XML 31 R10.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

BUSINESS SEGMENT AND FOREIGN INFORMATION | 12 Months Ended
--- | ---
Dec. 31, 2019
Segment Reporting [Abstract] |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT AND FOREIGN 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 for the years ended December 31 follows:
(In millions) | 2019 |  | 2018 |  | 2017
Revenues: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan: |  |  |  |  |  |  |  |  |  |  |
Net earned premiums: |  |  |  |  |  |  |  |  |  |  |
Cancer |  | $ | 6,031 |  |  |  |  | $ | 5,849 |  |  |  |  | $ | 5,612 |  |
Medical and other health |  | 3,582 |  |  |  |  | 3,516 |  |  |  |  | 3,379 |  |
Life insurance |  | 3,159 |  |  |  |  | 3,397 |  |  |  |  | 3,761 |  |
Net investment income, less amortized hedge costs (1),(2) |  | 2,496 |  |  |  |  | 2,403 |  |  |  |  | 2,235 |  |
Other income |  | 45 |  |  |  |  | 41 |  |  |  |  | 41 |  |
Total Aflac Japan |  | 15,313 |  |  |  |  | 15,206 |  |  |  |  | 15,028 |  |
Aflac U.S.: |  |  |  |  |  |  |  |  |  |  |
Net earned premiums: |  |  |  |  |  |  |  |  |  |  |
Accident/disability |  | 2,665 |  |  |  |  | 2,611 |  |  |  |  | 2,537 |  |
Cancer |  | 1,309 |  |  |  |  | 1,311 |  |  |  |  | 1,308 |  |
Other health |  | 1,548 |  |  |  |  | 1,508 |  |  |  |  | 1,445 |  |
Life insurance |  | 286 |  |  |  |  | 278 |  |  |  |  | 273 |  |
Net investment income |  | 720 |  |  |  |  | 727 |  |  |  |  | 721 |  |
Other income |  | 22 |  |  |  |  | 8 |  |  |  |  | 5 |  |
Total Aflac U.S. |  | 6,550 |  |  |  |  | 6,443 |  |  |  |  | 6,289 |  |
Corporate and other (3) |  | 393 |  |  |  |  | 339 |  |  |  |  | 272 |  |
Total adjusted revenues |  | 22,256 |  |  |  |  | 21,988 |  |  |  |  | 21,589 |  |
Realized investment gains (losses) (1),(2),(3) |  | 51 |  |  |  |  | (230 | ) |  |  |  | 78 |  |
Total revenues |  | $ | 22,307 |  |  |  |  | $ | 21,758 |  |  |  |  | $ | 21,667 |  |
(1) Amortized hedge costs of $257, $236 and $228 in 2019, 2018 and 2017, 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) Net interest cash flows from derivatives associated with certain investment strategies of $(17) in 2019 and an immaterial amount in 2018 have been reclassified from realized investment gains (losses) and included in adjusted earnings as a component of net investment income. (3) Amortized hedge income of $89 in 2019 and $36 in 2018 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.
(In millions) | 2019 |  | 2018 |  | 2017
Pretax earnings: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan (1),(2) |  | $ | 3,261 |  |  |  |  | $ | 3,208 |  |  |  |  | $ | 3,054 |  |
Aflac U.S. |  | 1,272 |  |  |  |  | 1,285 |  |  |  |  | 1,245 |  |
Corporate and other (3),(4) |  | (72 | ) |  |  |  | (139 | ) |  |  |  | (212 | ) |
Pretax adjusted earnings (5) |  | 4,461 |  |  |  |  | 4,354 |  |  |  |  | 4,087 |  |
Realized investment gains (losses) (1),(2),(3),(4) |  | (15 | ) |  |  |  | (297 | ) |  |  |  | 0 |  |
Other income (loss) (6) |  | (1 | ) |  |  |  | (74 | ) |  |  |  | (69 | ) |
Total earnings before income taxes |  | $ | 4,445 |  |  |  |  | $ | 3,983 |  |  |  |  | $ | 4,018 |  |
Income taxes applicable to pretax adjusted earnings |  | $ | 1,147 |  |  |  |  | $ | 1,129 |  |  |  |  | $ | 1,370 |  |
Effect of foreign currency translation on after-tax adjusted earnings |  | 15 |  |  |  |  | 28 |  |  |  |  | (41 | ) |
(1) Amortized hedge costs of $257, $236 and $228 in 2019, 2018 and 2017, 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) Net interest cash flows from derivatives associated with certain investment strategies of $(17) in 2019 and an immaterial amount in 2018 have been reclassified from realized investment gains (losses) and included in adjusted earnings as a component of net investment income. (3) Amortized hedge income of $89 in 2019 and $36 in 2018 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. (4) A gain of $66 in 2019, $67 in 2018 and $77 in 2017, 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. (5) Includes $135, $122 and $122 of interest expense on debt in 2019, 2018 and 2017 (6) Includes expense of $13 in 2017 for the early extinguishment of debt Assets as of December 31 were as follows:
(In millions) | 2019 |  | 2018 |
Assets: |  |  |  |  |  |  |  |
Aflac Japan |  | $ | 127,523 |  |  |  |  | $ | 118,342 |  |  |
Aflac U.S. |  | 20,945 |  |  |  |  | 19,100 |  |  |
Corporate and other |  | 4,300 |  |  |  |  | 2,964 |  |  |
Total assets |  | $ | 152,768 |  |  |  |  | $ | 140,406 |  |  |
Yen-Translation Effects:The following table shows the yen/dollar exchange rates used for or during the periods ended December 31. Exchange effects were calculated using the same yen/dollar exchange rate for the current year as for each respective prior year.
