BUSINESS SEGMENT AND FOREIGN INFORMATION

12 Months Ended

Dec. 31, 2015

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, including reinsurance retrocession 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)	2015					2014				2013
Revenues:
Aflac Japan:
Net earned premiums:
Cancer		$	4,933				$	5,596			$	6,123
Medical and other health		3,092					3,770				4,282
Life insurance		4,021					4,495				4,577
Net investment income		2,436					2,662				2,651
Other income		31					32				55
Total Aflac Japan		14,513					16,555				17,688
Aflac U.S.:
Net earned premiums:
Accident/disability		2,391					2,303				2,284
Cancer		1,293					1,279				1,283
Other health		1,395					1,371				1,334
Life insurance		268					258				252
Net investment income		678					645				632
Other income		8					3				6
Total Aflac U.S.		6,033					5,859				5,791
Other business segments		225					43				49
Total business segment revenues		20,771					22,457				23,528
Realized investment gains (losses) (1)		55					171				389
Corporate		282					281				302
Intercompany eliminations		(201		)			(248		)		(308		)
Other non-operating income (loss)		(35		)	(2)		67				28
Total revenues		$	20,872				$	22,728			$	23,939

⁽¹⁾ Excluding a gain of $85 in 2015, $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

⁽²⁾ Includes a loss of $20 related to the change in value of yen repatriation received in advance of settlement of certain foreign currency derivatives. The loss was offset by derivative gains included in realized investment gains (losses).

(In millions)	2015					2014				2013
Pretax earnings:
Aflac Japan		$	3,175				$	3,458			$	3,628
Aflac U.S.		1,101					1,073				1,038
Other business segments		14					(2		)		(1		)
Total business segment pretax operating earnings		4,290					4,529				4,665
Interest expense, noninsurance operations		(146		)			(198		)		(198		)
Corporate and eliminations		(71		)			(78		)		(68		)
Pretax operating earnings		4,073					4,253				4,399
Realized investment gains (losses) (1)		55					171				389
Other non-operating income (loss)		(266		)	(2),(3)		67				28
Total earnings before income taxes		$	3,862				$	4,491			$	4,816
Income taxes applicable to pretax operating earnings		$	1,403				$	1,456			$	1,512
Effect of foreign currency translation on operating earnings		(198		)			(117		)		(357		)

⁽¹⁾ Excluding a gain of $85 in 2015, $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

⁽²⁾ Includes a loss of $20 related to the change in value of yen repatriation received in advance of settlement of certain foreign currency derivatives. This loss was offset by derivative gains included in realized investment gains (losses).

⁽³⁾ Includes expense of $230 for the make-whole payment associated with the early extinguishment of debt

Assets as of December 31 were as follows:

(In millions)	2015				2014				2013
Assets:
Aflac Japan		$	97,646			$	98,525			$	102,973
Aflac U.S.		18,537				18,383				16,112
Other business segments		188				128				155
Total business segment assets		116,371				117,036				119,240
Corporate		23,415				24,636				19,909
Intercompany eliminations		(21,490		)		(21,905		)		(17,842		)
Total assets		$	118,296			$	119,767			$	121,307

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.

	2015				2014				2013
Statements of Earnings:
Weighted-average yen/dollar exchange rate		120.99				105.46				97.54
Yen percent strengthening (weakening)		(12.8		)%		(7.5		)%		(18.2		)%
Exchange effect on pretax operating earnings (in millions)		$	(288	)		$	(180	)		$	(534	)

	2015				2014
Balance Sheets:
Yen/dollar exchange rate at December 31		120.61				120.55
Yen percent strengthening (weakening)		(.05		)%		(12.6		)%
Exchange effect on total assets (in millions)		$	(36	)		$	(10,706	)
Exchange effect on total liabilities (in millions)		(41		)		(12,025		)

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)	2015			2014			2013
Management fees		$	53		$	39		$	37
Allocated expenses		101			71			74
Profit repatriation		2,139			1,704			771
Total transfers from Aflac Japan		$	2,293		$	1,814		$	882

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)	2015			2014
Property and equipment:
Land		$	166		$	168
Buildings		400			393
Equipment and furniture		329			305
Total property and equipment		895			866
Less accumulated depreciation		468			437
Net property and equipment		$	427		$	429

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, 2015, $257 million, or 36.4% of total receivables, were related to Aflac Japan's operations, compared with $386 million, or 45.8%, at December 31, 2014.