Edgar Filing: METLIFE INC

FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2013

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-15787

MetLife, Inc.

(Exact name of registrant as specified in its charter)


Delaware		13-4075851
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Park Avenue, New York, N.Y.		10166-0188
(Address of principal executive offices)		(Zip Code)

(212) 578-2211

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer þ		Accelerated filer ¨
Non-accelerated filer ¨	(Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

At April 30, 2013, 1,095,013,165 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

Table of Contents


	Page
Part I — Financial Information
Item 1. Financial Statements (at March 31, 2013 (Unaudited) and December 31, 2012 and for the Three Months Ended March 31, 2013 and 2012 (Unaudited))		5
Interim Condensed Consolidated Balance Sheets		5
Interim Condensed Consolidated Statements of Operations and Comprehensive Income		6
Interim Condensed Consolidated Statements of Equity		7
Interim Condensed Consolidated Statements of Cash Flows		9
Notes to the Interim Condensed Consolidated Financial Statements:
Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies		10
Note 2 — Segment Information		12
Note 3 — Acquisitions and Dispositions		18
Note 4 — Insurance		19
Note 5 — Closed Block		21
Note 6 — Investments		24
Note 7 — Derivatives		40
Note 8 — Fair Value		56
Note 9 — Equity		83
Note 10 — Other Expenses		86
Note 11 — Employee Benefit Plans		87
Note 12 — Earnings Per Common Share		88
Note 13 — Contingencies, Commitments and Guarantees		89
Note 14 — Subsequent Event		97
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		98
Item 3. Quantitative and Qualitative Disclosures About Market Risk		164
Item 4. Controls and Procedures		173

Part II — Other Information		173
Item 1. Legal Proceedings		173
Item 1A. Risk Factors		176
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		180
Item 6. Exhibits		181

Signatures		182

Exhibit Index		E-1

As used in this Form 10-Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of MetLife, Inc., its subsidiaries and affiliates. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”). These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the capital and credit markets, which may affect our ability to meet liquidity needs and access capital, including through our credit facilities, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets, including assets supporting risks ceded to certain of our captive reinsurers or hedging arrangements associated with those risks; (3) exposure to financial and capital market risk, including as a result of the disruption in Europe and possible withdrawal of one or more countries from the Euro zone; (4) impact of comprehensive financial services regulation reform on us, as a potential non-bank systemically important financial institution, or otherwise; (5) numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact how we conduct our business, including those compelling the liquidation of certain financial institutions; (6) regulatory, legislative or tax changes relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products or services, or increase the cost or administrative burdens of providing benefits to employees; (7) adverse results or other consequences from litigation, arbitration or regulatory investigations; (8) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (9) investment losses and defaults, and changes to investment valuations; (10) changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (11) impairments of goodwill and realized losses or market value impairments to illiquid assets; (12) defaults on our mortgage loans; (13) the defaults or deteriorating credit of other financial institutions that could adversely affect us; (14) economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (15) downgrades in our claims paying ability, financial strength or credit ratings; (16) a deterioration in the experience of the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company; (17) availability and effectiveness of reinsurance or indemnification arrangements, as well as any default or failure of counterparties to perform; (18) differences between actual claims experience and underwriting and reserving assumptions; (19) ineffectiveness of risk management policies and procedures; (20) catastrophe losses; (21) increasing cost and limited market capacity for statutory life insurance reserve financings; (22) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, and for personnel; (23) exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (24) our ability to address unforeseen liabilities, asset impairments, or rating actions arising from acquisitions or dispositions, including our acquisition of American Life Insurance Company and Delaware American Life Insurance Company (collectively, “ALICO”) and to successfully integrate and manage the growth of acquired

businesses with minimal disruption; (25) uncertainty with respect to the outcome of the closing agreement entered into with the United States Internal Revenue Service in connection with the acquisition of ALICO; (26) the dilutive impact on our stockholders resulting from the settlement of our outstanding common equity units; (27) regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (28) MetLife, Inc.’s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (29) the possibility that MetLife, Inc.’s Board of Directors may control the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; (30) changes in accounting standards, practices and/or policies; (31) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (32) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (33) inability to attract and retain sales representatives; (34) provisions of laws and our incorporation documents may delay, deter or prevent takeovers and corporate combinations involving MetLife; (35) the effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities, or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or other information security systems and management continuity planning; (36) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; and (37) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the SEC.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the SEC.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibit Index — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

Part I — Financial Information

Item 1. Financial Statements

MetLife, Inc.

