billion, or $6.93 per diluted share, for the full year of 2022. Adjusted earnings for the full year of 2023 were $3.7 billion, or $6.23 per diluted share, compared with $3.6 billion, or $5.67 per diluted share, in 2022. Excluding the negative impact of $0.19 per share from the weaker yen/dollar exchange rate, adjusted earnings per diluted share increased 13.4% to $6.43 for the full year of 2023.
Shareholders’ equity excluding AOCI (or adjusted book value*) was $27.5 billion, or $47.55 per share at December 31, 2023, compared with $26.6 billion, or $43.18 per share, at December 31, 2022. The annualized adjusted return on equity excluding foreign currency impact* in the fourth quarter was 10.7%.

AFLAC JAPAN
In yen terms, Aflac Japan's net earned premiums were ¥272.1 billion for the quarter, or 8.5% lower than a year ago, mainly due to reinsurance transactions during the year and limited pay products reaching paid-up status. Adjusted net investment income increased 13.5% to ¥97.8 billion, mainly due to higher variable investment income and decreased hedge cost. Total adjusted revenues in yen declined 3.5% to ¥371.1 billion. Pretax adjusted earnings in yen for the quarter increased 9.7% on a reported basis to ¥112.7 billion, primarily due to lower benefits and expenses partially offset by decreased revenue during the quarter. Pretax adjusted earnings increased 6.8% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment increased to 30.4%, compared with 26.7% a year ago.
For the full year, net earned premiums in yen were ¥1.1 trillion, or 5.9% lower than a year ago. Adjusted net investment income increased 4.0% to ¥365.6 billion. Total adjusted revenues in yen were down 3.6% to ¥1.5 trillion. Pretax adjusted earnings were ¥456.9 billion, or 6.0% higher than a year ago.
In dollar terms, net earned premiums decreased 12.5% to $1.8 billion in the fourth quarter. Adjusted net investment income increased 8.4% to $655 million. Total adjusted revenues declined by 7.7% to $2.5 billion. Pretax adjusted earnings increased 4.9% to $755 million.
For the full year, net earned premiums in dollars were $8.0 billion, or 12.4% lower than a year ago. Adjusted net investment income decreased 3.3% to $2.6 billion. Total adjusted revenues were down 10.3% to $10.7 billion. Pretax adjusted earnings were $3.2 billion, or 1.4% lower than a year ago.
For the quarter, total new annualized premium sales (sales) decreased 2.6% to ¥15.8 billion, or $107 million, primarily reflecting softer sales of first sector savings products. For the full year, total new sales increased 10.9% to ¥60.7 billion, or $432 million.
AFLAC U.S.
Aflac U.S. net earned premiums increased 1.1% to $1.4 billion in the fourth quarter compared to the prior year. Adjusted net investment income increased 9.9% to $211 million, largely due to higher variable investment income and a shift to higher-yielding fixed-income investments. Total adjusted revenues were up 1.1% to $1.6 billion. Pretax adjusted earnings were $302 million, 10.9% lower than a year ago, primarily due to higher adjusted expenses and benefits offset by higher adjusted net investment income. The pretax adjusted profit margin for the U.S. segment was 18.4%, compared with 20.9% a year ago.
For the full year, net earned premiums increased 1.9% to $5.7 billion. Adjusted net investment income increased 8.6% to $820 million. Total adjusted revenues were up 2.1% to $6.6 billion. Pretax adjusted earnings were $1.5 billion, or 10.4% higher than a year ago.
Aflac U.S. sales increased 2.6% in the quarter to $559 million, reflecting continued improvement from investment in growth initiatives as well as productivity gains. For the full year, total new sales increased 5.0% to $1.6 billion.
CORPORATE AND OTHER
For the quarter, total adjusted revenues decreased 3.8% to $76 million compared to the prior year. The decline was primarily driven by a $116 million decrease in adjusted net investment income due to a higher volume of tax credit investments, partially offset by a $109 million increase of total net earned premiums due to reinsurance activity. Total net benefits and claims increased $230 million primarily related to novation of a reinsurance treaty with a third party that has been ceded back to the company as of year-end as well as other reinsurance activity. Pretax adjusted earnings were a loss of $318 million, compared with a loss of $45 million a year ago, primarily due to the $151 million loss related to the novation transaction and higher volume of tax credit investments of $174 million, compared to $30 million in the fourth quarter of 2022.
For the full year, total adjusted revenues increased 72.3% to $460 million. Pretax adjusted earnings were a loss of $425 million, compared with a loss of $218 million a year ago.

DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS
The board of directors declared the first quarter dividend of $0.50 per share, payable on March 1, 2024 to shareholders of record at the close of business on February 21, 2024.
In the fourth quarter, Aflac Incorporated deployed $700 million in capital to repurchase 8.7 million of its common shares. At the end of December 2023, the company had 77.7 million remaining shares authorized for repurchase.
OUTLOOK
Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: "Aflac delivered very solid earnings for both the quarter and the year. We have continued to actively concentrate on numerous initiatives in the U.S. and Japan around new products and distribution strategies to set the stage for future growth.
"Looking at our operations in Japan, our fourth quarter medical sales were strong due to the mid-September launch of our new medical insurance product. I am pleased with our 10.9% sales increase for the year, which reflected improvements through agencies and alliances, including Japan Post, Dai-ichi Life and Daido Life. While the market presents challenges, we expect to reach ¥67 to ¥73 billion of sales in Japan by the end of 2026.
"In the U.S., I remain encouraged by the enhanced value we are delivering to our policyholders and the continued improvement in the productivity of our agents and brokers. We continue to work toward accelerating our momentum and reinforcing our leading position as we aim to exceed $1.8 billion of sales by the end of 2025.
"We continue to generate strong capital and cash flows while maintaining our commitment to prudent liquidity and capital management. I am very pleased that 2023 marked 41 consecutive years of dividend increases. We treasure our track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. Additionally, I would like to reiterate that I am very happy with the Board's decision to increase the first quarter 2024 dividend 19%. We also remained in the market repurchasing a record $2.8 billion in shares for the year. We intend to continue our balanced approach of investing in growth and driving long-term operating efficiencies while preserving the strength of underlying cash flows."
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts.
*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.
ABOUT AFLAC INCORPORATED
Aflac Incorporated (NYSE: AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for more than 68 years to millions of policyholders and customers through its subsidiaries in the U.S. and Japan. In the U.S., Aflac is the No. 1 provider of supplemental health insurance products.1 In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance in terms of policies in force. The Company takes pride in being there for its policyholders when they need us most, as well as being included in 2023 in the World’s Most Ethical Companies by Ethisphere for 17 consecutive years, Fortune’s World’s Most Admired Companies for 22 years and Bloomberg’s Gender-Equality Index for the fourth consecutive year. In addition, the Company became a signatory of the Principles for Responsible Investment (PRI) in 2021 and has been included in the Dow Jones Sustainability North America Index (2023) for ten years. To find out how to get help with expenses health insurance doesn't cover, get to know us at aflac.com or aflac.com/espanol. Investors may learn more about Aflac Incorporated and its commitment to corporate social responsibility and sustainability at investors.aflac.com under “Sustainability.”
1 LIMRA 2022 U.S. Supplemental Health Insurance Total Market Report
A copy of Aflac’s financial supplement for the quarter can be found on the “Investors” page at aflac.com.
Aflac Incorporated will webcast its quarterly conference call via the “Investors” page of aflac.com at 8:00 a.m. (ET) on February 1, 2024.
Note: Tables within this document may not foot due to rounding.

