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BUSINESS SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2019
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. In addition, operating business units that are not individually reportable and business activities, including reinsurance retrocession activities, not included in Aflac Japan or Aflac U.S. are included in Corporate and other.

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 adjusted earnings. Adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S. GAAP total revenues excluding realized investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect Aflac’s underlying business performance. The Company excludes income
taxes related to operations to arrive at pretax adjusted earnings. Information regarding operations by reportable segment and Corporate and other, follows:
  
Three Months Ended
March 31,
 
(In millions)
2019
 
2018
 
Revenues:
 
 
 
 
Aflac Japan:
 
 
 
 
   Net earned premiums
$
3,180

 
$
3,263

 
   Net investment income, less amortized hedge costs
610

 
588

 
   Other income
12

 
12

 
               Total Aflac Japan
3,802

 
3,863

 
Aflac U.S.:
 
 
 
 
   Net earned premiums
1,461

 
1,427

 
   Net investment income
177

 
175

 
   Other income
2

 
2

 
           Total Aflac U.S.
1,640

 
1,604

 
Corporate and other
95

 
79

 
           Total adjusted revenues
5,537

 
5,546

 
Realized investment gains (losses) (1),(2),(3)
120

 
(82
)
 
           Total revenues
$
5,657

 
$
5,464

 
(1) Amortized hedge costs of $62 and $55 for the three-month periods ended March 31, 2019, and 2018, respectively, related to certain foreign currency exposure management strategies have been reclassified from realized investment gains (losses) and reported as a deduction from net investment income when analyzing operations.
(2) Amortized hedge income of $20 and $2 for the three-month periods ended March 31, 2019, and 2018, respectively, related to certain foreign currency exposure management strategies has been reclassified from realized investment gains (losses) and reported as an increase to net investment income when analyzing operations.
(3) Net interest cash flows from derivatives associated with certain investment strategies of $(7) for the three-month period ended March 31, 2019 and an immaterial amount in 2018, respectively, have been reclassified from realized investment gains (losses) and included in adjusted earnings as a component of net investment income.

  
Three Months Ended
March 31,
 
(In millions)
2019
 
2018
 
Pretax earnings:
 
 
 
 
Aflac Japan
$
834

 
$
818

 
Aflac U.S.
323

 
337

 
Corporate and other
(18
)
 
(46
)
 
    Pretax adjusted earnings
1,139

 
1,109

 
Realized investment gains (losses) (1),(2),(3),(4)
103

 
(98
)
 
Other income (loss)
0

 
(29
)
 
    Total earnings before income taxes
$
1,242

 
$
982

 
Income taxes applicable to pretax adjusted earnings
$
291

 
$
289

 
Effect of foreign currency translation on after-tax
adjusted earnings
(8
)
 
21

 

(1) Amortized hedge costs of $62 and $55 for the three-month periods ended March 31, 2019, and 2018, respectively, related to certain foreign currency management strategies have been reclassified from realized investment gains (losses) and reported as a deduction from pretax adjusted earnings when analyzing operations.
(2) Amortized hedge income of $20 and $2 for the three-month periods ended March 31, 2019, and 2018, respectively, related to certain foreign currency management strategies has been reclassified from realized investment gains (losses) and reported as an increase in pretax adjusted earnings when analyzing operations.
(3) Net interest cash flows from derivatives associated with certain investment strategies of $(7) for the three-month period ended March 31, 2019 and an immaterial amount in 2018, respectively, have been reclassified from realized investment gains (losses) and included in adjusted earnings as a component of net investment income.
(4) A gain of $17 and $17 for the three-month periods ended March 31, 2019, and 2018, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable have been reclassified from realized investment gains (losses) and included in adjusted earnings when analyzing operations


Assets were as follows:
(In millions)
March 31,
2019
 
December 31,
2018
Assets:
 
 
 
 
 
 
 
Aflac Japan
 
$
123,042

 
 
 
$
118,342

 
Aflac U.S.
 
19,965

 
 
 
19,100

 
Corporate and other
 
2,672

 
 
 
2,964

 
    Total assets
 
$
145,679

 
 
 
$
140,406