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SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 12 Months Ended
Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract]  
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Aflac Incorporated (Parent Only)
Condensed Statements of Earnings
 
Years ended December 31,
(In millions)
2019
    
2018
    
2017
Revenues:
 
 
 
    
 
 
 
    
 
 
 
   Management and service fees from subsidiaries(1)
 
$
151

 
    
 
$
190

 
    
 
$
297

 
   Net investment income
 
77

 
    
 
69

 
    
 
30

 
   Interest from subsidiaries(1)
 
4

 
    
 
4

 
    
 
5

 
   Realized investment gains (losses)
 
98

 
    
 
(16
)
 
    
 
(1
)
 
     Total revenues
 
330

 
    
 
247

 
    
 
331

 
Operating expenses:
 
 
 
    
 
 
 
    
 
 
 
   Interest expense
 
200

 
    
 
188

 
    
 
197

 
   Other operating expenses(2)
 
221

 
    
 
225

 
    
 
180

 
     Total operating expenses
 
421

 
    
 
413

 
    
 
377

 
   Earnings before income taxes and equity in earnings of
subsidiaries
 
(91
)
 
    
 
(166
)
 
    
 
(46
)
 
Income tax expense (benefit)
 
(22
)
 
    
 
(12
)
 
    
 
(23
)
 
   Earnings before equity in earnings of subsidiaries
 
(69
)
 
    
 
(154
)
 
    
 
(23
)
 
Equity in earnings of subsidiaries(1)
 
3,373

 
    
 
3,074

 
    
 
4,627

 
     Net earnings
 
$
3,304

 
    
 
$
2,920

 
    
 
$
4,604

 
(1)Eliminated in consolidation
(2)Includes expense of $13 in 2017 for the early extinguishment of debt
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Statements of Comprehensive Income (Loss)
  
Years ended December 31,
(In millions)
2019
 
2018
 
2017
Net earnings
 
$
3,304

 
 
 
$
2,920

 
 
 
$
4,604

 
Other comprehensive income (loss) before income taxes:
 
 
 
 
 
 
 
 
 
 
 
Unrealized foreign currency translation gains (losses) during period
 
252

 
 
 
232

 
 
 
286

 
Unrealized gains (losses) on fixed maturity securities during period
 
5,852

 
 
 
(3,109
)
 
 
 
1,733

 
Unrealized gains (losses) on derivatives during period
 
(12
)
 
 
 
2

 
 
 
1

 
Pension liability adjustment during period
 
(85
)
 
 
 
(25
)
 
 
 
9

 
Total other comprehensive income (loss) before income taxes
 
6,007

 
 
 
(2,900
)
 
 
 
2,029

 
Income tax expense (benefit) related to items of other comprehensive
income (loss)
 
1,543

 
 
 
(797
)
 
 
 
631

 
Other comprehensive income (loss), net of income taxes
 
4,464

 
 
 
(2,103
)
 
 
 
1,398

 
Total comprehensive income (loss)
 
$
7,768

 
 
 
$
817

 
 
 
$
6,002

 

See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Balance Sheets
  
December 31,
(In millions, except for share and per-share amounts)
2019
 
2018
Assets:
 
 
 
 
 
 
 
Investments and cash:
 
 
 
 
 
 
 
Fixed maturity securities available for sale, at fair value
(amortized cost $1,506 in 2019 and $1,209 in 2018)
 
$
1,567

 
 
 
$
1,222

 
Investments in subsidiaries(1)
 
30,744

 
 
 
26,230

 
Other investments
 
36

 
 
 
21

 
Cash and cash equivalents
 
2,508

 
 
 
1,767

 
Total investments and cash
 
34,855

 
 
 
29,240

 
Due from subsidiaries(1)
 
170

 
 
 
98

 
Income taxes receivable
 
337

 
 
 
176

 
Other assets
 
405

 
 
 
390

 
Total assets
 
$
35,767

 
 
 
$
29,904

 
Liabilities and shareholders' equity:
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Employee benefit plans
 
$
323

 
 
 
$
310

 
Notes payable
 
6,136

 
 
 
5,765

 
Other liabilities
 
349

 
 
 
367

 
Total liabilities
 
6,808

 
 
