INVESTMENTS

Investment Holdings

The amortized cost for our investments in debt and perpetual securities, the cost for equity securities and the fair values of these investments are shown in the following tables.



	September 30, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	17,567		$	985		$	0		$	18,552
Municipalities		83			1			0			84
Mortgage- and asset-backed securities		397			34			0			431
Public utilities		1,946			170			6			2,110
Sovereign and supranational		881			163			0			1,044
Banks/financial institutions		3,031			288			197			3,122
Other corporate		3,809			371			107			4,073
Total yen-denominated		27,714			2,012			310			29,416
Dollar-denominated:
U.S. government and agencies		1,449			24			2			1,471
Municipalities		982			151			3			1,130
Mortgage- and asset-backed securities		182			24			0			206
Public utilities		5,209			753			60			5,902
Sovereign and supranational		356			94			0			450
Banks/financial institutions		3,084			646			11			3,719
Other corporate		23,307			2,106			475			24,938
Total dollar-denominated		34,569			3,798			551			37,816
Total fixed maturities		62,283			5,810			861			67,232
Perpetual securities:
Yen-denominated:
Banks/financial institutions		2,486			230			114			2,602
Other corporate		201			46			0			247
Dollar-denominated:
Banks/financial institutions		133			45			1			177
Total perpetual securities		2,820			321			115			3,026
Equity securities		15			8			0			23
Total securities available for sale		$	65,118		$	6,139		$	976		$	70,281



	September 30, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	22,056		$	2,143		$	0		$	24,199
Municipalities		382			56			0			438
Mortgage- and asset-backed securities		51			3			0			54
Public utilities		3,681			266			44			3,903
Sovereign and supranational		2,823			228			22			3,029
Banks/financial institutions		5,432			207			128			5,511
Other corporate		3,318			280			16			3,582
Total yen-denominated		37,743			3,183			210			40,716
Total securities held to maturity		$	37,743		$	3,183		$	210		$	40,716



	December 31, 2013
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	14,936		$	431		$	33		$	15,334
Mortgage- and asset-backed securities		558			29			0			587
Public utilities		2,261			100			18			2,343
Sovereign and supranational		978			85			28			1,035
Banks/financial institutions		2,799			220			242			2,777
Other corporate		3,956			151			185			3,922
Total yen-denominated		25,488			1,016			506			25,998
Dollar-denominated:
U.S. government and agencies		92			10			4			98
Municipalities		992			71			12			1,051
Mortgage- and asset-backed securities		163			21			0			184
Public utilities		4,931			471			183			5,219
Sovereign and supranational		404			85			1			488
Banks/financial institutions		3,318			447			33			3,732
Other corporate		21,123			1,347			1,170			21,300
Total dollar-denominated		31,023			2,452			1,403			32,072
Total fixed maturities		56,511			3,468			1,909			58,070
Perpetual securities:
Yen-denominated:
Banks/financial institutions		2,582			151			217			2,516
Other corporate		209			0			0			209
Dollar-denominated:
Banks/financial institutions		196			35			9			222
Total perpetual securities		2,987			186			226			2,947
Equity securities		17			5			1			21
Total securities available for sale		$	59,515		$	3,659		$	2,136		$	61,038



	December 31, 2013
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	27,362		$	1,347		$	1		$	28,708
Municipalities		399			41			0			440
Mortgage- and asset-backed securities		58			3			0			61
Public utilities		3,900			150			122			3,928
Sovereign and supranational		2,941			171			72			3,040
Banks/financial institutions		6,310			146			328			6,128
Other corporate		3,445			183			87			3,541
Total yen-denominated		44,415			2,041			610			45,846
Total securities held to maturity		$	44,415		$	2,041		$	610		$	45,846

The methods of determining the fair values of our investments in fixed-maturity securities, perpetual securities and equity securities are described in Note 5.

