EX-99.1 2 aflex991-q12022.htm EX-99.1 Document

    



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News Release
FOR IMMEDIATE RELEASE

Aflac Incorporated Announces First Quarter Results,
Reports First Quarter Net Earnings of $1.0 Billion,
Declares Second Quarter Cash Dividend


COLUMBUS, Ga. - April 27, 2022 - Aflac Incorporated (NYSE: AFL) today reported its first quarter results.

Total revenues were $5.3 billion in the first quarter of 2022, compared with $5.9 billion in the first quarter of 2021. Net earnings were $1.0 billion, or $1.58 per diluted share, compared with $1.3 billion, or $1.87 per diluted share a year ago.

Net earnings in the first quarter of 2022 included net investment gains of $122 million, or $0.19 per diluted share, compared with net investment gains of $307 million, or $0.44 per diluted share a year ago. The net investment gains were driven by net gains from certain derivatives and foreign currency activities of $167 million, net gains from sales and redemptions of $86 million, and a decrease in the allowance associated with the company's estimate of current expected credit losses (CECL) of $25 million offset by a decrease of $156 million in the fair value of equity securities.

Adjusted earnings* in the first quarter were $927 million, compared with $1.1 billion in the first quarter of 2021, reflecting a decrease of 12.4%. Adjusted earnings per diluted share* decreased 7.2% to $1.42 in the quarter. It included variable investment income from alternative investments, which was $0.04 per share above return expectations, and a gain of $0.01 per share related to the sale of a parcel of non-core real estate. Adjusted earnings per diluted share excluded adjusted net investment gains* of $0.21 per share. The weaker yen/dollar exchange rate impacted adjusted earnings per share by $0.06.

The average yen/dollar exchange rate in the first quarter of 2022 was 116.18, or 8.9% weaker than the average rate of 105.88 in the first quarter of 2021.

Total investments and cash at the end of March 2022 were $132.6 billion, compared with $143.3 billion at March 31, 2021. In the first quarter, Aflac Incorporated deployed $500 million in capital to repurchase 8.0 million of its common shares. At the end of March 2022, the company had 47.8 million remaining shares authorized for repurchase.

Shareholders’ equity was $29.5 billion, or $45.75 per share, at March 31, 2022, compared with $32.1 billion, or $47.16 per share, at March 31, 2021. Shareholders’ equity at the end of the first quarter included a net unrealized gain on investment securities and derivatives of $5.8 billion, compared with a net unrealized gain of $8.8 billion at March 31, 2021. Shareholders’ equity at the end of the first quarter also included an unrealized foreign currency translation loss of $2.5 billion, compared with an unrealized foreign currency translation loss of $1.7 billion at March 31, 2021. The annualized return on average shareholders’ equity in the first quarter was 13.2%.

Shareholders’ equity excluding AOCI (or adjusted book value*) was $26.4 billion, or $40.93 per share at March 31, 2022, compared with $25.3 billion, or $37.16 per share, at March 31, 2021. The annualized adjusted return on equity excluding foreign currency impact* in the first quarter was 14.7%.




    



AFLAC JAPAN

In yen terms, Aflac Japan's net earned premiums were ¥316.4 billion for the quarter, or 4.3% lower than a year ago, mainly due to limited pay products reaching paid-up status and constrained sales from the impact of pandemic conditions. Adjusted net investment income increased 5.9% to ¥79.0 billion, mainly due to higher alternative and floating rate income as well as the impact of a weaker yen on the dollar-denominated investment income. Total adjusted revenues in yen declined 2.5% to ¥396.5 billion. Pretax adjusted earnings in yen for the quarter increased 6.8% on a reported basis to ¥100.2 billion, due to continued favorable claim trends and higher net investment income. Pretax adjusted earnings increased 2.5% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment was 25.3%, compared with 23.1% a year ago. The increase in the profit margin is largely due to continued lower incurred benefits and higher adjusted net investment income.

In dollar terms, net earned premiums decreased 12.8% to $2.7 billion in the first quarter. Adjusted net investment income decreased 3.5% to $680 million. Total adjusted revenues declined by 11.1% to $3.4 billion. Pretax adjusted earnings declined 2.8% to $862 million.

For the quarter, total new annualized premium sales (sales) decreased 14.8% to ¥11.9 billion, or $103 million, reflecting comparisons to the first quarter 2021 launch of a new medical product as well as on going pandemic conditions.

AFLAC U.S.

