November 24, 2011

Financial Results for the Six Months Ended September 30, 2011
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the six months ended September 30, 2011.

[Contents]
1. Business Highlights…………………

P.1

2. Investment Results of General Account Assets…………………

P.3

3. Non-consolidated Balance Sheets…………………

P.10

4. Non-consolidated Statements of Operations…………………

P.11

5. Non-consolidated Statement of Changes in Net Assets…………………

P.12

6. Breakdown of Ordinary Profits (Fundamental Profit)…………………

P.22

7. Disclosed Claim Based on Categories of Obligors…………………

P.23

8. Risk-monitored Loans…………………

P.23

9. Solvency Margin Ratio…………………

P.24

10. Status of Separate Account…………………

P.26

11.Status of the Company, Subsidiaries and Affiliates…………………

P.33

Attached: Supplementary Materials for the Six Months Ended September 30, 2011

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2011
Number of policies(Thousands)

Individual insurance

As of September 30, 2011
AmountChanges(%, YoY)(100 millionsof yen)

2,967

100.1

AmountChanges(%, YoY)

Changes(%, Pre-FYE)(Thousands)

270,750

94.9

2,976

100.3

(100 millionsof yen)Changes(%, Pre-FYE)

265,386

98.0

755

100.9

29,754

99.8

758

100.5

29,763

100.0

3,722

100.2

300,504

95.4

3,734

100.3

295,150

98.2

Group insurance−−

162,472

101.8

−

−

162,036

99.7

Group annuities−−

19,664

98.2−−

19,677

100.1

Individual annuities
Subtotal

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for an annuity for whichannuity payments have not yet commenced and (b) the amount of policy reserve for an annuity for which payments have commenced.
2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserve.

(ii) New Policies

Six months ended
September 30, 2010

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

New business

Total(100 millionsof yen)Amount(100 millionsof yen)Changes(%, YoY)

AmountChanges(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

204

95.4

5,837

97.9

7,316

95.3

(1,478)−

Individual annuities

18

97.6

622

101.1

638

101.4

(15)

−

223

95.6

6,460

98.2

7,954

95.7

(1,493)−

Group insurance

−

−

362

173.4

362

173.4

−

−

Group annuities

−

−

0

35.2

0

35.2

−

−

Subtotal

Total
Six months ended
September 30, 2011

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

New business(100 millionsof yen)Amount(100 millionsof yen)Changes(%, YoY)

AmountChanges(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

193

94.7

6,565

112.5

7,623

104.2

(1,057)−

Individual annuities

18

96.5

615

98.8

627

98.4

(12)

−

212

94.9

7,180

111.1

8,251

103.7

(1,070)−Group insurance

−

−

106

29.3

106

29.3

−

−

Group annuities

−

−

503.2

0

503.2

−

−

Subtotal

0

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be held at the time annuity
payments are to commence.
3. Amount for group annuities is equal to the initial premium payment.

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Six months ended
September 30, 2010

Six months ended
September 30, 2011
Changes(%, YoY)

Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

9,066

93.3

8,182

90.2

Surrender and lapse ratio (%)

2.88(0.05)

2.72(0.16)

Notes: 1.The amount of lapse is not offset by the amount of reinstatement which was once lapsed.
2.The column of "Changes" of surrender and lapse ratio are increase-decrease points over year.

-1-

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen except percentage)

As ofMarch 31, 2011

As of
September 30, 2011

Changes(%, YoY)

Changes(%, Pre-FYE)

Individual insurance

2,848

97.0

2,832

99.4

Individual annuities

1,269

101.4

1,281

100.9

Total

4,118

98.3

4,113

99.9

1,018

101.0

1,027

100.9

Medical coverage and living benefits(ii) New Policies(100 millions of yen except percentage)

Six months ended
September 30, 2010

Six months ended
September 30, 2011

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

92

94.2

107

115.4

Individual annuities

28

93.8

28

101.5

Total

121

94.1

135

112.1

39

88.7

41

104.9

Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium
contracts, the amount is calculated by dividing the premium by the coverage period.)
2. Figures for medical coverage and living benefits represent portion of annualized premium corresponding to the medical
benefits (hospitalization benefits and surgery benefits, etc.), living benefits (nursing care benefits, etc.) and premium
waiver benefits, in which disability cause is excluded but causes such as specific illness are included.
3. New policies include net increase by conversion.

(3) Selected Items of Statements of Operations(100 millions of yen except percentage)

Six months ended
September 30, 2010

Six months ended
September 30, 2011

Changes(%, YoY)

Premium and other income

Changes(%, YoY)

3,495

112.6

3,136

89.7

790

99.6

722

91.5

3,527

122.8

2,605

73.9

Investment expenses

260

63.1

435

167.2

Ordinary profits

400

314.3

168

42.1

Investment income
Claims and other payments(4) Total Assets(100 millions of yen except percentage)

As of
September 30, 2011

As ofMarch 31, 2011
Changes(%, YoY)

Total assets

56,752-2-

Changes(%, Pre-FYE)

101.1

56,14998.9

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Asset Composition(Millions of yen)
As ofMarch 31, 2011
Cash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other securities
Other securities
Loans
Policy loans
Ordinary loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency denominated assets

As of
September 30, 2011

AmountPercentage
237,739
4.2
1,424
0.0
33,1690.6
3,699,745
66.1
2,430,669
43.4
352,641
6.3
862,075
15.4
687,834
12.3
174,240
3.1
54,3591.0
1,143,863
20.4
71,4791.3
1,072,383
19.2
281,288
5.0
87,332
1.6
112,466
2.0(2,513)(0.0)
5,594,517
100.0
696,207
12.4

AmountPercentage
117,389
2.1
1,386
0.0
34,2190.6
3,878,852
70.0
2,581,231
46.6
338,008
6.1
902,668
16.3
718,550
13.0
184,117
3.3
56,9451.0
1,091,446
19.7
70,4071.3
1,021,039
18.4
275,6095.0
80,6091.5
65,386
1.2(2,345)(0.0)
5,542,554
100.0
729,048
13.2(2) Changes (Increase/Decrease) in Assets(Millions of yen)Six months ended
September 30, 2010
Cash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds
Domestic stocks
Foreign securities(4,269)(256)
26
37,691(41,085)(73,483)
153,022
160,737(7,714)(761)(41,336)(591)(40,745)
(964)
1,149
5,386
(128)
(2,701)
167,228

Foreign bonds
Foreign stocks and other securities
Other securities
Loans
Policy loans
Ordinary loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency denominated assets-3-

Six months ended
September 30, 2011
(120,349)
(37)
1,049
179,106
150,561(14,633)
40,59230,715
9,877
2,585(52,416)(1,072)(51,344)(5,678)(6,722)(47,080)
167(51,963)
32,840

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)Interest, dividends and other income
Interest from deposits
Interest and dividends from securities
Interest from loans
Income from real estate for rent
Other interest and dividends
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities

Six months ended
September 30, 2010

Six months ended
September 30, 2011

54,772544
34,853
12,152
7,089
132
163

55,68384
36,89011,333
7,273
102

−
7,833

−
−
4,903
2,315
2,586
2
338
11,242−−
115
79,033−60
53
72,282−
16,148
9,884
6,261
1

Gains on sales of domestic bonds
Gains on sales of domestic stocks
Gains on sales of foreign securities
Gains on redemption of securities
Gains from derivative instruments, net
Foreign exchange gains, net
Reversal of allowance for possible loan losses
Other investment income
Total(4) Investment Expenses(Millions of yen)Interest expenses
Losses from money held in trust, net
Losses from trading securities, net
Losses on sales of securities

Six months ended
September 30, 2010

Six months ended
September 30, 2011

704

631
779
8,230
8,445
250
2,322
5,873
11,833

−
3,114
5,552
21
2,829
2,701
4,077

Losses on sales of domestic bonds
Losses on sales of domestic stocks
Losses on sales of foreign securities
Losses on valuation of securities
Losses on valuation of domestic bonds
Losses on valuation of domestic stocks
Losses on valuation of foreign securities
Other losses on valuation of securities
Losses on redemption of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Provision for allowance for possible loan losses
Write-off of loans
Depreciation of real estate for rent and other assets
Other investment expenses
Total

−
3,874
202
−
−
−
2,080
−
−
2,393
2,400
20,324−
10,871
703
259
−
−
1,947
−
−
3,228
2,496
37,593(5) Net Investment Income(Millions of yen)

Net investment income-4-

Six months ended
September 30, 2010

Six months ended
September 30, 2011

58,70934,688

Fukoku Mutual Life Insurance Company

(6) Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2011
Net valuation gains/losses
Carrying value on
included in the statements
balance sheetsof operations
260,341(3,640)

Trading securities

As of September 30, 2011
Net valuation gains/losses
Carrying value on
included in the statements
balance sheetsof operations
237,150(10,477)

Note: The table above includes money held in trust for trading purpose.

