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SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 12 Months Ended
Dec. 31, 2015
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)
2015
    
2014
    
2013
Revenues:
 
 
 
    
 
 
 
    
 
 
 
   Dividends from subsidiaries(1)
 
$
2,393

 
    
 
$
1,483

 
    
 
$
962

 
   Management and service fees from subsidiaries(1)
 
260

 
    
 
272

 
    
 
292

 
   Net investment income
 
22

 
    
 
13

 
    
 
11

 
   Interest from subsidiaries(1)
 
6

 
    
 
6

 
    
 
7

 
   Realized investment gains (losses)
 
86

 
    
 
45

 
    
 
10

 
   Change in fair value of the cross-currency interest rate swaps
 
(53
)
 
    
 
314

 
    
 
274

 
   Other income (loss)
 
0

 
    
 
(11
)
 
    
 
1

 
     Total revenues
 
2,714

 
    
 
2,122

 
    
 
1,557

 
Operating expenses:
 
 
 
    
 
 
 
    
 
 
 
   Interest expense
 
231

 
    
 
243

 
    
 
208

 
   Other operating expenses
 
321

(2) 
    
 
88

 
    
 
79

 
     Total operating expenses
 
552

 
    
 
331

 
    
 
287

 
   Earnings before income taxes and equity in undistributed earnings of
subsidiaries
 
2,162

 
    
 
1,791

 
    
 
1,270

 
Income tax expense (benefit):
 
 
 
    
 
 
 
    
 
 
 
   Current
 
2

 
    
 
1

 
    
 
0

 
   Deferred
 
(82
)
 
    
 
120

 
    
 
98

 
     Total income taxes
 
(80
)
 
    
 
121

 
    
 
98

 
   Earnings before equity in undistributed earnings of subsidiaries
 
2,242

 
    
 
1,670

 
    
 
1,172

 
Equity in undistributed earnings of subsidiaries(1)
 
291

 
    
 
1,281

 
    
 
1,986

 
     Net earnings
 
$
2,533

 
    
 
$
2,951

 
    
 
$
3,158

 
(1)Eliminated in consolidation
(2)Includes expense of $230 for the make-whole payment associated with the early extinguishment of debt
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)
2015
 
2014
 
2013
Net earnings
 
$
2,533

 
 
 
$
2,951

 
 
 
$
3,158

 
Other comprehensive income (loss) before income taxes:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments:
 
 
 
 
 
 
 
 
 
 
 
Unrealized foreign currency translation gains (losses)
during period - parent only
 
3

 
 
 
39

 
 
 
48

 
Equity in unrealized foreign currency translation gains (losses) of
subsidiaries during period
 
357

 
 
 
(1,494
)
 
 
 
(1,636
)
 
Unrealized gains (losses) on investment securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains (losses) on investment securities
during period - parent only
 
(8
)
 
 
 
9

 
 
 
(12
)
 
Equity in unrealized holding gains (losses) on investment securities
held by subsidiaries during period
 
(2,526
)
 
 
 
5,938

 
 
 
(2,350
)
 
Equity in reclassification adjustment for realized (gains) losses of
subsidiaries included in net earnings
 
(61
)
 
 
 
(54
)
 
 
 
(56
)
 
Unrealized gains (losses) on derivatives during period
 
0

 
 
 
(17
)
 
 
 
(10
)
 
Pension liability adjustment during period
 
(20
)
 
 
 
(76
)
 
 
 
157

 
Total other comprehensive income (loss) before
income taxes
 
(2,255
)
 
 
 
4,345

 
 
 
(3,859
)
 
Income tax expense (benefit) related to items of other comprehensive
income (loss)
 
(901
)
 
 
 
1,803

 
 
 
(581
)
 
Other comprehensive income (loss), net of income taxes
 
(1,354
)
 
 
 
2,542

 
 
 
(3,278
)
 
Total comprehensive income (loss)
 
$
1,179

 
 
 
$
5,493

 
 
 
$
(120
)
 

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)
2015
 
2014
Assets:
 
 
 
 
 
 
 
Investments and cash:
 
 
 
 
 
 
 
Fixed maturity securities available for sale, at fair value
(amortized cost $481 in 2015 and $419 in 2014)
 
$
493

 
 
 
$
437

 
Investments in subsidiaries(1)
 
20,500

 
 
 
21,430

 
Other investments
 
9

 
 
 
24

 
Cash and cash equivalents
 
1,721

 
 
 
1,638

 
Total investments and cash
 
22,723

 
 
 
23,529

 
Due from subsidiaries(1)
 
113

 
 
 
116

 
Other assets
 
582

 
 
 
766

 
Total assets
 
$
23,418

 
 
 
$
24,411

 
 
 
 
 
 
 
 
 
Liabilities and shareholders' equity:
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Income taxes
 
$
8

 
 
 
$
6

 
Employee benefit plans
 
274

 
 
 
282

 
Notes payable
 
5,008

 
 
 
5,285

 
Other liabilities
 
420

 
 
 
491

 
Total liabilities
 
5,710

 
 
 
6,064

 
Shareholders' equity:
 
 
 
 
 
 
 
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in
2015 and 2014; issued 669,723 shares in 2015 and 668,132 shares in 2014
 
67

 
 
 
67

 
Additional paid-in capital
 
1,828

 
 
 
1,711

 
Retained earnings
 
24,007

 
 
 
22,156

 
Accumulated other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized foreign currency translation gains
 
(2,196
)
 
 
 