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
THREE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Total revenues |  | $ | 3,777 |  |  | $ | 3,948 |  |  | (4.3) | %
Benefits and claims, net |  | 2,103 |  |  | 2,054 |  |  | 2.4 |
Total acquisition and operating expenses |  | 1,385 |  |  | 1,356 |  |  | 2.1 |
Earnings before income taxes |  | 289 |  |  | 538 |  |  | (46.3) |
Income taxes |  | 21 |  |  | 342 |  |  |
Net earnings |  | $ | 268 |  |  | $ | 196 |  |  | 36.7 | %
Net earnings per share – basic |  | $ | 0.46 |  |  | $ | 0.32 |  |  | 43.8 | %
Net earnings per share – diluted |  | 0.46 |  |  | 0.31 |  |  | 48.4 |
Shares used to compute earnings per share (000): |  |  |  |  |  |
Basic |  | 581,876 |  |  | 619,845 |  |  | (6.1) | %
Diluted |  | 584,881 |  |  | 622,994 |  |  | (6.1) |
Dividends paid per share |  | $ | 0.42 |  |  | $ | 0.40 |  |  | 5.0 | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
TWELVE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Total revenues |  | $ | 18,701 |  |  | $ | 19,140 |  |  | (2.3) | %
Benefits and claims, net |  | 8,211 |  |  | 8,887 |  |  | (7.6) |
Total acquisition and operating expenses |  | 5,228 |  |  | 5,384 |  |  | (2.9) |
Earnings before income taxes |  | 5,262 |  |  | 4,869 |  |  | 8.1 |
Income taxes |  | 603 |  |  | 451 |  |  |
Net earnings |  | $ | 4,659 |  |  | $ | 4,418 |  |  | 5.5 | %
Net earnings per share – basic |  | $ | 7.81 |  |  | $ | 6.96 |  |  | 12.2 | %
Net earnings per share – diluted |  | 7.78 |  |  | 6.93 |  |  | 12.3 |
Shares used to compute earnings per share (000): |  |  |  |  |  |
Basic |  | 596,173 |  |  | 634,816 |  |  | (6.1) | %
Diluted |  | 598,745 |  |  | 637,655 |  |  | (6.1) |
Dividends paid per share |  | $ | 1.68 |  |  | $ | 1.60 |  |  | 5.0 | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)
DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Assets: |  |  |  |  |  |
Total investments and cash |  | $ | 113,560 |  |  | $ | 117,397 |  |  | (3.3) | %
Deferred policy acquisition costs |  | 9,132 |  |  | 9,239 |  |  | (1.2) |
Other assets |  | 4,032 |  |  | 5,102 |  |  | (21.0) |
Total assets |  | $ | 126,724 |  |  | $ | 131,738 |  |  | (3.8) | %
Liabilities and shareholders’ equity: |  |  |  |  |  |
Policy liabilities |  | $ | 91,599 |  |  | $ | 96,910 |  |  | (5.5) | %
Notes payable and lease obligations |  | 7,364 |  |  | 7,442 |  |  | (1.0) |
Other liabilities |  | 5,776 |  |  | 7,246 |  |  | (20.3) |
Shareholders’ equity |  | 21,985 |  |  | 20,140 |  |  | 9.2 |
Total liabilities and shareholders’ equity |  | $ | 126,724 |  |  | $ | 131,738 |  |  | (3.8) | %
Shares outstanding at end of period (000) |  | 578,479 |  |  | 615,256 |  |  | (6.0) | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.

NON-U.S. GAAP FINANCIAL MEASURES
This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations.
Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).
The company defines the non-U.S. GAAP financial measures included in this earnings release as follows:
•Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring 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. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively.
•Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency 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. 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; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively.
•Adjusted return on equity is adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using net earnings and average total shareholders’ equity.
•Adjusted return on equity excluding foreign currency impact is adjusted earnings excluding the current period foreign currency impact divided by average shareholders’ equity, excluding AOCI. The Company considers adjusted return on equity excluding foreign currency impact important as it excludes changes in foreign currency and components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity excluding foreign currency impact is return on average equity (ROE) as determined using net earnings and average total shareholders’ equity.
•Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in Corporate and other. 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 term of the hedge. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparable U.S. GAAP financial measure for amortized hedge costs/ income.