(7) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)

As of March 31, 2011

As of September 30, 2011

Gains/losses

Book value

Fair value

427,312436,409

9,096

9,983

Domestic bonds

378,178

387,523

9,345

Foreign bonds

49,134

48,885

Monetary claims bought−

Negotiable certificate of deposits−

OthersGains/losses

Book value

Fair value

886

460,231484,605

24,37325,341

9,345−

416,483

439,797

23,31423,547

233

(249)

637

886

43,74844,807

1,058

1,794

735

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

652,180

672,087

19,90723,872

3,965

663,603699,635

36,032

38,1782,146

Domestic bonds

644,831664,759

19,92823,872

3,944

650,978

687,030

36,052

38,1332,081

Foreign bonds

7,349

7,328

(21)

0

21

12,625

12,604

(20)

44

65

1,393

868

(524)

−

524

1,393

785

(607)

−

607
79,801Gains
Held-to-maturity debt securities

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

Losses

Gains

Losses968

2,331,356

2,347,024

15,66776,48660,8182,460,599

2,495,743

35,144

114,945

Domestic bonds

1,389,523

1,407,660

18,13624,3696,232

1,450,606

1,513,769

63,16365,6872,523

Domestic stocks

300,218

317,678

17,46043,32725,867290,248

294,054

3,805

36,84933,043Foreign securities

593,121575,527(17,594)

7,582

25,177667,272

640,470(26,801)

11,74838,549Foreign bonds

411,835

403,179(8,656)

4,572

13,228464,819458,245(6,574)

9,408

15,982Foreign stocks and other securities

181,285

172,347(8,938)3,010

11,948202,452

182,224(20,227)

2,339

22,56748,491

46,158(2,333)

1,207

3,541

52,47247,448(5,023)

660

5,684

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

3,412,242

3,456,389

44,146110,342

66,195

3,585,828

3,680,770

94,941

178,466

83,524

Other securities

Total
Domestic bonds

2,412,533

2,459,943

47,41057,587

10,1762,518,067

2,640,597

122,530

127,368

4,838

Domestic stocks

300,218

317,678

17,46043,32725,867290,248

294,054

3,805

36,84933,043Foreign securities

650,998

632,608(18,390)

8,220

26,610725,039698,668(26,370)

13,58739,958Foreign bonds

468,319459,392(8,927)

5,209

14,136521,193515,658(5,535)

11,247

16,783Foreign stocks and other securities

182,678

173,215(9,462)

3,010

12,473203,845

183,010(20,834)

2,339

23,174

48,491

46,158(2,333)

1,207

3,541

52,47247,448(5,023)

660

5,684

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

Other securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments and Exchange Law.

* Book value of securities without fair value are as follows:(Millions of yen)
As of
September 30, 2011

As ofMarch 31, 2011
Held-to-maturity debt securities−−

Unlisted foreign bonds−−

Others−−−−Investments in subsidiaries and affiliates

26,61635,616

Available-for-sale securities

Policy-reserve-matching bonds

17,047

18,332Unlisted domestic stocks (except over-the-counter stocks)

8,345

8,336

Unlisted foreign stocks (except over-the-counter stocks)

500

500

Unlisted foreign bonds
Others
Total

-5-

−

−

8,201

9,496

43,66453,949

Fukoku Mutual Life Insurance Company

(8) Fair Value Information on Money Held in Trust(Millions of yen)
As of March 31, 2011
Carrying
value onbalancesheetsMoney held in trust

33,169As of September 30, 2011

Gains/losses
Fair value

33,169Gains−

Losses−−Carrying
value onbalancesheets34,219Gains/losses
Fair value

34,219Gains−

Losses−−* Money held in trust for trading purpose(Millions of yen)
As of September 30, 2011

As of March 31, 2011
Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets
Money held in trust
for trading purpose

32,169Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets(0)

33,219(305)* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)
As of September 30, 2011

As of March 31, 2011
Book value Fair value

Gains/losses
Gains

LossesBook value Fair value

Gains/losses
Gains

LossesMoney held in trust
for held-to-maturity

−

−

−

−

−

−

−

−

−

−

Money held in trust
for policy-reserve-matching

−

−

−

−

−

−

−

−

−

−

Money held in trust
for available-for-sale

−

−

−

−

−

−

−

−

−

−

-6-

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (General Account)(i) Gains and Losses on Derivatives
As of March 31, 2011
Hedge accounting applied
Hedge accounting not applied
Total
As of September 30, 2011
Hedge accounting applied
Hedge accounting not applied
Total(Millions of yen)Interest- Currencyrelated
related(2,290)560
69(5,996)629(8,287)
Interest- Currencyrelated
related
396
2,721
(89)
1,669
307
4,390

Stockrelated
−
(123)
(123)
Stockrelated
−
(117)
(117)

Bondrelated−−−
Bondrelated−−−

Others−−−Others−−−Total(1,730)(6,049)(7,780)
Total
3,118
1,462
4,581

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of \2,290 million as of March 31, 2011and gains of \2,721 million as of September 30, 2011) included in gains and losses with hedge accounting applied, and gains
and losses with hedge accounting not applied are reported in the statements of operations.

(ii) Interest-related Transactions
As of March 31, 2011
Notional amount/contract value
Fair
Over
value
1 yearOver-the-counter transactions
Yen interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
Foreign interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
US dollar
Total

Gains
(losses)(Millions of yen)
As of September 30, 2011
Notional amount/contract value
Fair
Gains
Over
value
(losses)
1 year

39,863−

17,905
−

560
−

560
−

32,760−12,802
−

396
−

396
−

−
16,404
16,404−
16,404
16,404

−
69
69

−
69
69
629

−
7,757
7,757

−
7,757
7,757

−
(89)
(89)

−
(89)
(89)
307

* Interest rate swap contracts by contractual maturity dates
As of March 31, 2011

(Millions of yen)
As of September 30, 2011

Yen interest rate swap contracts
1 year or
shorter
Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
Average fixed rate (payment)
Foreign interest rate swap contracts

21,958
1.35%
0.45%
−
−
−
1 year or
shorter

Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
US dollar
Average fixed rate (payment)
US dollar

−
−
−
−
−
−
−
−

Over
1 year to
3 years
17,000
1.64%
0.62%
−
−
−
Over
1 year to
3 years
−
−
−
−
−
−
−
−

-7-

Over
3 years

1 year or
shorter

905
2.28%
1.25%
−
−
−

19,958
1.44%
0.50%
−
−
−

Over
3 years

1 year or
shorter−−−
16,404
0.31%
0.31%
3.49%
3.49%

−
−
−
−
−
−
−
−

Over
1 year to
3 years
12,000
1.65%
0.59%
−
−
−
Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years
802
2.29%
1.24%
−
−
−
Over
3 years
−
−
−
7,757
0.34%
0.34%
2.22%
2.22%

Fukoku Mutual Life Insurance Company

(iii) Currency-related Transactions
As of March 31, 2011
Notional amount/contract value
Fair
value
Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
US dollar
Euro
British Pound
Canadian dollar
Australian dollar
BoughtCurrency Options
Sold
Calls
[
US dollar[
Puts[
Bought
Calls
[
Puts
[
US dollar

342,733
188,104
55,921
11,80938,861
48,035
−

−
−
−
−
−
−
−

−
−]
−
−]
−
−]

−

−
−]
−
−]
−
−

−

Gains
(losses)

351,020
189,857
58,346
12,03040,16850,617−−(8,287)(1,752)(2,425)(220)(1,306)(2,582)
−

− [

−
−

− [

−
−

− [

−

− [

−
−

− [

−
−

Total

− [

(millions of yen)
As of September 30, 2011
Notional amount/contract value
Fair
Gains
value
(losses)Over
1 year288,341
153,295
75,90925,452
21,852
11,830
−

−
−
−
−
−
−
−

15,73163 ]
15,731
63 ]
−
−]

−

−
−]
15,00086 ]15,00086 ]−283,925
153,134
73,03625,137
21,427
11,189
−

4,415
161
2,872
315
425
641
−

7

55

7

55

−

−

−

−

6

(80)

6

(80)

−
−

−
−

(8,287)

4,390

Notes: 1. Figures in [ ] are option premiums which are included in balance sheets.
2. Forward exchange rates are used for exchange rates as of the end of period.
3. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts and arereported in yen amounts in the balance sheets, those currency forward contracts are excluded from the table above.

(iv) Stock-related Transactions(millions of yen)
As of March 31, 2011
Notional amount/Gainscontract value
Fair value(losses)Over
1 yearExchange-traded transactions
Yen stock index futures
Sold
Bought

9,636
−

−
−

9,760
−

Total

(123)
−
(123)

As of September 30, 2011
Notional amount/contract value
Fair valueOver
1 year

3,797
−

−
−

3,915
−

Gains
(losses)

(117)
−
(117)

Note: Figures in [ ] are option premiums which are included in balance sheets.

(v) Bond-related Transactions
No ending balance as of March 31, 2011 and September 30, 2011.

-8-

Fukoku Mutual Life Insurance Company

(reference) Fair Value of Real Estate ( Land and Leaseholds)(millions of yen)
As of March 31, 2011
Carrying value on
the balance sheets
163,749

Fair value
230,903

As of September 30, 2011
Carrying value on
the balance sheets

Gains(losses)
67,153

161,114

Fair value
226,343

Gains(losses)
65,228Notes: 1. As of September 30, 2011, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax
and the road rate as of January 1, 2011.
2. As of March 31, 2011, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax as ofJanuary 1, 2011 and the road rate as of January 1, 2010.

-9-

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets(Millions of yen)
As of March 31, 2011

Assets:Cash and deposits

As of September 30, 2011

237,823

18,77998,700

Monetary claims bought

−
1,424

Money held in trust

33,16934,219Call loans

Securities

1,386

3,778,639

3,949,765[1,695,927][1,840,701][Local government bonds][149,399][149,565][Corporate bonds][615,051][620,609][Stocks][379,416][361,566][Foreign securities][884,029][919,971]

1,143,863

1,091,446[Government bonds]

Loans
Policy loans

71,47970,407

Ordinary loans

1,072,383

1,021,039

Tangible fixed assets

284,670279,217

Intangible fixed assets

8,765

8,453

Reinsurance receivables

170

72

Other assets

101,867

54,693

Deferred tax assets

87,33280,609Allowance for possible loan losses(2,513)(2,345)5,675,214

5,614,999

Total assets

As of March 31, 2011

Liabilities:
Policy reserves

5,216,576

Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables

As of September 30, 2011

5,244,900

31,053

21,715

5,132,317

5,158,356

53,20564,82886

70

Subordinated bonds

35,214

31,182Other liabilities

125,256

44,858

Corporate income tax payable

10,8503,701

Asset retirement obligations

2,846

2,813

111,559

38,343

Reserve for employees' retirement benefits

50,10946,852

Reserve for price fluctuation of securities

33,432

34,476

Deferred tax liabilities for revaluation reserve for land

19,936

19,064

5,480,612

5,421,406

Other liabilities

Total liabilities
Net assets:
Foundation funds

40,00035,000

Accumulated foundation funds redeemed

46,00071,000Reserve for revaluation
Surplus

112

112

96,76364,715

Legal reserve for future losses

2,249

2,325

Other surplus

94,51362,389Reserve for redemption of foundation funds

20,000Reserve for dividend allowances

3,895

−
3,895

Reserve for advanced depreciation of real estate for tax purpose−
296

Other reserves

767

767

69,554

46,438

182,875

170,827

9,994

22,418365

259

Accumulated fund for price fluctuation

Unappropriated surplus
Total foundation funds, surplus and others
Net unrealized gains (losses) on available-for-sale securities, net of tax
Deferred valuation gains (losses) under hedge accounting

