News Release

Aflac Incorporated Announces Fourth Quarter Results,

Reports Fourth Quarter Net Earnings of $185 Million,

Reiterates Increase in First Quarter Cash Dividend of 5.0%

COLUMBUS, Ga. - February 1, 2023 - Aflac Incorporated (NYSE: AFL) today reported its fourth quarter results.

Total revenues were $4.0 billion in the fourth quarter of 2022, compared with $5.4 billion in the fourth quarter of 2021. Net earnings were $185 million, or $0.30 per diluted share, compared with $1.0 billion, or $1.57 per diluted share a year ago. The large decline in net earnings for the fourth quarter reflects significant foreign exchange-related net investment losses recognized in the current quarter as compared with significant net realized gains a year ago.

Net earnings in the fourth quarter of 2022 included net investment losses of $521 million, or $0.84 per diluted share, compared with net investment gains of $243 million, or $0.37 per diluted share a year ago. These net investment losses were driven by net losses on certain derivatives and foreign currency activities of $684 million, which was partially offset by $207 million of net gains from sales and redemptions, both of which were largely driven by changes in exchange rates. Net investment losses also included a $28 million loss from a decrease in the fair value of equity securities and a $16 million increase in the company's current expected credit losses (CECL) reserves and impairments.

Adjusted earnings* in the fourth quarter were $806 million, compared with $850 million in the fourth quarter of 2021, reflecting a decrease of 5.2%. Adjusted earnings per diluted share* increased 0.8% to $1.29 in the quarter. Adjusted earnings included a variable investment income loss of$21 million from alternative investments, which was $0.09 per share below return expectations. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per share by $0.11.

The average yen/dollar exchange rate in the fourth quarter of 2022 was 141.87, or 19.9% weaker than the average rate of 113.70 in the fourth quarter of 2021. For the full year, the average exchange rate was 130.17, or 15.7% weaker than the rate of 109.79 a year ago.

Total investments and cash at the end of December 2022 were $117.4 billion, compared with $143.0 billion at December 31, 2021. The decline in the portfolio is principally driven by the weaker yen and higher interest rates.

Shareholders’ equity was $22.4 billion, or $36.35 per share, at December 31, 2022, compared with $33.3 billion, or $50.99 per share, at December 31, 2021. Shareholders’ equity at the end of the fourth quarter included a net unrealized loss on investment securities and derivatives of $0.7 billion, compared with a net unrealized gain of $9.6 billion at December 31, 2021. Shareholders’ equity at the end of the fourth quarter also included an unrealized foreign currency translation loss of $3.6 billion, compared with an unrealized foreign currency translation loss of $2.0 billion at December 31, 2021. The annualized return on average shareholders’ equity in the fourth quarter was 3.2%.

For the full year of 2022, total revenues were down 11.8% to $19.5 billion, compared with $22.1 billion for the full year of 2021. Net earnings were $4.2 billion, or $6.59 per diluted share, compared with $4.3 billion, or $6.39 per share, for the full year of 2021. Adjusted earnings for the full year of 2022 were $3.4 billion, or $5.33 per diluted share, compared with $4.0 billion, or $5.94 per share, in 2021. Adjusted earnings included variable investment income from alternative investments, which was $0.10 per diluted share below return expectations. Excluding the negative impact of $0.34 per diluted share from the weaker yen/dollar exchange rate, adjusted earnings per share decreased 4.5% to $5.67 for the full year of 2022.

Shareholders’ equity excluding AOCI (or adjusted book value*) was $26.8 billion, or $43.51 per share at December 31, 2022, compared with $25.9 billion, or $39.65 per share, at December 31, 2021. The annualized adjusted return on equity excluding foreign currency impact* in the fourth quarter was 12.9%.

AFLAC JAPAN

In yen terms, Aflac Japan's net earned premiums were ¥306.1 billion for the quarter, or 4.1% lower than a year ago, mainly due to limited pay products reaching paid-up status and slightly declining inforce. Adjusted net investment income decreased 1.7% to ¥86.2 billion, mainly due to lower variable investment income. Total adjusted revenues in yen declined 3.6% to ¥393.3 billion. Pretax adjusted earnings in yen for the quarter declined 0.4% on a reported basis to ¥100.5 billion, primarily due to decreased revenues offset by lower benefits recognized during the quarter. Pretax adjusted earnings decreased 10.8% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment increased to 25.5%, compared with 24.7% a year ago.

