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BUSINESS SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 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. 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) 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 pretax operating earnings 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 earnings before income taxes. 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 |  |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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