(2,541
)
 
Unrealized gains (losses) on investment securities
 
2,986

 
 
 
4,672

 
Unrealized gains (losses) on derivatives
 
(26
)
 
 
 
(26
)
 
Pension liability adjustment
 
(139
)
 
 
 
(126
)
 
Treasury stock, at average cost
 
(8,819
)
 
 
 
(7,566
)
 
Total shareholders' equity
 
17,708

 
 
 
18,347

 
Total liabilities and shareholders' equity
 
$
23,418

 
 
 
$
24,411

 

(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)
2015
 
2014
 
2013
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
$
2,533

 
 
 
$
2,951

 
 
 
$
3,158

 
Adjustments to reconcile net earnings to net cash provided from
operating activities:
 
 
 
 
 
 
 
 
 
 
 
              Equity in undistributed earnings of subsidiaries(1)
 
(291
)
 
 
 
(1,281
)
 
 
 
(1,986
)
 
 Change in income tax liabilities
 
6

 
 
 
115

 
 
 
155

 
 Other, net
 
149

(2 
) 
 
 
(72
)
 
 
 
11

 
Net cash provided (used) by operating activities
 
2,397

 
 
 
1,713

 
 
 
1,338

 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities sold
 
121

 
 
 
38

 
 
 
8

 
Fixed maturity securities purchased
 
(202
)
 
 
 
(105
)
 
 
 
(206
)
 
Other investments sold (purchased)
 
14

 
 
 
291

 
 
 
(298
)
 
Settlement of derivatives
 
147

 
 
 
(1
)
 
 
 
0

 
Additional capitalization of subsidiaries(1)
 
(43
)
 
 
 
0

 
 
 
0

 
Net cash provided (used) by investing activities
 
37

 
 
 
223

 
 
 
(496
)
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of treasury stock
 
(1,315
)
 
 
 
(1,210
)
 
 
 
(813
)
 
Proceeds from borrowings
 
998

 
 
 
750

 
 
 
700

 
Principal payments under debt obligations
 
(1,272
)
 
 
 
(335
)
 
 
 
0

 
Dividends paid to shareholders
 
(656
)
 
 
 
(654
)
 
 
 
(635
)
 
Treasury stock reissued
 
36

 
 
 
33

 
 
 
88

 
Proceeds from exercise of stock options
 
47

 
 
 
23

 
 
 
41

 
       Net change in amount due to/from subsidiaries(1)
 
43

 
 
 
14

 
 
 
28

 
Other, net
 
(232
)
(2 
) 
 
 
0

 
 
 
0

 
Net cash provided (used) by financing activities
 
(2,351
)
 
 
 
(1,379
)
 
 
 
(591
)
 
Net change in cash and cash equivalents
 
83

 
 
 
557

 
 
 
251

 
Cash and cash equivalents, beginning of period
 
1,638

 
 
 
1,081

 
 
 
830

 
Cash and cash equivalents, end of period
 
$
1,721

 
 
 
$
1,638

 
 
 
$
1,081

 

(1)Eliminated in consolidation
(2)Operating activities excludes and financing activities includes a cash outflow of $230 for the make-whole payment associated with the early extinguishment of debt
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)
2015
 
2014
 
3.45% senior notes paid August 2015
 
$
0

 
  
 
$
300

 
  
2.65% senior notes due February 2017
 
652

(1) 
 
 
653

(1) 
 
8.50% senior notes due May 2019
 
0

(2) 
 
 
850

 
 
2.40% senior notes due March 2020
 
550

 
 
 
0

 
 
4.00% senior notes due February 2022
 
350

 
 
 
350

 
  
3.625% senior notes due June 2023
 
700

 
 
 
700

 
 
3.625% senior notes due November 2024
 
749

(3) 
 
 
749

(3) 
 
3.25% senior notes due March 2025
 
448

(3) 
 
 
0

 
 
6.90% senior notes due December 2039
 
397

(3) 
 
 
397

(3) 
 
6.45% senior notes due August 2040
 
448

(3) 
 
 
448

(3) 
 
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

  
  
 
83

  
  
Yen-denominated Samurai notes:
 
 
 
 
 
 
 
 
1.84% notes due July 2016 (principal amount 15.8 billion yen)
 
131

 
 
 
131

 
 
Yen-denominated loans:
 
 
 
 
 
 
 
 
3.60% loan paid July 2015 (principal amount 10 billion yen)
 
0

  
  
 
83

  
  
3.00% loan paid August 2015 (principal amount 5 billion yen)
 
0

  
  
 
41

  
  
Total notes payable
 
$
5,008

  
  
 
$
5,285

  
  

(1) Principal amount plus an issuance premium that is being amortized over the life of the notes
(2) Redeemed in April 2015
(3) 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, 2015. 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, 2015, are as follows:
(In millions)
 
 
2016
$
214

 
2017
650

 
2018
0

 
2019
0

 
2020
550

 
Thereafter
3,600

 
Total
$
5,014

 


For further information regarding notes payable, see Note 9 of the Notes to the Consolidated Financial Statements.
(B) Derivatives
At December 31, 2015, 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, March 2020, February 2022, June 2023, November 2024 and March 2025, 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)
2015
 
2014
 
2013
Interest paid
 
$
235

 
 
 
$
241

 
 
 
$
205

 
Noncash financing activities:
 
 
 
 
 
 
 
 
 
 
 
Treasury stock issued for shareholder dividend reinvestment
 
26

 
 
 
26

 
 
 
25