Aflac U.S. net earned premiums declined 0.6% to $1.4 billion in the first quarter, impacted by lower persistency. In terms of revenue, this was more than offset by a $12 million increase in fee income and an $8 million increase in adjusted net investment income. As a result, total adjusted revenues were up 0.7% to $1.6 billion. Pretax adjusted earnings were $325 million, 27.0% lower than a year ago, which was driven by higher incurred benefits as benefits approach pre-pandemic levels, and elevated adjusted expenses. The pretax adjusted profit margin for the U.S. segment was 19.8%, compared with 27.3% a year ago.

Aflac U.S. sales increased 19.0% in the quarter to $299 million, reflecting continued improvement in pandemic conditions and investment in growth initiatives.

CORPORATE AND OTHER

For the quarter, total adjusted revenues decreased 10.8% to $74 million, due to an $18 million decline in adjusted net investment income. This was primarily due to the impact of federal tax credit investments, as tax benefits are recognized in a corresponding lower income tax expense. Amortized hedge income was lower as a result of changing market conditions, partially offset by an increase in other income due to the receipt of interest on a tax refund and a gain on the sale of a parcel of non-core real estate. Pretax adjusted earnings were a loss of $44 million, compared with a loss of $26 million a year ago, primarily reflecting lower adjusted revenues and increases in other adjusted expenses.

DIVIDEND

The board of directors declared the second quarter dividend of $0.40 per share, payable on June 1, 2022 to shareholders of record at the close of business on May 18, 2022.

OUTLOOK

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: "The company generated solid earnings for the first quarter, supported in part by the continuation of low benefit ratios associated with pandemic conditions and better-than-expected returns from alternative investments, despite the weakening yen. We continue to remain cautiously optimistic as we continue to navigate the pandemic.

"Looking at our operations in Japan, persistency remained strong in the first quarter, but sales were constrained as we continued to operate in the wake of evolving pandemic conditions, including various states of emergency that were in effect through mid-March. These impacted our ability to meet face-to-face with customers, which continues to be key to a recovery in sales. Recognizing pandemic conditions in Japan, we expect stronger sales in the second half of the year assuming that those conditions subside, productivity continues to improve at Japan Post, and we execute on our product introduction and refreshment plans.



    




"In the U.S., I am pleased with the 19% sales increase for the quarter, which reflects continued momentum in our core voluntary business; increased contribution from newly acquired growth platforms of dental, vision, and group benefits; and general recovery in pandemic conditions. We continue to work toward reinforcing our position and generating stronger sales for the year, while we keep an eye on potential headwinds.

"As always, we are committed to prudent liquidity and capital management. We continue to maintain strong capital ratios on behalf of our policyholders in both the U.S. and Japan. We value our record of dividend growth. Coming off our 39th consecutive year of dividend increases, I am pleased with the board’s decision to increase the first quarter dividend by 21.2%, as we announced last year. Our dividend track record is 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. By doing so, we look to emerge from this period in a continued position of strength and leadership."

*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., where it is a leading supplemental insurer by 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. 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 was included in the Dow Jones Sustainability North America Index and became a signatory of the Principles for Responsible Investment (PRI). In 2022, Aflac Incorporated was included on Ethisphere’s list of the World's Most Ethical Companies for the 16th consecutive year, Fortune's list of World's Most Admired Companies for the 21st time and Bloomberg's Gender-Equality Index for the third 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/español. Investors may learn more about Aflac Incorporated and its commitment to ESG and social responsibility at investors.aflac.com under "Sustainability."

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, April 28, 2022.

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 MARCH 31,20222021% Change
Total revenues$5,272 $5,869 (10.2)%
Benefits and claims, net2,487 2,735 (9.1)
Total acquisition and operating expenses1,509 1,531 (1.4)
Earnings before income taxes1,276 1,603 (20.4)
Income taxes244 310 
Net earnings$1,032 $1,293 (20.2)%
Net earnings per share – basic$1.59 $1.88 (15.4)%
Net earnings per share – diluted1.58 1.87 (15.5)
Shares used to compute earnings per share (000):
Basic649,753 688,938 (5.7)%
Diluted652,827 691,940 (5.7)
Dividends paid per share$0.40 $0.33 21.2 %




    



AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)
MARCH 31,20222021% Change
Assets:
Total investments and cash$132,599 $143,289 (7.5)%
Deferred policy acquisition costs9,082 9,835 (7.7)
Other assets5,365 5,033 6.6 
Total assets$147,046 $158,157 (7.0)%
Liabilities and shareholders’ equity:
Policy liabilities$99,643 $107,905 (7.7)%
Notes payable and lease obligations7,768 8,088 (4.0)
Other liabilities10,108 10,061 0.5 
Shareholders’ equity29,527 32,103 (8.0)
Total liabilities and shareholders’ equity$147,046 $158,157 (7.0)%
Shares outstanding at end of period (000)645,349 680,707 (5.2)%