 
6,442

 
Shareholders' equity:
 
 
 
 
 
 
 
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2019 and 2018; issued 1,349,309 shares in 2019 and 1,347,540 shares in 2018
 
135

 
 
 
135

 
Additional paid-in capital
 
2,313

 
 
 
2,177

 
Retained earnings
 
34,291

 
 
 
31,788

 
Accumulated other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized foreign currency translation gains (losses)
 
(1,623
)
 
 
 
(1,847
)
 
Unrealized gains (losses) on fixed maturity securities
 
8,548

 
 
 
4,234

 
Unrealized gains (losses) on derivatives
 
(33
)
 
 
 
(24
)
 
Pension liability adjustment
 
(277
)
 
 
 
(212
)
 
Treasury stock, at average cost
 
(14,395
)
 
 
 
(12,789
)
 
Total shareholders' equity
 
28,959

 
 
 
23,462

 
Total liabilities and shareholders' equity
 
$
35,767

 
 
 
$
29,904

 

(1)Eliminated in consolidation
See the accompanying Notes to Condensed Financial Statements.
See the accompanying Report of Independent Registered Public Accounting Firm.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Aflac Incorporated (Parent Only)
Condensed Statements of Cash Flows
  
Years ended December 31,
(In millions)
2019
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
$
3,304

 
 
 
$
2,920

 
 
 
$
4,604

 
Adjustments to reconcile net earnings to net cash provided from
operating activities:
 
 
 
 
 
 
 
 
 
 
 
              Equity in earnings of subsidiaries(1)
 
(3,373
)
 
 
 
(3,074
)
 
 
 
(4,627
)
 
 Cash dividends received from subsidiaries
 
3,466

 
 
 
1,820

 
 
 
2,001

 
 Other, net
 
(203
)
 
 
 
99

 
 
 
(46
)
 
Net cash provided (used) by operating activities
 
3,194

 
 
 
1,765

 
 
 
1,932

 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities sold
 
340

 
 
 
207

 
 
 
263

 
Fixed maturity securities purchased
 
(639
)
 
 
 
(254
)
 
 
 
(329
)
 
Other investments sold (purchased)
 
(16
)
 
 
 
31

 
 
 
(47
)
 
Settlement of derivatives
 
22

 
 
 
(2
)
 
 
 
223

 
Additional capitalization of subsidiaries(1)
 
(214
)
 
 
 
(62
)
 
 
 
(69
)
 
Other, net
 
87

 
 
 
(107
)
 
 
 
(218
)
 
Net cash provided (used) by investing activities
 
(420
)
 
 
 
(187
)
 
 
 
(177
)
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of treasury stock
 
(1,627
)
 
 
 
(1,301
)
 
 
 
(1,351
)
 
Proceeds from borrowings
 
347

 
 
 
1,020

 
 
 
1,040

 
Principal payments under debt obligations
 
0

 
 
 
(550
)
 
 
 
(1,161
)
 
Dividends paid to shareholders
 
(771
)
 
 
 
(793
)
 
 
 
(661
)
 
Treasury stock reissued
 
49

 
 
 
58

 
 
 
33

 
Proceeds from exercise of stock options
 
29

 
 
 
34

 
 
 
38

 
       Net change in amount due to/from subsidiaries(1)
 
(58
)
 
 
 
(4
)
 
 
 
(5
)
 
Other, net
 
(2
)
 
 
 
0

 
 
 
0

 
Net cash provided (used) by financing activities
 
(2,033
)
 
 
 
(1,536
)
 
 
 
(2,067
)
 
Net change in cash and cash equivalents
 
741

 
 
 
42

 
 
 
(312
)
 
Cash and cash equivalents, beginning of period
 
1,767

 
 
 
1,725

 
 
 
2,037

 
Cash and cash equivalents, end of period
 
$
2,508

 
 
 
$
1,767

 
 
 
$
1,725

 

(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)
2019
 
2018
4.00% senior notes due February 2022 (1)
 
$
348

 
 
 
$
348

 
3.625% senior notes due June 2023
 
698

 
 
 
698

 
3.625% senior notes due November 2024
 
747

 
 
 
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
 
541

 
 
