BUSINESS SEGMENT AND FOREIGN INFORMATION

12 Months Ended

Dec. 31, 2014

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 includes interest cash flows associated with notes payable and 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), nonrecurring items and other non-operating income (loss). 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)	2014					2013					2012
Revenues:
Aflac Japan:
Net earned premiums:
Cancer		$	5,596				$	6,123				$	7,537
Medical and other health		3,770					4,282					5,244
Life insurance		4,495					4,577					4,370
Net investment income		2,662					2,651					2,845
Other income		32					55					57
Total Aflac Japan		16,555					17,688					20,053
Aflac U.S.:
Earned premiums:
Accident/disability		2,303					2,284					2,213
Cancer		1,279					1,283					1,282
Other health		1,371					1,334					1,259
Life insurance		258					252					242
Net investment income		645					632					613
Other income		3					6					19
Total Aflac U.S.		5,859					5,791					5,628
Other business segments		43					49					46
Total business segment revenues		22,457					23,528					25,727
Realized investment gains (losses)		171			(1)		389			(1)		(349		)
Corporate		281					302					269
Intercompany eliminations		(248		)			(308		)			(276		)
Other non-operating income (loss)		67					28					(7		)
Total revenues		$	22,728				$	23,939				$	25,364

⁽¹⁾ Excluding a gain of $44 in 2014 and $10 in 2013 related to the interest rate component of the change in fair value of foreign currency swaps on notes payable which is classified as an operating gain when analyzing segment operations

(In millions)	2014					2013					2012
Pretax earnings:
Aflac Japan		$	3,458				$	3,628				$	3,904
Aflac U.S.		1,073					1,038					997
Other business segments		(2		)			(1		)			(3		)
Total business segment pretax operating earnings		4,529					4,665					4,898
Interest expense, noninsurance operations		(198		)			(198		)			(184		)
Corporate and eliminations		(78		)			(68		)			(56		)
Pretax operating earnings		4,253					4,399					4,658
Realized investment gains (losses)		171			(1)		389			(1)		(349		)
Other non-operating income (loss)		67					28					(7		)
Total earnings before income taxes		$	4,491				$	4,816				$	4,302
Income taxes applicable to pretax operating earnings		$	1,456				$	1,512				$	1,561
Effect of foreign currency translation on operating earnings		(117		)			(357		)			8

⁽¹⁾ Excluding a gain of $44 in 2014 and $10 in 2013 related to the interest rate component of the change in fair value of foreign currency swaps on notes payable which is classified as an operating gain when analyzing segment operations

Assets as of December 31 were as follows:

(In millions)	2014				2013				2012
Assets:
Aflac Japan		$	98,525			$	102,973			$	113,678
Aflac U.S.		18,383				16,112				16,122
Other business segments		128				155				154
Total business segment assets		117,036				119,240				129,954
Corporate		24,636				19,909				20,318
Intercompany eliminations		(21,905		)		(17,842		)		(19,178		)
Total assets		$	119,767			$	121,307			$	131,094

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.

	2014				2013				2012
Statements of Earnings:
Weighted-average yen/dollar exchange rate		105.46				97.54				79.81
Yen percent strengthening (weakening)		(7.5		)%		(18.2		)%		(.1		)%
Exchange effect on pretax operating earnings (in millions)		$	(180	)		$	(534	)		$	11

	2014				2013
Balance Sheets:
Yen/dollar exchange rate at December 31		120.55				105.39
Yen percent strengthening (weakening)		(12.6		)%		(17.8		)%
Exchange effect on total assets (in millions)		$	(10,706	)		$	(17,836	)
Exchange effect on total liabilities (in millions)		(12,025		)		(19,806		)

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 13 for information concerning restrictions on transfers from Aflac Japan.

(In millions)	2014			2013			2012
Management fees		$	39		$	37		$	30
Allocated expenses		71			74			58
Profit repatriation		1,704			771			422
Total transfers from Aflac Japan		$	1,814		$	882		$	510

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)	2014			2013
Property and equipment:
Land		$	168		$	168
Buildings		393			444
Equipment and furniture		305			329
Total property and equipment		866			941
Less accumulated depreciation		437			460
Net property and equipment		$	429		$	481

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, 2014, $386 million, or 45.8% of total receivables, were related to Aflac Japan's operations, compared with $731 million, or 82.9%, at December 31, 2013.