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. Aflac Incorporated (the Parent Company) and its subsidiaries (collectively with the Parent Company, the Company) desire to take advantage of these provisions. This report 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 or furnished to 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 the ones listed below or similar words, as well as specific projections of future results, generally qualify as forward-looking. The Company undertakes no obligation to update such forward-looking statements, except as may be required by law. • expect • anticipate • believe • goal • objective • strategy • may • should • estimate • intend • project • future • will • assume • potential • target • outlook • continue 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 Japanese 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, and uncertainty regarding the impact of the incident involving unauthorized access to the Company’s network in June 2025 •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, 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 78 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 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. As a result, the following discussion should be read in conjunction with the consolidated financial statements and notes that are included in the Company's annual report on Form 10-K for the year ended December 31, 2025 (2025 Annual Report). In this MD&A, amounts may not foot due to rounding. This MD&A is divided into the following sections: Page Executive Summary 80 Results of Operations 81 Investments 99 Hedging Activities 105 Policy Liabilities 108 Benefit Plans 109 Policyholder Protection 109 Liquidity and Capital Resources 109 Critical Accounting Estimates 114 79 EXECUTIVE SUMMARY Company Overview Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) provide financial protection to millions of policyholders and customers in Japan and the United States (U.S.). The Company’s principal business is supplemental health and life insurance products with the goal to provide customers the best value in supplemental insurance products in Japan and the U.S. The Company's insurance business consists of two reporting segments: Aflac Japan and Aflac U.S. The Parent Company’s primary insurance subsidiaries are Aflac Life Insurance Japan Ltd. in Japan (Aflac Japan) and American Family Life Assurance Company of Columbus (Aflac); Continental American Insurance Company (CAIC), branded as Aflac Group Insurance (AGI); American Family Life Assurance Company of New York (Aflac New York); Tier One Insurance Company (TOIC) and Aflac Benefits Solutions, Inc. (ABS), which provides a platform for Aflac Dental and Vision in the U.S. (collectively, Aflac U.S.). The Parent Company, other operating business units that are not individually reportable, reinsurance activities, including reinsurance activity of Aflac Re Bermuda Ltd. (Aflac Re), and other business activities not included in Aflac Japan or Aflac U.S., as well as intercompany eliminations, are included in Corporate and other. Performance Highlights 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; 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. 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%. 80 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. GAAP financial measure. (2) Yen/dollar exchange rates are based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM). 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 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 litigation, governmental investigations, or potential enforcement actions; expenses related to compliance, finance, and legal advisory services; elevated cybersecurity insurance premiums; 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 The Company earns its revenues principally from insurance premiums and investments. The Company’s operating expenses primarily consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, commissions and other costs of selling and servicing its products. Profitability for the Company depends principally on its ability to price its insurance products at a level that enables the Company to earn a margin over the costs associated with providing benefits and administering those products. Profitability also depends on, among other items, actuarial and policyholder behavior experience on insurance products, and the Company's ability to attract and retain customer assets, generate and maintain favorable investment results, effectively deploy capital and utilize tax capacity, and manage expenses. 81 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 Japanese yen weakens, translating Japanese yen into U.S. dollars results in fewer U.S. dollars being reported. When the Japanese yen strengthens, translating Japanese yen into U.S. dollars results in more U.S. dollars being reported. Consequently, Japanese yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while Japanese 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 Japanese yen and never converted into U.S. dollars but translated into U.S. 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 document 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 are outside of management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. 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 from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. 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 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 income/expense 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 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. •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. 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 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 82 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 book value is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income 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 accumulated other comprehensive income, 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 excluding foreign currency remeasurement is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet and excluding the cumulative (beginning January 1, 2021) foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. Adjusted book value excluding foreign currency remeasurement per common share is adjusted book value excluding foreign currency remeasurement at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share important as they exclude both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measures for adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share are total book value and total book value per common share, respectively. •Adjusted return on equity is annualized adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income. 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 accumulated other comprehensive income, 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 equity as determined using annualized net earnings and average total shareholders’ equity. •Adjusted return on equity excluding foreign currency remeasurement is annualized adjusted earnings divided by average shareholders’ equity, excluding both accumulated other comprehensive income and the cumulative (beginning January 1, 2021) foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The Company considers adjusted return on equity excluding foreign currency remeasurement important because it excludes both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, 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 remeasurement is return on equity as determined using annualized net earnings and average total shareholders’ equity. •U.S. dollar-denominated investment income excluding foreign currency impact represents amounts excluding foreign currency impact on U.S. dollar-denominated investment income using the average foreign exchange rate for the comparable prior year period. The Company considers U.S. dollar-denominated investment income excluding foreign currency impact important as it eliminates the impact of foreign currency changes on the Aflac Japan segment results, which are outside management’s control. The most comparable U.S. GAAP financial measure for U.S. dollar-denominated investment income excluding foreign currency impact is the corresponding net investment income amount from the U.S. dollar denominated investments translated to yen. 83 The following table is a reconciliation of items impacting adjusted earnings and adjusted earnings per diluted share to the most directly comparable U.S. GAAP financial measures of net earnings and net earnings per diluted share, respectively. Reconciliation of Net Earnings to Adjusted Earnings 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 Net earnings $ 825 $ 599 $ 1.63 $ 1.11 $ 1,844 $ 628 $ 3.61 $ 1.16 Items impacting net earnings: Adjusted net investment (gains) losses (1) 106 377 .21 .70 3 1,301 .01 2.40 Other and non-recurring (income) loss 0 0 .00 .00 0 53 .00 .10 Income tax (benefit) expense on items excluded from adjusted earnings (48) (19) (.09) (.04) (63) (119) (.12) (.22) Adjusted earnings 883 957 1.75 1.78 1,784 1,863 3.50 3.43 Current period foreign currency impact (2) 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 (1) See reconciliation of net investment (gains) losses to adjusted net investment (gains) losses below. (2) Prior period foreign currency impact reflected as “N/A” to isolate change for current period only. Reconciling Items Net Investment Gains and Losses The following table is a reconciliation of items impacting adjusted net investment (gains) losses to the most directly comparable U.S. GAAP financial measure of net investment (gains) losses. Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment (Gains) Losses Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net investment (gains) losses $ 153 $ 421 $ 104 $ 1,384 Items impacting net investment (gains) losses: Amortized hedge costs (12) (11) (27) (18) Amortized hedge income 19 30 37 60 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 Adjusted net investment (gains) losses $ 106 $ 377 $ 3 $ 1,301 The Company's investment strategy is to invest primarily in fixed maturity securities to provide a reliable stream of investment income, which is one of the drivers of the Company’s profitability. This investment strategy incorporates asset-liability matching to align the expected cash flows of the portfolio to the needs of the Company's liability structure. The Company does not purchase securities with the intent of generating investment gains or losses. However, investment gains and losses may be realized as a result of changes in the financial markets and the creditworthiness of specific issuers, tax planning strategies, and/or general portfolio management and rebalancing. The realization of investment gains and losses is independent of the underwriting and administration of the Company's insurance products. 84 Net investment gains and losses excluded from adjusted earnings include the following: •Securities Transactions •Credit Losses •Changes in the Fair Value of Equity Securities •Certain Derivative and Foreign Currency Activities. Securities Transactions, Credit Losses and Changes in the Fair Value of Equity Securities Securities transactions include gains and losses from sales and redemptions of investments where the amount received is different from the amortized cost of the investment. Credit losses include losses for held-to-maturity securities, available-for-sale securities, loan receivables, loan commitments and reinsurance recoverables. Changes in the fair value of equity securities are the result of gains or losses driven by fluctuations in market prices. Certain Derivative and Foreign Currency Activities The Company's freestanding derivative instruments include: •Foreign currency forwards •Foreign currency options •Foreign currency swaps •Cross-currency swaps •Interest rate swaps •Interest rate swaptions (swaptions) •Bond purchase commitments Gains and losses are recognized as a result of valuing these derivatives, net of the effects of hedge accounting. The Company also excludes from adjusted earnings the accounting impacts of foreign currency remeasurement associated with changes in the foreign currency exchange rate. For additional information regarding net investment gains and losses, including details of reported amounts for the periods presented, see Notes 3 and 4 of the Notes to the Consolidated Financial Statements. Other and Non-recurring Items The U.S. insurance industry has a policyholder protection system that provides funds for the policyholders of insolvent insurers. The system can result in periodic charges to the Company as a result of insolvencies/bankruptcies that occur with other companies in the life insurance industry. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. These charges neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, but result from external situations not controlled by the Company. The Company excludes any charges associated with U.S. guaranty fund assessments and the corresponding tax benefit or expense from adjusted earnings. In Japan, the government also requires the insurance industry to contribute to a policyholder protection corporation that provides funds for the policyholders of insolvent insurers; however, these costs are calculated and administered differently than in the U.S. In Japan, these costs are not directly related to specific insolvencies or bankruptcies, but are rather a regular operational cost for an insurance company. Based on this structure, the Company does not remove the Japan policyholder protection expenses from adjusted earnings. The Company considers the costs associated with the early redemption of its debt to be unrelated to the underlying fundamentals and trends in its insurance operations. Additionally, these costs are driven by changes in interest rates subsequent to the issuance of the debt, and the Company considers these interest rate changes to represent economic conditions not directly associated with its insurance operations. 85 In January 2025, as part of the U.S. defined benefit plan freeze effective January 1, 2024, the Company purchased a nonparticipating single premium group annuity contract from an external insurer to settle its obligations under the plan and paid to the insurer the related annuity premium. As a result, the Company recognized a settlement charge of $55 million in the first quarter of 2025. The settlement charge was both unusual and non-recurring; therefore, the Company excluded the settlement charge from adjusted earnings. Foreign Currency Translation Aflac Japan’s premiums and a significant portion of its investment income are received in Japanese yen, and its claims and most expenses are paid in Japanese yen. Aflac Japan purchases Japanese yen-denominated assets and U.S. dollar-denominated assets, which may be hedged to Japanese yen, to support Japanese yen-denominated policy liabilities. Japanese yen-denominated income statement accounts are translated to U.S. dollars using the weighted average yen/dollar foreign exchange rate for the reporting period, except realized gains and losses on securities transactions which are translated at the foreign exchange rate on the trade date of each transaction. Japanese yen-denominated balance sheet accounts are translated to U.S. dollars using the spot yen/dollar exchange rate at the end of the reporting period. In recent periods, the Japanese yen has weakened against the U.S. dollar. Although the Company is unable to predict the timing or extent of future movements of the yen/dollar exchange rate, the Company maintains hedging strategies (see the Hedging Activities section of this MD&A) that are intended to mitigate the impacts of Japanese yen fluctuation on the Company’s financial position and results of operations. See the risk factor entitled “The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate” in Item 1A. Risk Factors of the 2025 Annual Report for more information. Income Taxes The Company's combined U.S. 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 Aflac Japan U.S. dollar-denominated investments held in the Delaware Statutory Trust. For additional information, see Note 10 of the Notes to the Consolidated Financial Statements and the Critical Accounting Estimates - Income Taxes section of Item 7. MD&A in the 2025 Annual Report. The effective tax rate continues to be subject to future tax law changes both in the U.S. and in foreign jurisdictions. See the risk factor entitled "Tax rates applicable to the Company may change" in Item 1A. Risk Factors of the 2025 Annual Report for more information. 86 Reconciliation of Book Value to Adjusted Book Value (Excluding Foreign Currency Remeasurement) The following table is a reconciliation of items impacting adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share to the most directly comparable U.S. GAAP financial measures of book value and book value per common share, respectively. (In millions, except for share and per-share amounts) June 30, 2026 December 31, 2025 U.S. GAAP book value $ 30,312 $ 29,490 Items impacting U.S. GAAP book value: Unrealized foreign currency translation gains (losses) (5,048) (4,847) Unrealized gains (losses) on securities and derivatives (2,769) (1,822) Effect of changes in discount rate assumptions 10,415 8,035 Pension liability adjustment 83 86 Total accumulated other comprehensive income 2,681 1,452 Adjusted book value 27,631 28,038 Foreign currency remeasurement gains (losses) 6,927 5,910 Adjusted book value excluding foreign currency remeasurement $ 20,704 $ 22,128 Number of shares outstanding at end of period 502,257 518,690 U.S. GAAP book value per common share $ 60.35 $ 56.85 Items impacting U.S. GAAP book value per common share: Unrealized foreign currency translation gains (losses) per common share (10.05) (9.34) Unrealized gains (losses) on securities and derivatives per common share (5.51) (3.51) Effect of changes in discount rate assumptions per common share 20.74 15.49 Pension liability adjustment per common share .17 .17 Total accumulated other comprehensive income per common share 5.34 2.80 Adjusted book value per common share 55.01 54.06 Foreign currency remeasurement gains (losses) per common share 13.79 11.39 Adjusted book value excluding foreign currency remeasurement per common share $ 41.22 $ 42.66 87 Reconciliation of Return on Equity to Adjusted Return on Equity (Excluding Foreign Currency Remeasurement) The following table is a reconciliation of items impacting adjusted return on equity excluding foreign currency remeasurement to the most directly comparable U.S. GAAP financial measure of return on equity. Three Months Ended June 30, 2026 2025 U.S. GAAP return on equity - net earnings (1) 10.9 % 9.0 % Impact of excluding unrealized foreign currency translation gains (losses) (2.0) (1.5) Impact of excluding unrealized gains (losses) on securities and derivatives (1.1) (.5) Impact of excluding effect of changes in discount rate assumptions 3.9 1.6 Impact of excluding pension liability adjustment .0 .0 Impact of excluding