XML 41 R26.htm IDEA: XBRL DOCUMENT v3.20.4
SCHEDULE II CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 12 Months Ended
Dec. 31, 2020
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)202020192018
Revenues:
   Management and service fees from subsidiaries(1)
$131 $151 $190 
   Net investment income62 77 69 
   Interest from subsidiaries(1)
3 4 4 
   Net investment gains (losses)399 98 (16)
     Total revenues595 330 247 
Operating expenses:
   Interest expense221 200 188 
   Other operating expenses(2)
277 221 225 
     Total operating expenses498 421 413 
   Earnings before income taxes and equity in earnings of
subsidiaries		97 (91)(166)
Income tax expense (benefit)(15)(22)(12)
   Earnings before equity in earnings of subsidiaries112 (69)(154)
Equity in earnings of subsidiaries(1)
4,666 3,373 3,074 
     Net earnings$4,778 $3,304 $2,920 
(1)Eliminated in consolidation
(2)Includes expense of $15 in 2020 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)202020192018
Net earnings$4,778 $3,304 $2,920 
Other comprehensive income (loss) before income taxes:
Unrealized foreign currency translation gains (losses) during period510 252 232 
Unrealized gains (losses) on fixed maturity securities during period1,220 5,852 (3,109)
Unrealized gains (losses) on derivatives during period(1)(12)2 
Pension liability adjustment during period(7)(85)(25)
Total other comprehensive income (loss) before income taxes1,722 6,007 (2,900)
Income tax expense (benefit) related to items of other comprehensive
income (loss)		251 1,543 (797)
Other comprehensive income (loss), net of income taxes1,471 4,464 (2,103)
Total comprehensive income (loss)$6,249 $7,768 $817 
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)20202019
Assets:
Investments and cash:
Fixed maturity securities available for sale, at fair value
  (amortized cost $1,782 in 2020 and $1,506 in 2019)
$1,876 $1,567 
Investments in subsidiaries(1)
36,217 30,744 
Other investments902 36 
Cash and cash equivalents2,126 2,508 
Total investments and cash41,121 34,855 
Due from subsidiaries(1)
253 170 
Income taxes receivable203 337 
Other assets368 405 
Total assets$41,945 $35,767 
Liabilities and shareholders' equity:
Liabilities:
Employee benefit plans$340 $323 
Notes payable7,456 6,136 
Other liabilities590 349 
Total liabilities8,386 6,808 
Shareholders' equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares
  in 2020 and 2019; issued 1,351,018 shares in 2020 and 1,349,309 shares in 2019
135 135 
Additional paid-in capital2,410 2,313 
Retained earnings37,984 34,291 
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains (losses)(1,109)(1,623)
Unrealized gains (losses) on fixed maturity securities10,361 8,548 
Unrealized gains (losses) on derivatives(34)(33)
Pension liability adjustment(284)(277)
Treasury stock, at average cost(15,904)(14,395)
Total shareholders' equity33,559 28,959 
Total liabilities and shareholders' equity$41,945 $35,767 
(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)202020192018
Cash flows from operating activities:
Net earnings$4,778 $3,304 $2,920 
Adjustments to reconcile net earnings to net cash provided from
operating activities:
              Equity in earnings of subsidiaries(1)
(4,666)(3,373)(3,074)
 Cash dividends received from subsidiaries 2,060 3,466 1,820 
 Other, net(331)(203)99 
Net cash provided (used) by operating activities1,841 3,194 1,765 
Cash flows from investing activities:
Fixed maturity securities sold438 340 207 
Fixed maturity securities purchased(484)(639)(254)
Other investments sold (purchased)(711)(16)31 
Settlement of derivatives4 22 (2)
Additional capitalization of subsidiaries(1)
(291)(214)(62)
Other, net2 87 (107)
Net cash provided (used) by investing activities(1,042)(420)(187)
Cash flows from financing activities:
Purchases of treasury stock(1,537)(1,627)(1,301)
Proceeds from borrowings1,545 347 1,020 
Principal payments under debt obligations(350)0 (550)
Dividends paid to shareholders(769)(771)(793)
Treasury stock reissued34 49 58 
Proceeds from exercise of stock options12 29 34 
       Net change in amount due to/from subsidiaries(1)
(89)(58)(4)
Other, net(27)(2)0 
Net cash provided (used) by financing activities(1,181)(2,033)(1,536)
Net change in cash and cash equivalents(382)741 42 
Cash and cash equivalents, beginning of period2,508 1,767 1,725 
Cash and cash equivalents, end of period$2,126 $2,508 $1,767 