During the third quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of the transfer, the security had an amortized cost of $233 million and an unrealized loss of $18 million. During the second quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of the transfer, the security had an amortized cost of $128 million and an unrealized loss of $28 million. Following the reclassification, we impaired the security by $28 million. During the first quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of transfer, the security had an amortized cost of $63 million and an unrealized loss of $8 million.

During the first and third quarters of 2013, we did not reclassify any investments from the held-to-maturity portfolio to the available-for-sale portfolio. During the second quarter of 2013, we reclassified one investment from the held-to maturity portfolio to the available-for-sale portfolio as a result of the issuer being downgraded to below investment grade. At the time of transfer, the security had an amortized cost of $297 million and an unrealized loss of $108 million.

Contractual and Economic Maturities

The contractual maturities of our investments in fixed maturities at September 30, 2014, were as follows:



	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Available for sale:
Due in one year or less		$	344		$	357		$	52		$	52
Due after one year through five years		1,891			2,078			647			755
Due after five years through 10 years		12,883			13,258			1,441			1,521
Due after 10 years		35,201			38,084			8,950			10,178
Mortgage- and asset-backed securities		456			505			37			46
Total fixed maturities available for sale		$	50,775		$	54,282		$	11,127		$	12,552
Held to maturity:
Due in one year or less		$	14		$	14		$	0		$	0
Due after one year through five years		1,491			1,628			0			0
Due after five years through 10 years		2,323			2,532			0			0
Due after 10 years		33,864			36,489			0			0
Mortgage- and asset-backed securities		51			53			0			0
Total fixed maturities held to maturity		$	37,743		$	40,716		$	0		$	0

At September 30, 2014, the Parent Company had a portfolio of available-for-sale fixed-maturity securities totaling $381 million at amortized cost and $398 million at fair value, which is not included in the table above.

Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call premiums or prepayment penalties.

The majority of our perpetual securities are subordinated to other debt obligations of the issuer, but rank higher than the issuer's equity securities. Perpetual securities have characteristics of both debt and equity investments, along with unique features that create economic maturity dates for the securities. Although perpetual securities have no contractual maturity date, they have stated interest coupons that were fixed at their issuance and subsequently change to a floating short-term interest rate of 125 to more than 300 basis points above an appropriate market index, generally by the 25th year after issuance, thereby creating an economic maturity date. The economic maturities of our investments in perpetual securities, which were all reported as available for sale at September 30, 2014, were as follows:



	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Due in one year or less		$	383		$	376		$	5		$	5
Due after one year through five years		778			830			0			0
Due after 10 years		1,615			1,759			39			56
Total perpetual securities available for sale		$	2,776		$	2,965		$	44		$	61

Investment Concentrations

Our investment process begins with an independent approach to underwriting each issuer's fundamental credit quality. We evaluate independently those factors which we believe could influence an issuer's ability to make payments under the contractual terms of our instruments. This includes a thorough analysis of a variety of items including the issuer's country of domicile (including political, legal, and financial considerations); the industry in which the issuer competes (with an analysis of industry structure, end-market dynamics, and regulation); company specific issues (such as management, assets, earnings, cash generation, and capital needs); and contractual provisions of the instrument (such as financial covenants and position in the capital structure). We further evaluate the investment considering broad business and portfolio management objectives, including asset/liability needs, portfolio diversification, and expected income.

Banks and Financial Institutions

One of our largest investment sector concentrations as of September 30, 2014, was banks and financial institutions. Within the countries we approve for investment opportunities, we primarily invest in financial institutions that are strategically crucial to each approved country's economy. The bank and financial institution sector is a highly regulated industry and plays a strategic role in the global economy.