    



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 MARCH 31,20222021% Change
Net earnings$1,032 $1,293 (20.2)%
Items impacting net earnings:
Adjusted net investment (gains) losses(134)(304)
Other and non-recurring (income) loss
Income tax (benefit) expense on items excluded
from adjusted earnings
28 62 
Adjusted earnings 927 1,058 (12.4)%
Current period foreign currency impact 1
37 N/A
Adjusted earnings excluding current period foreign
currency impact
2
$963 $1,058 (9.0)%
Net earnings per diluted share$1.58 $1.87 (15.5)%
Items impacting net earnings:
Adjusted net investment (gains) losses(0.21)(0.44)
Other and non-recurring (income) loss
— 0.01 
Income tax (benefit) expense on items excluded
from adjusted earnings
0.04 0.09 
Adjusted earnings per diluted share1.42 1.53 (7.2)%
Current period foreign currency impact 1
0.06 N/A
Adjusted earnings per diluted share excluding
current period foreign currency impact
2
$1.48 $1.53 (3.3)%
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 INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED MARCH 31,20222021% Change
Net investment (gains) losses$(122)$(307)(60.3)%
Items impacting net investment (gains) losses:
Amortized hedge costs(26)(19)
Amortized hedge income11 17 
Net interest cash flows from derivatives associated
     with certain investment strategies
(9)(8)
Interest rate component of the change in fair value of foreign
     currency swaps on notes payable1
13 14 
Adjusted net investment (gains) losses$(134)$(304)(55.9)%
1    Amounts are included with interest expenses that are a component of adjusted expenses.



RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED MARCH 31,20222021% Change
Net investment income$903 $925 (2.4)%
Items impacting net investment income:
Amortized hedge costs(26)(19)
Amortized hedge income11 17 
Net interest cash flows from derivatives associated
     with certain investment strategies
(9)(8)
Adjusted net investment income$879 $915 (3.9)%




    



RECONCILIATION OF U.S. GAAP BOOK VALUE TO ADJUSTED BOOK VALUE
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
MARCH 31,20222021% Change
U.S. GAAP book value $29,527 $32,103 
Less:
Unrealized foreign currency translation gains (losses)
(2,482)(1,674)
Unrealized gains (losses) on securities and derivatives
5,758 8,761 
Pension liability adjustment
(163)(280)
Total AOCI
3,113 6,807 
Adjusted book value$26,414 $25,296 
Add:
Unrealized foreign currency translation gains (losses)
(2,482)(1,674)
Adjusted book value including unrealized foreign currency translation gains (losses)$23,932 $23,622 
Number of outstanding shares at end of period (000)645,349 680,707 
U.S. GAAP book value per common share $45.75 $47.16 (3.0)%
Less:
Unrealized foreign currency translation gains (losses) per common share
(3.85)(2.46)
Unrealized gains (losses) on securities and derivatives per common share
8.92 12.87 
Pension liability adjustment per common share
(0.25)(0.41)
Total AOCI per common share
4.82 10.00 
Adjusted book value per common share$40.93 $37.16 10.1 %
Add:
Unrealized foreign currency translation gains (losses) per common share
(3.85)(2.46)
Adjusted book value including unrealized foreign currency translation gains (losses) per common share$37.08 $34.70 6.9 %





    



RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
THREE MONTHS ENDED MARCH 31,20222021
U.S. GAAP ROE - Net earnings1
13.2 %15.8 %
Impact of excluding unrealized foreign currency translation gains (losses)
(1.1)(0.9)
Impact of excluding unrealized gains (losses) on securities and derivatives
3.8 6.1 
Impact of excluding pension liability adjustment
(0.1)(0.2)
Impact of excluding AOCI
2.6 5.0 
U.S. GAAP ROE - less AOCI15.8 20.7 
Differences between adjusted earnings and net earnings2
(1.6)(3.8)
Adjusted ROE - reported14.2 17.0 
Less: Impact of foreign currency3
(0.6)N/A
Adjusted ROE, excluding impact of foreign currency14.7 17.0 
1    U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.
2    See separate reconciliation of net income to adjusted earnings.
3    Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure.




    



EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2022Including
Currency
Changes
Excluding
Currency
Changes2
Net earned premiums3
(9.0)%(3.2)%
Adjusted net investment income4
(3.9)%(0.8)
Total benefits and expenses(6.2)(0.2)
Adjusted earnings(12.4)(9.0)
Adjusted earnings per diluted share(7.2)(3.3)
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
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 judgments 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
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
the 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 the coronavirus 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