accumulated other comprehensive income .9 (.4) U.S. GAAP return on equity less accumulated other comprehensive income 11.9 8.6 Differences between adjusted earnings and net earnings (2) .8 5.1 Adjusted return on equity - reported 12.7 13.7 Impact of excluding gains (losses) associated with foreign currency remeasurement (3) 3.9 2.9 Adjusted return on equity excluding foreign currency remeasurement 16.6 16.6 (1) U.S. GAAP return on equity is calculated by dividing net earnings (annualized) by average shareholders' equity. (2) See separate reconciliation of net earnings to adjusted earnings above. (3) Impact of gains/losses associated with foreign currency remeasurement is calculated by excluding the cumulative (beginning January 1, 2021) foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The impact is the difference of adjusted return on equity - reported compared with adjusted return on equity, excluding from shareholders' equity, gains/losses associated with foreign currency remeasurement. RESULTS OF OPERATIONS BY SEGMENT U.S. GAAP financial reporting requires that a company report financial and descriptive information about operating segments in its annual and interim period financial statements. Furthermore, the Company is required to report a measure of segment profit or loss, certain revenue and expense items, and segment assets. The Company's insurance business consists of two segments: Aflac Japan and Aflac U.S. Aflac Japan is the principal contributor to consolidated earnings. In addition, the Parent Company, other business units that are not individually reportable, reinsurance activities, including reinsurance activity of Aflac Re, and other business activities not included in Aflac Japan or Aflac U.S., as well as intercompany eliminations, are included in Corporate and other. See Item 1. Business in the 2025 Annual Report for a summary of each segment's products and distribution channels. Consistent with U.S. GAAP guidance for segment reporting, pretax adjusted earnings is the Company's U.S. GAAP measure of segment performance. The Company believes that a presentation of this measure is vitally important to an understanding of the underlying profitability drivers and trends of its business. Additional performance measures used to evaluate the financial condition and performance of the Company's segments are listed below. •Operating Ratios •New Annualized Premium Sales •New Money Yield •Return on Average Invested Assets •Portfolio Book Yield •Average Weekly Producer •Premium Persistency For additional information on the Company’s performance measures included in this MD&A, see the Glossary of Selected Terms found directly following Part II. Other Information. See Note 2 of the Notes to the Consolidated Financial Statements for the reconciliation of segment results to the Company's consolidated U.S. GAAP results and additional information. 88 AFLAC JAPAN SEGMENT Aflac Japan Pretax Adjusted Earnings Changes in Aflac Japan’s pretax adjusted earnings and profit margins are primarily affected by morbidity, mortality, expenses, persistency and investment yields. The following table presents a summary of operating results for Aflac Japan. Aflac Japan Summary of Operating Results In Dollars In Yen 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 Net earned premiums (1) $ 1,537 $ 1,761 $ 3,110 $ 3,442 ¥ 245 ¥ 255 ¥ 492 ¥ 511 Net investment income: (2) Yen-denominated investment income 190 246 387 470 30 36 61 70 U.S. dollar-denominated investment income 438 464 847 833 70 67 134 123 Net investment income 628 710 1,234 1,303 100 103 195 193 Amortized hedge costs 12 11 27 18 2 2 4 3 Adjusted net investment income 616 699 1,207 1,285 98 101 191 190 Other income (loss) 8 12 16 17 1 2 3 3 Total adjusted revenues 2,161 2,472 4,333 4,744 345 357 685 704 Benefits and claims: Benefits and claims, excluding reserve remeasurement 1,006 1,186 2,041 2,316 161 172 323 344 Reserve remeasurement (gains) losses (23) (14) (68) (39) (4) (2) (11) (6) Total benefits and claims, net 983 1,172 1,973 2,277 157 169 312 338 Adjusted expenses: Amortization of deferred policy acquisition costs 76 85 154 164 12 12 24 24 Insurance commissions 94 112 189 217 15 16 30 32 Insurance and other expenses 267 313 517 574 42 45 82 85 Total adjusted expenses 437 509 860 954 70 74 136 142 Total benefits and adjusted expenses 1,420 1,682 2,833 3,232 226 243 448 480 Pretax adjusted earnings $ 741 $ 790 $ 1,500 $ 1,512 ¥ 118 ¥ 114 ¥ 237 ¥ 224 Weighted-average yen/dollar exchange rate 159.45 144.60 158.14 148.32 — — — — Percentage change over previous period: Net earned premiums (12.7) % 2.7 % (9.6) % (2.5) % (3.7) % (4.8) % (3.8) % (4.9) % Adjusted net investment income (11.9) (3.6) (6.1) (6.5) (2.9) (10.5) .4 (9.1) Total adjusted revenues (12.6) 1.0 (8.7) (3.6) (3.6) (6.2) (2.6) (6.0) Total benefits and claims, net (16.1) 2.1 (13.4) (3.7) (7.5) (5.3) (7.7) (6.0) Total adjusted expenses (14.1) 17.0 (9.9) 8.4 (5.6) 8.9 (4.0) 5.7 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- 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. 89 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 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. 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 $7.2 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. dollar-denominated securities and reverse dual-currency securities (Japanese yen-denominated fixed maturity securities with dollar coupon payments). In years when the Japanese yen strengthens in relation to the U.S. dollar, translating Aflac Japan's U.S. dollar-denominated investment income into Japanese yen lowers growth rates for net investment income, total adjusted revenues, and pretax adjusted earnings in Japanese yen terms. In years when the Japanese yen weakens, translating U.S. dollar-denominated investment income into Japanese yen magnifies growth rates for net investment income, total adjusted revenues, and pretax adjusted earnings in Japanese yen terms. 90 The following table illustrates the effect of translating Aflac Japan’s U.S. dollar-denominated investment income and related items into Japanese yen by comparing certain segment results with those that would have been reported had foreign exchange rates remained unchanged from the comparable period in the prior year. Amounts excluding foreign currency impact on U.S. dollar-denominated investment income were determined using the average foreign exchange rate for the comparable prior year period. See non-U.S. GAAP financial measures defined above. Aflac Japan Percentage Changes Over Previous Period (Japanese Yen Operating Results) For the Periods Ended June 30, Including Foreign Currency Changes Excluding Foreign Currency Changes Three Months Six Months Three Months Six Months 2026 2025 2026 2025 2026 2025 2026 2025 Adjusted net investment income (2.9) % (10.5) % .4 % (9.1) % (9.4) % (6.1) % (4.1) % (7.4) % Total adjusted revenues (3.6) (6.2) (2.6) (6.0) (5.4) (4.9) (3.9) (5.5) 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 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, net 45.5 % 47.4 % 45.5 % 48.0 % Adjusted expenses: Amortization of deferred policy acquisition costs 3.6 3.4 3.6 3.4 Insurance commissions 4.3 4.5 4.4 4.6 Insurance and other expenses 12.3 12.7 11.9 12.1 Total adjusted expenses 20.2 20.6 19.8 20.1 Pretax adjusted earnings 34.3 32.0 34.6 31.9 Ratios to total premiums: Total benefits and claims, net 64.0 % 66.5 % 63.4 % 66.2 % Adjusted expenses: Amortization of deferred policy acquisition costs 5.0 4.8 5.0 4.7 •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. 2026 2025 Premium persistency 92.7 % 93.7 % 91 Aflac Japan Sales 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 Three Months Six Months (In millions of dollars and billions of yen) 2026 2025 2026 2025 2026 2025 2026 2025 New annualized premium sales $ 123 $ 143 $ 235 $ 236 ¥ 19.6 ¥ 20.7 ¥ 37.3 ¥ 34.8 Increase (decrease) over prior period (14.3) % 32.8 % (.2) % 23.0 % (5.6) % 23.2 % 7.0 % 18.7 % 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 % Medical and other health 17.8 10.9 20.5 12.7 Life insurance: Tsumitasu 22.0 11.1 19.2 13.6 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 % (1) Includes term life, whole life and child endowment The foundation of Aflac Japan's product portfolio has been, and continues to be, third sector products, which include cancer, medical and other products. With continued cost pressure on Japan’s health care system, the Company expects the need for third sector products will continue to rise in the future and that the cancer and medical insurance products Aflac Japan provides will continue to be an important part of its product portfolio. 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 June 30. 2026 2025 Independent corporate and individual 50.0 % 46.8 % Affiliated corporate (1) 47.3 50.4 Bank 2.7 2.8 Total 100.0 % 100.0 % (1) Includes Japan Post Group, Dai-ichi Life and Daido Life 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 June 30, 2026, Aflac Japan had agreements to sell its products at 356 banks, approximately 90% of the total number of banks in Japan. 