(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)20202019
4.00% senior notes paid January 2020
$0 $348 
3.625% senior notes due June 2023
698 698 
3.625% senior notes due November 2024
747 747 
3.25% senior notes due March 2025
448 448 
2.875% senior notes due October 2026
298 298 
3.60% senior notes due April 2030
990 0 
6.90% senior notes due December 2039
221 220 
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
541 541 
Yen-denominated senior notes and subordinated debentures:
.300% senior notes due September 2025 (principal amount ¥12.4 billion)
119 0 
.932% senior notes due January 2027 (principal amount ¥60.0 billion)
578 545 
.500% senior notes due December 2029 (principal amount ¥12.6 billion)
121 114 
.550% senior notes due March 2030 (principal amount ¥13.3 billion)
127 0 
1.159% senior notes due October 2030 (principal amount ¥29.3 billion)
282 266 
.843% senior notes due December 2031 (principal amount ¥9.3 billion)
90 84 
.750% senior notes due March 2032 (principal amount ¥20.7 billion)
198 0 
1.488% senior notes due October 2033 (principal amount ¥15.2 billion)
146 138 
.934% senior notes due December 2034 (principal amount ¥9.8 billion)
94 88 
.830% senior notes due March 2035 (principal amount ¥10.6 billion)
101 0 
1.750% senior notes due October 2038 (principal amount ¥8.9 billion)
85 81 
1.122% senior notes due December 2039 (principal amount ¥6.3 billion)
61 57 
2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion)
575 543 
Yen-denominated loans:
Variable interest rate loan due September 2026 (.43% in 2020 and .42% in 2019,
  principal amount ¥5.0 billion)
48 45 
Variable interest rate loan due September 2029 (.58% in 2020 and .57% in 2019,
  principal amount ¥25.0 billion)
240 227 
Total notes payable$7,456 $6,136 
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 2020, the Parent Company issued $1.0 billion of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 3.60% per annum, payable semi-annually, and will mature in April 2030. These notes are redeemable at the Parent Company's option in whole at any time or in part from time to time at a redemption price equal to the greater of: (i) the aggregate principal amount of the notes to be redeemed or (ii) the amount equal to the sum of the present values of the remaining scheduled payments for principal of and interest on the notes to be redeemed, not including any portion of the payments of interest accrued as of such redemption date, discounted to such redemption date on a semiannual basis at the yield to maturity for a U.S. Treasury security with a maturity comparable to the remaining
term of the notes, plus 45 basis points, plus in each case, accrued and unpaid interest on the principal amount of the notes to be redeemed to, but excluding, such redemption date.

In March 2020, the Parent Company issued four series of senior notes totaling ¥57.0 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥12.4 billion, bears interest at a fixed rate of .300% per annum, payable semiannually and will mature in September 2025. The second series, which totaled ¥13.3 billion, bears interest at a fixed rate of .550% per annum, payable semi-annually, and will mature in March 2030. The third series, which totaled ¥20.7 billion, bears interest at a fixed rate of .750% per annum, payable semiannually and will mature in March 2032. The fourth series, which totaled ¥10.6 billion, bears interest at a fixed rate of .830% per annum, payable semi-annually, and will mature in March 2035. 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 January 2020, the Parent Company used the net proceeds from senior notes issued in December 2019 to redeem $350 million of its 4.00% fixed-rate senior notes due February 2022.

The aggregate contractual maturities of notes payable during each of the years after December 31, 2020, are as follows:
(In millions)
2021$0 
20220 
2023700 
2024750 
2025570 
Thereafter5,494 
Total$7,514 

For further information regarding notes payable, see Note 9 of the Notes to the Consolidated Financial Statements.
(B) Derivatives
At December 31, 2020, 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 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)202020192018
Interest paid$209 $189 $179 
Noncash financing activities:
Treasury stock issued for shareholder dividend reinvestment29 30 8