Interim Condensed Consolidated Balance Sheets

March 31, 2013 (Unaudited) and December 31, 2012

(In millions, except share and per share data)


	March 31, 2013		December 31, 2012
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $342,533 and $340,870, respectively; includes $3,873 and $3,378, respectively, relating to variable interest entities)	$	374,294	$	374,266
Equity securities available-for-sale, at estimated fair value (cost: $2,898 and $2,838, respectively)		3,188		2,891
Fair value option and trading securities, at estimated fair value (includes $792 and $659, respectively, of actively traded securities; and $101 and $112, respectively, relating to variable interest entities)		16,588		16,348
Mortgage loans:
Held-for-investment, principally at amortized cost (net of valuation allowances of $332 and $347, respectively; includes $2,454 and $2,715, respectively, at estimated fair value, relating to variable interest entities)		55,343		56,592
Held-for-sale, principally at estimated fair value (includes $2 and $49, respectively, under the fair value option)		271		414

Mortgage loans, net		55,614		57,006
Policy loans (includes $3 and $0, respectively, relating to variable interest entities)		11,781		11,884
Real estate and real estate joint ventures (includes $10 and $10, respectively, relating to variable interest entities)		9,998		9,918
Other limited partnership interests (includes $156 and $274, respectively, relating to variable interest entities)		7,087		6,688
Short-term investments, principally at estimated fair value (includes $14 and $0, respectively, relating to variable interest entities)		13,653		16,906
Other invested assets, principally at estimated fair value (includes $81 and $81, respectively, relating to variable interest entities)		20,269		21,145

Total investments		512,472		517,052
Cash and cash equivalents, principally at estimated fair value (includes $208 and $99, respectively, relating to variable interest entities)		9,983		15,738
Accrued investment income (includes $30 and $13, respectively, relating to variable interest entities)		4,555		4,374
Premiums, reinsurance and other receivables (includes $20 and $5, respectively, relating to variable interest entities)		23,052		21,634
Deferred policy acquisition costs and value of business acquired (includes $299 and $0, respectively, relating to variable interest entities)		24,645		24,761
Goodwill		9,696		9,953
Other assets (includes $149 and $5, respectively, relating to variable interest entities)		8,062		7,876
Separate account assets (includes $1,218 and $0, respectively, relating to variable interest entities)		249,220		235,393

Total assets	$	841,685	$	836,781

Liabilities and Equity
Liabilities
Future policy benefits (includes $475 and $0, respectively, relating to variable interest entities)	$	190,054	$	192,351
Policyholder account balances (includes $71 and $0, respectively, relating to variable interest entities)		224,044		225,821
Other policy-related balances (includes $145 and $0, respectively, relating to variable interest entities)		15,472		15,463
Policyholder dividends payable		713		728
Policyholder dividend obligation		3,599		3,828
Payables for collateral under securities loaned and other transactions		34,215		33,687
Bank deposits		—		6,416
Short-term debt		100		100
Long-term debt (includes $2,268 and $2,527, respectively, at estimated fair value, relating to variable interest entities)		18,721		19,062
Collateral financing arrangements		4,196		4,196
Junior subordinated debt securities		3,193		3,192
Current income tax payable		231		401
Deferred income tax liability		8,699		8,693
Other liabilities (includes $109 and $40, respectively, relating to variable interest entities)		24,260		22,492
Separate account liabilities (includes $1,218 and $0, respectively, relating to variable interest entities)		249,220		235,393

Total liabilities		776,717		771,823

Contingencies, Commitments and Guarantees (Note 13)
Redeemable noncontrolling interests in partially-owned consolidated subsidiaries		96		121

Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized: 84,000,000 shares issued and outstanding; $2,100 aggregate liquidation preference		1		1
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,097,412,771 and 1,094,880,623 shares issued at March 31, 2013 and December 31, 2012, respectively; 1,094,218,884 and 1,091,686,736 shares outstanding at March 31, 2013 and December 31, 2012, respectively		11		11
Additional paid-in capital		28,072		28,011
Retained earnings		25,958		25,205
Treasury stock, at cost; 3,193,887 shares at March 31, 2013 and December 31, 2012		(172)		(172)
Accumulated other comprehensive income (loss)		10,580		11,397

Total MetLife, Inc.’s stockholders’ equity		64,450		64,453
Noncontrolling interests		422		384

