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.

The Company does not allocate corporate overhead expenses to business segments. Consistent with U.S. GAAP accounting guidance for segment reporting, the Company evaluates and manages its business segments using a financial performance measure called pretax operating earnings. The Company's definition of operating earnings includes interest cash flows associated with notes payable and amortized 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, change in loan loss reserves 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. The Company excludes income taxes related to operations to arrive at pretax operating earnings. Information regarding operations by segment follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	2017		2016			2017			2016
Revenues:
Aflac Japan:
Net earned premiums	$	3,200	$	3,596		$	9,616		$	10,177
Net investment income, less amortized hedge costs ⁽¹⁾	561		607			1,676			1,802
Other income	11		10			31			29
Total Aflac Japan	3,772		4,213			11,323			12,008
Aflac U.S.:
Net earned premiums	1,393		1,365			4,172			4,093
Net investment income	181		176			539			526
Other income	1		1			3			5
Total Aflac U.S.	1,575		1,542			4,714			4,624
Other business segments	69		71			204			207
Total business segment revenues	5,416		5,826			16,241			16,839
Corporate and eliminations	19		20			59			63
Total operating revenues	5,435		5,846			16,300			16,902
Realized investment gains (losses) ^{(1), (2), (3)}	71		(130		)	(57		)	(298		)
Total revenues	$	5,506	$	5,716		$	16,243		$	16,604

⁽¹⁾Amortized hedge costs related to hedging U.S. dollar-denominated investments held in Aflac Japan were $60 and $54 for the three-month periods and $168 and $123 for the nine-month periods ended September 30, 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 $19 and $20 for the three-month periods and $60 and $64 for the nine-month periods ended September 30, 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 September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Pretax earnings:
Aflac Japan ⁽¹⁾	$	748		$	827		$	2,308		$	2,436
Aflac U.S.	316			323			956			946
Other business segments	5			4			9			12
Total business segment pretax operating earnings	1,069			1,154			3,273			3,394
Interest expense, noninsurance operations	(30		)	(31		)	(89		)	(90		)
Corporate and eliminations	(25		)	(31		)	(70		)	(91		)
Pretax operating earnings	1,014			1,092			3,114			3,213
Realized investment gains (losses) ^{(1), (2), (3)}	71			(130		)	(57		)	(298		)
Other non-operating income (loss)⁽³⁾	(10		)	1			(38		)	(1		)
Total earnings before income taxes	$	1,075		$	963		$	3,019		$	2,914
Income taxes applicable to pretax operating earnings	$	338		$	379		$	1,031		$	1,112
Effect of foreign currency translation on after-tax operating earnings	(29		)	61			(31		)	110

⁽¹⁾Amortizedhedge costs related to hedging U.S. dollar-denominated investments held in Aflac Japan were $60 and $54 for the three-month periods and $168 and $123 for the nine-month periods ended September 30, 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.

Assets were as follows:



(In millions)	September 30, 2017			December 31, 2016
Assets:
Aflac Japan		$	113,625		$	107,858
Aflac U.S.		20,348			19,453
Other business segments		513			270
Total business segment assets		134,486			127,581
Corporate and eliminations		1,597			2,238
Total assets		$	136,083		$	129,819