11,000289

Revaluation reserve for land, net of tax

1,366

87

Total valuation and translation adjustments

11,726

22,765

Total net assets
Total liabilities and net assets- 10 -

194,601

193,592

5,675,214

5,614,999

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations

Ordinary revenues:
Premium and other income[Premium income]Investment income[Interest, dividends and other income][Gains from money held in trust, net]
[Gains on sales of securities][Gains from derivative instruments, net]
Other ordinary revenues[Reversal of reserve for outstanding claims][Reversal of policy reserve]
Total ordinary revenues
Ordinary expenditures:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision for policy reserve and others
Provision for policy reserve
Interest on accumulated dividends to policyholders
Investment expenses[Interest expenses][Losses from money held in trust, net]
[Losses from trading securities, net]
[Losses on sales of securities][Losses on valuation of securities][Losses from separate accounts, net]
Operating expenses
Other ordinary expenditures
Total ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Reversal of allowance for possible loan losses
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Losses on reduction entry of real estate for tax purpose
Effect of applying the accounting standard for asset retirement obligations

Total extraordinary losses
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus for the period- 11 -

Six months ended
September 30, 2010

(Millions of yen)Six months ended
September 30, 2011

349,537[349,508]
79,033[54,772][163][16,148][7,833]44,201[3,572][34,856]

313,670[313,484]
72,282[55,683][−][4,903][11,242]
14,618[9,337][−]472,771

400,572

352,757[115,410][44,494][98,608][83,323][10,774]
65−
65
26,053[704][−][3,114][5,552][4,077][5,728]42,954
10,888260,529[85,849][46,973][64,508][48,191][14,873]
26,084
26,03945
43,548[631][779][8,230][8,445][11,833][5,954]
43,614
9,930

432,71940,052

383,708
16,864

0
40

4,639

41

4,639

28
239
992

55
284
1,044
9

−
966

−

2,227
37,866−
1,392
20,11011,946(1,919)10,027

4,304(1,141)
3,162

27,83916,948

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Changes in Net Assets(Millions of yen)

For the six months ended For the six months ended
September 30, 2010
September 30, 2011
Foundation funds, surplus and others
Foundation funds
Balance at the beginning of current period

40,00040,000−−−40,00020,000(25,000)(5,000)35,00046,00046,000−−46,00025,00025,00071,000

112

112

−
112

−
112

2,187

2,249

62
62
2,249

76
76
2,325

15,00020,000

5,000
−
5,000
20,0005,000(25,000)(20,000)
−

3,895

3,895

−
3,895

−
3,895

−

−

−
−
−

11,00011,00011,000

303

296

(7)
(7)
296

(7)
(7)
289

767

767

−
767

−
767

54,07569,554(19,505)(62)(892)
27,839(5,000)
−
7
(662)
1,724
55,799(24,381)(76)(892)
16,948(5,000)(11,000)
7
1,278(23,116)
46,438Changes in the current period
Financing of additional foundation funds
Redemption of foundation funds
Total changes in the current period
Balance at the end of current period
Accumulated foundation funds redeemed
Balance at the beginning of current period
Changes in the current period
Additions to accumulated foundation funds redeemed
Total changes in the current period
Balance at the end of current period
Reserve for revaluation
Balance at the beginning of current period
Changes in the current period
Total changes in the current period
Balance at the end of current period
Surplus
Legal reserve for future losses
Balance at the beginning of current period
Changes in the current period
Additions to legal reserve for future losses
Total changes in the current period
Balance at the end of current period
Other surplus
Reserve for redemption of foundation funds
Balance at the beginning of current period
Changes in the current period
Additions to reserve for redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Total changes in the current period
Balance at the end of current period
Reserve for dividend allowances
Balance at the beginning of current period
Changes in the current period
Total changes in the current period
Balance at the end of current period
Accumulated fund for price fluctuation
Balance at the beginning of current period
Changes in the current period
Additions to accumulated fund for price fluctuation
Total changes in the current period
Balance at the end of current period
Reserve for advanced depreciation of real estate for tax purpose
Balance at the beginning of current period
Changes in the current period
Reversal of reserve for advanced depreciation of real estate for tax purpose
Total changes in the current period
Balance at the end of current period
Other reserves
Balance at the beginning of current period
Changes in the current period
Total changes in the current period
Balance at the end of current period
Unappropriated surplus
Balance at the beginning of current period
Changes in the current period
Additions to reserve for dividends to policyholders
Additions to legal reserve for future losses
Payment of interest on foundation funds
Net surplus for the current period
Additions to reserve for redemption of foundation funds
Additions to accumulated fund for price fluctuation
Reversal of reserve for advanced depreciation of real estate for tax purpose
Reversal of revaluation reserve for land
Total changes in the current period
Balance at the end of current period- 12 -

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Changes in Net Assets (Continued)(Millions of yen)

For the six months ended For the six months ended
September 30, 2010
September 30, 2011
Total surplus
Balance at the beginning of current period

76,22996,763(19,505)(892)
27,839
−
(662)
6,778
83,008(24,381)(892)
16,948(25,000)
1,278(32,047)
64,715

162,341

182,875−(19,505)−(892)
27,839
−
−
(662)
6,778
169,120

20,000(24,381)
25,000(892)
16,948(25,000)(25,000)
1,278(12,047)
170,827

48,291

9,994

1,398
1,398
49,69012,423
12,423
22,418

538

365

(53)
(53)
484

(106)
(106)
259

773

1,366

662
662
1,436

(1,278)(1,278)87

49,604

11,726

2,006
2,006
51,611

11,03911,03922,765211,946

194,601−(19,505)−(892)
27,839
−
−
(662)
2,006
8,785
220,732

20,000(24,381)
25,000(892)
16,948(25,000)(25,000)
1,278
11,039(1,008)
193,592

Changes in the current period
Additions to reserve for dividends to policyholders
Payment of interest on foundation funds
Net surplus for the current period
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current period
Balance at the end of current period
Total foundation funds, surplus and others
Balance at the beginning of current period
Changes in the current period
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the current period
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current period
Balance at the end of current period
Valuation and translation adjustments
Net unrealized gains (losses) on available-for-sale securities, net of tax
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Deferred valuation gains (losses) under hedge accounting
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Revaluation reserve for land, net of tax
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Total valuation and translation adjustments
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes in the current period
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the current period
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period- 13 -

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I. Presentation of the Non-consolidated Financial Statements
1. Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) in accordance with theprovisions set forth in the Insurance Business Law of Japan and its related rules and regulations andin conformity with accounting principles generally accepted in Japan, which are different in certain
respects from accounting principles generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been eliminated. As a result, total in yen shown herein
do not necessarily agree with the sum of the individual amounts.

II. Notes to Balance Sheet
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

Policy-reserve-matching bonds are stated at amortized cost under the straight-line method,
cost being determined by the moving average method in accordance with “Temporary
Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No.21 issued by the Japanese Instituteof Certified Public Accountants on November 16, 2000).

iv)

Investments in subsidiaries and affiliates are stated at cost, cost being determined by themoving average method.

v)

Available-for-sale securities with fair market value are stated at fair market value based on
the market prices at the balance sheet date. Costs of their sales are determined by themoving average method. Net unrealized gains or losses on these available-for-sale securities,
net of taxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land
(Law No.34 promulgated on March 31, 1998). The difference between fair value and book value- 14 -

Fukoku Mutual Life Insurance Company

resulting from the revaluation, net of related taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax is recorded as deferred tax liabilities forrevaluation reserve for land.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of tangible fixed assets is calculated by the following methods.
• Buildings (excluding lease assets)i)

Acquired on or before March 31, 1998: Previous declining-balance methodii)

Acquired on or after April 1, 1998 but on or before March 31, 2007: Previous straight-line
methodiii)

Acquired on or after April 1, 2007: Straight-line method• Assets other than buildings (excluding lease assets)i)

Acquired on or before March 31, 2007: Previous declining-balance methodii)

Acquired on or after April 1, 2007: Declining-balance method• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities, except for investments in subsidiaries andaffiliates, are translated into Japanese yen at the effective exchange rate prevailing at the balance
sheet date. Investments in subsidiaries and affiliates are translated into Japanese yen at the exchange
rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who aresubstantially bankrupt (hereinafter called “substantially bankrupt borrowers”), the Company
provides the remaining amount of credits after the direct write-off described below and the
deductions of the amount expected to be collected through the disposal of collateral or the
execution of guarantees.

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy, the Company provides the amounts deemed as necessary considering theborrowers’ ability to pay, within the amounts after deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,- 15 -

Fukoku Mutual Life Insurance Company

which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of September 30, 2011 was ¥362 million.
(7) Reserve for Employees’ Retirement Benefits
The Company adopts accounting standards for employees' retirement benefits (Business Accounting
Council dated June 16, 1998) and accounts for the reserve for employees’ retirement benefits basedon the projected benefit obligation and plan assets at the balance sheet date.
The Company adopts “Guidance on Accounting for Transfers between Retirement Benefit Plans”(ASBJ Guidance No.1 issued by the Accounting Standards Board of Japan on January 31, 2002) as
the Company transferred qualified retirement pension plan to defined benefit pension plan, and part oflump sum benefit plan to defined contribution pension plan on July 1, 2011.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessee
Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.
(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “investment expenses”, which is calculated by deducting an amountequivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in
the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
Deposits denominated in foreign currencies for which forward foreign exchange contracts areused to hedge the foreign currency fluctuations are translated at the contract rates if the forward
contracts qualify for specific hedge accounting. In this case, exchange differences between theexchange rate on the trade date and the forward contract rate are allocated to each fiscal year fromthe date contracted to the date settled.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.