Total equity		64,872		64,837

Total liabilities and equity	$	841,685	$	836,781

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Operations and Comprehensive Income

For the Three Months Ended March 31, 2013 and 2012 (Unaudited)

(In millions, except per share data)


	Three Months Ended March 31,
	2013		2012
Revenues
Premiums	$	9,151	$	9,129
Universal life and investment-type product policy fees		2,291		2,078
Net investment income		6,077		6,200
Other revenues		480		597
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(29)		(135)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)		(31)		2
Other net investment gains (losses)		374		23

Total net investment gains (losses)		314		(110)
Net derivative gains (losses)		(630)		(1,978)

Total revenues		17,683		15,916

Expenses
Policyholder benefits and claims		9,395		9,104
Interest credited to policyholder account balances		2,590		2,557
Policyholder dividends		313		343
Other expenses		4,138		4,321

Total expenses		16,436		16,325

Income (loss) from continuing operations before provision for income tax		1,247		(409)
Provision for income tax expense (benefit)		252		(275)

Income (loss) from continuing operations, net of income tax		995		(134)
Income (loss) from discontinued operations, net of income tax		(3)		14

Net income (loss)		992		(120)
Less: Net income (loss) attributable to noncontrolling interests		6		24

Net income (loss) attributable to MetLife, Inc.		986		(144)
Less: Preferred stock dividends		30		30

Net income (loss) available to MetLife, Inc.’s common shareholders	$	956	$	(174)

Comprehensive income (loss)	$	178	$	1,054
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax		9		15

Comprehensive income (loss) attributable to MetLife, Inc.	$	169	$	1,039

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.87	$	(0.17)

Diluted	$	0.87	$	(0.17)

Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.87	$	(0.16)

Diluted	$	0.87	$	(0.16)

Cash dividends declared per common share	$	0.185	$	—

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2013 (Unaudited)

(In millions)


											Accumulated Other Comprehensive Income (Loss)
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Net Unrealized Investment Gains (Losses)		Other-Than- Temporary Impairments		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests (1)		Total Equity
Balance at December 31, 2012	$	1	$	11	$	28,011	$	25,205	$	(172)	$	14,642	$	(223)	$	(533)	$	(2,489)	$	64,453	$	384	$	64,837
Stock-based compensation						100														100				100
Dividends on preferred stock								(30)												(30)				(30)
Dividends on common stock								(203)												(203)				(203)
Change in equity of noncontrolling interests						(39)														(39)		29		(10)
Net income (loss)								986												986		6		992
Other comprehensive income (loss), net of income tax												(241)		59		(672)		37		(817)		3		(814)

Balance at March 31, 2013	$	1	$	11	$	28,072	$	25,958	$	(172)	$	14,401	$	(164)	$	(1,205)	$	(2,452)	$	64,450	$	422	$	64,872

(1)	Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than $1 million.

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Equity — (Continued)

For the Three Months Ended March 31, 2012 (Unaudited)

(In millions)


											Accumulated Other Comprehensive Income (Loss)
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Net Unrealized Investment Gains (Losses)		Other-Than- Temporary Impairments		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests (1)		Total Equity
Balance at December 31, 2011	$	1	$	11	$	26,782	$	24,814	$	(172)	$	9,115	$	(441)	$	(648)	$	(1,943)	$	57,519	$	370	$	57,889
Stock-based compensation						138														138				138
Dividends on preferred stock								(30)												(30)				(30)
Change in equity of noncontrolling interests																						(41)		(41)
Net income (loss)								(144)												(144)		8		(136)
Other comprehensive income (loss), net of income tax												814		31		313		25		1,183		7		1,190

Balance at March 31, 2012	$	1	$	11	$	26,920	$	24,640	$	(172)	$	9,929	$	(410)	$	(335)	$	(1,918)	$	58,666	$	344	$	59,010

(1)	Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of $16 million.

