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SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 12 Months Ended
Dec. 31, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Aflac Incorporated (Parent Only)
Condensed Statements of Earnings
 
Years ended December 31,
(In millions)
2013
    
2012
    
2011
Revenues:
 
 
 
    
 
 
 
    
 
 
 
   Dividends from subsidiaries(1)
 
$
962

 
    
 
$
0

 
    
 
$
282

 
   Management and service fees from subsidiaries(1)
 
292

 
    
 
249

 
    
 
230

 
   Net investment income
 
11

 
    
 
20

 
    
 
10

 
   Interest from subsidiaries(1)
 
7

 
    
 
7

 
    
 
8

 
   Realized investment gains (losses)
 
10

 
    
 
1

 
    
 
(1
)
 
   Change in fair value of the cross-currency interest rate swaps
 
274

 
    
 
154

 
    
 
0

 
   Other income (loss)
 
1

 
    
 
(7
)
 
    
 
1

 
     Total revenues
 
1,557

 
    
 
424

 
    
 
530

 
Operating expenses:
 
 
 
    
 
 
 
    
 
 
 
   Interest expense
 
208

 
    
 
184

 
    
 
168

 
   Other operating expenses
 
79

 
    
 
72

 
    
 
69

 
     Total operating expenses
 
287

 
    
 
256

 
    
 
237

 
   Earnings before income taxes and equity in undistributed earnings of
subsidiaries
 
1,270

 
    
 
168

 
    
 
293

 
Income tax expense (benefit):
 
 
 
    
 
 
 
    
 
 
 
   Current
 
0

 
    
 
1

 
    
 
0

 
   Deferred
 
98

 
    
 
50

 
    
 
(2
)
 
     Total income taxes
 
98

 
    
 
51

 
    
 
(2
)
 
   Earnings before equity in undistributed earnings of subsidiaries
 
1,172

 
    
 
117

 
    
 
295

 
Equity in undistributed earnings of subsidiaries(1)
 
1,986

 
    
 
2,749

 
    
 
1,642

 
     Net earnings
 
$
3,158

 
    
 
$
2,866

 
    
 
$
1,937

 
(1)Eliminated in consolidation
Amounts prior to 2012 have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Statements of Comprehensive Income (Loss)
  
Years ended December 31,
(In millions)
2013
 
2012
 
2011
Net earnings
 
$
3,158

 
 
 
$
2,866

 
 
 
$
1,937

 
Other comprehensive income (loss) before income taxes:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments:
 
 
 
 
 
 
 
 
 
 
 
Unrealized foreign currency translation gains (losses)
during period - parent only
 
48

 
 
 
95

 
 
 
(54
)
 
Equity in unrealized foreign currency translation gains (losses) of
subsidiaries during period
 
(1,636
)
 
 
 
(382
)
 
 
 
36

 
Unrealized gains (losses) on investment securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains (losses) on investment securities
during period - parent only
 
(12
)
 
 
 
15

 
 
 
11

 
Equity in unrealized holding gains (losses) on investment securities
held by subsidiaries during period
 
(2,350
)
 
 
 
1,645

 
 
 
555

 
Equity in reclassification adjustment for realized (gains) losses of
subsidiaries included in net earnings
 
(56
)
 
 
 
497

 
 
 
1,154

 
Unrealized gains (losses) on derivatives during period
 
(10
)
 
 
 
(22
)
 
 
 
(33
)
 
Pension liability adjustment during period
 
157

 
 
 
(20
)
 
 
 
(65
)
 
Total other comprehensive income (loss) before
income taxes
 
(3,859
)
 
 
 
1,828

 
 
 
1,604

 
Income tax expense (benefit) related to items of other comprehensive
income (loss)
 
(581
)
 
 
 
1,078

 
 
 
392

 
Other comprehensive income (loss), net of income taxes
 
(3,278
)
 
 
 
750

 
 
 
1,212

 
Total comprehensive income (loss)
 
$
(120
)
 
 
 
$
3,616

 
 
 
$
3,149

 
Amounts prior to 2012 have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Balance Sheets
  
December 31,
(In millions, except for share and per-share amounts)
2013
 
2012
Assets:
 
 
 
 
 
 
 
Investments and cash:
 
