Other Expenses

9 Months Ended

Sep. 30, 2012

Other Expenses [Abstract]

Other Expenses

15. Other Expenses

Information on other expenses was as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In millions)
Compensation	$	1,307		$	1,326		$	4,196		$	3,982
Pension, postretirement and postemployment benefit costs		117			99			345			289
Commissions		1,442			1,771			4,466			4,774
Volume-related costs		154			109			402			283
Interest credited to bank deposits		19			26			60			72
Capitalization of DAC		(1,302	)		(1,527	)		(3,981	)		(4,158	)
Amortization of DAC and VOBA		1,008			1,718			3,201			3,911
Amortization of negative VOBA		(170	)		(170	)		(506	)		(536	)
Interest expense on debt and debt issuance costs		326			425			1,026			1,260
Premium taxes, licenses and fees		176			206			519			483
Professional services		432			336			1,210			1,019
Rent, net of sublease income		107			99			339			319
Other		629			780			2,064			2,289
Total other expenses	$	4,245		$	5,198		$	13,341		$	13,987

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 $95 million and $239 million for the three months and nine months ended September 30, 2012, respectively, and $84 million and $254 million for the three months and nine months ended September 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. The restructuring program has been finalized and the remaining payments associated with the aforementioned restructuring program are expected to be completed by March 31, 2013. Estimated restructuring charges may change as management continues to execute its restructuring plans. See Note 2 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report.

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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In millions)
Balance, beginning of period	$	8		$	9		$	13		$	10
Restructuring charges		1			7			10			31
Cash payments		(3	)		(7	)		(17	)		(32	)
Balance, end of period	$	6		$	9		$	6		$	9
Restructuring charges incurred in current period	$	1		$	7		$	10		$	31
Total restructuring charges incurred since inception of restructuring plans	$	66		$	41		$	66		$	41

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 charges were as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2012			2012
	(In millions)
Balance, beginning of period	$	21		$	—
Restructuring charges		54			101
Cash payments		(40	)		(66	)
Balance, end of period	$	35		$	35
Restructuring charges incurred in current period	$	54		$	101
Total restructuring charges incurred since inception of initiative	$	101		$	101

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 September 30, 2012.