MetLife 2005 Annual Report Download - page 96

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
5. Insurance
Deferred Policy Acquisition Costs and Value of Business Acquired
Information regarding DAC and VOBA for the years ended December 31, 2005, 2004 and 2003 is as follows:
Deferred
Policy Value of
Acquisition Business
Costs Acquired Total
(In millions)
Balance at January 1, 2003***************************************************************** $ 9,983 $1,739 $11,722
Capitalizations ************************************************************************** 2,792 — 2,792
Acquisitions **************************************************************************** 218 40 258
Total ****************************************************************************** 12,993 1,779 14,772
Less: Amortization related to:
Net investment gains (losses) *********************************************************** 7(7) —
Unrealized investment gains (losses)****************************************************** 146 (31) 115
Other expenses *********************************************************************** 1,658 162 1,820
Total amortization ******************************************************************** 1,811 124 1,935
Less: Dispositions and other ************************************************************** (98) (2) (100)
Balance at December 31, 2003 ************************************************************* 11,280 1,657 12,937
Capitalizations ************************************************************************** 3,101 — 3,101
Acquisitions **************************************************************************** —6 6
Total ****************************************************************************** 14,381 1,663 16,044
Less: Amortization related to:
Net investment gains (losses) *********************************************************** 74 11
Unrealized investment gains (losses)****************************************************** (41) (92) (133)
Other expenses *********************************************************************** 1,757 140 1,897
Total amortization ******************************************************************** 1,723 52 1,775
Less: Dispositions and other ************************************************************** (85) 27 (58)
Balance at December 31, 2004 ************************************************************* 12,743 1,584 14,327
Capitalizations ************************************************************************** 3,604 — 3,604
Acquisitions **************************************************************************** — 3,780 3,780
Total ****************************************************************************** 16,347 5,364 21,711
Less: Amortization related to:
Net investment gains (losses) *********************************************************** 12 (25) (13)
Unrealized investment gains (losses)****************************************************** (323) (139) (462)
Other expenses *********************************************************************** 2,128 336 2,464
Total amortization ******************************************************************** 1,817 172 1,989
Less: Dispositions and other ************************************************************** 102 (21) 81
Balance at December 31, 2005 ************************************************************* $14,428 $5,213 $19,641
The estimated future amortization expense for the next five years allocated to other expenses for VOBA is $506 million in 2006, $477 million in 2007,
$449 million in 2008, $422 million in 2009 and $392 million in 2010.
Amortization of VOBA and DAC is related to (i) investment gains and losses and the impact of such gains and losses on the amount of the
amortization; (ii) unrealized investment gains and losses to provide information regarding the amount that would have been amortized if such gains and
losses had been recognized; and (iii) other expenses to provide amounts related to the gross margins or profits originating from transactions other than
investment gains and losses.
Value of Distribution Agreements and Customer Relationships Acquired
Changes in value of distribution agreements (‘‘VODA’’), and value of customer relationships acquired (‘‘VOCRA’’), which are reported within other
assets in the consolidated balance sheet, are as follows:
Years Ended
December 31,
2005 2004
(In millions)
Balance at January 1 *************************************************************************************** $— $—
Acquisitions *********************************************************************************************** 716 —
Amortization*********************************************************************************************** (1) —
Less: Dispositions and other********************************************************************************* ——
Balance at December 31 *********************************************************************************** $715 $—
MetLife, Inc.
F-34