92 Aflac Japan Investments The level of investment income in Japanese yen is affected by available cash flow from operations, the timing of investing the cash flow, yields on new investments, the effect of yen/dollar exchange rates on U.S. dollar-denominated investment income and other factors. As part of the Company's portfolio management and asset allocation process, Aflac Japan primarily invests in Japanese yen- and U.S. dollar-denominated investments. Aflac Japan's Japanese yen-denominated investments primarily consist of Japan Government Bonds (JGBs), public and private fixed maturity securities and equity securities. Aflac Japan's U.S. dollar-denominated investments include fixed maturity investments, loan receivables, and growth assets, including alternative investments in limited partnerships or similar investment vehicles. Aflac Japan invests in both publicly traded and privately originated U.S. dollar-denominated investment-grade and below-investment-grade fixed maturity securities and loan receivables, and has entered into foreign currency derivatives to economically hedge the foreign currency exchange risk on the fair value of a portion of the U.S. dollar-denominated investments. The following table details the investment purchases for Aflac Japan. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Yen-denominated: Fixed maturity securities: Japan government and agencies $ 2,394 $ 482 $ 2,652 $ 4,608 Private placements 45 0 172 0 Other fixed maturity securities 129 126 279 147 Equity securities 182 81 457 238 Other investments 13 7 25 17 Total yen-denominated 2,763 696 3,585 5,010 U.S. dollar-denominated: Fixed maturity securities: Other fixed maturity securities 1,258 1,437 2,284 3,100 Infrastructure debt 10 75 20 116 Collateralized loan obligations 0 74 0 74 Commercial mortgage and other loans: Transitional real estate loans 4 15 69 26 Middle market loans 292 254 559 522 Other loans 28 48 69 80 Other investments 79 111 164 192 Total U.S. dollar-denominated 1,671 2,014 3,165 4,110 Other currencies: Fixed maturity securities: 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: Other loans 10 0 10 26 Other investments 1 4 4 4 Total other currencies 11 70 14 149 Total Aflac Japan purchases $ 4,445 $ 2,780 $ 6,764 $ 9,269 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. 93 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) $ 4,352 $ 2,658 $ 6,571 $ 9,056 New money yield (1),(2) 4.19 % 5.26 % 4.45 % 3.85 % Return on average invested assets (3) 3.18 3.38 3.12 3.19 Portfolio book yield, including U.S. dollar-denominated investments, end of period (1),(2) 3.39 % 3.26 % 3.39 % 3.26 % (1) Includes fixed maturity securities, commercial mortgage and other loans, equity securities, and excludes alternative investments in limited partnerships (2) Reported on a gross yield basis; excludes investment expenses, external management fees and amortized hedge costs (3) Net of investment expenses and amortized hedge costs, year-to-date number reflected on a quarterly average basis 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. AFLAC U.S. SEGMENT Aflac U.S. Pretax Adjusted Earnings Changes in Aflac U.S. pretax adjusted earnings and profit margins are primarily affected by morbidity, mortality, expenses, persistency and investment yields. The following table presents a summary of operating results for Aflac U.S. Aflac U.S. Summary of Operating Results Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net earned premiums $ 1,539 $ 1,504 $ 3,094 $ 3,006 Adjusted net investment income (1) 208 207 409 409 Other income 24 17 47 34 Total adjusted revenues 1,771 1,728 3,550 3,449 Benefits and claims: Benefits and claims, excluding reserve remeasurement 782 736 1,552 1,467 Reserve remeasurement (gains) losses (20) (24) (56) (39) Total benefits and claims, net 762 712 1,496 1,428 Adjusted expenses: Amortization of deferred policy acquisition costs 142 136 285 273 Insurance commissions 145 139 287 274 Insurance and other expenses 352 353 749 728 Total adjusted expenses 639 628 1,321 1,275 Total benefits and adjusted expenses 1,401 1,340 2,817 2,703 Pretax adjusted earnings $ 370 $ 388 $ 733 $ 746 Percentage change over previous period: Net earned premiums 2.3 % 3.4 % 2.9 % 2.6 % Adjusted net investment income .5 (5.0) .0 (3.5) Total adjusted revenues 2.5 2.6 2.9 1.9 Total benefits and claims, net 7.0 4.7 4.8 4.6 Total adjusted expenses 1.8 1.1 3.6 (.3) 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 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. 94 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 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 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 % Adjusted expenses: Amortization of deferred policy acquisition costs 8.0 7.9 8.0 7.9 Insurance commissions 8.2 8.0 8.1 7.9 Insurance and other expenses 19.9 20.4 21.1 21.1 Total adjusted expenses 36.1 36.3 37.2 37.0 Pretax adjusted earnings 20.9 22.5 20.6 21.6 Ratios to total premiums: Total benefits and claims 49.5 % 47.3 % 48.4 % 47.5 % Adjusted expenses: Amortization of deferred policy acquisition costs 9.2 9.0 9.2 9.1 •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. 95 The following table presents premium persistency for Aflac U.S. on a 12-month rolling basis as of June 30. 2026 2025 Premium persistency 79.4 % 79.2 % Aflac U.S. Sales The following table presents Aflac's U.S. new annualized premium sales for the periods ended June 30. Three Months Six Months (In millions) 2026 2025 2026 2025 New annualized premium sales $ 349 $ 340 $ 667 $ 649 Increase (decrease) over prior period 2.6 % 2.7 % 2.8 % 3.1 % The increase in new annualized premium sales for Aflac U.S. 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 June 30. Three Months Six Months 2026 2025 2026 2025 Accident 18.2 % 19.0 % 19.0 % 20.0 % Disability 26.3 27.7 24.2 25.3 Critical care(1) 17.2 21.8 18.7 21.8 Hospital indemnity 11.8 11.9 12.6 13.3 Dental/vision 7.5 6.5 7.6 6.7 Life 19.0 13.1 17.9 12.9 Total 100.0 % 100.0 % 100.0 % 100.0 % (1) Includes cancer, critical illness, and hospital intensive care products In the second quarter of 2026, the Aflac U.S. sales force included an average of approximately 5,100 U.S. agents, including brokers, who were actively producing business on a weekly basis. The Company believes that this average weekly producer equivalent metric allows sales management to monitor progress and needs, as well as serve as a leading indicator of future production capacity. Aflac U.S. Investments The level of investment income is affected by available cash flow from operations, the timing of investing the cash flow, yields on new investments and other factors. As part of the Company's portfolio management and asset allocation process, Aflac U.S. invests in fixed maturity securities, loan receivables and growth assets, including equity securities and alternative investments in limited partnerships. Aflac U.S. invests in both publicly traded and privately originated investment-grade and below-investment-grade fixed maturity securities and loan receivables. 96 The following table details the investment purchases for Aflac U.S. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 U.S. dollar-denominated: Fixed maturity securities: Other fixed maturity securities $ 482 $ 184 $ 1,027 $ 606 Infrastructure debt 103 13 103 25 Collateralized loan obligations 0 25 0 25 Equity securities 0 9 0 15 Commercial mortgage and other loans: Transitional real estate loans 1 5 7 7 Commercial mortgage loans 35 0 48 0 Middle market loans 56 49 106 89 Other loans 2 42 52 52 Other investments: Limited partnerships 18 59 60 73 Other 14 0 28 0 Total U.S. dollar-denominated 711 386 1,431 892 Other currencies: Other investments 0 1 0 1 Total other currencies 0 1 0 1 Total Aflac U.S. purchases $ 711 $ 387 $ 1,431 $ 893 See Note 3 of the Notes to the Consolidated Financial Statements and Notes 1 and 3 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report for more information regarding loans and loans receivables. The following table presents the results of Aflac's U.S. 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) 6.37 % 6.97 % 6.30 % 6.75 % Return on average invested assets (3) 4.98 4.94 4.96 4.92 Portfolio book yield, end of period (1),(2) 5.51 % 5.57 % 5.51 % 5.57 % (1) Includes fixed maturity securities, commercial mortgage and other loans, equity securities, and excludes alternative investments in limited partnerships (2) Reported on a gross yield basis; excludes investment expenses and external management fees (3) Net of investment expenses, year-to-date number reflected on a quarterly average basis The decrease in the Aflac U.S. 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. 97 CORPORATE AND OTHER 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 June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net earned premiums $ 176 $ 206 $ 358 $ 404 Net investment income (loss) (1) 95 98 186 194 Amortized hedge income 19 30 37 60 Adjusted net investment income 114 128 223 254 Other income 1 2 2 4 Total adjusted revenues 291 336 583 662 Benefits and claims: Benefits and claims, excluding reserve remeasurement 108 126 218 251 Reserve remeasurement (gains) losses (2) 0 (3) (1) Total benefits and claims, net 106 126 215 250 Adjusted expenses: Interest expense 62 51 120 96 Other adjusted expenses 133 139 258 253 Total adjusted expenses 195 190 378 349 Total benefits and adjusted expenses 301 316 593 599 Pretax adjusted earnings $ (10) $ 20 $ (10) $ 63 Percentage change over previous period: Net earned premiums (14.6) % 32.9 % (11.4) % 26.3 % Adjusted net investment income (10.9) 40.7 (12.2) 50.3 Total adjusted revenues (13.4) 34.9 (11.9) 33.2 Total benefits and claims, net (15.9) 34.0 (14.0) 24.4 Total adjusted expenses 2.6 43.9 8.3 26.9 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 $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 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. 98 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. Tax credits generated by these investments are reported as an income tax benefit in the consolidated statements of earnings. INVESTMENTS The Company’s investment strategy utilizes disciplined asset and liability management while seeking long-term risk-adjusted investment returns and the delivery of stable income within regulatory and capital objectives, and preserving shareholder value. In attempting to optimally balance these objectives, the Company seeks to maintain on behalf of Aflac Japan a diversified portfolio of Japanese yen-denominated investment assets, a U.S. dollar-denominated investment portfolio hedged back to Japanese yen and a portfolio of unhedged U.S. dollar-denominated assets. As part of the Company's portfolio management and asset allocation process, Aflac U.S. invests in fixed maturity securities and growth assets, including equity securities and alternative investments in limited partnerships. Aflac U.S. invests in both publicly traded and privately originated investment-grade and below-investment-grade fixed maturity securities and loans. For additional information concerning the Company's investments, see Notes 3, 4, and 5 of the Notes to the Consolidated Financial Statements. 99 The following tables detail investments by segment. Investment Securities by Segment June 30, 2026 (In millions) Aflac Japan Aflac U.S. Corporate and Other Total Fixed maturity securities available-for-sale, at fair value $ 42,962 $ 12,500 $ 7,386 $ 62,848 Fixed maturity securities held-to-maturity, at amortized cost (1) 15,505 0 0 15,505 Equity securities 715 2 208 925 Commercial mortgage and other loans: (1) Transitional real estate loans 2,396 530 103 3,029 Commercial mortgage loans 772 590 0 1,362 Middle market loans 3,904 484 0 4,388 Other loans 437 123 15 575 Other investments: Policy loans 163 41 0 204 Short-term investments (2) 2,181 307 327 2,815 Limited partnerships 3,468 584 294 4,346 Real estate owned 727 120 0 847 Other 0 39 0 39 Investment in affiliate (3) 0 1,260 (1,260) 0 Total investments 73,230 16,580 7,073 96,883 Cash and cash equivalents 1,965 1,105 3,050 6,120 Total investments and cash $ 75,195 $ 17,685 $ 10,123 $ 103,003 (1) Net of allowance for credit losses (2) Includes securities lending collateral (3) For consolidated reporting, Aflac U.S.'s investment in Aflac Re is eliminated in Corporate and other. 100 December 31, 2025 (In millions) Aflac Japan Aflac U.S. Corporate and Other Total Fixed maturity securities available-for-sale, at fair value $ 44,782 $ 12,426 $ 6,913 $ 64,121 Fixed maturity securities held-to-maturity, at amortized cost (1) 16,120 0 0 16,120 Equity securities 632 2 253 887 Commercial mortgage and other loans: (1) Transitional real estate loans 2,818 658 135 3,611 Commercial mortgage loans 878 565 0 1,443 Middle market loans 3,827 439 0 4,266 Other loans 373 57 15 445 Other investments: Policy loans 172 38 0 210 Short-term investments (2) 596 223 554 1,373 Limited partnerships 3,273 536 300 4,109 Real estate owned 777 125 0 902 Other 0 28 0 28 Investment in affiliate (3) 0 1,164 (1,164) 0 Total investments 74,248 16,261 7,006 97,515 Cash and cash equivalents 2,025 829 3,391 6,245 Total investments and cash $ 76,273 $ 17,090 $ 10,397 $ 103,760 (1) Net of allowance for credit losses (2) Includes securities lending collateral (3) For consolidated reporting, Aflac U.S.'s investment in Aflac Re is eliminated in Corporate and other. The Company has invested in a variety of commercial mortgage loans (CMLs) and other loans including transitional real estate loans (TREs). The Company's TRE and CML investments are collateralized by commercial real estate, including some office properties. The Company considers these investments to be well diversified by geography and among property types. Further, the Company believes that the portfolio is generally well positioned with exposures concentrated in high quality underlying properties with institutional investors who are experienced in managing their assets during periods of market volatility. While generally resilient, the Company's investments in TREs and CMLs have been affected by conditions in the commercial real estate market, with a greater impact on mortgages secured by office properties. The Company invested in certain TREs and CMLs that are currently in default of interest or maturity payments. The Company works with the affected borrowers to resolve specific situations through loan continuance with potential modifications, through loan sales, or through the process of foreclosure or deed in lieu of foreclosure. In recent years, the Company has taken possession, through foreclosure or deed in lieu of foreclosure, of certain commercial real estate properties, which secured defaulted loans. 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 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. The Company closely monitors the activities of these managers. In the event that a loan workout is necessary, the Company believes these external managers have the experience and resources to manage the process to maximize recovery. 101 The Company also monitors its commercial mortgage and other loan investments internally on an ongoing basis, including a review of loans' credit quality indicators and payment status as current, past due, restructured or under foreclosure. See Note 3 of the Notes to the Consolidated Financial Statements for further information concerning credit quality indicators, information on loans that are on nonaccrual status, and REO obtained through foreclosure or deed in lieu of foreclosure. See also Item 1A. Risk Factors in the 2025 Annual Report for a discussion of risk factors associated with the Company's investments. The ratings of the Company's securities referenced in the table below are based on the ratings designations provided by major rating organizations such as Moody's, Standard & Poor's and Fitch or, if not rated, are determined based on the Company's internal analysis of such securities. When the ratings issued by the rating agencies differ, the Company utilizes the second lowest rating when three or more rating agency ratings are available or the lowest rating when only two rating agency ratings are available. The distributions of fixed maturity securities the Company owns, by credit rating, were as follows: Composition of Fixed Maturity Securities by Credit Rating June 30, 2026 December 31, 2025 Amortized Cost Fair Value Amortized Cost Fair Value AAA 1.3 % 1.4 % 1.1 % 1.1 % AA 7.0 7.5 6.6 7.1 A 69.0 65.8 69.0 66.0 BBB 21.4 23.9 21.9 24.2 BB or lower 1.3 1.4 1.4 1.6 Total 100.0 % 100.0 % 100.0 % 100.0 % 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 Rating Amortized Cost Fair Value Unrealized Loss Japan National Government A+ $ 29,714 $ 24,612 $ (5,102) Urban Renaissance Agency A+ 150 79 (71) JPMorgan Chase & Co. A+ 186 140 (46) Japan Expressway Holding and Debt A+ 222 180 (42) Mitsubishi Estate Co Ltd. A 123 84 (39) West Japan Railway Company A+ 99 61 (38) 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. The Company believes these issuers have the ability to continue making timely payments of principal and interest. See the Unrealized Investment Gains and Losses section in Note 3 of the Notes to the Consolidated Financial Statements for further discussions of unrealized losses related to the Company's investments. 102 Below-Investment-Grade Securities The Company's portfolio of below-investment-grade securities includes fixed maturity securities purchased while the issuer was rated investment grade plus other loans and bonds invested in as part of an allocation to that segment of the market. The following is the Company's below-investment-grade exposure. Below-Investment-Grade Investments June 30, 2026 (In millions) Par Value Amortized Cost (1) Fair Value Unrealized Gain (Loss) Investcorp Capital Limited $ 216 $ 216 $ 212 $ (4) Hella KGAA Hueck & Co Mtn 135 135 132 (3) Telecom Italia SpA 123 123 153 30 KLM Royal Dutch Airlines 123 123 87 (36) IKB Deutsche Industriebank AG 80 46 63 17 Carbonfree Chile Series B 54 50 46 (4) Anpac Spa (Proeject Neptune) 37 34 33 (1) Paramount Global 35 26 23 (3) Amarok Parent LLC 25 22 25 3 Other Issuers 84 83 77 (6) Subtotal (2) 912 858 851 (7) High yield corporate bonds 233 198 230 32 Middle market loans 4,295 4,062 3,991 (71) Grand Total $ 5,440 $ 5,118 $ 5,072 $ (46) (1) Net of allowance for credit losses (2) Securities initially purchased as investment grade, but have subsequently been downgraded to below investment grade The Company maintains an allocation to higher yielding corporate bonds within the Aflac Japan and Aflac U.S. portfolios. Most of these securities were rated below-investment-grade at the time of purchase, but the Company also purchased several that were rated investment grade which, because of market pricing, offer yields commensurate with below-investment-grade risk profiles. The objective of this allocation was to enhance the Company's yield on invested assets and further diversify credit risk. All investments in this program must have a minimum rating at purchase of low BB using the Company's above described rating methodology and are managed by the Company's internal credit portfolio management team. The Company invests in middle market loans primarily to U.S. corporate borrowers, most of which have below-investment-grade ratings. The objectives of this program include enhancing the yield on invested assets, achieving further diversification of credit risk, and mitigating the risk of rising interest rates and hedge costs through the acquisition of floating rate assets. 