AFL · 10-Q · 2026Q2 · Full report

FX / Currency Headwinds

AFLAC INC · 2026-08-07 · Importance 25 · Surprise 32 · In source text

Aflac Japan’s yen-denominated premiums, investment income, claims, and expenses create significant exposure to yen/dollar translation in U.S. GAAP results. The average yen/dollar exchange rate was 159.45 in the second quarter of 2026, 9.3% weaker than 144.60 in the prior-year quarter, reducing adjusted earnings per diluted share by $0.05; for the first six months, the 6.2% weaker yen reduced adjusted earnings per diluted share by $0.07. The weaker yen contributed to a $5.0 billion unrealized foreign currency translation loss in shareholders’ equity at June 30, 2026, compared with $4.8 billion at December 31, 2025. The Company maintains foreign currency hedging strategies to mitigate the effect on its financial position and results of operations.

Key facts

• Shareholders’ equity at June 30, 2026 included an unrealized foreign currency translation loss of $5.0 billion. source
• Unrealized foreign currency translation gains (losses) were $(5,048) million at June 30 and $(4,847) million at December 31 (amounts shown in reconciliation table). source
• Shareholders’ equity at December 31, 2025 included an unrealized foreign currency translation loss of $4.8 billion. source
• Reverse dual-currency securities amortized cost at June 30 were $3,089 million (privately issued) and total reverse dual-currency securities $3,951 million, representing 4.8% of total investment securities. source
• The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.05 for the three-month period ended June 30, 2026. source
• The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.07 for the six-month period ended June 30, 2026. source
• The average yen/dollar exchange rate 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. source
• The average yen/dollar exchange rate 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. source

Impact estimates