8. NOTES PAYABLE

A summary of notes payable as of December 31 follows:


(In millions)	2011			2010
8.50% senior notes due May 2019	$	850		$	850
6.45% senior notes due August 2040		448	⁽¹⁾		448	⁽¹⁾
6.90% senior notes due December 2039		396	⁽²⁾		396	⁽²⁾
3.45% senior notes due August 2015		300			300
Yen-denominated Uridashi notes:
1.52% notes paid September 2011 (principal amount 15 billion yen)		0			184
2.26% notes due September 2016 (principal amount 8 billion yen)		103			98
Variable interest rate notes paid September 2011 (.66% at December 2010, principal amount 20 billion yen)		0			245
Yen-denominated Samurai notes:
1.47% notes due July 2014 (principal amount 28.7 billion yen)		369			0
1.87% notes due June 2012 (principal amount 26.6 billion yen)		342			327
1.84% notes due July 2016 (principal amount 15.8 billion yen)		203			0
Variable interest rate notes due July 2014 (1.34% at December 2011, principal amount 5.5 billion yen)		71			0
Yen-denominated loans:
3.60% loan due July 2015 (principal amount 10 billion yen)		129			123
3.00% loan due August 2015 (principal amount 5 billion yen)		64			61
Capitalized lease obligations payable through 2022		10			6

Total notes payable	$	3,285		$	3,038

⁽¹⁾

$450 issuance net of a $2 underwriting discount that is being amortized over the life of the notes

⁽²⁾

$400 issuance net of a $4 underwriting discount that is being amortized over the life of the notes

In July 2011, the Parent Company issued three series of Samurai notes totaling 50 billion yen through a public debt offering. The first series, which totaled 28.7 billion yen, bears interest at a fixed rate of 1.47% per annum, payable semi-annually, and has a three-year maturity. The second series, which totaled 15.8 billion yen, bears interest at a fixed rate of 1.84% per annum, payable semi-annually, and has a five-year maturity. The third series, which totaled 5.5 billion yen, bears interest at a variable rate of three-month yen LIBOR plus a spread, payable quarterly, and has a three-year maturity. We have entered into an interest rate swap related to the 5.5 billion yen variable interest rate notes to swap the variable interest rate to a fixed interest rate of 1.475% (see Note 4). These Samurai notes are not available to U.S. persons.

In 2010 and 2009, we issued a total of $2.0 billion of senior notes through U.S. public debt offerings. The details of these notes are as follows. In August 2010, we issued $450 million and $300 million of senior notes that have 30-year and five-year maturities, respectively. In December 2009, we issued $400 million of senior notes that have a 30-year maturity. In May 2009, we issued $850 million of senior notes that have a 10-year maturity. These senior notes pay interest semi-annually and are redeemable at our option in whole at any time or in part from time to time at a redemption price equal to the greater of: (i) the principal amount of the notes or (ii) the present value of the remaining scheduled payments of principal and interest to be redeemed, discounted to the redemption date, plus accrued and unpaid interest.

In September 2006, the Parent Company issued three tranches of Uridashi notes totaling 45 billion yen. The first tranche totaled 15 billion yen and had a five-year maturity. The second tranche totaled 10 billion yen and has a 10-year maturity. The third tranche totaled 20 billion yen and had a five-year maturity and a variable interest coupon of six-month yen LIBOR plus a spread. We had interest rate swaps related to the 20 billion yen variable interest rate notes (see Note 4). Each outstanding tranche of Uridashi notes pays interest semiannually, may only be redeemed prior to maturity upon the occurrence of a tax event as specified in the respective bond agreement and is not available to U.S. persons. In September 2011, we redeemed the first and third tranches of these notes upon their maturity. The interest rate swap agreements expired with the redemption of the third tranche of Uridashi notes.

The Parent Company issued yen-denominated Samurai notes totaling 30 billion yen in June 2007. The Samurai notes have a five-year-maturity, pay interest semiannually, may only be redeemed prior to maturity upon the occurrence of a tax event as specified in the respective bond agreement and are not available to U.S. persons.

During 2009, we extinguished portions of our yen-denominated Uridashi and Samurai debt by buying the notes on the open market. We extinguished 2.0 billion yen (par value) of our Uridashi notes due September 2016 at a cost of 1.4 billion yen, yielding a gain of .6 billion yen. We also extinguished 3.4 billion yen (par value) of our Samurai notes due June 2012 at a cost of 2.5 billion yen, yielding a gain of .9 billion yen.

For our yen-denominated loans, the principal amount as stated in dollar terms will fluctuate from period to period due to changes in the yen/dollar exchange rate. We have designated the majority of our yen-denominated notes payable as a nonderivative hedge of the foreign currency exposure of our investment in Aflac Japan. We have also designated the interest rate swap on our variable interest rate Samurai notes as a hedge of the variability in our interest cash flows associated with these notes.

The aggregate contractual maturities of notes payable during each of the years after December 31, 2011, are as follows:


(In millions)	Long-term Debt		Capitalized Lease Obligations		Total Notes Payable
2012	$	342	$	3	$	345
2013		0		3		3
2014		440		2		442
2015		493		1		494
2016		306		0		306
Thereafter		1,700		1		1,701

Total	$	3,281	$	10	$	3,291

We have no restrictive financial covenants related to our notes payable. We were in compliance with all of the covenants of our notes payable at December 31, 2011. No events of default or defaults occurred during 2011 and 2010.