103 Fixed Maturity Securities by Sector The Company maintains diversification in investments by sector to avoid concentrations to any one sector, thus managing exposure risk. The following table shows the distribution of fixed maturities by sector classification. June 30, 2026 (In millions) AmortizedCost (1) Gross Unrealized Gains Gross Unrealized Losses Fair Value % of Total Government and agencies $ 32,488 $ 35 $ (5,260) $ 27,263 40.3 % Municipalities 2,136 81 (248) 1,969 2.6 Mortgage- and asset-backed securities 5,553 268 (96) 5,725 6.9 Public utilities 6,807 519 (346) 6,980 8.5 Electric 5,390 403 (225) 5,568 6.7 Natural Gas 874 64 (89) 849 1.1 Other 543 52 (32) 563 .7 Sovereign and supranational 706 27 (44) 689 .9 Banks/financial institutions 9,230 614 (626) 9,218 11.3 Banking 5,189 336 (353) 5,172 6.3 Insurance 1,798 152 (90) 1,860 2.2 Other 2,243 126 (183) 2,186 2.8 Other corporate 23,775 2,753 (1,268) 25,260 29.5 Basic Industry 1,978 295 (109) 2,164 2.4 Capital Goods 2,776 310 (107) 2,979 3.4 Communications 2,490 400 (103) 2,787 3.1 Consumer Cyclical 1,861 163 (58) 1,966 2.3 Consumer Non-Cyclical 5,375 674 (267) 5,782 6.7 Energy 2,548 432 (26) 2,954 3.2 Other 1,012 28 (156) 884 1.3 Technology 3,086 211 (156) 3,141 3.8 Transportation 2,649 240 (286) 2,603 3.3 Total fixed maturity securities $ 80,695 $ 4,297 $ (7,888) $ 77,104 100.0 % (1) Net of allowance for credit losses Securities by Type of Issuance The Company has investments in both publicly and privately issued securities. The Company's ability to sell either type of security is a function of overall market liquidity which is impacted by, among other things, the amount of outstanding securities of a particular issuer or issuance, trading history of the issue or issuer, overall market conditions, and idiosyncratic events affecting the specific issue or issuer. 104 The following table details investment securities by type of issuance. Investment Securities by Type of Issuance June 30, 2026 December 31, 2025 (In millions) Amortized Cost (1) Fair Value AmortizedCost (1) Fair Value Publicly issued securities: Fixed maturity securities $ 64,544 $ 61,248 $ 65,522 $ 63,559 Equity securities 766 766 726 726 Total publicly issued 65,310 62,014 66,248 64,285 Privately issued securities: (2) Fixed maturity securities (3) 16,151 15,856 15,861 16,038 Equity securities 159 159 161 161 Total privately issued 16,310 16,015 16,022 16,199 Total investment securities $ 81,620 $ 78,029 $ 82,270 $ 80,484 (1) Net of allowance for credit losses (2) Primarily consists of securities held by Aflac Japan (3) Excludes Rule 144A securities The following table details the Company's reverse dual-currency securities. Reverse Dual-Currency Securities(1) (Amortized cost, in millions) June 30, 2026 December 31, 2025 Privately issued reverse dual-currency securities $ 3,089 $ 3,196 Publicly issued collateral structured as reverse dual-currency securities 862 895 Total reverse dual-currency securities $ 3,951 $ 4,091 Reverse dual-currency securities as a percentage of total investment securities 4.8 % 5.0 % (1) Principal payments in Japanese yen and interest payments in U.S. dollars Aflac Japan has a portfolio of privately issued securities to better match liability characteristics and secure higher yields than those available on Japanese government or other public corporate bonds. Aflac Japan’s investments in Japanese yen-denominated privately issued securities consist primarily of non-Japanese issuers, are rated investment grade at purchase and have longer maturities, thereby allowing the Company to improve asset/liability matching and overall investment returns. These securities are generally either privately negotiated arrangements or issued under medium-term note programs and have standard documentation commensurate with credit ratings of the issuer, except when internal credit analysis indicates that additional protective and/or event-risk covenants were required. Many of these investments have protective covenants appropriate to the specific investment. These may include a prohibition of certain activities by the borrower, maintenance of certain financial measures, and specific conditions impacting the payment of the Company's notes. HEDGING ACTIVITIES The Company uses derivative contracts to hedge foreign currency exchange risk and interest rate risk. The Company uses various strategies, including derivatives, to manage these risks. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the 2025 Annual Report for more information about market risk and the Company’s use of derivatives. See Note 4 of the Notes to the Consolidated Financial Statements for: •A description of the Company's derivatives, hedging strategies and underlying risk exposure. •Information about the notional amount and fair market value of the Company's derivatives. •Impact on earnings and other comprehensive income (loss) from various qualifying and non-qualifying hedging relationships. 105 Foreign Currency Exchange Risk Hedge Program The Company has deployed the following hedging strategies to mitigate exposure to foreign currency exchange risk: •Aflac Japan hedges U.S. dollar-denominated investments back to Japanese yen (see Aflac Japan’s U.S. Dollar-Denominated Hedge Program below). •Aflac Japan maintains certain unhedged U.S. dollar-denominated securities, which serve as an economic currency hedge of a portion of the Company's investment in Aflac Japan, while utilizing foreign currency options to mitigate against significant movements in the yen/dollar exchange rate (see Aflac Japan’s U.S. Dollar-Denominated Hedge Program below). •Aflac Japan economically hedges the foreign currency exchange risk on certain of its investments that are denominated in other foreign currencies. •The Parent Company designates Japanese yen-denominated liabilities (notes payable and loans) as non-derivative hedging instruments and designates certain foreign currency forwards and options as derivative hedges of the Company’s net investment in Aflac Japan (see Enterprise Corporate Hedging Program below). •The Parent Company enters into forward and option contracts to protect the value of Aflac Japan in U.S. 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 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 Aflac Japan: FX Forwards 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) FX Options FX option notional at the end of period (in billions) (1) $ 9.2 $ 25.0 $ 9.2 $ 25.0 Amortized hedge income (cost) for period (in millions) $ (4) $ (8) $ (12) $ (15) Corporate and other (Parent Company): FX Forwards 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 Options 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 (1) Notional is reported net of any offsetting positions within Aflac Japan or the Parent Company, respectively. Amortized hedge costs/income can fluctuate based upon many factors, including the derivative notional amount, the length of time of the derivative contract, implied volatility, changes in both U.S. and Japan interest rates, and the cross-currency basis. Amortized hedge costs/income have fluctuated in recent periods due to changes in the previously mentioned factors. Aflac Japan’s U.S. Dollar-Denominated Hedge Program (U.S. Dollar Program) Aflac Japan buys U.S. dollar-denominated investments, typically corporate bonds, and hedges them back to Japanese yen with foreign currency forwards and options to hedge foreign currency exchange risk. This economically creates Japanese yen assets that match Japanese yen liabilities during the life of the derivative. The currency risk being hedged is generally based on fair value of hedged investments. The following table summarizes the U.S. dollar-denominated investments held by Aflac Japan. 106 June 30, 2026 December 31, 2025 (In millions) Amortized Cost (1) Fair Value Amortized Cost (1) Fair Value Available-for-sale securities: Fixed maturity securities $ 13,229 $ 15,581 $ 12,618 $ 15,075 Equity securities 22 24 22 24 Commercial mortgage and other loans: Transitional real estate loans (floating rate) 2,396 2,426 2,818 2,849 Commercial mortgage loans 772 704 878 811 Middle market loans (floating rate) 3,904 3,841 3,827 3,751 Other loans 269 265 204 209 Other investments 4,790 4,790 3,136 3,136 Total U.S. Dollar Program 25,382 27,631 23,503 25,855 Available-for-sale securities: Fixed maturity securities - economically converted to yen 1,613 2,408 1,632 2,398 Total U.S. dollar-denominated investments in Aflac Japan $ 26,995 $ 30,039 $ 25,135 $ 28,253 (1) Net of allowance for credit losses The U.S. Dollar Program includes all U.S. dollar-denominated investments held by Aflac Japan other than the investments in certain consolidated variable interest entities (VIEs) where the instrument is economically converted to Japanese yen as a result of a derivative in the consolidated VIE. The Company uses foreign currency forwards to hedge foreign currency exchange risk on certain U.S. dollar-denominated investments held by Aflac Japan and one-sided foreign currency put options to mitigate the risk of a decline in the value of U.S. dollar-denominated assets (in Japanese yen terms) related to extreme foreign exchange rate changes. From time to time, Aflac Japan also maintains a collar program on a portion of its U.S. Dollar Program to mitigate against more extreme moves in foreign exchange rates. 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. Foreign currency derivatives used for hedging are periodically settled, which results in cash receipt or payment at inception, maturity or early termination. The following table presents the settlements associated with the Company's foreign currency derivatives used for hedging Aflac Japan’s U.S. dollar-denominated investments. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net cash inflows (outflows) $ (36) $ (10) $ (55) $ (16) In addition to the U.S. 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 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 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 $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. 107 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- 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. In order to economically mitigate risks associated with the enterprise-wide exposure to the Japanese yen and the level and volatility of hedge costs, the Parent Company enters into foreign currency forward and option contracts. By buying U.S. dollars and selling Japanese yen, the Parent Company is effectively lowering its overall economic exposure to the Japanese yen. In addition to reducing Japanese yen exposure from dividend payments by Aflac Japan to the Parent Company, this strategy also reduces enterprise-wide hedge costs. This activity is reported in Corporate and other. The Company continually evaluates the program’s efficacy. As part of the Company’s reinsurance platform, Aflac Re enters into foreign currency forwards with the Parent Company, and may enter into such forwards with third parties, to economically manage the currency mismatch between Aflac Re's assets, which are mostly denominated in U.S. dollars, and its liabilities, which are mostly denominated in Japanese yen, in order to support and optimize Bermuda Monetary Authority (BMA) capital requirements. For additional information on the Company's reinsurance platform, see Note 8 of the Notes to the Consolidated Financial Statements and the Liquidity and Capital Resources section of this MD&A and Note 8 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report. For additional discussion of the risks associated with the foreign currency exposure refer to the Currency Risk section in Item 7A., Quantitative and Qualitative Disclosures about Market Risk, and Item 1A, specifically to the Risk Factors titled “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" in the 2025 Annual Report. Interest Rate Risk Hedge Program Aflac Japan and Aflac U.S. use interest rate swaps from time to time to mitigate the risk of investment income volatility for certain variable-rate investments. Additionally, to manage interest rate risk associated with its U.S. dollar-denominated investments held by Aflac Japan, from time to time the Company utilizes interest rate swaptions. See Note 4 of the Notes to the Consolidated Financial Statements for additional information on the Company's hedging activities. POLICY LIABILITIES The following table presents policy liabilities by segment and in total. (In millions) June 30, 2026 December 31, 2025 % Change Aflac Japan $ 53,557 $ 59,292 (9.7) % (1) Aflac U.S. 11,231 11,378 (1.3) Corporate and other 4,189 4,088 2.5 Intercompany eliminations (2) (4,629) (5,175) 10.6 Total $ 64,348 $ 69,583 (7.5) % (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. See Note 8 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report. See Note 7 of the Notes to the Consolidated Financial Statements for additional information on the Company's policy liabilities. 108 BENEFIT PLANS Aflac Japan and Aflac U.S. have various benefit plans. For additional information on the Company's Japanese and U.S. plans, see Note 12 of the Notes to the Consolidated Financial Statements and Note 13 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report. POLICYHOLDER PROTECTION Policyholder Protection Corporation The Japanese insurance industry has a policyholder protection system that provides funds for the policyholders of insolvent insurers. Legislation enacted regarding the framework of the Life Insurance Policyholder Protection Corporation (LIPPC) included government fiscal measures supporting the LIPPC. In March 2022, Japan's Diet passed legislation that extended the government's fiscal support of the LIPPC through March 2027. In March 2022, the LIPPC reached the required balance for the total life industry of ¥400 billion as specified by its Articles of Incorporation. 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 six-month periods ended June 30, 2026 and June 30, 2025. Guaranty Fund Assessments Under U.S. state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business. 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- and six-month periods ended June 30, 2026 and 2025 were immaterial. LIQUIDITY AND CAPITAL RESOURCES Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of the businesses, fund business growth and provide for an ability to withstand adverse circumstances. Financial leverage (leverage) refers to a strategy of utilizing debt in managing the Company's capital structure and cost of capital. The Company targets and actively manages liquidity, capital and leverage in the context of a number of considerations, including: •business investment and growth needs •strategic growth objectives •financial flexibility and obligations •capital support for hedging activity •a constantly evolving business and economic environment •a balanced approach to capital allocation and deployment to shareholders The governance framework supporting liquidity, capital, and leverage includes global senior management and board committees that review and approve all significant capital related decisions. The Company remains committed to prudent liquidity and capital management. To provide a capital buffer and liquidity support at the holding company, the target minimum amount for the Parent Company is approximately $1.0 billion. Aflac Japan and Aflac U.S. generate cash flows from their operations and provide the primary sources of liquidity to the Parent Company through management fees and dividends, with Aflac Japan being the largest contributor. 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. 109 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 (In millions) 2026 2025 Management fees paid by subsidiaries $ 91 $ 87 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 six-month periods ended June 30. Aflac Japan Remittances (In millions of dollars and billions of yen) 2026 2025 Aflac Japan management fees paid to Parent Company $ 41 $ 39 Aflac Japan dividends declared or paid to Parent Company (in U.S. dollars) 1,478 2,018 Aflac Japan dividends declared or paid to Parent Company (in yen) ¥ 238.1 ¥ 296.3 The Company maintains liquidity at the Parent Company for risk management purposes and to support certain derivative activity. Further, the Company plans to continue to maintain a population of unhedged U.S. dollar-denominated investments at Aflac Japan and to consider whether the amount of such investments should be increased or decreased relative to the Company’s view of economic equity surplus in Aflac Japan in light of potentially rising hedge costs and other factors. See the Hedging Activities subsection of this MD&A for additional information. The Company believes that its balance of cash and cash equivalents and cash generated by operations will be sufficient to satisfy both its short-term and long-term cash requirements and plans for cash, including material cash requirements from known contractual obligations and returning capital to shareholders through share repurchases and dividends. For additional information, see the Liquidity and Capital Resources section of Item 7. MD&A in the 2025 Annual Report. In addition to cash and cash equivalents, the Company also maintains senior note facility agreements, credit facilities (both intercompany and with external partners), and a number of other available tools to support liquidity needs on a global basis. 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 June 30, 2026. For additional information, see Note 9 of the Notes to the Consolidated Financial Statements. As part of enterprise-wide capital management and optimization, the Company also utilizes the intercompany reinsurance platform to execute internal reinsurance transactions with Aflac Re. For additional information, see Note 8 of the Notes to the Consolidated Financial Statements. The Company's consolidated financial statements convey its financing arrangements during the periods presented. 