Information on other expenses was as follows:
|
| | | | | | | | | | | |
| Years Ended December 31, |
| 2013 | | 2012 | | 2011 |
| (In millions) |
Compensation | $ | 5,108 |
| | $ | 5,562 |
| | $ | 5,287 |
|
Pension, postretirement and postemployment benefit costs | 488 |
| | 428 |
| | 463 |
|
Commissions | 5,428 |
| | 5,909 |
| | 6,378 |
|
Volume-related costs | 842 |
| | 599 |
| | 335 |
|
Interest credited to bank deposits | 2 |
| | 78 |
| | 95 |
|
Capitalization of DAC | (4,786 | ) | | (5,289 | ) | | (5,558 | ) |
Amortization of DAC and VOBA | 3,550 |
| | 4,199 |
| | 4,898 |
|
Amortization of negative VOBA | (579 | ) | | (622 | ) | | (697 | ) |
Interest expense on debt and debt issuance costs | 1,282 |
| | 1,356 |
| | 1,629 |
|
Premium taxes, licenses and fees | 658 |
| | 677 |
| | 633 |
|
Professional services | 1,454 |
| | 1,664 |
| | 1,597 |
|
Rent and related expenses, net of sublease income | 376 |
| | 422 |
| | 426 |
|
Other (1) | 2,779 |
| | 2,772 |
| | 3,051 |
|
Total other expenses | $ | 16,602 |
| | $ | 17,755 |
| | $ | 18,537 |
|
__________________
| |
(1) | See Note 19 for information on the Japan income tax refund included in other expenses for the year ended December 31, 2013. |
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 were as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2013 | | 2012 |
| Severance | | Lease and Asset Impairment | | Total | | Severance | | Lease and Asset Impairment | | Total |
| (In millions) |
Balance at January 1, | $ | 23 |
| | $ | — |
| | $ | 23 |
| | $ | — |
| | $ | — |
| | $ | — |
|
Restructuring charges | 99 |
| | 16 |
| | 115 |
| | 141 |
| | 18 |
| | 159 |
|
Cash payments | (82 | ) | | (10 | ) | | (92 | ) | | (118 | ) | | (18 | ) | | (136 | ) |
Balance at December 31, | $ | 40 |
| | $ | 6 |
| | $ | 46 |
| | $ | 23 |
| | $ | — |
| | $ | 23 |
|
Total restructuring charges incurred since inception of initiative | $ | 240 |
| | $ | 34 |
| | $ | 274 |
| | $ | 141 |
| | $ | 18 |
| | $ | 159 |
|
Management anticipates further restructuring charges including severance, as well as lease and asset impairments, through the year ending December 31, 2015. However, such restructuring plans were not sufficiently developed to enable management to make an estimate of such restructuring charges at December 31, 2013.
ALICO Acquisition Integration-Related Expenses
Integration-related costs were $138 million, $305 million and $362 million for the years ended December 31, 2013, 2012 and 2011, respectively. Integration-related costs represent costs directly related to integrating ALICO, including expenses for consulting 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. The Company does not expect future ALICO integration-related costs to be material.
See Note 3 for discussion of costs related to other acquisitions.