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2013 and 2012 (Unaudited)

(In millions)


	Three Months Ended March 31,
	2013		2012
Net cash provided by (used in) operating activities	$	2,733	$	5,758

Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		30,024		25,815
Equity securities		249		166
Mortgage loans		2,510		2,160
Real estate and real estate joint ventures		86		251
Other limited partnership interests		225		188
Purchases of:
Fixed maturity securities		(34,698)		(27,657)
Equity securities		(389)		(108)
Mortgage loans		(1,764)		(1,802)
Real estate and real estate joint ventures		(426)		(117)
Other limited partnership interests		(481)		(278)
Cash received in connection with freestanding derivatives		330		417
Cash paid in connection with freestanding derivatives		(2,428)		(1,566)
Net change in securitized reverse residential mortgage loans		—		(561)
Sales of businesses (1)		373		—
Sale of bank deposits		(6,395)		—
Net change in policy loans		(52)		(53)
Net change in short-term investments		3,303		5,522
Net change in other invested assets		(226)		(170)
Other, net		40		(40)

Net cash provided by (used in) investing activities		(9,719)		2,167

Cash flows from financing activities
Policyholder account balances:
Deposits		21,370		25,069
Withdrawals		(20,034)		(23,247)
Net change in payables for collateral under securities loaned and other transactions		528		(1,220)
Net change in bank deposits		8		(50)
Net change in short-term debt		—		(585)
Long-term debt repaid		(240)		(349)
Net change in liability for securitized reverse residential mortgage loans		—		561
Dividends on preferred stock		(30)		(30)
Dividends on common stock		(203)		—
Other, net		(75)		91

Net cash provided by (used in) financing activities		1,324		240

Effect of change in foreign currency exchange rates on cash and cash equivalents balances		(93)		41

Change in cash and cash equivalents		(5,755)		8,206
Cash and cash equivalents, beginning of period		15,738		10,461

Cash and cash equivalents, end of period	$	9,983	$	18,667

Supplemental disclosures of cash flow information:
Net cash paid (received) for:
Interest	$	264	$	266

Income tax	$	217	$	83

Non-cash transactions:
Real estate and real estate joint ventures acquired in satisfaction of debt	$	55	$	123

(1)	See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report.

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

“MetLife” or the “Company” refers to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is a leading global provider of insurance, annuities and employee benefit programs throughout the United States, Japan, Latin America, Asia, Europe and the Middle East. MetLife offers life insurance, annuities, property & casualty insurance, and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions.

MetLife is organized into six segments: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and Europe, the Middle East and Africa (“EMEA”).

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from estimates.

The accompanying interim condensed consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.

Certain international subsidiaries have a fiscal year-end of November 30. Accordingly, the Company’s interim condensed consolidated financial statements reflect the assets and liabilities of such subsidiaries as of February 28, 2013 and November 30, 2012 and the operating results of such subsidiaries for the three months ended February 28, 2013 and February 29, 2012.

The Company uses the equity method of accounting for investments in equity securities when it has significant influence or at least a 20% interest and for investments in real estate joint ventures and other limited partnership interests (“investees”) when it has more than a minor ownership interest or more than minor influence over the investee’s operations, but does not have a controlling financial interest. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. The Company uses the cost method of accounting for investments in which it has virtually no influence over the investee’s operations.

Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the 2013 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at March 31, 2013, its consolidated results of operations and comprehensive income for the three months ended March 31, 2013 and 2012, its consolidated statements of equity for the three months ended March 31, 2013 and 2012, and its consolidated statements of cash flows for the three months ended March 31, 2013 and 2012, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2012 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2012, (the “2012 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), which include all disclosures required by

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2012 Annual Report.

Adoption of New Accounting Pronouncements

Effective January 1, 2013, the Company adopted new guidance regarding comprehensive income that requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”) by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. The adoption was prospectively applied and resulted in additional disclosures. See Note 9 for expanded disclosures.

Effective January 1, 2013, the Company adopted new guidance regarding balance sheet offsetting disclosures which requires an entity to disclose information about offsetting and related arrangements for derivatives, including bifurcated embedded derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions, to enable users of its financial statements to understand the effects of those arrangements on its financial position. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of the guidance is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. The adoption was retrospectively applied and resulted in additional disclosures related to derivatives. See Note 7 for such expanded disclosures.

Future Adoption of New Accounting Pronouncements

In March 2013, the Financial Accounting Standards Board (“FASB”) issued new guidance regarding foreign currency (Accounting Standards Update (“ASU”) 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity), effective prospectively for fiscal years and interim reporting periods within those years beginning after December 15, 2013. The amendments require an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to apply the guidance in Subtopic 830-30, Foreign Currency Matters — Translation of Financial Statements, to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. For an equity method investment that is a foreign entity, the partial sale guidance in section 830-30-40, Derecognition, still applies. As such, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In February 2013, the FASB issued new guidance regarding liabilities (ASU 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date), effective retrospectively for fiscal years beginning after December 15, 2013 and interim periods within those years. The amendments require an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. In addition, the amendments require an entity to disclose the nature and amount of the obligation, as well as other information about the obligations. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

In July 2011, the FASB issued new guidance on other expenses (ASU 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers), effective for calendar years beginning after December 31, 2013. The objective of this standard is to address how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act. The amendments in this standard specify that the liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using the straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Segment Information

MetLife is organized into six segments, reflecting three broad geographic regions: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and EMEA. In addition, the Company reports certain of its results of operations in Corporate & Other, which included MetLife Bank, National Association (“MetLife Bank”) (see Note 3) and other business activities.

