Aflac 2009 Annual Report Download - page 92

In addition to the benet obligations for funded employee
plans, we also maintain unfunded supplemental retirement
plans for certain ofcers and beneciaries. Retirement
expense for these unfunded supplemental plans was
$23 million in 2009, $11 million in 2008 and $5 million in
2007. The accrued retirement liability for the unfunded
supplemental retirement plans was $224 million at
December 31, 2009, compared with $217 million a year ago.
The assumptions used in the valuation of these plans were
the same as for the funded plans.
Stock Bonus Plan: Aac U.S. maintains a stock bonus
plan for eligible U.S. sales associates. Plan participants
receive shares of Aac Incorporated common stock based
on their new annualized premium sales and their rst-year
persistency of substantially all new insurance policies.
The cost of this plan, which is included in deferred policy
acquisition costs, amounted to $40 million in 2009, $46
million in 2008 and $45 million in 2007.
13. COMMITMENTS AND CONTINGENT
LIABILITIES
We have three outsourcing agreements with IBM. The rst
agreement provides mainframe computer operations and
support for Aac Japan. It has a remaining term of six years
and an aggregate remaining cost of ¥17.3 billion ($188
million using the December 31, 2009, exchange rate). The
second agreement provides distributed computer mid-
range server operations and support for Aac Japan. It has
a remaining term of six years and an aggregate remaining
cost of ¥20.4 billion ($222 million using the December
31, 2009, exchange rate). The third agreement provides
application maintenance and development services for
Aac Japan. It has a remaining term of three years and an
aggregate remaining cost of ¥4.9 billion ($53 million using
the December 31, 2009, exchange rate).
We have an outsourcing agreement with Accenture
to provide application maintenance and development
services for our Japanese operation. The agreement has
a remaining term of ve years with an aggregate remaining
cost of ¥4.9 billion ($53 million using the December 31,
2009, exchange rate).
We lease ofce space and equipment under agreements
that expire in various years through 2019. Future minimum
lease payments due under non-cancelable operating leases
at December 31, 2009, were as follows:
(In millions)
2010 $ 63
2011 45
2012 15
2013 13
2014 12
Thereafter 33
Total future minimum lease payments $ 181
In a strategic marketing effort to continue to reach business
decision-makers and the large and loyal NASCAR fan base
to grow our U.S. business, we entered into an agreement
with Roush Fenway for the primary sponsorship of racing
driver Carl Edwards for the years 2009 through 2011. As of
December 31, 2009, the remaining cost of the marketing
agreement was $51 million, however contracts with
co-sponsors during the remaining term of this agreement
will reduce our total cost.
We are a defendant in various lawsuits considered to be
in the normal course of business. Members of our senior
legal and nancial management teams review litigation on a
quarterly and annual basis. The nal results of any litigation
cannot be predicted with certainty. Although some of this
litigation is pending in states where large punitive damages,
bearing little relation to the actual damages sustained by
plaintiffs, have been awarded in recent years, we believe
the outcome of pending litigation will not have a material
adverse effect on our nancial position, results of operations,
or cash ows.
14. SUBSEQUENT EVENTS
We evaluated events that occurred subsequent to
December 31, 2009, for recognition or disclosure in our
nancial statements and notes to our nancial statements.
We’ve got you under our wing.
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