For the full year, net earned premiums in yen were ¥1.2 trillion, or 4.2% lower than a year ago. Adjusted net investment income increased 5.5% to ¥351.5 billion. Total adjusted revenues in yen were down 2.2% to ¥1.6 trillion. Pretax adjusted earnings were ¥399.3 billion, or 3.1% lower than a year ago.

In dollar terms, net earned premiums decreased 22.9% to $2.2 billion in the fourth quarter. Adjusted net investment income decreased 21.7% to $604 million. Total adjusted revenues declined by 22.7% to $2.8 billion. Pretax adjusted earnings declined 20.6% to $704 million.

For the full year, net earned premiums in dollars were $9.5 billion, or 19.4% lower than a year ago. Adjusted net investment income decreased 11.9% to $2.7 billion. Total adjusted revenues were down 17.9% to $12.3 billion. Pretax adjusted earnings were $3.1 billion, or 18.6% lower than a year ago.

For the quarter, total new annualized premium sales (sales) increased 11.4% to ¥16.2 billion, or $115 million, primarily reflecting the continued rollout of the new cancer product. For the full year, total new sales were essentially flat at ¥54.8 billion, or $416 million, reflecting constrained sales in the first half of the year due to ongoing pandemic conditions offset by a new cancer product launch and first sector product updates in the second half of the year.

AFLAC U.S.

Aflac U.S. net earned premiums declined 0.2% to $1.4 billion in the fourth quarter, impacted by lower persistency. Adjusted net investment income decreased 2.5% to $192 million, largely due to lower variable investment income. Total adjusted revenues were up 0.1% to $1.6 billion. Pretax adjusted earnings were $340 million, 30.3% higher than a year ago, primarily due to lower benefits recognized during the quarter. The pretax adjusted profit margin for the U.S. segment was 21.0%, compared with 16.1% a year ago.

For the full year, net earned premiums declined 0.8% to $5.6 billion, impacted by lower persistency. Adjusted net investment income increased 0.1% to $755 million. Total adjusted revenues were essentially flat at $6.5 billion. Pretax adjusted earnings were $1.3 billion, or 10.4% lower than a year ago.

Aflac U.S. sales increased 17.4% in the quarter to $545 million, reflecting continued improvement from investment in growth initiatives as well as productivity gains. For the full year, total new sales increased 16.1% to $1.5 billion.

CORPORATE AND OTHER

For the quarter, total adjusted revenues increased 325.7% to $79 million, primarily due to higher adjusted net investment income resulting from lower federal tax credit investments, higher interest rates, and an increase in amortized hedge income, partially offset by a reduction in total premiums as a result of significant yen weakening. Pretax adjusted earnings were a loss of $44 million, compared with a loss of $155 million a year ago, primarily reflecting an increase in adjusted net investment income.

For the full year, total adjusted revenues increased 52.6% to $267 million, primarily due to a $114 million increase in adjusted net investment income, partially offset by a reduction in total premiums as a result of significant yen weakening. Pretax adjusted earnings were a loss of $223 million, compared with a loss of $298 million a year ago.

DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS

The board of directors declared the first quarter dividend of $0.42 per share, payable on March 1, 2023 to shareholders of record at the close of business on February 15, 2023.

In the fourth quarter, Aflac Incorporated deployed $600 million in capital to repurchase 8.9 million of its common shares. For the full year, the company deployed $2.4 billion in capital to repurchase 39.2 million of its common shares. At the end of December 2022, the company had 116.6 million remaining shares authorized for repurchase.

OUTLOOK

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: "When adjusting for a material weakening in the yen, Aflac delivered another quarter of solid earnings results capping off a year of overall strong performance. Pandemic conditions in Japan are gradually improving, but impacted operations throughout the year, while in the U.S. they have largely subsided.

