SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2016

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)	2016					2015					2014
Revenues:
Dividends from subsidiaries⁽¹⁾		$	2,020				$	2,393				$	1,483
Management and service fees from subsidiaries⁽¹⁾		265					260					272
Net investment income		18					22					13
Interest from subsidiaries⁽¹⁾		5					6					6
Realized investment gains (losses)		84					86					45
Change in fair value of the cross-currency interest rate swaps		(159		)			(53		)			314
Other income (loss)		0					0					(11		)
Total revenues		2,233					2,714					2,122
Operating expenses:
Interest expense		213					231					243
Other operating expenses		277			⁽²⁾		321			⁽²⁾		88
Total operating expenses		490					552					331
Earnings before income taxes and equity in undistributed earnings of subsidiaries		1,743					2,162					1,791
Income tax expense (benefit):
Current		3					2					1
Deferred		(105		)			(82		)			120
Total income taxes		(102		)			(80		)			121
Earnings before equity in undistributed earnings of subsidiaries		1,845					2,242					1,670
Equity in undistributed earnings of subsidiaries⁽¹⁾		814					291					1,281
Net earnings		$	2,659				$	2,533				$	2,951

⁽¹⁾Eliminated in consolidation

⁽²⁾Includes expense of $137 in 2016 and $230 in 2015 for the payments 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)	2016				2015				2014
Net earnings		$	2,659			$	2,533			$	2,951
Other comprehensive income (loss) before income taxes:
Foreign currency translation adjustments:
Unrealized foreign currency translation gains (losses) during period - parent only		0				3				39
Equity in unrealized foreign currency translation gains (losses) of subsidiaries during period		283				357				(1,494		)
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) on investment securities during period - parent only		2				(8		)		9
Equity in unrealized holding gains (losses) on investment securities held by subsidiaries during period		2,850				(2,526		)		5,938
Equity in reclassification adjustment for realized (gains) losses of subsidiaries included in net earnings		(53		)		(61		)		(54		)
Unrealized gains (losses) on derivatives during period		3				0				(17		)
Pension liability adjustment during period		(45		)		(20		)		(76		)
Total other comprehensive income (loss) before income taxes		3,040				(2,255		)		4,345
Income tax expense (benefit) related to items of other comprehensive income (loss)		1,035				(901		)		1,803
Other comprehensive income (loss), net of income taxes		2,005				(1,354		)		2,542
Total comprehensive income (loss)		$	4,664			$	1,179			$	5,493

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)	2016				2015
Assets:
Investments and cash:
Fixed maturity securities available for sale, at fair value (amortized cost $483 in 2016 and $481 in 2015)		$	496			$	493
Investments in subsidiaries⁽¹⁾		23,353				20,500
Other investments		3				9
Cash and cash equivalents		2,037				1,721
Total investments and cash		25,889				22,723
Due from subsidiaries⁽¹⁾		75				113
Income taxes receivable		103				0
Other assets		497				542
Total assets		$	26,564			$	23,378

Liabilities and shareholders' equity:
Liabilities:
Income taxes		$	0			$	8
Employee benefit plans		293				274
Notes payable		5,339				4,968
Other liabilities		450				420
Total liabilities		6,082				5,670
Shareholders' equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2016 and 2015; issued 671,249 shares in 2016 and 669,723 shares in 2015		67				67
Additional paid-in capital		1,976				1,828
Retained earnings		25,981				24,007
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains		(1,983		)		(2,196		)
Unrealized gains (losses) on investment securities		4,805				2,986
Unrealized gains (losses) on derivatives		(24		)		(26		)
Pension liability adjustment		(168		)		(139		)
Treasury stock, at average cost		(10,172		)		(8,819		)
Total shareholders' equity		20,482				17,708
Total liabilities and shareholders' equity		$	26,564			$	23,378

⁽¹⁾Eliminated in consolidation

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2016 related to debt issuance 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 Cash Flows



	Years ended December 31,
(In millions)	2016					2015					2014
Cash flows from operating activities:
Net earnings		$	2,659				$	2,533				$	2,951
Adjustments to reconcile net earnings to net cash provided from operating activities:
Equity in undistributed earnings of subsidiaries⁽¹⁾		(814		)			(291		)			(1,281		)
Change in income tax liabilities		(112		)			6					115
Other, net		406			⁽²⁾		149			⁽²⁾		(72		)
Net cash provided (used) by operating activities		2,139					2,397					1,713
Cash flows from investing activities:
Fixed maturity securities sold		225					121					38
Fixed maturity securities purchased		(229		)			(202		)			(105		)
Other investments sold (purchased)		6					14					291
Settlement of derivatives		0					147					(1		)
Additional capitalization of subsidiaries⁽¹⁾		(36		)			(43		)			0
Other, net		(25		)			0					0
Net cash provided (used) by investing activities		(59		)			37					223
Cash flows from financing activities:
Purchases of treasury stock		(1,422		)			(1,315		)			(1,210		)
Proceeds from borrowings		986					998					750
Principal payments under debt obligations		(621		)			(1,272		)			(335		)
Dividends paid to shareholders		(658		)			(656		)			(654		)
Treasury stock reissued		46					36					33
Proceeds from exercise of stock options		36					47					23
Net change in amount due to/from subsidiaries⁽¹⁾		(6		)			43					14
Other, net		(125		)	⁽²⁾		(232		)	⁽²⁾		0
Net cash provided (used) by financing activities		(1,764		)			(2,351		)			(1,379		)
Net change in cash and cash equivalents		316					83					557
Cash and cash equivalents, beginning of period		1,721					1,638					1,081
Cash and cash equivalents, end of period		$	2,037				$	1,721				$	1,638

⁽¹⁾Eliminated in consolidation

⁽²⁾Operating activities excludes and financing activities includes a cash outflow of $137 in 2016 and $230 in 2015 for the payments 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)	2016			2015
2.65% senior notes due February 2017		$	649		$	651
2.40% senior notes due March 2020		547			546
4.00% senior notes due February 2022		348			348
3.625% senior notes due June 2023		696			696
3.625% senior notes due November 2024		745			744
3.25% senior notes due March 2025		445			445
2.875% senior notes due October 2026		298			0
6.90% senior notes due December 2039		220			393
6.45% senior notes due August 2040		254			445
4.00% senior notes due October 2046		394			0
5.50% subordinated debentures due September 2052		486			486
Yen-denominated Uridashi notes:
2.26% notes paid September 2016 (principal amount 10 billion yen)		0			83
Yen-denominated Samurai notes:
1.84% notes paid July 2016 (principal amount 15.8 billion yen)		0			131
Yen-denominated loans:
Variable interest rate loan due September 2021 (.31% in 2016, principal amount 5.0 billion yen)		43			0
Variable interest rate loan due September 2023 (.46% in 2016, principal amount 25.0 billion yen)		214			0
Total notes payable		$	5,339		$	4,968

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2016 related to debt issuance costs.

Amounts in the table above are reported net of debt issuance costs and issuance premiums or discounts, if applicable, that are 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. These notes were redeemed in September 2016. In consolidation, those notes were extinguished; however, they remained 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, 2016, are as follows:



(In millions)
2017	$	650
2018	0
2019	0
2020	550
2021	43
Thereafter	4,145
Total	$	5,388

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

(B) Derivatives

At December 31, 2016, 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.

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)	2016			2015			2014
Interest paid		$	209		$	235		$	241
Noncash financing activities:
Treasury stock issued for shareholder dividend reinvestment		26			26			26

- 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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