BUSINESS SEGMENT INFORMATION

3 Months Ended

Jun. 30, 2022

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, the Parent Company, other 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 net 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 the Company'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 June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Revenues:
Aflac Japan:
Net earned premiums	$	2,419	$	2,987	$	5,143	$	6,111
Adjusted net investment income (1),(2)	723		792		1,402		1,497
Other income	9		10		18		22
Total adjusted revenue Aflac Japan	3,151		3,789		6,563		7,630
Aflac U.S.:
Net earned premiums	1,394		1,408		2,807		2,830
Adjusted net investment income (3)	193		189		377		366
Other income	41		30		83		58
Total adjusted revenue Aflac U.S.	1,628		1,627		3,267		3,254
Corporate and other (4),(5)	42		50		116		133
Total adjusted revenues	4,821		5,466		9,946		11,017
Net investment gains (losses) (1),(2),(3),(4)	579		98		726		416
Total revenues	$	5,400	$	5,564	$	10,672	$	11,433

(1) Amortized hedge costs of $30 and $17 for the three-month periods and $55 and $36 for the six-month periods ended June 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations.

(2) Net interest cash flows from derivatives associated with certain investment strategies of $(2) and $(9) for the three-month periods and $(12) and $(17) for the six-month periods ended June 30, 2022 and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations.

(3) Net interest cash flows from derivatives associated with certain investment strategies of $1 for the three-month period and $2 for the six-month period ended June 30, 2022, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations.

(4) Amortized hedge income of $14 and $16 for the three-month periods and $25 and $33 for the six-month periods ended June 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase to net investment income when analyzing operations.

(5) The change in value of federal historic rehabilitation and solar investments in partnerships of $31 and $30 for the three-month periods and $42 and $30 for the six-month periods ended June 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $28 and $12 for the three-month periods and $44 and $25 for the six-month periods ended June 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments.

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Pretax earnings:
Aflac Japan (1),(2)	$	860	$	1,004	$	1,722	$	1,891
Aflac U.S. (3)	349		413		674		859
Corporate and other (4),(5),(6)	(75)		(76)		(120)		(102)
Pretax adjusted earnings (7)	1,134		1,341		2,276		2,648
Net investment gains (losses) (1),(2),(3),(4),(5)	567		85		701		388
Other income (loss)	0		(53)		0		(59)
Total earnings before income taxes	$	1,701	$	1,373	$	2,977	$	2,977
Income taxes applicable to pretax adjusted earnings	$	194	$	262	$	409	$	510
Effect of foreign currency translation on after-tax   adjusted earnings	(57)		(6)		(94)		7

(1) Amortized hedge costs of $30 and $17 for the three-month periods and $55 and $36 for the six-month periods ended June 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations.

(2) Net interest cash flows from derivatives associated with certain investment strategies of $(2) and $(9) for the three-month periods and $(12) and $(17) for the six-month periods ended June 30, 2022 and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations.

(3) Net interest cash flows from derivatives associated with certain investment strategies of $1 for the three-month period and $2 for the six-month period ended June 30, 2022, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations.

(4) Amortized hedge income of $14 and $16 for the three-month periods and $25 and $33 for the six-month periods ended June 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase in net investment income when analyzing operations.

(5) A gain of $12 and $14 for the three-month periods and $25 and $27 for the six-month periods ended June 30, 2022, and 2021, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable has been reclassified from net investment gains (losses) and included in adjusted earnings when analyzing operations.

(6) The change in value of federal historic rehabilitation and solar investments in partnerships of $31 and $30 for the three-month periods and $42 and $30 for the six-month periods ended June 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $28 and $12 for the three-month periods and $44 and $25 for the six-month periods ended June 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments.

(7) Includes $41 and $45 for the three-month periods and $82 and $89 for the six-month periods ended June 30, 2022, and 2021, respectively, of interest expense on debt.

Assets were as follows:

(In millions)	June 30, 2022			December 31, 2021
Assets:
Aflac Japan		$	107,698		$	128,536
Aflac U.S.		20,828			23,106
Corporate and other		7,103			5,900
Total assets		$	135,629		$	157,542