"Looking at our operations in Japan, I am encouraged by the sales increase of 11.4% in the fourth quarter and 10.8% in the second half of the year, which reflected a new cancer product launch and first sector product updates. Persistency remained strong in the fourth quarter. We continue to monitor evolving pandemic conditions, which resulted in a slow start to 2022. The slow start negatively impacted sales for the full year, but we are working to build on the momentum we experienced in the quarter as we look to 2023. As anticipated, our benefit ratio returned to a more normal level in the fourth quarter.

"In the U.S., I am pleased with the 17.4% sales increase in the fourth quarter and 16.1% sales increase for the year. This reflects continued improvement in the productivity of our agents and brokers as well as contribution from the buildout of our acquired platforms, namely network dental and vision and group life and disability. We continue to work toward reinforcing our leading position and building our momentum into 2023.

"As always, we are committed to prudent liquidity and capital management. We continue to generate strong investment results while remaining in a defensive position as we monitor evolving economic conditions. In addition, we have taken proactive steps in recent years to defend cash flow and deployable capital against a weakening yen. With the fourth quarter's declaration, 2022 marked the 40th consecutive year of dividend increases. We treasure our track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. At the same time, we remain in the market repurchasing shares with a tactical approach, focused on integrating the growth investments we have made in our platform to improve our strength and leadership position."

*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.

ABOUT AFLAC INCORPORATED

Aflac Incorporated (NYSE: AFL) is a Fortune 500 company helping provide protection to more than 50 million people through its subsidiaries in Japan and the U.S., paying cash fast when policyholders get sick or injured. For more than six decades, insurance policies of Aflac Incorporated's subsidiaries have given policyholders the opportunity to focus on recovery, not financial stress. In the U.S., Aflac is the number one provider ofsupplemental health insurance products1. Aflac Life Insurance Japan is the leading provider of medical and cancer insurance in Japan, where it insures 1 in 4 households. In 2021, the company became a signatory of the Principles for Responsible Investment (PRI). In 2022, the company was included in the Dow Jones Sustainability North America Index, as one of the World's Most Ethical Companies by Ethisphere for the 16th consecutive year, on Fortune's World's Most Admired Companies for the 21st time and in Bloomberg's Gender-Equality Index for the fourth consecutive year. To find out how to get help with expenses health insurance doesn't cover, get to know us at aflac.com or aflac.com/espanol. Investors may learn more about Aflac Incorporated and its commitment to ESG and social responsibility at investors.aflac.com under “Sustainability.”

1 LIMRA 2021 U.S. Supplemental Health Insurance Total Market Report

A copy of Aflac’s Financial Analysts Briefing (FAB) supplement for the quarter can be found on the “Investors” page at aflac.com.

Aflac Incorporated will webcast its quarterly conference call via the “Investors” page of aflac.com at 8:00 a.m. (ET) on Thursday, February 2, 2023.

Note: Tables within this document may not foot due to rounding.

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
THREE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Total revenues	$	4,010	$	5,433	(26.2)	%
Benefits and claims, net	2,028		2,581		(21.4)
Total acquisition and operating expenses	1,458		1,619		(9.9)
Earnings before income taxes	524		1,233		(57.5)
Income taxes	339		194
Net earnings	$	185	$	1,039	(82.2)	%
Net earnings per share – basic	$	0.30	$	1.58	(81.0)	%
Net earnings per share – diluted	0.30		1.57		(80.9)
Shares used to compute earnings per share (000):
Basic	619,845		659,100		(6.0)	%
Diluted	622,994		662,512		(6.0)
Dividends paid per share	$	0.40	$	0.33	21.2	%

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
TWELVE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Total revenues	$	19,502	$	22,106	(11.8)	%
Benefits and claims, net	9,153		10,576		(13.5)
Total acquisition and operating expenses	5,745		6,208		(7.5)
Earnings before income taxes	4,604		5,322		(13.5)
Income taxes	403		997
Net earnings	$	4,201	$	4,325	(2.9)	%
Net earnings per share – basic	$	6.62	$	6.42	3.1	%
Net earnings per share – diluted	6.59		6.39		3.1
Shares used to compute earnings per share (000):
Basic	634,816		673,617		(5.8)	%
Diluted	637,655		676,729		(5.8)
Dividends paid per share	$	1.60	$	1.32	21.2	%

AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)
DECEMBER 31,	2022		2021		% Change
Assets:
Total investments and cash	$	117,397	$	142,978	(17.9)	%
Deferred policy acquisition costs	8,593		9,525		(9.8)
Other assets	5,027		5,039		(0.2)
Total assets	$	131,017	$	157,542	(16.8)	%
Liabilities and shareholders’ equity:
Policy liabilities	$	93,258	$	105,072	(11.2)	%
Notes payable and lease obligations	7,442		7,956		(6.5)
Other liabilities	7,952		11,261		(29.4)
Shareholders’ equity	22,365		33,253		(32.7)
Total liabilities and shareholders’ equity	$	131,017	$	157,542	(16.8)	%
Shares outstanding at end of period (000)	615,256		652,132		(5.7)	%

NON-U.S. GAAP FINANCIAL MEASURES

This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations.

Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).

The company defines the non-U.S. GAAP financial measures included in this earnings release as follows:

•Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively.

•Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in Japan and foreign exchange rates are outside management’s control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively.

•Adjusted return on equity is adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using net earnings and average total shareholders’ equity.

•Adjusted return on equity excluding foreign currency impact is adjusted earnings excluding the current period foreign currency impact divided by average shareholders’ equity, excluding AOCI. The Company considers adjusted return on equity excluding foreign currency impact important as it excludes changes in foreign currency and components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity excluding foreign currency impact is ROE as determined using net earnings and average total shareholders’ equity.

•Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in Corporate and other. These amortized hedge costs/ income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight-line basis over the term of the hedge. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparable U.S. GAAP financial measure for amortized hedge costs/ income.

•Adjusted book value is the U.S. GAAP book value (representing total shareholders’ equity), less AOCI as recorded on the U.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude AOCI, which fluctuates due to market movements that are outside management’s control. The most comparable U.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively.

•Adjusted book value including unrealized foreign currency translation gains and losses is adjusted book value plus unrealized foreign currency translation gains and losses. Adjusted book value including unrealized foreign currency translation gains and losses per common share is adjusted book value plus unrealized foreign currency translation gains and losses at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value including unrealized foreign currency translation gains and losses, and its related per share financial measure, important as they exclude certain components of AOCI, which fluctuate due to market movements that are outside management's control; however, it includes the impact of foreign currency as a result of the significance of Aflac’s Japan operation. The most comparable U.S. GAAP financial measures for adjusted book value including unrealized foreign currency translation gains and losses and adjusted book value including unrealized foreign currency translation gains and losses per common share are total book value and total book value per common share, respectively.

•Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company’s investments and related hedging strategies. The most comparable U.S. GAAP financial measure for adjusted net investment income is net investment income.

•Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest cash flows from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management’s control, while excluding the components that are within management’s control and are accordingly reclassified to net investment income and interest expense. The most comparable U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
THREE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net earnings	$	185	$	1,039	(82.2)	%
Items impacting net earnings:
Adjusted net investment (gains) losses	477		(246)
Other and non-recurring (income) loss	—		6
Income tax (benefit) expense on items excluded from adjusted earnings	144		50
Adjusted earnings	806		850		(5.2)	%
Current period foreign currency impact 1	68		N/A
Adjusted earnings excluding current period foreign currency impact 2	$	875	$	850	2.9	%
Net earnings per diluted share	$	0.30	$	1.57	(80.9)	%
Items impacting net earnings:
Adjusted net investment (gains) losses	0.77		(0.37)
Other and non-recurring (income) loss	—		0.01
Income tax (benefit) expense on items excluded from adjusted earnings	0.23		0.08
Adjusted earnings per diluted share	1.29		1.28		0.8	%
Current period foreign currency impact 1	0.11		N/A
Adjusted earnings per diluted share excluding current period foreign currency impact 2	$	1.40	$	1.28	9.4	%

1    Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.

