NOTES PAYABLE AND LEASE OBLIGATIONS

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

NOTES PAYABLE AND LEASE OBLIGATIONS

NOTES PAYABLE AND LEASE OBLIGATIONS

A summary of notes payable and lease obligations follows:

(In millions)	September 30, 2024			December 31, 2023
1.125% senior sustainability notes due March 2026		$	399		$	398
2.875% senior notes due October 2026		299			299
3.60% senior notes due April 2030		994			993
6.90% senior notes due December 2039		221			221
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		542			542
Yen-denominated senior notes and subordinated debentures:
.300% senior notes due September 2025 (principal amount ¥12.4 billion)		87			87
.932% senior notes due January 2027 (principal amount ¥60.0 billion)		419			422
1.048% senior notes due March 2029 (principal amount ¥13.0 billion)		91			0
1.075% senior notes due September 2029 (principal amount ¥33.4 billion)		233			234
.500% senior notes due December 2029 (principal amount ¥12.6 billion)		88			88
.550% senior notes due March 2030 (principal amount ¥13.3 billion)		93			93
1.159% senior notes due October 2030 (principal amount ¥29.3 billion)		204			206
1.412% senior notes due March 2031 (principal amount ¥27.9 billion)		195			0
.633% senior notes due April 2031 (principal amount ¥30.0 billion)		209			211
.843% senior notes due December 2031 (principal amount ¥9.3 billion)		65			65
.750% senior notes due March 2032 (principal amount ¥20.7 billion)		144			145
1.320% senior notes due December 2032 (principal amount ¥21.1 billion)		147			148
.844% senior notes due April 2033 (principal amount ¥12.0 billion)		84			84
1.488% senior notes due October 2033 (principal amount ¥15.2 billion)		106			106
1.682% senior notes due March 2034 (principal amount ¥7.7 billion)		54			0
1.600% senior notes due March 2034 (principal amount ¥18.3 billion)		127			0
.934% senior notes due December 2034 (principal amount ¥9.8 billion)		68			69
.830% senior notes due March 2035 (principal amount ¥10.6 billion)		74			74
1.740% senior notes due March 2036 (principal amount ¥15.0 billion)		104			0
1.039% senior notes due April 2036 (principal amount ¥10.0 billion)		69			70
1.594% senior notes due September 2037 (principal amount ¥6.5 billion)		45			45
1.750% senior notes due October 2038 (principal amount ¥8.9 billion)		62			62
1.920% senior notes due March 2039 (principal amount ¥16.5 billion)		114			0
1.122% senior notes due December 2039 (principal amount ¥6.3 billion)		44			44
1.264% senior notes due April 2041 (principal amount ¥10.0 billion)		69			70
2.160% senior notes due March 2044 (principal amount ¥5.7 billion)		40			0
2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion)		416			419
.963% subordinated bonds paid April 2024 (principal amount ¥30.0 billion)		0			211
1.560% senior notes due April 2051 (principal amount ¥20.0 billion)		139			140
2.144% senior notes due September 2052 (principal amount ¥12.0 billion)		83			84
1.958% subordinated bonds due December 2053 (principal amount ¥30.0 billion)		209			210
2.400% senior notes due March 2054 (principal amount ¥19.5 billion)		135			0
Yen-denominated loans:
Variable interest rate loan due August 2027 (.72% in 2024 and .35% in 2023,   principal amount ¥11.7 billion)		82			82
Variable interest rate loan due August 2029 (.82% in 2024 and .45% in 2023,   principal amount ¥25.3 billion)		177			178
Variable interest rate loan due August 2032 (.97% in 2024 and .60% in 2023,   principal amount ¥70.0 billion)		489			492
Finance lease obligations payable through 2030		5			6
Operating lease obligations payable through 2049		105			118
Total notes payable and lease obligations		$	7,978		$	7,364

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 2024, ALIJ redeemed ¥30.0 billion of its .963% subordinated bonds due April 2049.

In March 2024, the Parent Company issued five series of senior notes totaling ¥75.0 billion through a private placement. The first series, which totaled ¥18.3 billion, bears interest at a fixed rate of 1.600% per annum, payable semi-annually, and will mature in March 2034. The second series, which totaled ¥15.0 billion, bears interest at a fixed rate of 1.740% per annum, payable semi-annually, and will mature in March 2036. The third series, which totaled ¥16.5 billion, bears interest at a fixed rate of 1.920% per annum, payable semi-annually, and will mature in March 2039. The fourth series, which totaled ¥5.7 billion, bears interest at a fixed rate of 2.160% per annum, payable semi-annually, and will mature in March 2044. The fifth series, which totaled ¥19.5 billion, bears interest at a fixed rate of 2.400% per annum, payable semi-annually, and will mature in March 2054. These notes are redeemable at the Parent Company's option (i) in whole at any time or (ii) in part from time to time in an amount not less than 5% of the aggregate principal amount then outstanding of the notes to be redeemed.