- 16 -

Fukoku Mutual Life Insurance Company

(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes
on certain assets, which are not deductible from consumption taxes withheld and that are stipulated to
be deferred under the Tax Law, are deferred as other assets and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at thebalance sheet date is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
(14) Software
The software for internal use recorded in “intangible fixed assets” is amortized based on straight-line
method over the estimated useful lives.
(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.
(16) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
2. Changes in Presentation
Effective for the six months ended September 30, 2011, in accordance with the amendment of the
Enforcement Regulation of the Insurance Business Law, the presentation of financial statements has
been changed as follows.
(a) As for the statement of operations, “reversal of allowance for possible loan losses” which waspresented in “extraordinary gains” until previous fiscal year is included in “investment income”.
(b) As for the statement of changes in net assets, the item which was presented as “balance at theend of previous fiscal year” until previous fiscal year is presented as “balance at the beginning ofcurrent period”.

- 17 -

Fukoku Mutual Life Insurance Company

3. Financial Instruments
The carrying amounts, fair values and their related differences of major financial assets and liabilities
as of September 30, 2011 were as follows:
Carrying
amountCall loans ..............................................................
Monetary claims bought:
Claims treated as loans ....................................
Total monetary claims bought ...........................
Money held in trust:
Trading securities..............................................
Total money held in trust...................................
Securities:
Trading securities..............................................
Held-to-maturity debt securities........................
Policy-reserve-matching bonds ........................
Investments in subsidiaries and affiliates .........
Available-for-sale securities ..............................
Total securities ..................................................
Loans:
Policy loans.......................................................
Ordinary loans ..................................................
Total loans.........................................................
Derivative instruments:
Hedge accounting not applied ..........................
Hedge accounting applied ................................
Total derivative instruments ..............................

¥

98,700Fair value¥

98,700Difference(Millions of yen)
¥
―

1,386
1,386

1,410
1,410

24
24

33,21933,21933,21933,219――203,930
460,231663,603
1,393
2,495,743
3,824,902

203,930
484,605
699,635
785
2,495,743
3,884,700―
24,37336,032(607 )―
59,79770,407
1,021,039
1,091,446

70,406
1,053,990
1,124,397(0 )32,95032,950

1,462
3,118
4,581

1,462
3,118
4,581

―
―
―

¥

¥

¥

(1) Call loans:
The fair values of call loans are based on their book values since fair values approximate bookvalues due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities basedon “Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the balance
sheet date. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or
counterparty financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships
whereby partnership assets consist of unlisted stocks whose fair values are deemed extremely
difficult to obtain, are excluded from above securities. The carrying amounts of investments in
subsidiaries and affiliates, unlisted stocks and investments in partnerships as of September 30,
2011 were ¥35,616 million, ¥8,836 million and ¥9,496 million, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set
up due to the characteristics that the loan is limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values of policy loans.

- 18 -

Fukoku Mutual Life Insurance Company

The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and borrowers who are not currently bankrupt but have a high possibility of bankruptcy
and monetary claims bought treated as loans are computed by deducting the amount of theallowance for doubtful accounts from the book values before direct write-offs.
(4) Derivative instruments:i)

The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot
exchange rate and forward contract rate.
4. Investment and Rental Property
Information on the carrying amounts and the fair values of investment and rental properties theCompany holds is omitted from the notes because there were not significant changes in those figurescompared to the end of previous fiscal year.
5. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥274 million, ¥910 million and ¥2,293 million, respectively and their total
amount was ¥3,477 million as of September 30, 2011. There was no balance of delinquent loans past
3 months or more as of September 30, 2011.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described above, and exclude credits to bankrupt borrowers and loans for which interest
payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers
in the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by¥1 million and delinquent loans described above by ¥361 million as of September 30, 2011.
6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥133,463 million as of September 30,
2011.

- 19 -

Fukoku Mutual Life Insurance Company

7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥74,049 million as of September 30, 2011. The amount of separate account liabilities was the same as
separate account assets.
8. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the six months ended September 30, 2011 wereas follows:(Millions of yen)
Balance at the beginning of current period.................
Transfer from surplus in previous fiscal year ..............
Dividends paid in the current period ...........................
Increase in interest .....................................................
Balance at the end of current period ..........................

¥ 53,205
24,381(12,804)45¥ 64,828

9. Stocks of Subsidiaries
The amount of stocks of subsidiaries the Company held as of September 30, 2011 was ¥37,009
million.
10. Pledged Assets and Secured Debts
Assets pledged as collateral as of September 30, 2011 were ¥23,029 million of securities. Secured
debts as of September 30, 2011 were ¥4,702 million.
11. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called“reserve for outstanding claims for ceded reinsurance”) was ¥11 million as of September 30, 2011.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥35 million as of September 30, 2011.
12. Additional Foundation Funds
The Company raised additional foundation funds of ¥20,000 million during the six months ended
September 30, 2011 in accordance with Article 60 of the Insurance Business Law.
13. Redemption of Foundation Funds
In the six months ended September 30, 2011, in connection with the redemption of foundation funds of¥25,000 million, the Company reversed the reserve for redemption of foundation funds and provided
the equivalent amount for accumulated foundation funds redeemed in accordance with Article 56 of
the Insurance Business Law.
14. Commitment LineAs of September 30, 2011, there were unused commitment line agreements under which theCompany is the lender of ¥2,092 million.
15. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.

- 20 -

Fukoku Mutual Life Insurance Company

16. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥10,731 million as of September 30, 2011.
The contribution was charged as operating expenses in the year in which it was paid.

III. Notes to Statement of Operations
1. Gains on Sales of Securities
Major items of gains on sales of securities for the six months ended September 30, 2011 were as
follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 2,3152,586
2

2. Losses on Sales of Securities
Major items of losses on sales of securities for the six months ended September 30, 2011 were as
follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 250
2,322
5,873

3. Losses on Valuation of Securities
Major items of losses on valuation of securities for the six months ended September 30, 2011 were as
follows:(Millions of yen)Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 10,871
703

4. Policy Reserves for the Reinsurance Contracts
For the six months ended September 30, 2011, reversal of reserve for outstanding claims for ceded
reinsurance considered in calculation of reversal of reserve for outstanding claims was ¥31 million andprovision for policy reserve for ceded reinsurance considered in calculation of provision for policy
reserve was ¥3 million.
5. Interest, Dividends and Other Income
Breakdown of interest, dividends and other income for the six months ended September 30, 2011 was
as follows:(Millions of yen)Interest on deposits ....................................................................
Interest and dividends on securities ...........................................
Interest on loans .........................................................................
Income from real estate for rent..................................................
Other interest and dividends.......................................................
Total ............................................................................................

- 21 -¥
84
36,89011,333
7,273
102¥55,683

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)
Six months ended
September 30, 2010

(Millions of Yen)
Six months ended
September 30, 2011

A

33,434

36,141

Capital gains
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains from derivative instruments, net
Foreign exchange gains, net
Other capital gains
Capital losses
Losses from money held in trust, net
Losses from trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
B
Fundamental profit plus net capital gains (losses)
A+B
Non-recurring gains
Reinsurance income
Reversal of contingency reserve
Other non-recurring gains
Non-recurring losses
Reinsurance premiums
Provision for contingency reserve
Provision for specific allowance for possible loan losses
Allowance for specified overseas loans
Write-off of loans
Other non-recurring losses
Non-recurring gains (losses)
C
Ordinary profits
A+B+C

23,99413－
16,148
7,833－－
17,319
－
5,607
5,552
4,077
－
2,080
－
6,675
40,110
－
－
－
－
57
－
57
－
－
－
－
(57)
40,052

16,146－－
4,903
11,242－－35,015855
11,933
8,445
11,833－
1,947－(18,868)
17,272
－
－
－
－
408
－
78
78
－
－
251
(408)
16,864

Fundamental profit

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥150 million in respect of the six
months ended September 30, 2010 and ¥76 million in respect of the six months ended September 30, 2011.
2. The following amounts in respect of gains / losses from trading securities have been excluded from capital gains / losses andincluded in fundamental profit due to the their income nature (being interest and dividend income): ¥2,493 million in respect of
the six months ended September 30, 2010 and ¥3,703 million in respect of the six months ended September 30, 2011.
3. For the six months ended September 30, 2011, other non-recurring losses represent the losses relating to revision of theCompany's retirement benefit plans.

Breakdown of Fundamental Profit

Fundamental profit
Loading profit
Mortality and morbidity profit
Negative spread- 22 -

Six months ended
September 30, 2010(100 millions of yen)Six months ended
September 30, 2011

334
24
368
(58)

361
8
393
(39)

Fukoku Mutual Life Insurance Company

7. Disclosed Claims Based on Categories of Obligors
As ofMarch 31, 2011
Claims against bankrupt and quasi-bankrupt obligors
Claims with collection risk
Claims for special attention
Subtotal[Percentage of total]
Claims against normal obligors
Total

491
589
2,236
3,317
[0.29%]
1,145,795
1,149,112(Millions of yen)
As of
September 30, 2011
437
757
2,293
3,487
[0.32%]
1,093,076
1,096,564

Notes: 1. Claims against bankrupt and quasi-bankrupt obligors are loans to borrowers who are subject to bankruptcy, corporate
reorganisation or rehabilitation or other similar proceedings and other borrowers in serious financial difficulties.
2. Claims with collection risk are loans to obligors (other than bankrupt and quasi-bankrupt obligors) with deteriorated financial
condition and results of operations from which it is unlikely that the principal and interest on the loans will be recovered.
3. Claims for special attention are loans on which principal and/or interest are past due for three months or more and loans witha concessionary interest rate, as well as loans with renegotiated conditions in favour of the borrower, including renegotiatedschedule and/or waivers, in each case, other than the loans described in note 1 or 2 above.
4. Claims against normal obligors are all other loans.