Our total investments in the bank and financial institution sector, including those classified as perpetual securities, were as follows:



	September 30, 2014						December 31, 2013
	Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment Portfolio			Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment Portfolio
Fixed maturities:
Amortized cost		$	11,547		11	%		$	12,427		12	%
Fair value		12,352			11			12,637			12
Perpetual securities:
Upper Tier II:
Amortized cost		$	1,849		2	%		$	1,920		2	%
Fair value		1,951			2			1,913			2
Tier I:
Amortized cost		770			1			858			1
Fair value		828			1			825			1
Total:
Amortized cost		$	14,166		14	%		$	15,205		15	%
Fair value		15,131			14			15,375			15

Realized Investment Gains and Losses

Information regarding pretax realized gains and losses from investments is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2014			2013			2014			2013
Realized investment gains (losses) on securities:
Fixed maturities:
Available for sale:
Gross gains from sales	$	17		$	92		$	144		$	284
Gross losses from sales	0			(24		)	(1		)	(30		)
Net gains (losses) from redemptions	16			4			27			25
Other-than-temporary impairment losses	0			(10		)	(31		)	(64		)
Held to maturity:
Net gains (losses) from redemptions	0			0			1			0
Total fixed maturities	33			62			140			215
Perpetual securities:
Available for sale:
Gross losses from sales	0			0			0			(2		)
Total perpetual securities	0			0			0			(2		)
Equity securities:
Other-than-temporary impairment losses	0			0			0			(1		)
Total equity securities	0			0			0			(1		)
Derivatives and other:
Derivative gains (losses)	(17		)	(41		)	(67		)	157
Other	0			1			(1		)	10
Total derivatives and other	(17		)	(40		)	(68		)	167
Total realized investment gains (losses)	$	16		$	22		$	72		$	379

Other-than-temporary Impairment

The fair values of our debt and perpetual security investments fluctuate based on changes in interest rates, foreign exchange, and credit spreads in the global financial markets. Fair values can also be heavily influenced by the values of the assets of the issuer and expected ultimate recovery values upon default, bankruptcy or other financial restructuring. Credit spreads are most impacted by the general credit environment and global market liquidity. Interest rates are driven by numerous factors including, but not limited to, supply and demand, governmental monetary actions, expectations of inflation and economic growth. We believe that fluctuations in the fair values of our investment securities related to general changes in the level of credit spreads or interest rates have little bearing on underlying credit quality of the issuer, and whether our investment is ultimately recoverable. Generally, we consider such declines in fair values to be temporary even in situations where an investment remains in an unrealized loss position for a year or more.

However, in the course of our credit review process, we may determine that it is unlikely that we will recover our investment in an issuer due to factors specific to an individual issuer, as opposed to general changes in global credit spreads or interest rates. In this event, we consider such a decline in the investment's fair value, to the extent it is below the investment's cost or amortized cost, to be an other-than-temporary impairment of the investment and reduce the book value of the investment to its fair value.

In addition to the usual investment risk associated with a debt instrument, our perpetual security holdings are largely issued by banks that are integral to the financial markets of the sovereign country of the issuer. As a result of the issuer's position within the economy of the sovereign country, our perpetual securities may be subject to a higher risk of nationalization of their issuers in connection with capital injections from an issuer's sovereign government. We cannot be assured that such capital support will extend to all levels of an issuer's capital structure. In addition, certain governments or regulators may consider imposing interest and principal payment restrictions on issuers of hybrid securities to preserve cash and preserve the issuer's capital. Beyond the cash flow impact that additional deferrals would have on our portfolio, such deferrals could result in ratings downgrades of the affected securities, which in turn could result in a reduction of fair value of the securities and increase our regulatory capital requirements. We consider these factors in our credit review process.

When determining our intention to sell a security prior to recovery of its fair value to amortized cost, we evaluate facts and circumstances such as, but not limited to, future cash flow needs, decisions to reposition our security portfolio, and risk profile of individual investment holdings. We perform ongoing analyses of our liquidity needs, which includes cash flow testing of our policy liabilities, debt maturities, projected dividend payments and other cash flow and liquidity needs. Our cash flow testing includes extensive duration analysis of our investment portfolio and policy liabilities. Based on our analyses, we have concluded that we have sufficient excess cash flows to meet our liquidity needs without selling any of our investments prior to their maturity.