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

RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
TWELVE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net earnings	$	4,201	$	4,325	(2.9)	%
Items impacting net earnings:
Adjusted net investment (gains) losses	(447)		(462)
Other and non-recurring (income) loss	(1)		73
Income tax (benefit) expense on items excluded from adjusted earnings 1	(357)		83
Adjusted earnings	3,397		4,019		(15.5)	%
Current period foreign currency impact 2	215		N/A
Adjusted earnings excluding current period foreign currency impact 3	$	3,613	$	4,019	(10.1)	%
Net earnings per diluted share	$	6.59	$	6.39	3.1	%
Items impacting net earnings:
Adjusted net investment (gains) losses	(0.7)		(0.68)
Other and non-recurring (income) loss	—		0.11
Income tax (benefit) expense on items excluded from adjusted earnings 1	(0.56)		0.12
Adjusted earnings per diluted share	5.33		5.94		(10.3)	%
Current period foreign currency impact 2	0.34		N/A
Adjusted earnings excluding current period foreign currency impact 3	$	5.67	$	5.94	(4.5)	%

1 Primarily reflects release of $452 million in deferred taxes year to date.

2 Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.

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

RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net investment (gains) losses	$	521	$	(243)	(314.4)	%
Items impacting net investment (gains) losses:
Amortized hedge costs	(28)		(21)
Amortized hedge income	25		11
Net interest cash flows from derivatives associated      with certain investment strategies	(53)		(7)
Interest rate component of the change in fair value of foreign      currency swaps on notes payable1	13		14
Adjusted net investment (gains) losses	$	477	$	(246)	(293.9)	%

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

RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net investment income	$	896	$	910	(1.5)	%
Items impacting net investment income:
Amortized hedge costs	(28)		(21)
Amortized hedge income	25		11
Net interest cash flows from derivatives associated      with certain investment strategies	(53)		(7)
Adjusted net investment income	$	840	$	893	(5.9)	%

RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
TWELVE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net investment (gains) losses	$	(363)	$	(468)	(22.4)	%
Items impacting net investment (gains) losses:
Amortized hedge costs	(112)		(76)
Amortized hedge income	68		57
Net interest cash flows from derivatives associated      with certain investment strategies	(90)		(30)
Interest rate component of the change in fair value of foreign      currency swaps on notes payable1	50		55
Adjusted net investment (gains) losses	$	(447)	$	(462)	(3.2)	%

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

RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
TWELVE MONTHS ENDED DECEMBER 31,	2022		2021		% Change
Net investment income	$	3,656	$	3,818	(4.2)	%
Items impacting net investment income:
Amortized hedge costs	(112)		(76)
Amortized hedge income	68		57
Net interest cash flows from derivatives associated      with certain investment strategies	(90)		(30)
Adjusted net investment income	$	3,522	$	3,769	(6.6)	%

RECONCILIATION OF U.S. GAAP BOOK VALUE TO ADJUSTED BOOK VALUE
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
DECEMBER 31,	2022		2021		% Change
U.S. GAAP book value	$	22,365	$	33,253
Less:
Unrealized foreign currency translation gains (losses)	(3,640)		(2,013)
Unrealized gains (losses) on securities and derivatives	(729)		9,572
Pension liability adjustment	(36)		(166)
Total AOCI	(4,405)		7,393
Adjusted book value	$	26,770	$	25,860
Add:
Unrealized foreign currency translation gains (losses)	(3,640)		(2,013)
Adjusted book value including unrealized foreign currency translation gains (losses)	$	23,130	$	23,847
Number of outstanding shares at end of period (000)	615,256		652,132
U.S. GAAP book value per common share	$	36.35	$	50.99	(28.7)	%
Less:
Unrealized foreign currency translation gains (losses) per common share	(5.92)		(3.09)
Unrealized gains (losses) on securities and derivatives per common share	(1.18)		14.68
Pension liability adjustment per common share	(0.06)		(0.25)
Total AOCI per common share	(7.16)		11.34
Adjusted book value per common share	$	43.51	$	39.65	9.7	%
Add:
Unrealized foreign currency translation gains (losses) per common share	(5.92)		(3.09)
Adjusted book value including unrealized foreign currency translation gains (losses) per common share	$	37.59	$	36.57	2.8	%

RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
THREE MONTHS ENDED DECEMBER 31,	2022		2021
U.S. GAAP ROE - Net earnings1	3.2	%	12.4	%
Impact of excluding unrealized foreign currency translation gains (losses)	(0.5)		(0.9)
Impact of excluding unrealized gains (losses) on securities and derivatives	—		4.6
Impact of excluding pension liability adjustment	—		(0.1)
Impact of excluding AOCI	(0.5)		3.6
U.S. GAAP ROE - less AOCI	2.7		16.1
Differences between adjusted earnings and net earnings2	9.1		(2.9)
Adjusted ROE - reported	11.8		13.1
Less: Impact of foreign currency3	(1.0)		N/A
Adjusted ROE, excluding impact of foreign currency	12.9		13.1

1U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.