 
 
 
 
 
 
Fixed maturity securities available for sale, at fair value
(amortized cost $322 in 2013 and $131 in 2012)
 
$
332

 
 
 
$
156

 
Investments in subsidiaries(1)
 
17,678

 
 
 
19,001

 
Other investments
 
313

 
 
 
14

 
Cash and cash equivalents
 
1,081

 
 
 
830

 
Total investments and cash
 
19,404

 
 
 
20,001

 
Due from subsidiaries(1)
 
128

 
 
 
156

 
Other assets
 
464

 
 
 
257

 
Total assets
 
$
19,996

 
 
 
$
20,414

 
 
 
 
 
 
 
 
 
Liabilities and shareholders' equity:
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Income taxes
 
$
(120
)
 
 
 
$
(232
)
 
Employee benefit plans
 
246

 
 
 
255

 
Notes payable
 
4,910

 
 
 
4,367

 
Other liabilities
 
340

 
 
 
46

 
Total liabilities
 
5,376

 
 
 
4,436

 
Shareholders' equity:
 
 
 
 
 
 
 
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in
2013 and 2012; issued 667,046 shares in 2013 and 665,239 shares in 2012
 
67

 
 
 
67

 
Additional paid-in capital
 
1,644

 
 
 
1,505

 
Retained earnings
 
19,885

 
 
 
17,387

 
Accumulated other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized foreign currency translation gains
 
(1,505
)
 
 
 
333

 
Unrealized gains (losses) on investment securities
 
1,035

 
 
 
2,570

 
Unrealized gains (losses) on derivatives
 
(12
)
 
 
 
(5
)
 
Pension liability adjustment
 
(81
)
 
 
 
(183
)
 
Treasury stock, at average cost
 
(6,413
)
 
 
 
(5,696
)
 
Total shareholders' equity
 
14,620

 
 
 
15,978

 
Total liabilities and shareholders' equity
 
$
19,996

 
 
 
$
20,414

 

(1)Eliminated in consolidation
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Statements of Cash Flows
  
Years ended December 31,
(In millions)
2013
 
2012
 
2011
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
$
3,158

 
 
 
$
2,866

 
 
 
$
1,937

 
Adjustments to reconcile net earnings to net cash provided from
operating activities:
 
 
 
 
 
 
 
 
 
 
 
              Equity in undistributed earnings of subsidiaries(1)
 
(1,986
)
 
 
 
(2,749
)
 
 
 
(1,642
)
 
 Change in income tax liabilities
 
155

 
 
 
111

 
 
 
(52
)
 
 Other, net
 
11

 
 
 
(242
)
 
 
 
145

 
Net cash provided (used) by operating activities
 
1,338

 
 
 
(14
)
 
 
 
388

 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities sold
 
8

 
 
 
13

 
 
 
4

 
Fixed maturity securities purchased
 
(206
)
 
 
 
(26
)
 
 
 
(10
)
 
Other investments sold (purchased)
 
(298
)
 
 
 
(3
)
 
 
 
0

 
       Additional capitalization of subsidiaries(1)
 
0

 
 
 
0

 
 
 
(40
)
 
Net cash provided (used) by investing activities
 
(496
)
 
 
 
(16
)
 
 
 
(46
)
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of treasury stock
 
(813
)
 
 
 
(118
)
 
 
 
(308
)
 
Proceeds from borrowings
 
700

 
 
 
1,506

 
 
 
620

 
Principal payments under debt obligations
 
0

 
 
 
(380
)
 
 
 
(459
)
 
Dividends paid to shareholders
 
(635
)
 
 
 
(603
)
 
 
 
(552
)
 
Treasury stock reissued
 
88

 
 
 
70

 
 
 
26

 
Proceeds from exercise of stock options
 
41

 
 
 
21

 
 
 
14

 
       Net change in amount due to/from subsidiaries(1)
 
28

 
 
 
(21
)
 
 
 
9

 
Net cash provided (used) by financing activities
 
(591
)
 
 
 
475

 
 
 
(650
)
 
Net change in cash and cash equivalents
 
251

 
 
 
445

 
 
 
(308
)
 
Cash and cash equivalents, beginning of period
 
830

 
 
 
385

 
 
