INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) applicable to pretax earnings for the years ended December 31 were as follows:

(In millions)	Japan			U.S.			Total
2011:
Current		$358			$533			$891
Deferred		(290	)		427			137
Total income tax expense		$68			$960			$1,028
2010:
Current	$	513		$	349		$	862
Deferred		546			(167	)		379
Total income tax expense	$	1,059		$	182		$	1,241
2009:
Current	$	565		$	265		$	830
Deferred		62			(154	)		(92	)
Total income tax expense	$	627		$	111		$	738

Schedule of Effective Income Tax Rate Reconciliation

The principal reasons for the differences and the related tax effects for the years ended December 31 were as follows:

(In millions)	2011			2010			2009
Income taxes based on U.S. statutory rates	$	1,047		$	1,255		$	782
Utilization of foreign tax credit		(36	)		(31	)		(29	)
Nondeductible expenses		10			10			11
Other, net		7			7			(26	)
Income tax expense	$	1,028		$	1,241		$	738

Schedule of Income Tax Expense Benefit Intraperiod Tax Allocation

Total income tax expense for the years ended December 31 was allocated as follows:

(In millions)	2011			2010			2009
Statements of earnings	$	1,028		$	1,241		$	738
Other comprehensive income (loss):
Unrealized foreign currency translation gains (losses) during period		(185	)		(339	)		39
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) on investment securities during period		1,016			447			728
Reclassification adjustment for realized (gains) losses on investment securities included in net earnings		(404	)		(147	)		(424	)
Unrealized gains (losses) on derivatives during period		(12	)		18			0
Pension liability adjustment during period		(23	)		(11	)		8
Total income tax expense (benefit) related to items of other comprehensive income (loss)		392			(32	)		351
Additional paid-in capital (exercise of stock options)		(7	)		(31	)		(3	)
Cumulative effect of change in accounting principle		0			(89	)		0
Total income taxes	$	1,413		$	1,089		$	1,086

Schedule of Deferred Tax Assets and Liabilities

The income tax effects of the temporary differences that gave rise to deferred income tax assets and liabilities as of December 31 were as follows:

(In millions)	2011		2010
Deferred income tax liabilities:
Deferred policy acquisition costs	$	3,104	$	2,814
Unrealized gains on investment securities		397		114
Premiums receivable		153		151
Policy benefit reserves		1,896		1,583
Other		0		297
Total deferred income tax liabilities		5,550		4,959
Deferred income tax assets:
Depreciation		134		144
Policyholder protection corporation obligation		5		22
Difference in tax basis of investment in Aflac Japan		47		244
Other basis differences in investment securities		1,363		1,557
Unfunded retirement benefits		44		44
Other accrued expenses		64		70
Policy and contract claims		106		107
Unrealized exchange loss on yen-denominated notes payable		124		142
Deferred compensation		201		168
Capital loss carryforwards		784		374
Other		405		385
Total deferred income tax assets		3,277		3,257
Net deferred income tax liability		2,273		1,702
Current income tax liability		340		267
Total income tax liability	$	2,613	$	1,969

Summary of Income Tax Contingencies

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31:

(In millions)	2011			2010
Balance, beginning of year	$	24	(1)	$	17	(1)
Additions for tax positions of prior years		7			7
Settlements		0			0
Reductions for tax positions of prior years		0			0
Balance, end of year	$	31	(1)	$	24	(1)

⁽¹⁾ Amounts do not include tax deductions of $10 at December 31, 2011, $8 at December 31, 2010, and $6 at January 1, 2010.