| 2019 |  | 2018 |  | 2017
Statements of Earnings: |  |  |  |  |  |  |  |  |  |  |
Weighted-average yen/dollar exchange rate (1) |  | 109.07 |  |  |  |  | 110.39 |  |  |  |  | 112.16 |  |
Yen percent strengthening (weakening) |  | 1.2 | % |  |  |  | 1.6 | % |  |  |  | (3.1 | )% |
Exchange effect on pretax adjusted earnings (in millions) |  | $ | 20 |  |  |  |  | $ | 38 |  |  |  |  | $ | (63 | ) |
| 2019 |  | 2018
Balance Sheets: |  |  |  |  |  |  |
Yen/dollar exchange rate at December 31(1) |  | 109.56 |  |  |  |  | 111.00 |  |
Yen percent strengthening (weakening) |  | 1.3 | % |  |  |  | 1.8 | % |
Exchange effect on total assets (in millions) |  | $ | 1,225 |  |  |  |  | $ | 1,362 |  |
Exchange effect on total liabilities (in millions) |  | 1,533 |  |  |  |  | 1,270 |  |
(1) Rates are based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM) Transfers of funds from Aflac Japan:Aflac Japan makes payments to the Parent Company for management fees, allocated expenses and remittances of earnings. Prior to the Aflac Japan branch conversion on April 1, 2018, Aflac Japan paid allocated expenses and profit remittances to Aflac U.S. Information on transfers for each of the years ended December 31 is shown below. See Note 13 for information concerning restrictions on transfers from Aflac Japan.
(In millions) | 2019 |  | 2018 |  | 2017
Management fees |  | $ | 75 |  |  |  |  | $ | 136 |  |  |  |  | $ | 93 |  |
Allocated expenses |  | 4 |  |  |  |  | 24 |  |  |  |  | 109 |  |
Profit remittances |  | 2,070 |  |  |  |  | 808 |  |  |  |  | 1,150 |  |
Total transfers from Aflac Japan |  | $ | 2,149 |  |  |  |  | $ | 968 |  |  |  |  | $ | 1,352 |  |
Property and Equipment:The costs of buildings, furniture and equipment are depreciated principally on a straight-line basis over their estimated useful lives (maximum of 50 years for buildings and 20 years for furniture and equipment). Expenditures for maintenance and repairs are expensed as incurred; expenditures for betterments are capitalized and depreciated. Classes of property and equipment as of December 31 were as follows:
(In millions) | 2019 |  | 2018
Property and equipment: |  |  |  |  |  |  |
Land |  | $ | 168 |  |  |  |  | $ | 168 |  |
Buildings |  | 473 |  |  |  |  | 456 |  |
Equipment and furniture |  | 549 |  |  |  |  | 400 |  |
Total property and equipment |  | 1,190 |  |  |  |  | 1,024 |  |
Less accumulated depreciation |  | 609 |  |  |  |  | 581 |  |
Net property and equipment |  | $ | 581 |  |  |  |  | $ | 443 |  |
Receivables:Receivables consist primarily of monthly insurance premiums due from individual policyholders or their employers for payroll deduction of premiums, net of an allowance for doubtful accounts. At December 31, 2019, $258 million, or 31.2% of total receivables, were related to Aflac Japan's operations, compared with $334 million, or 39.2%, at December 31, 2018.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration