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NOTES PAYABLE | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
NOTES PAYABLE | NOTES PAYABLE AND LEASE OBLIGATIONS A summary of notes payable and lease obligations 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 |  |
.963% subordinated bonds due April 2049 (principal amount ¥30.0 billion) |  | 272 |  |  |  |  | 0 |  |
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 |  |
Finance lease obligations payable through 2026 |  | 12 |  |  |  |  | 13 |  |
Operating lease obligations payable through 2049 (2) |  | 149 |  |  |  |  | 0 |  |
Total notes payable and lease obligations |  | $ | 6,569 |  |  |  |  | $ | 5,778 |  |
(1) Redeemed in January 2020 (2) 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 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. In April 2019, ALIJ issued ¥30.0 billion (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. In November 2019, ALIJ amended the bonds to change their duration from perpetual to a stated maturity date of April 16, 2049 and to remove provisions that permitted ALIJ to defer payments of interest under certain circumstances. In October 2018, the Parent Company issued $550 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 4.750% per annum, payable semi-annually, and will mature in January 2049. 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 25 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 October 2018, the Parent Company issued three series of senior notes totaling ¥53.4 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥29.3 billion, bears interest at a fixed rate of 1.159% per annum, payable semi-annually, and will mature in October 2030. The second series, which totaled ¥15.2 billion, bears interest at a fixed rate of 1.488% per annum, payable semi-annually, and will mature in October 2033. The third series, which totaled ¥8.9 billion, bears interest at a fixed rate of 1.750% per annum, payable semi-annually, and will mature in October 2038. 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 October 2017, the Parent Company issued ¥60.0 billion of subordinated debentures through a U.S. public debt offering. The debentures bear interest at an initial rate of 2.108% per annum through October 22, 2027, or earlier redemption. Thereafter, the rate of the interest of the debentures will be reset every five years at a rate of interest equal to the then-current JPY 5-year Swap Offered Rate plus 205 basis points. The debentures are payable semi-annually in arrears and will mature in October 2047. The debentures are redeemable (i) at any time, in whole but not in part, upon the occurrence of certain tax events or certain rating agency events, as specified in the indenture governing the terms of the debentures or (ii) on or after October 23, 2027, in whole or in part, at a redemption price equal to their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption. In January 2017, the Parent Company issued ¥60.0 billion of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of .932% per annum, payable semi-annually, and will mature in January 2027. 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 2016, the Parent Company issued two series of senior notes totaling $700 million through a U.S. public debt offering. The first series, which totaled $300 million, bears interest at a fixed rate of 2.875% per annum, payable semi-annually and will mature in October 2026. The second series, which totaled $400 million, bears interest at a fixed rate of 4.00% per annum, payable semi-annually, and will mature in October 2046. In March 2015, the Parent Company issued $450 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 3.25% per annum, payable semi-annually, and will mature in March 2025. The Parent Company entered into cross-currency swaps that convert the U.S. dollar-denominated principal and interest on the senior notes into yen-denominated obligations which results in lower nominal net interest rates on the debt. By entering into these cross-currency swaps, the Parent Company economically converted its $450 million liability into a ¥55.0 billion yen liability and reduced the interest rate on this debt from 3.25% in dollars to .82% in yen. In November 2014, the Parent Company issued $750 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 3.625% per annum, payable semi-annually, and will mature in November 2024. 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 treasury rate plus 20 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. The Parent Company entered into cross-currency interest rate swaps to reduce interest expense by converting the U.S. dollar-denominated principal and interest on the senior notes it issued into yen-denominated obligations. By entering into the swaps, the Parent Company economically converted its $750 million liability into an ¥85.3 billion liability and reduced the interest rate on this debt from 3.625% in dollars to 1.00% in yen. In June 2013, the Parent Company issued $700 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 3.625% per annum, payable semi-annually, and will mature in June 2023. 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 treasury rate plus 20 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. The Parent Company had entered into cross-currency interest rate swaps to reduce interest expense by converting the U.S. dollar-denominated principal and interest on the senior notes it issued into yen-denominated obligations. By entering into these swaps, the Parent Company economically converted its $700 million liability into a ¥69.8 billion liability and reduced the interest rate on this debt from 3.625% in dollars to 1.50% in yen. In February 2012, the Parent Company issued $350 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 4.00% per annum, payable semiannually, and will mature in February 2022. 