 
540

 
Yen-denominated senior notes and subordinated debentures:
 
 
 
 
 
 
 
.932% senior notes due January 2027 (principal amount ¥60.0 billion)
 
545

  
  
 
538

  
.500% senior notes due December 2029 (principal amount ¥12.6 billion)
 
114

 
 
 
0

 
1.159% senior notes due October 2030 (principal amount ¥29.3 billion)
 
266

 
 
 
262

 
.843% senior notes due December 2031 (principal amount ¥9.3 billion)
 
84

 
 
 
0

 
1.488% senior notes due October 2033 (principal amount ¥15.2 billion)
 
138

 
 
 
136

 
.934% senior notes due December 2034 (principal amount ¥9.8 billion)
 
88

 
 
 
0

 
1.750% senior notes due October 2038 (principal amount ¥8.9 billion)
 
81

 
 
 
79

 
1.122% senior notes due December 2039 (principal amount ¥6.3 billion)
 
57

 
 
 
0

 
2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion)
 
543

 
 
 
536

 
Yen-denominated loans:
 
 
 
 
 
 
 
Variable interest rate loan due September 2026 (.42% in 2019 and .32 in 2018, principal amount ¥5.0 billion)
 
45

 
 
 
45

 
Variable interest rate loan due September 2029 (.57% in 2019 and .47 in 2018, principal amount ¥25.0 billion)
 
227

 
 
 
225

 
Total notes payable
 
$
6,136

  
  
 
$
5,765

  

(1) Redeemed in January 2020
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 December 2019, the Parent Company issued four series of senior notes totaling ¥38.0 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥12.6 billion, bears interest at a fixed rate of .500% per annum, payable semi-annually, and will mature in December 2029. The second series, which totaled ¥9.3 billion, bears interest at a fixed rate of .843% per annum, payable semi-annually, and will mature in December 2031. The third series, which totaled ¥9.8 billion, bears interest at a fixed rate of .934% per annum, payable semi-annually, and will mature in December 2034. The fourth series, which totaled ¥6.3 billion, bears interest at a fixed rate of 1.122% per annum, payable semi-annually, and will mature in December 2039. These notes may only be redeemed before maturity, in whole but not in part, upon the occurrence of certain changes affecting U.S. taxation, as specified in the indenture governing the terms of the issuance.

In September 2019, the Parent Company renewed a ¥30.0 billion senior term loan facility. The first tranche of the facility, which totaled ¥5.0 billion, bears interest at a rate per annum equal to the Tokyo interbank market rate (TIBOR), or alternate TIBOR, if applicable, plus the applicable TIBOR margin and will mature in September 2026. The applicable margin ranges
between .30% and .70%, depending on the Parent Company's debt ratings as of the date of determination. The second tranche, which totaled ¥25.0 billion, bears interest at a rate per annum equal to the TIBOR, or alternate TIBOR, if applicable, plus the applicable TIBOR margin and will mature in September 2029. The applicable margin ranges between .45% and 1.00%, depending on the Parent Company's debt ratings as of the date of determination.

The aggregate contractual maturities of notes payable during each of the years after December 31, 2019, are as follows:
(In millions)
 
 
2020
$
0

 
2021
0

 
2022
350

 
2023
700

 
2024
750

 
Thereafter
4,386

 
Total
$
6,186

 

For further information regarding notes payable, see Note 9 of the Notes to the Consolidated Financial Statements.
(B) Derivatives
At December 31, 2019, the Parent Company's outstanding freestanding derivative contracts were swaps, foreign currency forwards and options. The swaps are associated with its notes payable, consisting of cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with the Parent Company's senior notes due in February 2022, June 2023, November 2024 and March 2025. The foreign currency forwards and options are designated as derivative hedges of the foreign currency exposure of the Company's net investment in Aflac Japan. The Parent Company does not use derivative financial instruments for trading purposes, nor does it 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)
2019
 
2018
 
2017
Interest paid
 
$
189

 
 
 
$
179

 
 
 
$
195

 
Noncash financing activities:
 
 
 
 
 
 
 
 
 
 
 
Treasury stock issued for shareholder dividend reinvestment
 
30

 
 
 
8

 
 
 
29