MetLife 2012 Annual Report Download - page 186

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
17. Other Expenses
Information on other expenses was as follows:
Years Ended December 31,
2012 2011 2010
(In millions)
Compensation ................................................................................ $ 5,562 $ 5,287 $ 3,575
Pension, postretirement and postemployment benefit costs ............................................. 428 463 380
Commissions ................................................................................. 5,909 6,378 3,607
Volume-related costs ........................................................................... 599 335 379
Interest credited to bank deposits ................................................................. 78 95 137
Capitalization of DAC ........................................................................... (5,289) (5,558) (2,770)
Amortization of DAC and VOBA ................................................................... 4,199 4,898 2,477
Amortization of negative VOBA .................................................................... (622) (697) (64)
Interest expense on debt and debt issuance costs .................................................... 1,356 1,629 1,550
Premium taxes, licenses and fees ................................................................. 677 633 513
Professional services ........................................................................... 1,664 1,597 1,103
Rent, net of sublease income ..................................................................... 422 426 305
Other ....................................................................................... 2,772 3,051 1,735
Total other expenses ......................................................................... $17,755 $18,537 $12,927
Capitalization of DAC and Amortization of DAC and VOBA
See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See also Note 7 for a description of the
DAC amortization impact associated with the closed block.
Interest Expense on Debt and Debt Issuance Costs
See Notes 12, 13, 14 and 15 for attribution of interest expense by debt issuance. Interest expense on debt and debt issuance costs includes
interest expense related to CSEs. See Note 8.
Restructuring Charges
The Company commenced in 2012 an enterprise-wide strategic initiative. This global strategy focuses on leveraging the Company’s scale to
improve the value it provides to customers and shareholders in order to reduce costs, enhance revenues, achieve efficiencies and reinvest in its
technology, platforms and functionality to improve its current operations and develop new capabilities.
These restructuring charges are included in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate &
Other. Estimated restructuring costs may change as management continues to execute this enterprise-wide strategic initiative. Such restructuring
charges, primarily related to severance, were as follows:
Year Ended December 31, 2012
(In millions)
Balance at January 1, .............................................................. $ —
Restructuring charges .............................................................. 159
Cash payments ................................................................... (136)
Balance at December 31, ........................................................... $ 23
Total restructuring charges incurred since inception of initiative ............................... $159
Management anticipates further restructuring charges including severance, lease and asset impairments, through the year ending December 31,
2014. However, such restructuring plans were not sufficiently developed to enable management to make an estimate of such restructuring charges at
December 31, 2012.
Costs Related to ALICO Acquisition
Integration-Related Expenses
Integration-related costs were $305 million, $362 million and $176 million for the years ended December 31, 2012, 2011 and 2010, respectively.
Integration-related costs represent costs directly related to integrating ALICO, including expenses for consulting, rebranding and the integration of
information systems. Such costs have been expensed as incurred and, as the integration of ALICO is an enterprise-wide initiative, these expenses are
reported in Corporate & Other.
Restructuring Charges
As part of the integration of ALICO’s operations, management initiated restructuring plans focused on increasing productivity and improving the
efficiency of the Company’s operations. The restructuring program has been finalized and the remaining payments associated with the restructuring
program are expected to be completed by March 31, 2013.
180 MetLife, Inc.