NOTES PAYABLE AND LEASE OBLIGATIONS

6 Months Ended

Jun. 30, 2019

A summary of notes payable and lease obligations follows:



(In millions)	June 30, 2019			December 31, 2018
4.00% senior notes due February 2022		$	348		$	348
3.625% senior notes due June 2023		698			698
3.625% senior notes due November 2024		746			746
3.25% senior notes due March 2025		448			447
2.875% senior notes due October 2026		298			297
6.90% senior notes due December 2039		220			220
6.45% senior notes due August 2040		254			254
4.00% senior notes due October 2046		394			394
4.750% senior notes due January 2049		540			540
Yen-denominated senior notes and subordinated debentures:
.932% senior notes due January 2027 (principal amount 60.0 billion yen)		554			538
1.159% senior notes due October 2030 (principal amount 29.3 billion yen)		270			262
1.488% senior notes due October 2033 (principal amount 15.2 billion yen)		140			136
1.750% senior notes due October 2038 (principal amount 8.9 billion yen)		82			79
2.108% subordinated debentures due October 2047 (principal amount 60.0 billion yen)		552			536
.963% perpetual subordinated bonds callable April 2024 (principal amount 30.0 billion yen)		276			0
Yen-denominated loans:
Variable interest rate loan due September 2021 (.32% in 2019 and 2018, principal amount 5.0 billion yen)		46			45
Variable interest rate loan due September 2023 (.47% in 2019 and 2018, principal amount 25.0 billion yen)		232			225
Finance lease obligations payable through 2025		12			13
Operating lease obligations payable through 2028 ⁽¹⁾		121			0
Total notes payable and lease obligations		$	6,231		$	5,778

⁽¹⁾See Note 1 of the Notes to the Consolidated Financial Statements for the adoption of accounting guidance on January 1, 2019 related to leases.

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.

In April 2019, ALIJ issued 30.0 billion yen (par value) of perpetual subordinated bonds. These bonds bear interest at a fixed rate of .963% per annum and then at six-month Euro Yen LIBOR plus an applicable spread on and after the day immediately following April 18, 2024. The bonds will be callable on each interest payment date on and after April 18, 2024.

The following table presents the contractual maturities and present value of lease liabilities.



	June 30, 2019
(In millions)	Operating Leases		Finance Leases		Total
2019	$	32	$	3	$	35
2020	30		3		33
2021	20		2		22
2022	17		2		19
2023	9		1		10
After 2023	24		1		25
Total lease payments	$	132	$	12	$	144
Less: Interest	11		0		11
Present value of lease liabilities	$	121	$	12	$	133

The following table presents the weighted average remaining lease term and weighted average discount rate for lease liabilities.



	June 30, 2019
Weighted average remaining lease term (years):
Operating leases	4.1
Finance leases	3.8

Weighted average discount rate:
Operating leases	2.5%
Finance leases	1.5%

Operating lease costs for the three- and six-month periods ended June 30, 2019 were $14 million and $29 million, respectively. Operating cash outflow for operating leases for the six-month period ended June 30, 2019 was $28 million.

A summary of the Company's lines of credit as of June 30, 2019 follows:



Borrower	Type	Term	Expiration Date	Capacity	Amount Outstanding	Interest Rate on Borrowed Amount	Maturity Period	Commitment Fee	Business Purpose
Aflac Incorporated and Aflac	uncommitted bilateral	364 days	December 27, 2019	$100 million	$0 million	The rate quoted by the bank and agreed upon at the time of borrowing	Up to 3 months	None	General corporate purposes
Aflac Incorporated	unsecured revolving	5 years	March 29, 2024, or the date commitments are terminated pursuant to an event of default	100.0 billion yen	0.0 billion yen	A rate per annum equal to (a) Tokyo interbank market rate (TIBOR) plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period	No later than March 29, 2024	.30% to .50%, depending on the Parent Company's debt ratings as of the date of determination	General corporate purposes, including a capital contingency plan for the operations of the Parent Company
Aflac Incorporated and Aflac	unsecured revolving	5 years	April 4, 2023, or the date commitments are terminated pursuant to an event of default	55.0 billion yen, or the equivalent amount in U.S. dollars	0.0 billion yen	A rate per annum equal to, at the Company's option, either, (a) London Interbank Offered Rate (LIBOR) adjusted for certain costs or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 1/2 of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate, or (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin	No later than April 4, 2023	.085% to .225%, depending on the Parent Company's debt ratings as of the date of determination	General corporate purposes, including a capital contingency plan for the operations of the Parent Company
Aflac Incorporated and Aflac	uncommitted bilateral	None specified	None specified	$50 million	$0 million	A rate per annum equal to, at the Parent Company's option, either (a) a eurocurrency rate determined by reference to the agent's LIBOR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the greater of (i) the prime rate as determined by the agent, and (ii) the sum of 0.50% and the federal funds rate for such day	Up to 3 months	None	General corporate purposes
Aflac⁽¹⁾	uncommitted revolving	364 days	November 29, 2019	$250 million	$0 million	USD three-month LIBOR plus 75 basis points per annum	3 months	None	General corporate purposes
Aflac Incorporated⁽¹⁾	uncommitted revolving	364 days	April 2, 2020	50.0 billion yen	0.0 billion yen	Three-month TIBOR plus 70 basis points per annum	3 months	None	General corporate purposes

⁽¹⁾ Intercompany credit agreement

The Company was in compliance with all of the covenants of its notes payable and lines of credit at June 30, 2019. No events of default or defaults occurred during the six-month period ended June 30, 2019.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2018 Annual Report.