MetLife 2011 Annual Report Download - page 179

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
6. Deferred Policy Acquisition Costs and Value of Business Acquired
Information regarding DAC and VOBA was as follows:
DAC VOBA Total
(In millions)
Balance at January 1, 2009 .................................................... $16,510 $ 3,491 $20,001
Capitalizations ............................................................... 2,976 — 2,976
Subtotal .................................................................. 19,486 3,491 22,977
Amortization related to: ........................................................
Net investment gains (losses) ................................................. 625 87 712
Other expenses ............................................................ (1,736) (265) (2,001)
Total amortization ......................................................... (1,111) (178) (1,289)
Unrealized investment gains (losses) .............................................. (2,314) (505) (2,819)
Effect of foreign currency translation and other ...................................... 158 56 214
Balance at December 31, 2009 ................................................. 16,219 2,864 19,083
Capitalizations ............................................................... 3,299 — 3,299
Acquisitions ................................................................. — 9,210 9,210
Subtotal .................................................................. 19,518 12,074 31,592
Amortization related to: ........................................................
Net investment gains (losses) ................................................. (108) (16) (124)
Other expenses ............................................................ (2,225) (494) (2,719)
Total amortization ......................................................... (2,333) (510) (2,843)
Unrealized investment gains (losses) .............................................. (1,258) (125) (1,383)
Effect of foreign currency translation and other ...................................... 77 (351) (274)
Balance at December 31, 2010 ................................................. 16,004 11,088 27,092
Capitalizations ............................................................... 6,858 — 6,858
Acquisitions ................................................................. — 11 11
Subtotal .................................................................. 22,862 11,099 33,961
Amortization related to: ........................................................
Net investment gains (losses) ................................................. (523) (49) (572)
Other expenses ............................................................ (3,062) (1,757) (4,819)
Total amortization ......................................................... (3,585) (1,806) (5,391)
Unrealized investment gains (losses) .............................................. (518) (361) (879)
Effect of foreign currency translation and other ...................................... (167) 447 280
Balance at December 31, 2011 ................................................. $18,592 $ 9,379 $27,971
See Note 2 for a description of acquisitions and dispositions.
The estimated future amortization expense allocated to other expenses for the next five years for VOBA is $1.3 billion in 2012, $1.1 billion in 2013,
$917 million in 2014, $774 million in 2015 and $661 million in 2016.
Amortization of DAC and VOBA is attributed to both investment gains and losses and to other expenses for the amount of gross margins or profits
originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA
that would have been amortized if such gains and losses had been recognized.
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