SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2014

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)	2014				2013			2012
Revenues:
Dividends from subsidiaries⁽¹⁾		$	1,483			$	962		$	0
Management and service fees from subsidiaries⁽¹⁾		272				292			249
Net investment income		13				11			20
Interest from subsidiaries⁽¹⁾		6				7			7
Realized investment gains (losses)		45				10			1
Change in fair value of the cross-currency interest rate swaps		314				274			154
Other income (loss)		(11		)		1			(7		)
Total revenues		2,122				1,557			424
Operating expenses:
Interest expense		243				208			184
Other operating expenses		88				79			72
Total operating expenses		331				287			256
Earnings before income taxes and equity in undistributed earnings of subsidiaries		1,791				1,270			168
Income tax expense (benefit):
Current		1				0			1
Deferred		120				98			50
Total income taxes		121				98			51
Earnings before equity in undistributed earnings of subsidiaries		1,670				1,172			117
Equity in undistributed earnings of subsidiaries⁽¹⁾		1,281				1,986			2,749
Net earnings		$	2,951			$	3,158		$	2,866

⁽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 Comprehensive Income (Loss)



	Years ended December 31,
(In millions)	2014				2013				2012
Net earnings		$	2,951			$	3,158			$	2,866
Other comprehensive income (loss) before income taxes:
Foreign currency translation adjustments:
Unrealized foreign currency translation gains (losses) during period - parent only		39				48				95
Equity in unrealized foreign currency translation gains (losses) of subsidiaries during period		(1,494		)		(1,636		)		(382		)
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) on investment securities during period - parent only		9				(12		)		15
Equity in unrealized holding gains (losses) on investment securities held by subsidiaries during period		5,938				(2,350		)		1,645
Equity in reclassification adjustment for realized (gains) losses of subsidiaries included in net earnings		(54		)		(56		)		497
Unrealized gains (losses) on derivatives during period		(17		)		(10		)		(22		)
Pension liability adjustment during period		(76		)		157				(20		)
Total other comprehensive income (loss) before income taxes		4,345				(3,859		)		1,828
Income tax expense (benefit) related to items of other comprehensive income (loss)		1,803				(581		)		1,078
Other comprehensive income (loss), net of income taxes		2,542				(3,278		)		750
Total comprehensive income (loss)		$	5,493			$	(120	)		$	3,616

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)	2014				2013
Assets:
Investments and cash:
Fixed maturity securities available for sale, at fair value (amortized cost $419 in 2014 and $322 in 2013)		$	437			$	332
Investments in subsidiaries⁽¹⁾		21,430				17,678
Other investments		24				313
Cash and cash equivalents		1,638				1,081
Total investments and cash		23,529				19,404
Due from subsidiaries⁽¹⁾		116				128
Other assets		766				464
Total assets		$	24,411			$	19,996

Liabilities and shareholders' equity:
Liabilities:
Income taxes		$	6			$	(120	)
Employee benefit plans		282				246
Notes payable		5,285				4,910
Other liabilities		491				340
Total liabilities		6,064				5,376
Shareholders' equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2014 and 2013; issued 668,132 shares in 2014 and 667,046 shares in 2013		67				67
Additional paid-in capital		1,711				1,644
Retained earnings		22,156				19,885
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains		(2,541		)		(1,505		)
Unrealized gains (losses) on investment securities		4,672				1,035
Unrealized gains (losses) on derivatives		(26		)		(12		)
Pension liability adjustment		(126		)		(81		)
Treasury stock, at average cost		(7,566		)		(6,413		)
Total shareholders' equity		18,347				14,620
Total liabilities and shareholders' equity		$	24,411			$	19,996

⁽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)	2014				2013				2012
Cash flows from operating activities:
Net earnings		$	2,951			$	3,158			$	2,866
Adjustments to reconcile net earnings to net cash provided from operating activities:
Equity in undistributed earnings of subsidiaries⁽¹⁾		(1,281		)		(1,986		)		(2,749		)
Change in income tax liabilities		115				155				111
Other, net		(72		)		11				(242		)
Net cash provided (used) by operating activities		1,713				1,338				(14		)
Cash flows from investing activities:
Fixed maturity securities sold		38				8				13
Fixed maturity securities purchased		(105		)		(206		)		(26		)
Other investments sold (purchased)		290				(298		)		(3		)
Net cash provided (used) by investing activities		223				(496		)		(16		)
Cash flows from financing activities:
Purchases of treasury stock		(1,210		)		(813		)		(118		)
Proceeds from borrowings		750				700				1,506
Principal payments under debt obligations		(335		)		0				(380		)
Dividends paid to shareholders		(654		)		(635		)		(603		)
Treasury stock reissued		33				88				70
Proceeds from exercise of stock options		23				41				21
Net change in amount due to/from subsidiaries⁽¹⁾		14				28				(21		)
Net cash provided (used) by financing activities		(1,379		)		(591		)		475
Net change in cash and cash equivalents		557				251				445
Cash and cash equivalents, beginning of period		1,081				830				385
Cash and cash equivalents, end of period		$	1,638			$	1,081			$	830

⁽¹⁾Eliminated in consolidation

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)	2014				2013
3.45% senior notes due August 2015		$	300			$	300
2.65% senior notes due February 2017		653		⁽¹⁾		655		⁽¹⁾
8.50% senior notes due May 2019		850				850
4.00% senior notes due February 2022		350		⁽²⁾		349		⁽²⁾
3.625% senior notes due June 2023		700				700
3.625% senior notes due November 2024		749				0
6.90% senior notes due December 2039		397		⁽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)		83				95
Yen-denominated Samurai notes:
1.47% notes paid July 2014 (principal amount 28.7 billion yen)		0				272
1.84% notes due July 2016 (principal amount 15.8 billion yen)		131				150
Variable interest rate notes paid July 2014 (1.30% in 2013, principal amount 5.5 billion yen)		0				52
Yen-denominated loans:
3.60% loan due July 2015 (principal amount 10 billion yen)		83				95
3.00% loan due August 2015 (principal amount 5 billion yen)		41				48
Total notes payable		$	5,285			$	4,910

⁽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, 2014. 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, 2014, are as follows:



(In millions)
2015	$	424
2016	214
2017	650
2018	0
2019	850
Thereafter	3,150
Total	$	5,288

For further information regarding notes payable, see Note 9 of the Notes to the Consolidated Financial Statements.

(B) Derivatives

At December 31, 2014, the Parent Company's outstanding freestanding derivative contracts were swaps associated with our notes payable, consisting of cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with our senior notes due in February 2017, February 2022, June 2023 and November 2024, 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.

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)	2014			2013			2012
Interest paid		$	241		$	205		$	181
Noncash financing activities:
Treasury stock issued for shareholder dividend reinvestment		26			25			25

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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