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 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, 110 commitment, event or uncertainty that would reasonably result in its liquidity increasing or decreasing by a material amount. Consolidated Cash Flows The Company consistently generates positive cash flows from operations, and has the ability to adjust cash flow management from other sources of liquidity including reinvestment cash flows and selling investments in order to meet short-term cash needs. The Company translates cash flows for Aflac Japan’s yen-denominated items into U.S. dollars using weighted-average foreign exchange rates. In periods when the Japanese yen weakens, translating Japanese yen into U.S. dollars causes fewer U.S. dollars to be reported. When the Japanese yen strengthens, translating Japanese yen into U.S. dollars causes more U.S. dollars to be reported. The following table summarizes consolidated cash flows by activity for the six-month periods ended June 30. (In millions) 2026 2025 Operating activities $ 1,080 $ 988 Investing activities 1,035 1,174 Financing activities (2,204) (1,423) Exchange effect on cash and cash equivalents (36) (3) Net change in cash and cash equivalents $ (125) $ 736 Operating Activities The principal cash inflows for the Company's insurance activities come from insurance premiums and investment income. The principal cash outflows are the result of policy claims, operating expenses, income tax, as well as interest expense. As a result of policyholder aging, claims payments are expected to gradually increase over the life of a policy. Therefore, future policy benefit reserves are accumulated in the early years of a policy and are designed to help fund future claims payments. The Company expects its future cash flows from premiums and investment portfolios to be sufficient to meet its cash needs for benefits and expenses. Investing Activities The Company's investment objectives provide for liquidity primarily through the purchase of publicly traded investment-grade fixed maturity securities. Prudent portfolio management dictates that the Company attempts to match the duration of its assets with the duration of its liabilities. Currently, when the Company's fixed maturity securities mature, the proceeds may be reinvested at a yield below that required for the accretion of policy benefit liabilities on policies issued in earlier years. However, the long-term nature of the Company's business and its strong cash flows provide the Company with the ability to minimize the effect of mismatched durations and/or yields identified by various asset adequacy analyses. From time to time or when market opportunities arise, the Company disposes of selected fixed maturity securities that are available-for-sale to improve the duration matching of assets and liabilities, improve future investment yields, and/or rebalance its portfolio. 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 $230 million has been deployed as of June 30, 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. The central mission of Aflac Global Ventures is to support the organic growth and business development needs of Aflac Japan and Aflac U.S. with an emphasis on digital applications designed to improve the customer experience, gain efficiencies, and develop new markets in an effort to enhance and defend long-term shareholder value. Investments are included in equity securities or other investments in the consolidated balance sheets. As part of an arrangement with Federal Home Loan Bank of Atlanta (FHLB), Aflac U.S. obtains low-cost investment funding from FHLB supported by acceptable forms of collateral pledged by Aflac U.S. In the first six months of 2026, Aflac U.S. borrowed and repaid $362 million under this program. As of June 30, 2026, Aflac U.S. had outstanding borrowings of $567 million reported in its balance sheet. 111 See Note 3 of the Notes to the Consolidated Financial Statements for details on certain investment commitments. Financing Activities Cash flows from financing activities consist primarily of share repurchases, dividends to shareholders and, from time to time, debt issuances and redemptions. 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 $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 (In millions of dollars and thousands of shares) 2026 2025 Treasury stock purchases $ 1,984 $ 1,729 Number of shares purchased: Share repurchase program 17,534 16,413 Other 357 402 Total shares purchased 17,891 16,815 Treasury Stock Issued (In millions of dollars and thousands of shares) 2026 2025 Stock issued from treasury: Cash financing $ 7 $ 2 Noncash financing 38 41 Total stock issued from treasury $ 45 $ 43 Number of shares issued 537 633 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 Dividends paid in cash $ 603 $ 607 Dividends through issuance of treasury shares 21 22 Total dividends to shareholders $ 624 $ 629 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. 112 Regulatory Restrictions Aflac Japan 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 by net after-tax unrealized losses on available-for-sale securities. These dividend capacity requirements are generally aligned with the Economic Solvency Ratio (ESR). Japan's Financial Services Agency (FSA) maintains its own solvency standard which is quantified through the ESR. Aflac Japan's ESR is sensitive to interest rate, credit spread, and foreign exchange rate changes; therefore, the Company continues to evaluate alternatives for reducing this sensitivity, including the reduction of subsidiary dividends paid to the Parent Company and Parent Company capital contributions. In the event of a rapid change in market risk conditions causing ESR to decline, or in the event of reduced liquidity, the Company has a senior unsecured revolving credit facility in the amount of ¥100 billion as a contingency plan. See Note 9 of the Notes to the Consolidated Financial Statements for additional information. Additionally, subject to market conditions, the Company expects that it could take action to enter into derivatives on unhedged U.S. dollar-denominated investments with foreign currency options or forwards or execute additional reinsurance transactions. The FSA has introduced an economic value-based solvency regulation as a new prudential regulatory framework for insurance companies, effective from the fiscal year-end of 2025. 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. In accordance with this regulation, Aflac Japan made its initial disclosure of the ESR as of March 31, 2026 in July 2026. Aflac U.S. 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. Statutory accounting rules are different from U.S. GAAP and are intended to emphasize policyholder protection and company solvency. The continued long-term growth of the Company's business may require increases in the statutory capital and surplus of its insurance operations. The Company's insurance operations may secure additional statutory capital through various sources, such as internally generated statutory earnings, reduced dividends paid to the Parent Company, capital contributions by the Parent Company from funds generated through debt or equity offerings, or reinsurance transactions. The NAIC’s Risk-based capital (RBC) formula is used by insurance regulators to help identify inadequately capitalized insurance companies. 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 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. The maximum amount of dividends that can be paid to the Parent Company by Aflac, CAIC and TOIC without prior approval of Nebraska's director of insurance is the greater of the net income from operations, which excludes net investment gains, for the previous year determined under statutory accounting principles, or 10% of statutory capital and surplus as of the previous year-end. Dividends declared by Aflac during 2026 in excess of $664 million would be considered extraordinary and require such approval. Similar laws apply in New York, the domiciliary jurisdiction of Aflac New York. Corporate and Other Aflac Re is licensed by the BMA as a Class E long-term insurer and is subject to the Bermuda Insurance Act of 1978 (Bermuda Insurance Act). Aflac Re is required to file annual and quarterly returns for its Bermuda Solvency Capital Requirement (BSCR) which utilizes an Economic Balance Sheet (EBS) framework to determine Aflac Re’s Enhanced Capital Requirement (ECR). Aflac Re is also subject to a Minimum Margin of Solvency (MSM) related to its statutory financial statements. The MSM is equal to the greater of $8,000,000; 2% of the first $500,000,000 of assets under management plus 1.5% of the amount by which assets exceed $500,000,000; or 25% of ECR. Under the Bermuda Insurance Act, Aflac Re is prohibited from paying dividends in an amount that exceeds 25% of the prior year's statutory capital and surplus without an affidavit stating that Aflac Re will continue to meet its solvency margin. Further, Aflac Re may not reduce its total statutory capital by 15% or more without prior regulatory approval. Additionally, Aflac Re is not permitted to pay any dividends that would cause Aflac Re to fail to meet its minimum capital requirements. 113 Other For information regarding commitments and contingent liabilities, see Note 13 of the Notes to the Consolidated Financial Statements. Additional Information Investors should note that the Company announces material financial information in its SEC filings, press releases and public conference calls. In accordance with SEC guidance, the Company may also use the Investor Relations section of the Company's website (http://investors.aflac.com) to communicate with investors about the Company. It is possible that the financial and other information the Company posts there could be deemed to be material information. The information on the Company's website is not part of this document. Further, the Company's references to website URLs are intended to be inactive textual references only. CRITICAL ACCOUNTING ESTIMATES The Company prepares its financial statements in accordance with U.S. GAAP. These principles are established primarily by the Financial Accounting Standards Board (FASB). In this MD&A, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification™ (ASC). The preparation of financial statements in conformity with U.S. 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, 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 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 six-month period ended June 30, 2026. For additional information, see the Critical Accounting Estimates section of Item 7. MD&A included in the 2025 Annual Report. New Accounting Pronouncements For information on new accounting pronouncements and the impact, if any, on the Company's financial position or results of operations, see Note 1 of the Notes to the Consolidated Financial Statements.