The following table details our pretax other-than-temporary impairment losses by investment category that resulted from our impairment evaluation process.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2014		2013		2014		2013
Corporate bonds	$	0	$	3	$	31	$	41
Sovereign and supranational	0		7		0		23
Equity securities	0		0		0		1
Total other-than-temporary impairment losses realized ⁽¹⁾	$	0	$	10	$	31	$	65

⁽¹⁾Includes $0 and $1 for the nine-month periods ended September 30, 2014 and 2013, respectively, for impairments due to severity and duration of decline in fair value; $0 and $10 for the three-month periods and $31 and $64 for the nine-month periods ended September 30, 2014 and 2013, respectively, from change in intent to sell securities

Unrealized Investment Gains and Losses

Effect on Shareholders’ Equity

The net effect on shareholders’ equity of unrealized gains and losses from investment securities was as follows:



(In millions)	September 30, 2014				December 31, 2013
Unrealized gains (losses) on securities available for sale		$	5,163			$	1,523
Unamortized unrealized gains on securities transferred to held to maturity		8				11
Deferred income taxes		(1,769		)		(499		)
Shareholders’ equity, unrealized gains (losses) on investment securities		$	3,402			$	1,035

Gross Unrealized Loss Aging

The following tables show the fair values and gross unrealized losses of our available-for-sale and held-to-maturity investments that were in an unrealized loss position, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.



	September 30, 2014
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Municipalities:
Dollar-denominated		$	73		$	3		$	52		$	2		$	21		$	1
Public utilities:
Dollar-denominated		1,536			60			445			7			1,091			53
Yen-denominated		1,346			50			577			15			769			35
Sovereign and supranational:
Yen-denominated		389			22			0			0			389			22
Banks/financial institutions:
Dollar-denominated		320			11			34			1			286			10
Yen-denominated		2,881			325			341			7			2,540			318
Other corporate:
Dollar-denominated		10,837			475			2,699			46			8,138			429
Yen-denominated		1,266			123			0			0			1,266			123
U.S. government and agencies:
Dollar-denominated		167			2			167			2			0			0
Total fixed maturities		18,815			1,071			4,315			80			14,500			991
Perpetual securities:
Dollar-denominated		7			1			0			0			7			1
Yen-denominated		814			114			46			0			768			114
Total perpetual securities		821			115			46			0			775			115
Total		$	19,636		$	1,186		$	4,361		$	80		$	15,275		$	1,106



	December 31, 2013
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Japan government and agencies:
Yen-denominated		$	8,869		$	34		$	8,869		$	34		$	0		$	0
Municipalities:
Dollar-denominated		177			12			145			8			32			4
Public utilities:
Dollar-denominated		2,023			183			1,740			143			283			40
Yen-denominated		2,519			140			1,816			54			703			86
Sovereign and supranational:
Dollar-denominated		12			1			12			1			0			0
Yen-denominated		1,152			100			791			34			361			66
Banks/financial institutions:
Dollar-denominated		547			33			454			23			93			10
Yen-denominated		4,533			570			2,322			107			2,211			463
Other corporate:
Dollar-denominated		11,588			1,170			8,504			733			3,084			437
Yen-denominated		3,372			272			2,296			152			1,076			120
U.S. government and agencies:
Dollar-denominated		36			4			36			4			0			0
Total fixed maturities		34,828			2,519			26,985			1,293			7,843			1,226
Perpetual securities:
Dollar-denominated		59			9			52			8			7			1
Yen-denominated		1,322			217			748			74			574			143
Total perpetual securities		1,381			226			800			82			581			144
Equity securities		5			1			5			1			0			0
Total		$	36,214		$	2,746		$	27,790		$	1,376		$	8,424		$	1,370

Analysis of Securities in Unrealized Loss Positions

The unrealized losses on our investments have been primarily related to general market changes in interest rates, foreign exchange rates, and/or the levels of credit spreads rather than specific concerns with the issuer's ability to pay interest and repay principal. In addition, in the first quarter of 2013, we refined our methodology for valuing certain privately issued securities (see Note 5).

