BUSINESS SEGMENT AND FOREIGN INFORMATION

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT AND FOREIGN INFORMATION

The Company consists of two reportable insurance business segments: Aflac Japan and Aflac U.S., both of which sell supplemental health and life insurance. Operating business segments that are not individually reportable and business activities not included in Aflac Japan or Aflac U.S. are included in the "Other business segments" category.

We do not allocate corporate overhead expenses to business segments. We evaluate and manage our business segments using a financial performance measure called pretax operating earnings. Our definition of operating earnings excludes the following items from net earnings on an after-tax basis: realized investment gains/losses (securities transactions, impairments, and the impact of derivative and hedging activities) and nonrecurring items. We then exclude income taxes related to operations to arrive at pretax operating earnings. Information regarding operations by segment for the years ended December 31 follows:

(In millions)	2012				2011				2010
Revenues:
Aflac Japan:
Earned premiums:
Cancer		$	7,537			$	7,541			$	6,852
Medical and other health		5,244				5,158				4,574
Life insurance		4,370				2,920				2,061
Net investment income		2,845				2,688				2,453
Other income		57				46				37
Total Aflac Japan		20,053				18,353				15,977
Aflac U.S.:
Earned premiums:
Accident/disability		2,213				2,194				2,104
Cancer		1,282				1,258				1,239
Other health		1,259				1,061				1,026
Life insurance		242				230				217
Net investment income		613				588				549
Other income		19				10				11
Total Aflac U.S.		5,628				5,341				5,146
Other business segments		46				54				51
Total business segment revenues		25,727				23,748				21,174
Realized investment gains (losses)		(349		)		(1,552		)		(422		)
Corporate		262				241				217
Intercompany eliminations		(276		)		(266		)		(237		)
Total revenues		$	25,364			$	22,171			$	20,732

(In millions)	2012				2011				2010
Pretax earnings:
Aflac Japan		$	3,904			$	3,829			$	3,260
Aflac U.S.		997				904				922
Other business segments		(3		)		1				(2		)
Total business segment pretax operating earnings		4,898				4,734				4,180
Interest expense, noninsurance operations		(184		)		(168		)		(140		)
Corporate and eliminations		(56		)		(64		)		(57		)
Pretax operating earnings		4,658				4,502				3,983
Realized investment gains (losses)		(349		)		(1,552		)		(422		)
Other non-operating income (loss)		(7		)		0				0
Total earnings before income taxes		$	4,302			$	2,950			$	3,561
Income taxes applicable to pretax operating earnings		$	1,561			$	1,556			$	1,381
Effect of foreign currency translation on operating earnings		8				169				90

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.

Assets as of December 31 were as follows:

(In millions)	2012				2011				2010
Assets:
Aflac Japan		$	113,678			$	101,692			$	86,487
Aflac U.S.		16,122				13,942				12,874
Other business segments		154				160				155
Total business segment assets		129,954				115,794				99,516
Corporate		20,318				16,182				13,538
Intercompany eliminations		(19,178		)		(15,739		)		(12,811		)
Total assets		$	131,094			$	116,237			$	100,243

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.

Yen-Translation Effects: The following table shows the yen/dollar exchange rates used for or during the periods ended December 31. Exchange effects were calculated using the same yen/dollar exchange rate for the current year as for each respective prior year.

	2012				2011				2010
Statements of Earnings:
Weighted-average yen/dollar exchange rate		79.81				79.75				87.73
Yen percent strengthening (weakening)		(.1		)%		10.0		%		6.6		%
Exchange effect on net earnings (in millions)			$38				$160				$189

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.

	2012				2011
Balance Sheets:
Yen/dollar exchange rate at December 31		86.58				77.74
Yen percent strengthening (weakening)		(10.2		)%		4.8		%
Exchange effect on total assets (in millions)		$	(10,861	)		$	4,208
Exchange effect on total liabilities (in millions)		(11,441		)		4,210

Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2012 related to deferred policy acquisition costs.

Transfers of funds from Aflac Japan: Aflac Japan makes payments to the Parent Company for management fees and to Aflac U.S. for allocated expenses and profit repatriations. Information on transfers for each of the years ended December 31 is shown below. See Note 12 for information concerning restrictions on transfers from Aflac Japan.

(In millions)	2012			2011			2010
Management fees		$	30		$	28		$	30
Allocated expenses		58			43			37
Profit repatriation		422			143			317
Total transfers from Aflac Japan		$	510		$	214		$	384

Policyholder Protection Corporation: The total liability accrued for our obligations to the Japanese Life Insurance Policyholder Protection Corporation (LIPPC) was $23 million (2.0 billionyen) at December 31, 2012, compared with $71 million (5.5 billion yen) a year ago. The obligation is payable in semi-annual installments through 2013.

Property and Equipment: The costs of buildings, furniture and equipment are depreciated principally on a straight-line basis over their estimated useful lives (maximum of 50 years for buildings and 20 years for furniture and equipment). Expenditures for maintenance and repairs are expensed as incurred; expenditures for betterments are capitalized and depreciated. Classes of property and equipment as of December 31 were as follows:

(In millions)	2012			2011
Property and equipment:
Land		$	161		$	176
Buildings		535			575
Equipment		326			312
Total property and equipment		1,022			1,063
Less accumulated depreciation		458			446
Net property and equipment		$	564		$	617

Receivables: Receivables consist primarily of monthly insurance premiums due from individual policyholders or their employers for payroll deduction of premiums, net of an allowance for doubtful accounts. At December 31, 2012, $566 million, or 58.2% of total receivables, were related to Aflac Japan's operations, compared with $309 million, or 45.4%, at December 31, 2011.