8. Risk-monitored Loans
As of
March 31, 2011
Credits to bankrupt borrowers
Delinquent loans
Delinquent loans past three months or more
Restructured loans
Total[Percentage of total loans]

297
774
−
2,236
3,308
[0.29%](Millions of yen)
As of
September 30, 2011
274
910
−
2,293
3,477
[0.32%]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after deductions ofcollateral value or the amounts collectible through the execution of guarantees is written-off directly from the borrower’s balance as
the estimated uncollectible amounts. The amounts written-off related to credits to bankrupt borrowers were ¥1 million as of
September 30, 2011, and ¥1 million as of March 31, 2011. The amounts written-off related to delinquent loans were ¥361 million
as of September 30, 2011 and ¥258 million as of March 31, 2011.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate reorganisation or rehabilitation or othersimilar, including but not limited to foreign, proceedings. Accruing interest of these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant delay in repayment ofprincipal or interest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same reasons as described in note 2
above, and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled
to assist and support the borrowers in the restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment of principal are delinquent for threemonths or more from the due date under the terms of the related loan agreements, excluding those loans classified as credits
to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or exemptions,
rescheduling of due date of principal or interest payment, waiver of claim or other terms, have been negotiated for the purpose of
assisting and supporting theborrowers in the restructuring of their business. This category excludes loans classified as credits tobankrupt borrowers, delinquent loans and delinquent loans past three months or more.

- 23 -

Fukoku Mutual Life Insurance Company

9. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2011

As of
September 30, 2011

593,497

601,057

Foundation funds and surplus

156,224

157,031

Reserve for price fluctuation of securities

33,432

34,476

Contingency reserve

146,071

146,150

Allowance for possible loan losses

1,957

1,819

Net unrealized gains on available-for-sale securities x 90%(multiplied by 100% if losses)

14,101

31,629Net unrealized gains on real estate x 85%

73,176

68,737

Excess amount of policy reserve based on full-time Zillmer method

103,984

108,386

Qualifying subordinated debt

35,214

31,182

Deductible items(10,000)(19,000)

Others39,33440,643109,064

110,667

Total solvency margin

Total amount of risk(A)

( R1 + R8 ) 2 + (R2 + R3 + R7 ) + R4
2

(B)

Insurance risk

R1

28,485

28,114

3rd sector insurance risk

R8

9,443

9,491

Assumed investment yield risk

R2

18,52818,410Investment risk

R380,78382,705Business risk

R4

2,745

2,774

Minimum guarantee risk

R7

11

11

1088.3%1086.2%

Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Law and Ministry of
Finance Ordinance No. 50, 1996.
2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
3. "Minimum guarantee risk" is calculated by standard method.

- 24 -

Fukoku Mutual Life Insurance Company

(reference) Solvency Margin Ratio under the New Standards(Millions of yen)

As ofMarch 31, 2011

As of
September 30, 2011

581,306

588,866

Foundation funds and surplus

156,224

157,031

Reserve for price fluctuation of securities

33,432

34,476

Contingency reserve

146,071

146,150

Allowance for possible loan losses

1,957

1,819

Net unrealized gains on available-for-sale securities x 90%(multiplied by 100% if losses)

14,101

31,629Net unrealized gains on real estate x 85%

73,176

68,737

Excess amount of policy reserve based on full-time Zillmer method

103,984

108,386

Qualifying subordinated debt

35,214

31,182−−

Deductible items(10,000)(19,000)

Others27,14328,452

173,928

173,971

Total solvency margin(A)

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin

Total amount of risk

( R1 + R8 ) 2 + (R2 + R3 + R7 ) + R4
2

(B)

Insurance risk

R1

28,485

28,114

3rd sector insurance risk

R8

9,443

9,491

Assumed investment yield risk

R2

42,76042,498Investment risk

R3

122,801

123,185

Business risk

R4

4,069

4,065

Minimum guarantee risk

R7

7

8

668.4%

676.9%

Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. In accordance with Cabinet Office Ordinance No.23, 2010 and Financial Services Agency Ordinance No.48, 2010, the standards for the
calculation of total solvency margin and total amount of risk are planned to be revised to tighten margin calculation and tighten andrefine risk measurements. The revised standards will be officially applied at the end of fiscal year ending March 31, 2012. The above
figures are calculated by applying the revised standards to the financial results as of March 31, 2011 and September 30, 2011
2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
3. "Minimum guarantee risk" is calculated by standard method.

- 25 -

Fukoku Mutual Life Insurance Company

10. Status of Separate Account(1) Separate Account Assets by Products
As of March 31, 2011

(Millions of yen)
As of September 30, 2011

AmountAmountIndividual variable insurance−−

Individual variable annuities

538

494

Group annuities

82,74273,555

Total

83,28074,049(2) Individual Variable Insurance (Separate Account)
The company has not sold the individual variable insurance.

(3) Individual Variable Annuities (Separate Account)(i) Policies in Force(Millions of yen)
As of September 30, 2011

As of March 31, 2011
NumberAmountNumberAmountIndividual annuities

185

594

177

579

Total

185

594

177

579

(ii) Breakdown of Separate Account Assets for Individual Variable Annuities(Millions of yen)
As of September 30, 2011

As of March 31, 2011
AmountPercentage

AmountPercentage

Cash, deposits, call loans

82

15.4

88

17.8

Securities

455

84.6

406

82.2

Domestic bonds

−

−

−

−

Domestic stocks

−

−

−

−

Foreign securities

−

−

−

−

Foreign bonds

−

−

−

−

Foreign stocks and other securities

−

−

−

−

455

84.6

406

82.2

Loans

−

−

−

−

Others−−−−Allowance for possible loan losses

−

−

−

−

538

100.0

494

100.0

Other securities

Total- 26 -

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)Six months ended
September 30, 2011

Six months ended
September 30, 2010

AmountAmountInterest, dividends and other income

11

Gains on sales of securities−−

Gains on valuation of securities

29

41

Gains on redemption of securities−−

Gains from derivative instruments−−

Foreign exchange gains, net−−

Other investment income−−

Losses on sales of securities

2

1

Losses on valuation of securities

68

66

Losses on redemption of securities−−

Losses from derivative instruments−−

Foreign exchange losses, net−−

Other investment expenses

−

−

(40)

(25)

Net investment income(iv) Fair Value Information on Securities in Separate Account for Individual Variable Annuities* Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of September 30, 2011

As of March 31, 2011
Net valuation
gains/losses
Carrying value on
included in thebalance sheets
statementsof operations

Trading securities

455

Carrying value onbalance sheets

(26)

406

Net valuation
gains/losses
included in thestatementsof operations(24)

Note: The company had no balances of money held in trust and derivative instruments.

- 27 -

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Securities (Total of General Account and Separate Account)
Net Valuation Gains/Losses on Trading Securities(Millions of yen)

Trading securities

As of March 31, 2011
Net valuation gains/losses
Carrying value on
included in the statementbalance sheetof operations
339,235(4,697)

As of September 30, 2011
Net valuation gains/losses
Carrying value on
included in the statementbalance sheetof operations
308,063(15,809)

Note: The table above includes money held in trust for trading purpose.

Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2011

Book value

As of September 30, 2011

Gains/losses

Fair value

Gains
Held-to-maturity debt securities

Book value

Fair value

Gains/losses

Losses

Gains

Losses427,312436,409

9,096

9,983

886

460,231484,605

24,37325,341

Domestic bonds

378,178

387,523

9,345

9,345

−

416,483

439,797

23,31423,547233

Foreign bonds

49,134

48,885

(249)

637

886

43,74844,807

1,058

1,794

735

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

652,180

672,087

19,90723,872

3,965

663,603699,635

36,032

38,1782,146

Domestic bonds

644,831664,759

19,92823,872

3,944

650,978

687,030

36,052

38,1332,081

Foreign bonds

7,349

7,328

(21)

0

21

12,625

12,604

(20)

44

65

1,393

868

(524)

−

524

1,393

785

(607)

−

607
79,801

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

968

2,331,356

2,347,024

15,66776,48660,8182,460,599

2,495,743

35,144

114,945

Domestic bonds

1,389,523

1,407,660

18,13624,3696,232

1,450,606

1,513,769

63,16365,6872,523

Domestic stocks

300,218

317,678

17,46043,32725,867290,248

294,054

3,805

36,84933,043Foreign securities

593,121575,527(17,594)

7,582

25,177667,272

640,470(26,801)

11,74838,549Foreign bonds

411,835

403,179(8,656)

4,572

13,228464,819458,245(6,574)

9,408

15,982Foreign stocks and other securities

181,285

172,347(8,938)3,010

11,948202,452

182,224(20,227)

2,339

22,56748,491

46,158(2,333)

1,207

3,541

52,47247,448(5,023)

660

5,684

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

3,412,242

3,456,389

44,146110,342

66,195

3,585,828

3,680,770

94,941

178,466

83,524

Domestic bonds

2,412,533

2,459,943

47,41057,587

10,1762,518,067

2,640,597

122,530

127,368

4,838

Domestic stocks

300,218

317,678

17,46043,32725,867290,248

294,054

3,805

36,84933,043Foreign securities

650,998

632,608(18,390)

8,220

26,610725,039698,668(26,370)

13,58739,958Foreign bonds

468,319459,392(8,927)

5,209

14,136521,193515,658(5,535)

11,247

16,783Foreign stocks and other securities

182,678

173,215(9,462)

3,010

12,473203,845

183,010(20,834)

2,339

23,174

48,491

46,158(2,333)

1,207

3,541

52,47247,448(5,023)

660

5,684

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

Other securities

Total

Other securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments and Exchange Law.