As anticipated, in the third quarter of 2012, the Company continued to realign certain products and businesses among its existing segments. Management realigned certain individual disability income and property & casualty products, which were previously reported in the Group, Voluntary & Worksite Benefits segment and began reporting such product results in the Retail segment. In accordance with this realignment, prior period operating earnings for the Retail segment increased by $61 million, net of $19 million of income tax, with a corresponding decrease in the Group, Voluntary & Worksite Benefits segment, for the three months ended March 31, 2012. Management also realigned the businesses in South Asia and India, which were previously reported in the EMEA segment and began reporting such results in the Asia segment. In accordance with this realignment, prior period operating earnings for the Asia segment increased by $4 million, net of $2 million of income tax, with a corresponding decrease in the EMEA segment, for the three months ended March 31, 2012.

Americas

The Americas consists of the following segments:

Retail

The Retail segment offers a broad range of protection products and services and a variety of annuities to individuals and employees of corporations and other institutions, and is organized into two businesses: Life & Other and Annuities. Life & Other insurance products and services include variable life, universal life, term life and whole life products. Additionally, through broker-dealer affiliates, the Company offers a full range of mutual funds and other securities products. Life & Other products and services also include individual disability income products and personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance. Annuities includes a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs.

Group, Voluntary & Worksite Benefits

The Group, Voluntary & Worksite Benefits segment offers a broad range of protection products and services to individuals and corporations, as well as other institutions and their respective employees, and is organized into two businesses: Group and Voluntary & Worksite. Group insurance products and services include variable life, universal life and term life products. Group insurance products and services also include dental, group short- and long-term disability and accidental death & dismemberment coverages. The Voluntary & Worksite business includes personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance offered to employees on a voluntary basis. The Voluntary & Worksite business also includes long-term care, prepaid legal plans and critical illness products.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Corporate Benefit Funding

The Corporate Benefit Funding segment offers a broad range of annuity and investment products, including guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This segment also includes certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives.

Latin America

The Latin America segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, group medical, dental, credit insurance, endowment and retirement & savings products written in Latin America. Starting in the first quarter of 2013, the Latin America segment includes U.S. sponsored direct business, comprised of group products sold through sponsoring organizations and affinity groups. Products included are life, dental, group short- and long-term disability, accidental death & dismemberment coverages, property & casualty and critical illness.

Asia

The Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident and health insurance, fixed and variable annuities and endowment products.

EMEA

The EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, credit insurance, annuities, endowment and retirement & savings products.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments, external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges, and various start-up and certain run-off businesses. Start-up businesses include expatriate benefits insurance, as well as direct and digital marketing products. Corporate & Other also includes assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan. Under this in-force reinsurance agreement, the Company reinsures living and death benefit guarantees issued in connection with variable annuity products. Additionally, Corporate & Other includes interest expense related to the majority of the Company’s outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes the elimination of intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings.

Financial Measures and Segment Accounting Policies

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.

Operating earnings is defined as operating revenues less operating expenses, both net of income tax.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Operating revenues and operating expenses exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife, Inc. (“Divested Businesses”). Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). Operating expenses also excludes goodwill impairments.

The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues:

•

Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB Fees”);

•

Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•

Other revenues are adjusted for settlements of foreign currency earnings hedges.

The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

•

Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

•

Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances (“PABs”) but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;

•

Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;

•

Amortization of negative VOBA excludes amounts related to Market Value Adjustments;

•

Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•

Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition and integration costs.

Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

In the third quarter of 2012, MetLife, Inc. began reporting additional MetLife Bank operations as Divested Businesses. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report. Consequently, prior period results for Corporate & Other have increased by $1 million, net of $0 of income tax, for the three months ended March 31, 2012.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months ended March 31, 2013 and 2012. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company’s business.