For any significant declines in fair value, we perform a more focused review of the related issuers' credit profile. For corporate issuers, we evaluate their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, we analyze all sources of credit support, including issuer-specific factors. We utilize information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. We also consider ratings from the Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security we own including seniority in the issuer's capital structure, covenant protections, or other relevant features. From these reviews, we evaluate the issuers' continued ability to service our investment through payment of interest and principal.

The following table provides more information on our unrealized loss positions.



		September 30, 2014									December 31, 2013
(In millions)	Percentage of Total Investments in an Unrealized Loss Position			Percentage of Gross Unrealized Losses			Percentage of Gross Unrealized Losses for Investment Grade Securities			Percentage of Total Investments in an Unrealized Loss Position			Percentage of Gross Unrealized Losses			Percentage of Gross Unrealized Losses for Investment Grade Securities
Fixed Maturities:
Japan government and agencies		0	%		0	%		0	%		25	%		1	%		100	%
Public utilities		15			9			98			13			12			98
Sovereign and supranational		2			2			100			3			4			100
Banks/financial institutions		16			28			44			14			22			64
Other corporate		62			51			86			41			53			91
U.S. government and agencies		1			0			100			0			0			100
Total fixed maturities		96	%		90	%					96	%		92	%
Perpetual securities		4			10			95			4			8			90
Total		100	%		100	%					100	%		100	%

Assuming no credit-related factors develop, as investments near maturity, the unrealized gains or losses are expected to diminish. Based on our credit analysis, we believe that the issuers of our investments in the sectors shown in the table above have the ability to service their obligations to us.

Perpetual Securities

The majority of our investments in Upper Tier II and Tier I perpetual securities were in highly-rated global financial institutions. Upper Tier II securities have more debt-like characteristics than Tier I securities and are senior to Tier I securities, preferred stock, and common equity of the issuer. Conversely, Tier I securities have more equity-like characteristics, but are senior to the common equity of the issuer. They may also be senior to certain preferred shares, depending on the individual security, the issuer's capital structure and the regulatory jurisdiction of the issuer.

Details of our holdings of perpetual securities were as follows:

Perpetual Securities



		September 30, 2014										December 31, 2013
(In millions)	Credit Rating	Amortized Cost			Fair Value			Unrealized Gain (Loss)				Amortized Cost			Fair Value			Unrealized Gain (Loss)
Upper Tier II:
	A		$	67		$	87		$	20			$	145		$	183		$	38
	BBB		1,465			1,487			22				1,563			1,532			(31		)
	BB or lower		317			377			60				212			198			(14		)
Total Upper Tier II			1,849			1,951			102				1,920			1,913			(7		)
Tier I:
	BBB		572			559			(13		)		746			706			(40		)
	BB or lower		198			269			71				112			119			7
Total Tier I			770			828			58				858			825			(33		)
Other subordinated - non-banks:	BB or lower		201			247			46				209			209			0
Total			$	2,820		$	3,026		$	206			$	2,987		$	2,947		$	(40	)

Assuming no credit-related factors develop, as investments near maturity, the unrealized gains or losses are expected to diminish. Based on our credit analysis, we believe that the issuers of our investments in these sectors have the ability to service their obligations to us.

Variable Interest Entities (VIEs)

As a condition to our involvement or investment in a VIE, we enter into certain protective rights and covenants that preclude changes in the structure of the VIE that would alter the creditworthiness of our investment or our beneficial interest in the VIE.

Our involvement with all of the VIEs in which we have an interest is passive in nature, and we are not the arranger of these entities. We have not been involved in establishing these entities, except as it relates to our review and evaluation of the structure of these VIEs in the normal course of our investment decision-making process. Further, we are not, nor have we been, required to purchase any securities issued in the future by these VIEs.

Our ownership interest in the VIEs is limited to holding the obligations issued by them. All of the VIEs in which we invest are static with respect to funding and have no ongoing forms of funding after the initial funding date. We have no direct or contingent obligations to fund the limited activities of these VIEs, nor do we have any direct or indirect financial guarantees related to the limited activities of these VIEs. We have not provided any assistance or any other type of financing support to any of the VIEs we invest in, nor do we have any intention to do so in the future. The weighted-average lives of our notes are very similar to the underlying collateral held by these VIEs where applicable.