・ Held-to-maturity Debt Securities(Millions of yen)
As of March 31, 2011
Carrying
value on thebalancesheet

Securities whose fair value exceeds the
carrying value on the balance sheet

As of September 30, 2011

Fair value Differences

Carrying
value on thebalance
sheet

Fair value Differences

402,605

412,589

9,983

406,128

431,470

25,341

Domestic bonds

378,178

387,523

9,345

377,801

401,349

23,547

Foreign bonds

24,42725,065637

28,32630,121

1,794

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

24,706

23,819(886)

54,10353,134(968)

Securities whose fair value does not exceed
the carrying value on the balance sheet

−

−

−

38,681

38,448(233)

24,706

23,819(886)

15,421

14,686(735)

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

Domestic bonds
Foreign bonds- 28 -

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)
As of March 31, 2011
Carrying
value on thebalancesheet

Bonds whose fair value exceeds the carrying
value on the balance sheet

As of September 30, 2011

Fair value Differences

Carrying
value on thebalance
sheet

Fair value Differences

533,017556,889

23,872

624,162

662,341

38,178532,817556,689

23,872620,755

658,889

38,133

200

200

0

3,406

3,451

44

−

−

−

−

−

−

119,163

115,198(3,965)39,44037,294(2,146)

Domestic bonds

112,013108,069(3,944)30,22228,141(2,081)

Foreign bonds

7,149

7,128

(21)

9,218

9,153

(65)

−

−

−

−

−

−

Domestic bonds
Foreign bonds
OthersBonds whose fair value does not exceed thecarrying value on the balance sheet

Others・ Available-for-sale Securities(Millions of yen)
As of March 31, 2011
Book value
Securities whose carrying value on the balance
1,288,501
sheet exceeds the book value

As of September 30, 2011

Carrying
Carrying
value on thevalue on the
Differences Book value
Differencesbalancebalance
sheet
sheet

1,364,988

76,486

1,774,778

1,889,723

114,945

Domestic bonds

878,177

902,546

24,3691,422,653

1,488,340

65,687

Domestic stocks

154,257

197,585

43,327

107,670

144,519

36,849Foreign securities

238,266

245,848

7,582

230,160

241,908

11,748Foreign bonds

173,763

178,335

4,572

186,400

195,809

9,408

Foreign stocks

64,502

67,5133,010

43,75946,0992,339

17,80019,007

1,207

14,294

14,954660

Money held in trust

−

−

−

−

−

−

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−
(79,801)

Other securities

Securities whose carrying value on the balance
1,042,854
sheet does not exceed the book value

982,035(60,818)

685,821606,020

Domestic bonds

511,346

505,113(6,232)

27,952

25,428(2,523)

Domestic stocks

145,960

120,093(25,867)

182,578

149,535(33,043)

Foreign securities

354,855

329,678(25,177)

437,111

398,562(38,549)

Foreign bonds

238,072

224,843(13,228)

278,419

262,436(15,982)

Foreign stocks

116,783

104,834(11,948)

158,692

136,125(22,567)

30,691

27,150(3,541)

38,17832,494(5,684)

Money held in trust

−

−

−

−

−

−

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

Other securities* Book value of securities whose market value are deemed extremely difficult to obtain are as follows:(Millions of yen)
As of March 31, 2011

As of September 30, 2011−−

Unlisted foreign bonds−−

Others−−−−

Held-to-maturity bonds

Policy-reserve-matching bonds
Investments in subsidiaries and affiliates

26,61635,616

Available-for-sale securities

17,047

18,332Unlisted domestic stocks (except over-the-counter stocks)

8,345

8,336

Unlisted foreign stocks (except over-the-counter stocks)

500

500

Unlisted foreign bonds
OthersTotal- 29 -

−

−

8,201

9,496

43,66453,949

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (Total of General Account and Separate Account)(i) Gains and Losses on Derivatives
As of March 31, 2011
Hedge accounting applied
Hedge accounting not applied
Total
As of September 30, 2011
Hedge accounting applied
Hedge accounting not applied
Total(Millions of yen)Interest- Currencyrelated
related(2,290)560
69(5,996)629(8,287)
Interest- Currencyrelated
related
2,721
396
(89)
1,669
307
4,390

Stockrelated
−
(123)
(123)
Stockrelated
−
(117)
(117)

Bondrelated−−−
Bondrelated−−−

Others−−−Others−−−Total(1,730)(6,049)(7,780)
Total
3,118
1,462
4,581

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of \2,290 million as of March 31, 2011and gains of \2,721 million as of September 30, 2011) included in gains and losses with hedge accounting applied, and gains
and losses with hedge accounting not applied are reported in the statements of operations.

(ii) Hedge Accounting not Applied・ Interest-related Transactions
As of March 31, 2011
Notional amount/contract value
Fair
Over
value
1 yearOver-the-counter transactions
Foreign interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
US dollar
Total−
16,404
16,404−
16,404
16,404−
69
69(Millions of yen)
As of September 30, 2011
Notional amount/contract value
Fair
Gains
Over
value
(losses)
1 yearGains(losses)

−
69
69
69

−
7,757
7,757

−
7,757
7,757

−
(89)
(89)

−
(89)
(89)
(89)

* Interest rate swap contracts by contractual maturity dates
As of March 31, 2011

(Millions of yen)
As of September 30, 2011

Foreign interest rate swap contracts
1 year or
shorter
Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
US dollar
Average fixed rate (payment)
US dollar

−
−
−
−
−
−
−
−

Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years

1 year or
shorter−−−
16,404
0.31%
0.31%
3.49%
3.49%

−
−
−
−
−
−
−
−

Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years
−
−
−
7,757
0.34%
0.34%
2.22%
2.22%

Note: No ending balance of Yen interest rate swap contracts as of March 31, 2011 and September 30, 2011.

- 30 -

Fukoku Mutual Life Insurance Company

・ Currency-related Transactions
As of March 31, 2011
Notional amount/contract value
Fair
value
Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
US dollar
Euro
British pound
Canadian dollar
Australian dollar
Singapore dollar
BoughtCurrency Options
Sold
Calls
[
US dollar[
Puts[
Bought
Calls
[
Puts
[
US dollar[

212,028
93,51528,042
11,80938,86139,798
0
−

−
−
−
−
−
−
−
−

−
−]
−
−]
−
−]

−

−
−]
−
−]
−
−]

Gains
(losses)

218,024
94,762
28,975
12,03040,16842,0870−−(5,996)(1,247)(932)(220)(1,306)(2,289)
(0)
−

− [

−
−

− [

−
−

− [

−

− [

−
−
−

− [

−
−

Total

− [

(Millions of yen)
As of September 30, 2011
Notional amount/contract value
Fair
Gains
value
(losses)Over
1 year

165,690
66,68847,86125,452
21,852
3,834
0
−

−
−
−
−
−
−
−
−

15,73163 ]
15,731
63 ]
−
−]

−

−
−]
15,00086 ]15,00086 ]163,996
66,66147,02625,137
21,427
3,743
0
−

1,693
27
835
315
425
91
(0)
−

7

55

7

55

−

−

−

−

6

(80)

6

(80)

−
−
−
−
−

(5,996)

1,669

Notes: 1. Figures in [ ] are option premiums which are included in balance sheet.
2. Forward exchange rates are used for exchange rates as of the end of period.

・ Stock-related Transactions
As of March 31, 2011
Notional amount/contract value
Fair valueOver
1 yearExchange-traded transactions
Yen stock index futures
Sold
Bought

9,636
−

−
−

9,760
−

Total

Gains
(losses)(123)−(Millions of yen)
As of September 30, 2011
Notional amount/contract value
Gains
Fair value(losses)Over
1 year

3,797
−

(123)

−
−

3,915
−

(117)
−
(117)

Note: Figures in [ ] are option premiums which are included in balance sheet.

・ Bond-related Transactions
No ending balance of bond-related transactions as of September 30, 2011 and March 31, 2011.

- 31 -

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied・ Interest-related Transactions[As of March 31, 2011](Millions of yen)

Method ofHedged items
Hedging instruments
hedge accounting
Deferral hedge
Yen interest rate swap contracts LoansmethodReceipt fixed, payment floating
Payment fixed, receipt floating
Total

Notional amount / contract valueOver 1 year
39,863−

Fair value

17,905−560−

1 year or shorter
Over 1 year to 3 years
21,95817,000
1.35%
1.64%
0.45%
0.62%
−
−
−
−
−
−

(Millions of yen)Over 3 years
905
2.28%
1.25%
−
−
−

* Interest rate swap contracts by contractual maturity dates

Notional amount (receipts fixed, payments floating)
Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)
Average floating rate (receipt)
Average fixed rate (payment)[As of September 30, 2011](Millions of yen)

Method of
Hedging instruments
Hedged items
hedge accounting
Deferral hedge
Loans
Interest rate swap contracts
methodReceipt fixed, payment floating
Payment fixed, receipt floating
Total

Notional amount / contract valueOver 1 year
32,760−Fair value

12,802−396−* Interest rate swap contracts by contractual maturity dates(Millions of yen)
1 year or shorter
Over 1 year to 3 years
19,95812,000
1.44%
1.65%
0.50%
0.59%
−
−
−
−
−
−

Notional amount (receipts fixed, payments floating)
Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)
Average floating rate (receipt)
Average fixed rate (payment)

Over 3 years
802
2.29%
1.24%
−
−
−

Note: No ending balance of foreign interest rate swap contracts as of March 31, 2011 and September 30, 2011.

・ Currency-related Transactions[As of March 31, 2011]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year

Fair Value
−
−
−
−
−

130,705
94,58927,878
8,237−

132,995
95,09529,370
8,530
−

Total

[As of September 30, 2011]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year
122,651
86,60728,047
7,996−

Fair Value
−
−
−
−
−

119,929
86,47226,010
7,446
−

Total
Notes 1. Forward exchange rates are used for exchange rates as of the end of fiscal period.
2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward
contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

・ Stock-related Transactions
No ending balance as of March 31, 2011 and September 30, 2011.

・ Bond-related Transactions
No ending balance as of March 31, 2011 and September 30, 2011.

