Aflac 2007 Annual Report Download - page 73

69
Annual Report for 2007
yen. Profits repatriated by Aflac Japan to Aflac U.S. were as
follows for the years ended December 31:
In Dollars In Yen
(In millions of dollars and billions of yen) 2007 2006 2005 2007 2006 2005
Profit repatriation $ 567 $ 442 $ 374 ¥ 67.8 ¥ 50.0 ¥ 41.2
12. BENEFIT PLANS
Our basic employee defined-benefit pension plans cover
substantially all of our full-time employees in the United
States and Japan. At December 31, 2007, other liabilities
included a liability for both plans in the amount of $82 million,
compared with $102 million a year ago. We plan to make
contributions of $20 million to the U.S. plan and $12 million to
the Japanese plan in 2008.
On December 31, 2006, we adopted the recognition and
disclosure provisions and early adopted the measurement date
provisions of SFAS 158. SFAS 158 requires the recognition of
the funded status (i.e., the difference between the fair value of
plan assets and the projected benefit obligations) of our
benefit plans in our financial statements, with a corresponding
adjustment to accumulated other comprehensive income, net
of tax. The adjustment to accumulated other comprehensive
income at adoption represents the net unrecognized actuarial
losses, unrecognized prior service costs or credits, as applicable,
and the unrecognized transition asset remaining from the initial
adoption of SFAS 87, all of which were previously netted
against the plan’s funded status in the past under the
provisions of SFAS 87. These amounts will be subsequently
recognized as net periodic pension cost over future periods
consistent with our historical accounting policy for amortizing
such amounts. Further, the components of the benefit
obligations that arise in subsequent periods and are not
recognized as net periodic pension cost in the same periods
are recognized as a component of other comprehensive
income. Those amounts will also be subsequently recognized as
a component of net periodic pension cost as previously
described. The adoption of SFAS 158 had no effect on our net
earnings for any period presented, and it will not affect our
operating results in future periods.
The following table summarizes the amounts included in
accumulated other comprehensive income as of December 31.
2007 2006
(In millions) Japan U.S. Japan U.S.
Net loss $36 $ 47 $35 $62
Prior service cost (credit) (4) 1 (4) 1
Transition obligation 2– 2–
Total $34 $ 48 $33 $63
No prior service costs or credits arose during 2007 and the
amounts of prior service costs and credits as well as transition
obligation amortized to expense were immaterial for the years
ended December 31, 2007 and 2006. Amortization of
actuarial losses to expense in 2008 is estimated to be $1
million for the Japanese plan and $2 million for the U.S. plan,
while the amortization of prior service costs and credits are
expected to be negligible.
The following table summarizes the amounts recognized in
other comprehensive income for the year ended December
31, 2007.
2007
(In millions) Japan U.S.
Net loss (gain) $ 2 $ (11)
Amortization of net loss (1) (4)
Total $ 1 $ (15)
Reconciliations of the funded status of the basic employee
defined-benefit pension plans with amounts recognized in the
consolidated balance sheets as of December 31 were as
follows:
2007 2006
(In millions) Japan U.S. Japan U.S.
Projected benefit obligation:
Benefit obligation, beginning of year $110 $ 184 $ 104 $ 162
Adoption of SFAS 158 –––3
Service cost 910 89
Interest cost 310 39
Actuarial loss (gain) – (14) (1) 4
Benefits paid (2) (4) (3) (3)
Effect of foreign exchange rate changes 5–(1) –
Benefit obligation, end of year 125 186 110 184
Plan assets:
Fair value of plan assets, beginning of year 66 126 47 95
Adoption of SFAS 158 –––2
Actual return on plan assets –8312
Employer contribution 11 20 20 20
Benefits paid (2) (4) (3) (3)
Effect of foreign exchange rate changes 4–(1) –
Fair value of plan assets, end of year 79 150 66 126
Funded status $ (46) $ (36) $ (44) $ (58)
Accumulated benefit obligation $106 $ 139 $ 93 $ 137
The composition of plan assets as of December 31 was as
follows:
2007 2006
Japan U.S. Japan U.S.
Equity securities 36% 79% 39% 65%
Fixed-income securities 64 17 61 34
Cash and cash equivalents –1 –1
Other –3 ––
Total 100% 100% 100% 100%