Our risk of loss related to our interests in any of our VIEs is limited to our investment in the debt securities issued by them.

VIEs - Consolidated

The following table presents the amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported.

Investments in Consolidated Variable Interest Entities



	September 30, 2014						December 31, 2013
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	3,222		$	4,132		$	4,109		$	4,843
Perpetual securities, available for sale		446			483			463			468
Fixed maturities, held to maturity		91			88			237			236
Other assets		98			98			106			106
Total assets of consolidated VIEs		$	3,857		$	4,801		$	4,915		$	5,653
Liabilities:
Other liabilities		$	190		$	190		$	207		$	207
Total liabilities of consolidated VIEs		$	190		$	190		$	207		$	207

We are substantively the only investor in the consolidated VIEs listed in the table above. As the sole investor in these VIEs, we have the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and are therefore considered to be the primary beneficiary of the VIEs that we consolidate. We also participate in substantially all of the variability created by these VIEs. The activities of these VIEs are limited to holding debt and perpetual securities and interest rate, foreign currency, and/or credit default swaps (CDSs), as appropriate, and utilizing the cash flows from these securities to service our investment. Neither we nor any of our creditors are able to obtain the underlying collateral of the VIEs unless there is an event of default or other specified event. For those VIEs that contain a swap, we are not a direct counterparty to the swap contracts and have no control over them. Our loss exposure to these VIEs is limited to our original investment. Our consolidated VIEs do not rely on outside or ongoing sources of funding to support their activities beyond the underlying collateral and swap contracts, if applicable. With the exception of our investment in senior secured bank loans through unit trust structures, the underlying collateral assets and funding of our consolidated VIEs are generally static in nature and the underlying collateral and the reference corporate entities covered by any CDS contracts were all investment grade at the time of issuance.

We are exposed to credit losses within any consolidated collateralized debt obligations (CDOs) that could result in principal losses to our investments. We have mitigated our risk of credit loss through the structure of the VIE, which contractually requires the subordinated tranches within these VIEs to absorb the majority of the expected losses from the underlying credit default swaps. We currently own only senior mezzanine CDO tranches. Based on our statistical analysis models and the current subordination levels in our CDOs, each of these VIEs can sustain a reasonable number of defaults in the underlying reference entities in the CDSs with no loss to our investment.

VIEs-Not Consolidated

The table below reflects the amortized cost, fair value and balance sheet caption in which our investment in VIEs not consolidated are reported.

Investments in Variable Interest Entities Not Consolidated



	September 30, 2014						December 31, 2013
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	6,477		$	7,090		$	6,724		$	6,916
Perpetual securities, available for sale		356			377			370			378
Fixed maturities, held to maturity		2,838			3,076			2,949			3,039
Total investments in VIEs not consolidated		$	9,671		$	10,543		$	10,043		$	10,333

The VIEs that we are not required to consolidate are investments that are in the form of debt obligations from the VIEs that are irrevocably and unconditionally guaranteed by their corporate parents or sponsors. These VIEs are the primary financing vehicles used by their corporate sponsors to raise financing in the international capital markets. The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them. We do not have the power to direct the activities that most significantly impact the entity's economic performance, nor do we have (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. As such, we are not the primary beneficiary of these VIEs and are therefore not required to consolidate them. These VIE investments comprise securities from 189 separate issuers with an average credit rating of BBB.

Securities Lending

We lend fixed-maturity securities to financial institutions in short-term security-lending transactions. These short-term security-lending arrangements increase investment income with minimal risk. Our security lending policy requires that the fair value of the securities and/or unrestricted cash received as collateral be 102% or more of the fair value of the loaned securities. The following table presents our security loans outstanding and the corresponding collateral held:



(In millions)	September 30, 2014			December 31, 2013
Security loans outstanding, fair value		$	6,873		$	5,656
Cash collateral on loaned securities		7,025			5,820