- 32 -

Fukoku Mutual Life Insurance Company

11. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data

(Millions of yen)
Year ended
March 31,2011

Ordinary revenues
Ordinary profits
Net surplus for the period
Comprehensive income

795,010
40,995
28,10030,952
As ofMarch 31, 2011

Total assets

6,670,346

Six months ended
September 30, 2011

597,043
18,742
17,66031,302As of
September 30, 2011
6,793,397(2) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0- 33 -

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of March 31, 2011

Assets:Cash and deposits

As of September 30, 2011

314,392

79,67398,700

Monetary claims bought

−
1,424

Money held in trust

33,16934,219Securities

4,681,280

5,052,410

Loans

1,146,719

1,094,285

Tangible fixed assets

284,863

279,398

Intangible fixed assets

15,712

14,978Call loans

Agency receivables
Reinsurance receivables

1,386

4

3

174

117

Other assets

106,524

59,503

Deferred tax assets

88,745

81,234

Allowance for possible loan losses
Total assets(2,665)(2,514)

6,670,346

6,793,397

As of March 31, 2011

Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reserve for dividends to policyholders (subsidiary)
Agency payables

As of September 30, 2011

6,202,567

6,405,969

32,792

23,4406,115,914

6,317,149

53,20564,828

654

551

1,685

1,394

Reinsurance payables

100

103

Subordinated bonds

35,214

31,182Other liabilities

129,127

53,238Reserve for employees' retirement benefits

50,153

46,903

Reserve for price fluctuation of securities

33,86535,023

Deferred tax liabilities for revaluation reserve for land

19,936

19,064

Total liabilities

6,472,650

6,592,878

Net assets:
Foundation funds

40,00035,000

Accumulated foundation funds redeemed

46,00071,000Reserve for revaluation

112

112

Consolidated surplus

98,22866,892

Total foundation funds, surplus and others

184,340

173,004

Net unrealized gains (losses) on available-for-sale securities, net of tax

10,00623,449

365

259

1,366

87

Deferred valuation gains (losses) under hedge accounting
Revaluation reserve for land, net of tax
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets- 34 -

(761)

(744)

10,977

23,052

2,378

4,461

197,696

200,518

6,670,346

6,793,397

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)

Ordinary revenues:
Premium and other income
Investment income[Interest, dividends and other income][Gains from money held in trust, net]
[Gains on sales of securities][Gains from derivative instruments, net]
Other ordinary revenues[Reversal of reserve for outstanding claims]
Total ordinary revenues
Ordinary expenditures:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision for policy reserve and others
Provision for policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Investment expenses[Interest expenses][Losses from money held in trust, net]
[Losses from trading securities, net]
[Losses on sales of securities][Losses on valuation of securities][Losses from separate accounts, net]
Operating expenses
Other ordinary expenditures
Total ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Reversal of allowance for possible loan losses
Gain on change in equity
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Losses on reduction entry of real estate for tax purpose
Effect of applying the accounting standard for asset retirement obligations

Total extraordinary losses
Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net surplus before minority interests
Minority interests
Net surplus for the period- 35 -

Six months ended
September 30, 2010

Six months ended
September 30, 2011

701,099
84,237[59,936][163][16,187][7,833]
9,673[3,591]
795,010

500,799
81,188[64,095][−][5,436][11,242]
15,054[9,352]597,043

358,966[116,419][44,560][99,939][86,916][10,882]299,692
299,62565
025,843[712][−][3,114][5,587][4,077][5,728]57,244
12,269754,015
40,995271,251[86,943][47,052][67,232][54,765][15,032]
201,280
201,23445
043,357[639][779][8,230][8,449][11,833][5,954]
51,22911,181
578,301
18,742

0
76
−
77

4,639
−
55
4,694

28
239
1,070
−
967
2,306
185
38,58012,551(2,142)
10,40928,171
71
28,100

55
284
1,158
9
−
1,507
216
21,712
4,919(1,013)
3,906
17,806145
17,660

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)

Net surplus before minority interests
Other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of tax

Deferred valuation gains (losses) under hedge accounting
Foreign currency translation adjustment
Comprehensive income
Comprehensive income attributable to parent company
Comprehensive income attributable to minority interests- 36 -

Six months ended
September 30, 2010

Six months ended
September 30, 2011

28,171
2,780
2,928
(53)
(94)
30,95230,727224

17,806
13,496
13,585(106)
1731,30231,013
288

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows(Millions of yen)Six months ended
September 30, 2010

Six months ended
September 30, 2011

38,580
2,393
2,855
239
391
(3,591)
299,625
65
0
185
134
234
1,070
(59,936)(5,676)
712
2,082
993
19,118299,478
63,548(1,534)(11,006)(300)(2,305)
347,880

21,712
3,228
2,812
284
381
(9,352)201,234
45
0
216
(150)
(3,250)1,158(64,095)
18,230639
1,947(4,585)
16,890187,349
69,512(1,413)(12,804)(319)(12,436)
229,888(1)
256(3,500)3,581(1,138,814)
784,224(57,406)
92,2106,277
5,999(307,172)
40,707
(888)
8
(631)
(308,683)

259
37(9,800)7,929(731,531)
311,806(43,287)
89,8444,015
3,697(367,027)(137,139)(1,069)7,039(637)(361,695)

Cash flows from operating activities:
Surplus before income taxes
Depreciation of real estate for rent and other assets
Depreciation
Impairment losses
Amortization of goodwill
Increase (Decrease) in reserve for outstanding claims
Increase (Decrease) in policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Provision for reserve for dividends to policyholders (subsidiary)
Increase (Decrease) in allowance for possible loan losses
Increase (Decrease) in reserve for employees' retirement benefits
Increase (Decrease) in reserve for price fluctuation of securities
Interest, dividends and other income(Gains) Losses on securities
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets
OthersSubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Dividends to policyholders paid (subsidiary)Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities (I)Cash flows from investing activities:(Increase) Decrease in deposits
Proceeds from sales and redemption of monetary claims bought
Payments for increase in money held in trust
Proceeds from decrease in money held in trust
Payments for purchase of securities
Proceeds from sales and redemption of securities
Payments for additions to loans
Proceeds from collections of loans
Proceeds from settlement of derivatives
OthersSubtotal (IIa)(I+IIa)Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchase of intangible fixed assets
Net cash provided by (used in) investing activities- 37 -

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows (Continued)(Millions of yen)Six months ended
September 30, 2010

Six months ended
September 30, 2011

−
−
(892)
−
(15)
(59)
(967)
(514)
37,714
173,885
211,600

20,000(25,000)
(892)
1,999
(12)
(104)
(4,009)51(135,765)
313,939
178,173

Cash flows from financing activities:
Financing of additional foundation funds
Redemption of foundation funds
Interest payment for foundation funds
Proceeds from stock issuance to minority shareholders
Dividends paid to minority interests
Payments for lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period- 38 -

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets(Millions of yen)Six months ended
September 30, 2010

Six months ended
September 30, 2011

40,00040,000−−−40,00020,000(25,000)(5,000)35,00046,00046,000−−46,00025,00025,00071,000

112

112

−
112

−
112

77,02098,228(19,505)(892)
28,100
−
(662)
7,039
84,059(24,381)(892)
17,660(25,000)
1,278(31,335)
66,892

163,132

184,340−(19,505)−(892)
28,100
−
−
(662)
7,039
170,171

20,000(24,381)
25,000(892)
17,660(25,000)(25,000)
1,278(11,335)
173,004

Foundation funds, surplus and others
Foundation funds
Balance at the beginning of current period
Changes in the current period
Financing of additional foundation funds
Redemption of foundation funds
Total changes in the current period
Balance at the end of current period
Accumulated foundation funds redeemed
Balance at the beginning of current period
Changes in the current period
Additions to accumulated foundation funds redeemed
Total changes in the current period
Balance at the end of current period
Reserve for revaluation
Balance at the beginning of current period
Changes in the current period
Total changes in the current period
Balance at the end of current period
Consolidated surplus
Balance at the beginning of current period
Changes in the current period
Additions to reserve for dividends to policyholders
Payment of interest on foundation funds
Net surplus for the period
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current period
Balance at the end of current period
Total foundation funds, surplus and others
Balance at the beginning of current period
Changes in the current period
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the period
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current period
Balance at the end of current period- 39 -

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets (Continued)(Millions of yen)Six months ended
September 30, 2010

Six months ended
September 30, 2011

48,045

10,0062,775
2,775
50,82013,442
13,442
23,449

538

365

(53)
(53)
484

(106)
(106)
259

773

1,366

662
662
1,436

(1,278)(1,278)
87

(583)

(761)

(94)
(94)
(677)

17
17
(744)

48,774

10,9773,289
3,289
52,064

12,075
12,07523,052

2,513

2,378

209
209
2,722

2,082
2,082
4,461

214,419

197,696−(19,505)−(892)
28,100
−
−
(662)
3,499
10,538
224,958

20,000(24,381)
25,000(892)
17,660(25,000)(25,000)
1,278
14,157
2,822
200,518

Accumulated other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of tax
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Deferred valuation gains (losses) under hedge accounting
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Revaluation reserve for land, net of tax
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Foreign currency translation adjustment
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Total accumulated other comprehensive income
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Minority interests
Balance at the beginning of current period
Changes in the current period
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes in the current period
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the period
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Net changes, excluding foundation funds, surplus and others
Total changes in the current period
Balance at the end of current period- 40 -

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the Insurance Business Law of Japan and its
related rules and regulations and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects from accounting principles generally accepted in countries andjurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been eliminated. As a result, total in yen shown herein
do not necessarily agree with the sum of the individual amounts.
2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries for the six months ended September 30, 2011 are listed below:
Fukoku Shinyo Hosho Company Limited
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Company
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Limited
Fukoku Life International (America) Inc.
Major unconsolidated subsidiary is Fukoku Seimei Building Company Limited.
Seven subsidiaries are excluded from the scope of consolidation, as each one of them is small in
its total assets, amount of sales, net surplus for the period and surplus and is sufficiently insignificant
to reasonable judgement on its impact on the financial position and results of operation of theCompany's group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Seimei building Company Limited, etc.) are insignificant
in their impact on net surplus and surplus, and also immaterial as a whole, therefore, application ofequity method is withheld.
There are no affiliates for the six months ended September 30, 2011.
(3) Interim Closing Date of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, the interim closing date of overseas subsidiaries is June
30. For the preparation of consolidated financial statements, financial statements as of that date areused and concerning any important transaction taking place in between June 30 and September 30,
necessary adjustments for consolidation are made.