 
693

 
Cash and cash equivalents, end of period
 
$
1,081

 
 
 
$
830

 
 
 
$
385

 

(1)Eliminated in consolidation
Amounts prior to 2012 have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
(A) Notes Payable
A summary of notes payable as of December 31 follows:
(In millions)
2013
 
2012
 
3.45% senior notes due August 2015
 
$
300

 
  
 
$
300

 
  
2.65% senior notes due February 2017
 
655

(1) 
 
 
657

(1) 
 
8.50% senior notes due May 2019
 
850

 
 
 
850

 
 
4.00% senior notes due February 2022
 
349

(2) 
 
 
349

(2) 
  
3.625% senior notes due June 2023
 
700

 
 
 
0

 
 
6.90% senior notes due December 2039
 
396

(2) 
 
 
396

(2) 
 
6.45% senior notes due August 2040
 
448

(2) 
 
 
448

(2) 
 
5.50% subordinated debentures due September 2052
 
500

 
 
 
500

 
 
Yen-denominated Uridashi notes:
 
 
 
 
 
 
 
 
2.26% notes due September 2016 (principal amount 10 billion yen)
 
95

 
  
 
116

 
  
Yen-denominated Samurai notes:
 
 
  
 
 
 
  
 
1.47% notes due July 2014 (principal amount 28.7 billion yen)
 
272

 
  
 
331

 
  
1.84% notes due July 2016 (principal amount 15.8 billion yen)
 
150

 
 
 
182

 
 
Variable interest rate notes due July 2014 (1.30% in 2013 and
1.34% in 2012, principal amount 5.5 billion yen)
 
52

 
 
 
64

 
 
Yen-denominated loans:
 
 
 
 
 
 
 
 
3.60% loan due July 2015 (principal amount 10 billion yen)
 
95

  
  
 
116

  
  
3.00% loan due August 2015 (principal amount 5 billion yen)
 
48

  
  
 
58

  
  
Total notes payable
 
$
4,910

  
  
 
$
4,367

  
  

(1) Principal amount plus an issuance premium that is being amortized over the life of the notes
(2) Principal amount net of an issuance discount that is being amortized over the life of the notes

During 2009, Aflac Japan bought on the open market 2.0 billion yen of yen-denominated Uridashi notes issued by the Parent Company which are outstanding as of December 31, 2013. In consolidation, those notes have been extinguished; however, they remain an outstanding liability for the Parent Company until their maturity date.

The aggregate contractual maturities of notes payable during each of the years after December 31, 2013, are as follows:
(In millions)
 
 
2014
$
324

 
2015
443

 
2016
245

 
2017
650

 
2018
0

 
Thereafter
3,250

 
Total
$
4,912

 


For further information regarding notes payable, see Note 9 of the Notes to the Consolidated Financial Statements.
(B) Derivatives
At December 31, 2013, the Parent Company's outstanding freestanding derivative contracts were swaps associated with our notes payable, consisting of an interest rate swap for our variable interest rate yen-denominated debt and cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with our senior notes due in June 2023, February 2017 and February 2022 and subordinated debentures due in September 2052. We do not use derivative financial instruments for trading purposes, nor do we engage in leveraged derivative transactions. For further information regarding these derivatives, see Notes 1, 4 and 9 of the Notes to the Consolidated Financial Statements.
(C) Income Taxes
The Parent Company and its eligible U.S. subsidiaries file a consolidated U.S. federal income tax return. Income tax liabilities or benefits are recorded by each principal subsidiary based upon separate return calculations, and any difference between the consolidated provision and the aggregate amounts recorded by the subsidiaries is reflected in the Parent Company financial statements. For further information on income taxes, see Note 10 of the Notes to the Consolidated Financial Statements.
(D) Dividend Restrictions

See Note 13 of the Notes to the Consolidated Financial Statements for information regarding dividend restrictions.
(E) Supplemental Disclosures of Cash Flow Information
(In millions)
2013
 
2012
 
2011
Interest paid
 
$
205

 
 
 
$
181

 
 
 
$
163

 
Noncash financing activities:
 
 
 
 
 
 
 
 
 
 
 
Treasury stock issued for shareholder dividend reinvestment
 
25

 
 
 
25

 
 
 
23