Other Expenses

6 Months Ended

Jun. 30, 2012

Other Expenses [Abstract]

Other Expenses

14. Other Expenses

Information on other expenses was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(In millions)
Compensation	$	1,395		$	1,329		$	2,889		$	2,656
Pension, postretirement and postemployment benefit costs		110			95			228			190
Commissions		1,467			1,587			3,024			3,003
Volume-related costs		156			91			248			174
Interest credited to bank deposits		20			23			41			46
Capitalization of DAC		(1,315	)		(1,367	)		(2,679	)		(2,631	)
Amortization of DAC and VOBA		1,479			1,254			2,193			2,193
Amortization of negative VOBA		(181	)		(183	)		(336	)		(366	)
Interest expense on debt and debt issuance costs		342			420			700			835
Premium taxes, licenses and fees		144			142			343			277
Professional services		363			400			778			683
Rent, net of sublease income		112			113			232			220
Other		683			795			1,435			1,509
Total other expenses	$	4,775		$	4,699		$	9,096		$	8,789

Capitalization of DAC and Amortization of DAC and VOBA

See Note 6 for DAC and VOBA by segment and a rollforward of each including impacts of capitalization and amortization. See also Note 9 for a description of the DAC amortization impact associated with the closed block. See Note 1 for information on the retrospective application of the adoption of new accounting guidance related to DAC.

Costs Related to the Acquisition of ALICO

Integration-Related Expenses

Integration-related costs were $94 million and $179 million for the three months and six months ended June 30, 2012, respectively, and $102 million and $170 million for the three months and six months ended June 30, 2011, respectively. Integration-related costs represent costs directly related to integrating American Life and Delaware American Life Insurance Company (collectively, “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 within 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. See Note 2 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report. Estimated restructuring charges may change as management continues to execute its restructuring plans. Management anticipates further restructuring charges, including severance, contract termination costs and other associated costs through the year ended December 31, 2013. However, such restructuring plans are not sufficiently developed to enable management to make an estimate of such restructuring charges at June 30, 2012.

Restructuring charges associated with restructuring plans related to the acquisition of ALICO are included in other expenses within Corporate & Other. Such restructuring charges included:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(In millions)
Balance, beginning of period	$	11		$	13		$	13		$	10
Restructuring charges		6			7			9			24
Cash payments		(9	)		(11	)		(14	)		(25	)
Balance, end of period	$	8		$	9		$	8		$	9
Restructuring charges incurred in current period	$	6		$	7		$	9		$	24
Total restructuring charges incurred since inception of restructuring plans	$	65		$	34		$	65		$	34

Other Restructuring Charges

The Company has commenced 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 within Corporate & Other. Estimated restructuring costs may change as management continues to execute this enterprise-wide strategic initiative. Such restructuring changes were as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
	2012			2012
	(In millions)
Balance, beginning of period	$	27		$	—
Severance charges		20			47
Cash payments		(26	)		(26	)
Balance, end of period	$	21		$	21
Restructuring charges incurred in current period	$	20		$	47
Total restructuring charges incurred since inception of initiative	$	47		$	47

Management anticipates further restructuring charges including severance, lease and asset impairments, through the year ending December 31, 2014. However, such restructuring plans are not sufficiently developed to enable the Company to make an estimate of such restructuring charges at June 30, 2012.