•Adjusted book value is the U.S. GAAP book value (representing total shareholders’ equity), less AOCI as recorded on the U.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude AOCI, which fluctuates due to market movements that are outside management’s control. The most comparable U.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively.
•Adjusted book value including unrealized foreign currency translation gains and losses is adjusted book value plus unrealized foreign currency translation gains and losses. Adjusted book value including unrealized foreign currency translation gains and losses per common share is adjusted book value plus unrealized foreign currency translation gains and losses at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value including unrealized foreign currency translation gains and losses, and its related per share financial measure, important as they exclude certain components of AOCI, which fluctuate due to market movements that are outside management's control; however, it includes the impact of foreign currency as a result of the significance of Aflac’s Japan operation. The most comparable U.S. GAAP financial measures for adjusted book value including unrealized foreign currency translation gains and losses and adjusted book value including unrealized foreign currency translation gains and losses per common share are total book value and total book value per common share, respectively.
•Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company’s investments and related hedging strategies. The most comparable U.S. GAAP financial measure for adjusted net investment income is net investment income.
•Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest cash flows from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management’s control, while excluding the components that are within management’s control and are accordingly reclassified to net investment income and interest expense. The most comparable U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
THREE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net earnings |  | $ | 268 |  |  | $ | 196 |  |  | 36.7 | %
Items impacting net earnings: |  |  |  |  |  |
Adjusted net investment (gains) losses |  | 450 |  |  | 477 |  |  |
Other and non-recurring (income) loss |  | — |  |  | — |  |  |
Income tax (benefit) expense on items excluded from adjusted earnings |  | 14 |  |  | 144 |  |  |
Adjusted earnings |  | 732 |  |  | 817 |  |  | (10.4) | %
Current period foreign currency impact 1 |  | 14 |  |  | N/A |  |
Adjusted earnings excluding current period foreign currency impact 2 |  | $ | 746 |  |  | $ | 817 |  |  | (8.7) | %
Net earnings per diluted share |  | $ | 0.46 |  |  | $ | 0.31 |  |  | 48.4 | %
Items impacting net earnings: |  |  |  |  |  |
Adjusted net investment (gains) losses |  | 0.77 |  |  | 0.77 |  |  |
Other and non-recurring (income) loss |  | — |  |  | — |  |  |
Income tax (benefit) expense on items excluded from adjusted earnings |  | 0.02 |  |  | 0.23 |  |  |
Adjusted earnings per diluted share |  | 1.25 |  |  | 1.31 |  |  | (4.6) | %
Current period foreign currency impact 1 |  | 0.02 |  |  | N/A |  |
Adjusted earnings per diluted share excluding current period foreign currency impact 2 |  | $ | 1.28 |  |  | $ | 1.31 |  |  | (2.3) | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.
2 Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes.

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
TWELVE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net earnings |  | $ | 4,659 |  |  | $ | 4,418 |  |  | 5.5 | %
Items impacting net earnings: |  |  |  |  |  |
Adjusted net investment (gains) losses |  | (914) |  |  | (447) |  |  |
Other and non-recurring (income) loss |  | (39) |  |  | (1) |  |  |
Income tax (benefit) expense on items excluded from adjusted earnings 1 |  | 26 |  |  | (357) |  |  |
Adjusted earnings |  | 3,733 |  |  | 3,614 |  |  | 3.3 | %
Current period foreign currency impact 2 |  | 113 |  |  | N/A |  |
Adjusted earnings excluding current period foreign currency impact 3 |  | $ | 3,847 |  |  | $ | 3,614 |  |  | 6.4 | %
Net earnings per diluted share |  | $ | 7.78 |  |  | $ | 6.93 |  |  | 12.3 | %
Items impacting net earnings: |  |  |  |  |  |
Adjusted net investment (gains) losses |  | (1.53) |  |  | (0.70) |  |  |
Other and non-recurring (income) loss |  | (0.07) |  |  | — |  |  |
Income tax (benefit) expense on items excluded from adjusted earnings 1 |  | 0.04 |  |  | (0.56) |  |  |
Adjusted earnings per diluted share |  | 6.23 |  |  | 5.67 |  |  | 9.9 | %
Current period foreign currency impact 2 |  | 0.19 |  |  | N/A |  |
Adjusted earnings excluding current period foreign currency impact 3 |  | $ | 6.43 |  |  | $ | 5.67 |  |  | 13.4 | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 Primarily reflects release of $452 million in deferred taxes in 2022.
2 Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.
3 Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes.

RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net investment (gains) losses |  | $ | 511 |  |  | $ | 521 |  |  | (1.9) | %
Items impacting net investment (gains) losses: |  |  |  |  |  |
Amortized hedge costs |  | (9) |  |  | (28) |  |  |
Amortized hedge income |  | 29 |  |  | 25 |  |  |
Net interest cash flows from derivatives associated with certain investment strategies |  | (90) |  |  | (53) |  |  |
Interest rate component of the change in fair value of foreign currency swaps on notes payable 1 |  | 8 |  |  | 13 |  |  |
Adjusted net investment (gains) losses |  | $ | 450 |  |  | $ | 477 |  |  | (5.7) | %

1 Amounts are included with interest expenses that are a component of adjusted expenses.

RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net investment income |  | $ | 865 |  |  | $ | 896 |  |  | (3.5) | %
Items impacting net investment income: |  |  |  |  |  |
Amortized hedge costs |  | (9) |  |  | (28) |  |  |
Amortized hedge income |  | 29 |  |  | 25 |  |  |
Net interest cash flows from derivatives associated with certain investment strategies |  | (90) |  |  | (53) |  |  |
Adjusted net investment income |  | $ | 795 |  |  | $ | 840 |  |  | (5.4) | %

RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
TWELVE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net investment (gains) losses |  | $ | (590) |  |  | $ | (363) |  |  | 62.5 | %
Items impacting net investment (gains) losses: |  |  |  |  |  |
Amortized hedge costs |  | (157) |  |  | (112) |  |  |
Amortized hedge income |  | 121 |  |  | 68 |  |  |
Net interest cash flows from derivatives associated with certain investment strategies |  | (328) |  |  | (90) |  |  |
Interest rate component of the change in fair value of foreign currency swaps on notes payable 1 |  | 41 |  |  | 50 |  |  |
Adjusted net investment (gains) losses |  | $ | (914) |  |  | $ | (447) |  |  | 104.5 | %

1 Amounts are included with interest expenses that are a component of adjusted expenses.

RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
TWELVE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
Net investment income |  | $ | 3,811 |  |  | $ | 3,656 |  |  | 4.2 | %
Items impacting net investment income: |  |  |  |  |  |
Amortized hedge costs |  | (157) |  |  | (112) |  |  |
Amortized hedge income |  | 121 |  |  | 68 |  |  |
Net interest cash flows from derivatives associated with certain investment strategies |  | (328) |  |  | (90) |  |  |
Adjusted net investment income |  | $ | 3,447 |  |  | $ | 3,522 |  |  | (2.1) | %

RECONCILIATION OF U.S. GAAP BOOK VALUE TO ADJUSTED BOOK VALUE
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
DECEMBER 31, |  | 2023 |  | 2022 |  | % Change
U.S. GAAP book value |  | $ | 21,985 |  |  | $ | 20,140 |  |  |
Less: |  |  |  |  |  |
Unrealized foreign currency translation gains (losses) |  | (4,069) |  |  | (3,564) |  |  |
Unrealized gains (losses) on securities and derivatives |  | 1,117 |  |  | (729) |  |  |
Effect of changes in discount rate assumptions |  | (2,560) |  |  | (2,100) |  |  |
Pension liability adjustment |  | (8) |  |  | (36) |  |  |
Total AOCI |  | (5,520) |  |  | (6,429) |  |  |
Adjusted book value |  | $ | 27,505 |  |  | $ | 26,569 |  |  |
Add: |  |  |  |  |  |
Unrealized foreign currency translation gains (losses) |  | (4,069) |  |  | (3,564) |  |  |
Adjusted book value including unrealized foreign currency translation gains (losses) |  | $ | 23,436 |  |  | $ | 23,005 |  |  |
Number of outstanding shares at end of period (000) |  | 578,479 |  |  | 615,256 |  |  |
U.S. GAAP book value per common share |  | $ | 38.00 |  |  | $ | 32.73 |  |  | 16.1 | %
Less: |  |  |  |  |  |
Unrealized foreign currency translation gains (losses) per common share |  | (7.03) |  |  | (5.79) |  |  |
Unrealized gains (losses) on securities and derivatives per common share |  | 1.93 |  |  | (1.18) |  |  |
Effect of changes in discount rate assumptions per common share |  | (4.43) |  |  | (3.41) |  |  |
Pension liability adjustment per common share |  | (0.01) |  |  | (0.06) |  |  |
Total AOCI per common share |  | (9.54) |  |  | (10.45) |  |  |
Adjusted book value per common share |  | $ | 47.55 |  |  | $ | 43.18 |  |  | 10.1 | %
Add: |  |  |  |  |  |
Unrealized foreign currency translation gains (losses) per common share |  | (7.03) |  |  | (5.79) |  |  |
Adjusted book value including unrealized foreign currency translation gains (losses) per common share |  | $ | 40.51 |  |  | $ | 37.39 |  |  | 8.3 | %

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.

RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
THREE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022
U.S. GAAP ROE - Net earnings 1 |  | 4.8 | % |  | 3.9 | %
Impact of excluding unrealized foreign currency translation gains (losses) |  | (0.8) |  |  | (0.6) |
Impact of excluding unrealized gains (losses) on securities and derivatives |  | 0.1 |  |  | — |
Impact of excluding effect of changes in discount rate assumptions |  | (0.3) |  |  | (0.4) |
Impact of excluding pension liability adjustment |  | — |  |  | — |
Impact of excluding AOCI |  | (1.0) |  |  | (1.0) |
U.S. GAAP ROE - less AOCI |  | 3.8 |  |  | 2.9 |
Differences between adjusted earnings and net earnings 2 |  | 6.6 |  |  | 9.2 |
Adjusted ROE - reported |  | 10.5 |  |  | 12.1 |
Less: Impact of foreign currency 3 |  | (0.2) |  |  | N/A
Adjusted ROE, excluding impact of foreign currency |  | 10.7 |  |  | 12.1 |

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.
2 See separate reconciliation of net income to adjusted earnings.
3 Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure.

RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
TWELVE MONTHS ENDED DECEMBER 31, |  | 2023 |  | 2022
U.S. GAAP ROE - Net earnings 1 |  | 22.1 | % |  | 23.8 | %
Impact of excluding unrealized foreign currency translation gains (losses) |  | (3.1) |  |  | (2.5) |
Impact of excluding unrealized gains (losses) on securities and derivatives |  | 0.2 |  |  | 4.1 |
Impact of excluding effect of changes in discount rate assumptions |  | (1.9) |  |  | (8.2) |
Impact of excluding pension liability adjustment |  | — |  |  | (0.1) |
Impact of excluding AOCI |  | (4.9) |  |  | (6.8) |
U.S. GAAP ROE - less AOCI |  | 17.2 |  |  | 17.0 |
Differences between adjusted earnings and net earnings 2 |  | (3.4) |  |  | (3.1) |
Adjusted ROE - reported |  | 13.8 |  |  | 13.9 |
Less: Impact of foreign currency 3 |  | (0.4) |  |  | N/A
Adjusted ROE, excluding impact of foreign currency |  | 14.2 |  |  | 13.9 |

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.
2 See separate reconciliation of net income to adjusted earnings.
3 Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure.

EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS 1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2023 |  | Including Currency Changes |  | Excluding Currency Changes 2
Net earned premiums 3 |  | (3.9) | % |  | (1.7) | %
Adjusted net investment income 4 |  | (5.4) |  |  | (4.3) |
Total benefits and expenses |  | 2.4 |  |  | 4.6 |
Adjusted earnings |  | (10.4) |  |  | (8.7) |
Adjusted earnings per diluted share |  | (4.6) |  |  | (2.3) |

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 Refer to previously defined adjusted earnings and adjusted earnings per diluted share.
2 Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes.
3 Net of reinsurance
4 Refer to previously defined adjusted net investment income.

EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS 1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2023 |  | Including Currency Changes |  | Excluding Currency Changes 2
Net earned premiums 3 |  | (5.2) | % |  | (0.9) | %
Adjusted net investment income 4 |  | (2.1) |  |  | 0.1 |
Total benefits and expenses |  | (5.5) |  |  | (1.3) |
Adjusted earnings |  | 3.3 |  |  | 6.4 |
Adjusted earnings per diluted share |  | 9.9 |  |  | 13.4 |

All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration
insurance contracts.
1 Refer to previously defined adjusted earnings and adjusted earnings per diluted share.
2 Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes.
3 Net of reinsurance
4 Refer to previously defined adjusted net investment income.

FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “intends,” “projects,” “will,” “assumes,” “potential,” “target,” "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.
The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:
•difficult conditions in global capital markets and the economy, including inflation
•defaults and credit downgrades of investments
•global fluctuations in interest rates and exposure to significant interest rate risk
•concentration of business in Japan
•limited availability of acceptable yen-denominated investments
•foreign currency fluctuations in the yen/dollar exchange rate
•differing interpretations applied to investment valuations
•significant valuation judgments in determination of expected credit losses recorded on the Company's investments
•decreases in the Company's financial strength or debt ratings
•decline in creditworthiness of other financial institutions
•the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
•deviations in actual experience from pricing and reserving assumptions
•ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives
•interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems
•subsidiaries' ability to pay dividends to the Parent Company
•inherent limitations to risk management policies and procedures
•operational risks of third-party vendors
•tax rates applicable to the Company may change
•failure to comply with restrictions on policyholder privacy and information security
•extensive regulation and changes in law or regulation by governmental authorities
•competitive environment and ability to anticipate and respond to market trends
•catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events
•ability to protect the Aflac brand and the Company's reputation
•ability to effectively manage key executive succession
•changes in accounting standards
•level and outcome of litigation or regulatory inquiries
•allegations or determinations of worker misclassification in the United States
Analyst and investor contact - David A. Young, 706.596.3264; 800.235.2667 or dyoung@aflac.com
Media contact - Ines Gutzmer, 762.207.7601 or igutzmer@aflac.com