BUSINESS SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT 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. Consistent with U.S. GAAP accounting guidance for segment reporting, 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 hedge costs related to foreign currency denominated investments, but excludes certain items that cannot be predicted or that are outside of management's control, such as realized investment gains and losses from securities transactions, impairments, and certain derivative and foreign currency activities; nonrecurring items; and other non-operating income (loss) from net earnings. Nonrecurring and other non-operating items consist of infrequent events and activity not associated with the normal course of the Company’s insurance operations and do not reflect Aflac’s underlying business performance. We exclude income taxes related to operations to arrive at pretax operating earnings. Information regarding operations by segment follows:

	Three Months Ended March 31,
(In millions)	2017			2016
Revenues:
Aflac Japan:
Net earned premiums	$	3,194		$	3,179
Net investment income, less amortized hedge costs (1)	557			590
Other income	10			8
Total Aflac Japan	3,761			3,777
Aflac U.S.:
Net earned premiums	1,390			1,367
Net investment income	178			174
Other income	1			3
Total Aflac U.S.	1,569			1,544
Other business segments	67			65
Total business segment revenues	5,397			5,386
Realized investment gains (losses) (1), (2), (3)	(109		)	40
Corporate	87			67
Intercompany eliminations and other	(66		)	(42		)
Total revenues	$	5,309		$	5,451

⁽¹⁾ Hedge costs related to hedging U.S. dollar-denominated investments held in Aflac Japan were $52 and $32 for the three-month periods ended March 31, 2017, and 2016, respectively, and have been reclassified from realized investment gains (losses) and reported as a deduction from net investment income when analyzing segment operations to conform to current year reporting.

⁽²⁾ Excluding a gain of $21 and $22 for the three-month periods ended March 31, 2017, and 2016, respectively, 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

⁽³⁾Prior year foreign currency transaction gains and losses have been reclassified from other non-operating income (loss) to realized investment gains (losses) to conform to current-year reporting classifications. These reclassifications had no impact on total revenues.

	Three Months Ended March 31,
(In millions)	2017			2016
Pretax earnings:
Aflac Japan (1)	$	769		$	806
Aflac U.S.	310			332
Other business segments	0			3
Total business segment pretax operating earnings	1,079			1,141
Interest expense, noninsurance operations	(29		)	(29		)
Corporate and eliminations	(23		)	(35		)
Pretax operating earnings	1,027			1,077
Realized investment gains (losses) (1), (2), (3)	(109		)	40
Other non-operating income (loss) (3)	(20		)	0
Total earnings before income taxes	$	898		$	1,117
Income taxes applicable to pretax operating earnings	$	351		$	372
Effect of foreign currency translation on after-tax operating earnings	5			13

⁽¹⁾ Hedge costs related to hedging U.S. dollar-denominated investments held in Aflac Japan were $52 and $32 for the three-month periods ended March 31, 2017, and 2016, respectively, and have been reclassified from realized investment gains (losses) and reported as a deduction from pretax operating earnings when analyzing segment operations to conform to current year reporting.

⁽²⁾ Excluding a gain of $21 and $22 for the three-month periods ended March 31, 2017, and 2016, respectively, 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

⁽³⁾Prior year foreign currency transaction gains and losses have been reclassified from other non-operating income (loss) to realized investment gains (losses) to conform to current-year reporting classifications. These reclassifications had no impact on total earnings before income taxes.

Assets were as follows:

(In millions)	March 31, 2017				December 31, 2016
Assets:
Aflac Japan		$	112,023			$	107,858
Aflac U.S.		19,817				19,453
Other business segments		338				270
Total business segment assets		132,178				127,581
Corporate		26,024				26,476
Intercompany eliminations		(24,552		)		(24,238		)
Total assets		$	133,650			$	129,819