2See separate reconciliation of net income to adjusted earnings.

3Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure.

RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
TWELVE MONTHS ENDED DECEMBER 31,	2022		2021
U.S. GAAP ROE - Net earnings1	15.1	%	12.9	%
Impact of excluding unrealized foreign currency translation gains (losses)	(1.7)		(0.8)
Impact of excluding unrealized gains (losses) on securities and derivatives	2.7		5.1
Impact of excluding pension liability adjustment	(0.1)		(0.1)
Impact of excluding AOCI	0.9		4.2
U.S. GAAP ROE - less AOCI	16.0		17.1
Differences between adjusted earnings and net earnings2	(3.1)		(1.2)
Adjusted ROE - reported	12.9		15.9
Less: Impact of foreign currency3	(0.8)		N/A
Adjusted ROE, excluding impact of foreign currency	13.7		15.9

1    U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.

2See separate reconciliation of net income to adjusted earnings.

3Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure.

EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2022	Including Currency Changes		Excluding Currency Changes2
Net earned premiums3	(15.5)	%	(2.8)	%
Adjusted net investment income4	(5.9)	%	0.4
Total benefits and expenses	(16.9)		(4.6)
Adjusted earnings	(5.2)		2.9
Adjusted earnings per diluted share	0.8		9.4

1Refer to previously defined adjusted earnings and adjusted earnings per diluted share.

2Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes.

3Net of reinsurance

4Refer to previously defined adjusted net investment income.

EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2022	Including Currency Changes		Excluding Currency Changes2
Net earned premiums3	(13.5)	%	(3.2)	%
Adjusted net investment income4	(6.6)	%	(0.7)
Total benefits and expenses	(10.8)		(0.1)
Adjusted earnings	(15.5)		(10.1)
Adjusted earnings per diluted share	(10.3)		(4.5)

1Refer to previously defined adjusted earnings and adjusted earnings per diluted share.

2Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes.

3Net of reinsurance

4Refer to previously defined adjusted net investment income.

FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “intends,” “projects,” “will,” “assumes,” “potential,” “target,” "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.

The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:

•difficult conditions in global capital markets and the economy, including those caused by COVID-19

•defaults and credit downgrades of investments

•global fluctuations in interest rates and exposure to significant interest rate risk

•concentration of business in Japan

•limited availability of acceptable yen-denominated investments

•foreign currency fluctuations in the yen/dollar exchange rate

•differing interpretations applied to investment valuations

•significant valuation judgments in determination of expected credit losses recorded on the Company's investments

•decreases in the Company's financial strength or debt ratings

•decline in creditworthiness of other financial institutions

•concentration of the Company's investments in any particular single-issuer or sector

•major public health issues, the effects of COVID-19 and its variants (both known and emerging), and any resulting economic effects and government interventions, on the Company's business and financial results

•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

•interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security,

confidentiality or privacy of sensitive data residing on such systems

•subsidiaries' ability to pay dividends to the Parent Company

•inherent limitations to risk management policies and procedures

•operational risks of third party vendors

•tax rates applicable to the Company may change

•failure to comply with restrictions on policyholder privacy and information security

•extensive regulation and changes in law or regulation by governmental authorities

•competitive environment and ability to anticipate and respond to market trends

•catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics (such as COVID-19), tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, 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

•allegations or determinations of worker misclassification in the United States

Analyst and investor contact - David A. Young, 706.596.3264 or 800.235.2667 or dyoung@aflac.com

Media contact - Ines Gutzmer, 762.207.7601 or igutzmer@aflac.com