In March 2024, the Parent Company issued three series of senior notes totaling ¥48.6 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥13.0 billion, bears interest at a fixed rate of 1.048% per annum, payable semi-annually, and will mature in March 2029. The second series, which totaled ¥27.9 billion, bears interest at a fixed rate of 1.412% per annum, payable semi-annually, and will mature in March 2031. The third series, which totaled ¥7.7 billion, bears interest at a fixed rate of 1.682% per annum, payable semi-annually, and will mature in March 2034. These notes are redeemable at the Parent Company’s option at any time, 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 addition, the notes maturing in March 2029, March 2031 and March 2034 are redeemable at the Parent Company's option, in whole or in part from time to time, on or after December 21, 2028, December 31, 2030 and September 21, 2033, respectively, at a redemption price equal to the aggregate principal amount of the applicable series to be redeemed plus accrued and unpaid interest on the principal amount to be redeemed to, but excluding, the date of redemption.

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $49 million and $48 million for the three-month periods and $145 million and $144 million for the nine-month periods ended September 30, 2024 and 2023, respectively.

A summary of the Company's lines of credit as of September 30, 2024 follows:

Borrower(s)	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 6, 2024	$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	May 9, 2027, 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 May 10, 2027	.28% to .45%, 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 15, 2027, 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) Secured Overnight Financing Rate (SOFR) for U.S. dollar-denominated borrowings or TIBOR for Japanese yen-denominated borrowings, in either case 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 the agent as its prime rate, or (3) SOFR for an interest period of one month plus 1.00%, in each case plus an applicable margin	No later than November 15, 2027	.08% to .20%, 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 rate determined by reference to SOFR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the highest of (1) the lender's USD short-term commercial loan rate and (2) the federal funds rate plus 1/2 of 1%	Up to 3 months	None	General corporate purposes
Aflac(1)	uncommitted revolving	364 days	December 2, 2024	$250 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum	No later than December 3, 2024	None	General corporate purposes
Aflac Incorporated(1) (Tranche 1)	uncommitted revolving	364 days	November 25, 2024	¥50.0 billion	¥0.0 billion	Three-month yen TIBOR plus 75 basis points per annum	No later than November 26, 2024	None	General corporate purposes
Aflac Incorporated(1) (Tranche 2)	uncommitted revolving	364 days	November 25, 2024	¥50.0 billion	¥0.0 billion	Three-month yen TIBOR plus 75 basis points per annum	No later than November 26, 2024	None	General corporate purposes
Aflac New York(1)	uncommitted revolving	364 days	December 2, 2024	$25 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum	No later than December 3, 2024	None	General corporate purposes
CAIC(1)	uncommitted revolving	364 days	December 2, 2024	$15 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum	No later than December 3, 2024	None	General corporate purposes

(1) Intercompany credit agreement

(continued)

Borrower(s)	Type	Term	Expiration Date	Capacity	Amount Outstanding	Interest Rate on Borrowed Amount	Maturity Period	Commitment Fee	Business Purpose
TOIC(1)	uncommitted revolving	364 days	December 2, 2024	$0.3 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum	No later than December 3, 2024	None	General corporate purposes
Aflac GI Holdings LLC(1)	uncommitted revolving	364 days	December 2, 2024	$30 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 75 basis points per annum	No later than December 3, 2024	None	General corporate purposes
Aflac Incorporated(1)	uncommitted revolving	364 days	December 2, 2024	$400 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 97 basis points per annum for U.S. dollar-denominated borrowings or three-month TIBOR plus 97 basis points per annum for Japanese yen-denominated borrowings	No later than December 3, 2024	None	General corporate purposes
Aflac Re(1)	uncommitted revolving	364 days	December 2, 2024	$400 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S. dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings	No later than December 3, 2024	None	General corporate purposes
Aflac Asset Management LLC(1)	uncommitted revolving	214 days	December 2, 2024	$25 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S. dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings	No later than December 3, 2024	None	General corporate purposes
Aflac Global Ventures LLC(1)	uncommitted revolving	214 days	December 2, 2024	$2 million	$0 million	Three-month term SOFR plus a 10 basis point SOFR adjustment and an additional 68 basis points per annum for U.S. dollar-denominated borrowings or three-month TIBOR plus 68 basis points per annum for Japanese yen-denominated borrowings	No later than December 3, 2024	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 September 30, 2024. No events of default or defaults occurred during the nine-month period ended September 30, 2024.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2023 Annual Report.