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 principal amount of the notes or (ii) the present value of the remaining scheduled payments of principal and interest to be redeemed, discounted to the redemption date, plus accrued and unpaid interest. The Parent Company entered into cross-currency interest rate swaps to reduce interest expense by converting the U.S. dollar-denominated principal and interest on the senior notes it issued into yen-denominated obligations. By entering into these swaps, the Parent Company economically converted its $350 million liability into a ¥27.0 billion liability and reduced the interest rate on this debt from 4.00% in dollars to 2.07% in yen. In 2010 and 2009, the Parent Company issued senior notes through U.S. public debt offerings; the details of these notes are as follows. In August 2010, the Parent Company issued $450 million of senior notes that will mature in August 2040. In December 2009, the Parent Company issued $400 million of senior notes that will mature in December 2039. These senior notes pay interest semiannually and 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 principal amount of the notes or (ii) the present value of the remaining scheduled payments of principal and interest to be redeemed, discounted to the redemption date, plus accrued and unpaid interest. In December 2016, the Parent Company completed a tender offer in which it extinguished $176 million principal of its 6.90% senior notes due December 2039 and $193 million principal of its 6.45% senior notes due August 2040. The pretax loss due to the early redemption of these notes was $137 million. For the Company's yen-denominated notes and loans, the principal amount as stated in dollar terms will fluctuate from period to period due to changes in the yen/dollar exchange rate. The Company has designated the majority of its yen-denominated notes payable as a nonderivative hedge of the foreign currency exposure of the Company's investment in Aflac Japan. The aggregate contractual maturities of notes payable during each of the years after December 31, 2019, are as follows:
(In millions) | Total Notes Payable
2020 |  | $ | 0 |  |
2021 |  | 0 |  |
2022 |  | 350 |  |
2023 |  | 700 |  |
2024 |  | 750 |  |
Thereafter |  | 4,658 |  |
Total |  | $ | 6,458 |  |
The following table presents the contractual maturities and present value of lease liabilities as of December 31.
| 2019
(In millions) | Operating Leases |  | Finance Leases |  | Total
2020 | $ | 49 |  |  | $ | 4 |  |  | $ | 53 |
2021 | 37 |  |  | 3 |  |  | 40 |
2022 | 31 |  |  | 2 |  |  | 33 |
2023 | 10 |  |  | 2 |  |  | 12 |
2024 | 10 |  |  | 1 |  |  | 11 |
After 2024 | 22 |  |  | 0 |  |  | 22 |
Total lease payments | $ | 159 |  |  | $ | 12 |  |  | $ | 171 |
Less: Interest | 10 |  |  | 0 |  |  | 10 |
Present value of lease liabilities | $ | 149 |  |  | $ | 12 |  |  | $ | 161 |
The following table presents the weighted average remaining lease term and weighted average discount rate for lease liabilities as of December 31.
| 2019
Weighted average remaining lease term (years): |
Operating leases | 6.8
Finance leases | 3.7
Weighted average discount rate: |
Operating leases | 2.1%
Finance leases | 1.5%
Operating lease costs, included in insurance expenses in the consolidated statements of earnings, were $54 million, $73 million and $75 million for the years ended December 31, 2019, 2018 and 2017, respectively. Operating cash outflow for operating leases was $52 million for the year ended December 31, 2019. A summary of the Company's lines of credit as of December 31, 2019 follows:
Borrower | Type | Original 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 18, 2020 | $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 | ¥0.0 billion | 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 | November 18, 2024, or the date commitments are terminated pursuant to an event of default | $1.0 billion | $0.0 billion | A rate per annum equal to, at the Company's option, either, (a) the rate for Eurocurrency for deposits in the London interbank market for a period of one, two, three or six months (LIBOR) 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 in effect for such day as publicly announced from time to time by Mizuho as its “prime rate”, and (3) the LIBOR for a one month interest period in effect on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00%, and in each case an applicable margin | No later than November 18, 2024 | .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 30, 2020 | $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 | ¥0.0 billion | Three-month TIBOR plus 70 basis points per annum | 3 months | None | General corporate purposes
Aflac Incorporated(1) | uncommitted revolving | 364 days | November 25, 2020 | ¥50.0 billion | ¥0.0 billion | Three-month TIBOR plus 70 basis points per annum | 3 months | None | General corporate purposes
(1) Intercompany credit agreement The Parent Company was in compliance with all of the covenants of its notes payable and lines of credit at December 31, 2019. No events of default or defaults occurred during 2019 and 2018.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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