II. Notes to Balance Sheet
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:- 41 -

Fukoku Mutual Life Insurance Company

i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

Policy-reserve-matching bonds are stated at amortized cost under the straight-line method,
cost being determined by the moving average method in accordance with “Temporary
Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No.21 issued by the Japanese Instituteof Certified Public Accountants on November 16, 2000).

iv)

Investments in unconsolidated subsidiaries and affiliates which are not accounted for underthe equity method are stated at cost, cost being determined by the moving average method.

v)

Available-for-sale securities with fair market value are stated at fair market value based on
the market prices at the balance sheet date. Costs of their sales are determined by themoving average method. Net unrealized gains or losses on these available-for-sale securities,
net of taxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land
(Law No.34 promulgated on March 31, 1998). The difference between fair value and book value
resulting from the revaluation, net of related taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax is recorded as deferred tax liabilities forrevaluation reserve for land.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of the Company’s tangible fixed assets is calculated by the following methods.
• Buildings (excluding lease assets)i)

Acquired on or before March 31, 1998: Previous declining-balance methodii)

Acquired on or after April 1, 1998 but on or before March 31, 2007: Previous straight-line
methodiii)

Acquired on or after April 1, 2007: Straight-line method• Assets other than buildings (excluding lease assets)i)

Acquired on or before March 31, 2007: Previous declining-balance methodii)

Acquired on or after April 1, 2007: Declining-balance method- 42 -

Fukoku Mutual Life Insurance Company

• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities are translated into Japanese yen at the effective
exchange rate prevailing at the balance sheet date.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who aresubstantially bankrupt (hereinafter called “substantially bankrupt borrowers”), the Company
provides the remaining amount of credits after the direct write-off described below and the
deductions of the amount expected to be collected through the disposal of collateral or the
execution of guarantees.

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy, the Company provides the amounts deemed as necessary considering theborrowers’ ability to pay, within the amounts after deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of September 30, 2011 was ¥404 million.
(7) Reserve for Employees’ Retirement Benefits
The Company and its consolidated subsidiaries adopt accounting standards for employees' retirement
benefits (Business Accounting Council dated June 16, 1998) and account for the reserve for
employees’ retirement benefits based on the projected benefit obligation and plan assets at thebalance sheet date.
The Company adopts “Guidance on Accounting for Transfers between Retirement Benefit Plans”(ASBJ Guidance No.1 issued by the Accounting Standards Board of Japan on January 31, 2002) as
the Company transferred qualified retirement pension plan to defined benefit pension plan, and part oflump sum benefit plan to defined contribution pension plan on July 1, 2011.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessee
Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.

- 43 -

Fukoku Mutual Life Insurance Company

(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “investment expenses”, which is calculated by deducting an amountequivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in
the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
Deposits denominated in foreign currencies for which forward foreign exchange contracts areused to hedge the foreign currency fluctuations are translated at the contract rates if the forward
contracts qualify for specific hedge accounting. In this case, exchange differences between theexchange rate on the trade date and the forward contract rate are allocated to each fiscal year fromthe date contracted to the date settled.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes
on certain assets, which are not deductible from consumption taxes withheld and that are stipulated to
be deferred under the Tax Law, are deferred as other assets and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at thebalance sheet date is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
(14) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i)
ii)

Software for internal use is amortized based on a straight-line method over the estimateduseful lives.
Lease assets are amortized based on a straight-line method over the lease terms.

(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.

- 44 -

Fukoku Mutual Life Insurance Company

(16) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
2. Changes in Presentation
Effective for the six months ended September 30, 2011, in accordance with the amendment of the
Enforcement Regulation of the Insurance Business Law, the presentation of financial statements has
been changed as follows.
(a) As for the statement of operations, “reversal of allowance for possible loan losses” which waspresented in “extraordinary gains” until previous fiscal year is included in “investment income”.
(b) As for the statement of changes in net assets, the item which was presented as “balance at theend of previous fiscal year” until previous fiscal year is presented as “balance at the beginning ofcurrent period”.
3. Financial Instruments
The carrying amounts, fair values and their related differences of major financial assets and liabilities
as of September 30, 2011 were as follows:
Carrying
amountFair value

Difference(Millions of yen)

Monetary claims bought:
Claims treated as loans ....................................
Total monetary claims bought ...........................
Money held in trust:
Trading securities..............................................
Total money held in trust...................................
Securities:
Trading securities..............................................
Held-to-maturity debt securities........................
Policy-reserve-matching bonds ........................
Available-for-sale securities ..............................
Total securities ..................................................
Loans:
Policy loans.......................................................
Ordinary loans ..................................................
Total loans.........................................................
Derivative instruments:
Hedge accounting not applied ..........................
Hedge accounting applied ................................
Total derivative instruments ..............................

¥

1,386
1,386

¥

1,410
1,410

¥

24
24

33,21933,21933,21933,219――203,930
760,256
1,368,437
2,630,139
4,962,764

203,930
794,055
1,425,666
2,630,139
5,053,792―
33,79957,229―91,02873,279
1,021,006
1,094,285

73,279
1,053,905
1,127,184(0 )
32,89932,898

1,462
3,118
4,581

1,462
3,118
4,581

―
―
―

¥

¥

¥

(1) Securities including deposits and monetary claims bought which are treated as securities basedon “Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the balance- 45 -

Fukoku Mutual Life Insurance Company

sheet date. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or
counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships whereby partnership assets consist of unlisted stocks whose fair values are deemed
extremely difficult to obtain, are excluded from above securities. The carrying amounts ofinvestments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships as of September 30, 2011 were ¥398 million, ¥8,837 million and ¥9,496 million,
respectively.
(2) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set
up due to the characteristics that the loan is limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and borrowers who are not currently bankrupt but have a high possibility of bankruptcy
and monetary claims bought treated as loans are computed by deducting the amount of theallowance for doubtful accounts from the book values before direct write-offs.
(3) Derivative instruments:i)

The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot
exchange rate and forward contract rate.
4. Investment and Rental Property
Information on the carrying amounts and the fair values of investment and rental properties theCompany holds is omitted from the notes because there were not significant changes in those figurescompared to the end of previous fiscal year.
5. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥263 million, ¥889 million and ¥2,311 million, respectively and their total
amount was ¥3,463 million as of September 30, 2011. There was no balance of delinquent loans past
3 months or more as of September 30, 2011.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described above, and exclude credits to bankrupt borrowers and loans for which interest
payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.

- 46 -

Fukoku Mutual Life Insurance Company

Delinquent loans past 3 months or more are loans for which interest payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers
in the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by¥13 million and delinquent loans described above by ¥383 million as of September 30, 2011.
6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥133,739 million as of September 30,
2011.
7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥74,049 million as of September 30, 2011. The amount of separate account liabilities was the same as
separate account assets.
8. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the six months ended September 30, 2011 wereas follows:(Millions of yen)
Balance at the beginning of current period.................
Transfer from surplus in previous fiscal year ..............
Dividends paid in the current period ...........................
Increase in interest .....................................................
Balance at the end of current period ..........................

¥ 53,205
24,381(12,804)45¥ 64,828

9. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Company)
Changes in reserve for dividends to policyholders for the six months ended September 30, 2011 wereas follows:(Millions of yen)
Balance at the beginning of current period.................
Dividends paid in the current period ...........................
Increase in interest .....................................................
Provision for reserve for dividends to policyholders ...
Balance at the end of current period ..........................

¥ 654
(319)
0
216
¥ 551

10. Stocks of Unconsolidated Subsidiaries
The amount of stocks of unconsolidated subsidiaries the Company held as of September 30, 2011was ¥398 million.
11. Pledged Assets and Secured Debts
Assets pledged as collateral as of September 30, 2011 were ¥23,029 million of securities. Secured
debts as of September 30, 2011 were ¥4,702 million.

- 47 -

Fukoku Mutual Life Insurance Company

12. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called“reserve for outstanding claims for ceded reinsurance”) was ¥26 million as of September 30, 2011.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥58 million as of September 30, 2011.
13. Additional Foundation Funds
The Company raised additional foundation funds of ¥20,000 million during the six months ended
September 30, 2011 in accordance with Article 60 of the Insurance Business Law.
14. Redemption of Foundation Funds
In the six months ended September 30, 2011, in connection with the redemption of foundation funds of¥25,000 million, the Company reversed the reserve for redemption of foundation funds and provided
the equivalent amount for accumulated foundation funds redeemed in accordance with Article 56 of
the Insurance Business Law.
15. Commitment LineAs of September 30, 2011, there were unused commitment line agreements under which theCompany is the lender of ¥2,092 million.
16. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.
17. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥11,754 million as of September 30, 2011.
The contribution was charged as operating expenses in the year in which it was paid.

III. Notes to Statement of Operations
1. Policy Reserves for the Reinsurance Contracts
For the six months ended September 30, 2011, reversal of reserve for outstanding claims for ceded
reinsurance considered in calculation of reversal of reserve for outstanding claims was ¥16 million andprovision for policy reserve for ceded reinsurance considered in calculation of provision for policy
reserve was ¥3 million.

IV. Notes to Statement of Cash Flows
1. Scope of Cash and Cash Equivalents
Cash and cash equivalents as of September 30, 2011 consist of "Cash", "Deposits in transfer account","Current deposits", "Ordinary deposits", "Notice deposits", "Time deposits maturing within 3 months ofthe date of acquisition", "Foreign currency deposits maturing within 3 months of the date ofacquisition", "Negotiable certificate of deposits maturing within 3 months of the date of acquisition","Call loans" and "Monetary claims bought maturing within 3 months of the date of acquisition".
2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statement of cash flows to the- 48 -

Fukoku Mutual Life Insurance Company

consolidated balance sheet account as of September 30, 2011 were as follows:(Millions of yen)
Cash and deposits ..............................................................................................
Call loans ............................................................................................................
Monetary claims bought......................................................................................
Time deposits maturing over 3 months of the date of acquisition ......................
Monetary claims bought maturing over 3 months of the date of acquisition ......
Cash and cash equivalents.................................................................................

- 49 -¥ 79,673
98,7001,386(200 )(1,386 )¥ 178,173

Fukoku Mutual Life Insurance Company