The Company’s economic capital model aligns segment allocated equity with emerging standards and consistent risk principles. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, operating earnings or income (loss) from continuing operations, net of income tax.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Operating Earnings
	Americas
Three Months Ended March 31, 2013	Retail		Group, Voluntary & Worksite Benefits		Corporate Benefit Funding		Latin America		Total		Asia		EMEA		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	1,547	$	3,874	$	464	$	675	$	6,560	$	1,998	$	567	$	26	$	9,151	$	—	$	9,151
Universal life and investment-type product policy fees		1,167		180		68		225		1,640		444		91		36		2,211		80		2,291
Net investment income		1,961		453		1,435		277		4,126		732		128		146		5,132		945		6,077
Other revenues		243		108		73		4		428		13		27		13		481		(1)		480
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		314		314
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		(630)		(630)

Total revenues		4,918		4,615		2,040		1,181		12,754		3,187		813		221		16,975		708		17,683

Expenses
Policyholder benefits and claims and policyholder dividends		2,153		3,640		1,098		554		7,445		1,415		237		9		9,106		602		9,708
Interest credited to policyholder account balances		579		39		343		104		1,065		442		35		12		1,554		1,036		2,590
Capitalization of DAC		(374)		(33)		(17)		(105)		(529)		(546)		(177)		(4)		(1,256)		—		(1,256)
Amortization of DAC and VOBA		331		34		11		74		450		401		165		—		1,016		(192)		824
Amortization of negative VOBA		—		—		—		(1)		(1)		(113)		(17)		—		(131)		(15)		(146)
Interest expense on debt		—		—		2		(1)		1		—		1		286		288		33		321
Other expenses		1,278		588		143		372		2,381		1,094		448		164		4,087		308		4,395

Total expenses		3,967		4,268		1,580		997		10,812		2,693		692		467		14,664		1,772		16,436

Provision for income tax expense (benefit)		325		117		161		41		644		161		34		(193)		646		(394)		252

Operating earnings	$	626	$	230	$	299	$	143	$	1,298	$	333	$	87	$	(53)		1,665

Adjustments to:
Total revenues																		708
Total expenses																		(1,772)
Provision for income tax (expense) benefit																		394

Income (loss) from continuing operations, net of income tax																	$	995			$	995

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Operating Earnings
	Americas
Three Months Ended March 31, 2012	Retail		Group, Voluntary & Worksite Benefits		Corporate Benefit Funding		Latin America		Total		Asia		EMEA		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	1,624	$	3,585	$	507	$	686	$	6,402	$	2,039	$	652	$	14	$	9,107	$	22	$	9,129
Universal life and investment-type product policy fees		1,114		166		51		196		1,527		362		80		40		2,009		69		2,078
Net investment income		1,911		436		1,401		299		4,047		681		157		192		5,077		1,123		6,200
Other revenues		209		108		64		5		386		16		36		14		452		145		597
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		(110)		(110)
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		(1,978)		(1,978)

Total revenues		4,858		4,295		2,023		1,186		12,362		3,098		925		260		16,645		(729)		15,916

Expenses
Policyholder benefits and claims and policyholder dividends		2,228		3,313		1,092		592		7,225		1,360		343		11		8,939		508		9,447
Interest credited to policyholder account balances		596		42		339		100		1,077		429		33		—		1,539		1,018		2,557
Capitalization of DAC		(476)		(31)		(7)		(84)		(598)		(587)		(177)		—		(1,362)		(2)		(1,364)
Amortization of DAC and VOBA		404		30		10		55		499		373		146		—		1,018		(304)		714
Amortization of negative VOBA		—		—		—		(2)		(2)		(131)		(4)		—		(137)		(18)		(155)
Interest expense on debt		—		—		2		1		3		1		—		311		315		43		358
Other expenses		1,397		575		128		326		2,426		1,191		471		155		4,243		525		4,768

Total expenses		4,149		3,929		1,564		988		10,630		2,636		812		477		14,555		1,770		16,325

Provision for income tax expense (benefit)		240		123		161		50		574		161		41		(180)		596		(871)		(275)

Operating earnings	$	469	$	243	$	298	$	148	$	1,158	$	301	$	72	$	(37)		1,494

Adjustments to:
Total revenues																		(729)
Total expenses																		(1,770)
Provision for income tax (expense) benefit																		871

Income (loss) from continuing operations, net of income tax																	$	(134)			$	(134)

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:


	March 31, 2013		December 31, 2012
	(In millions)
Retail	$	342,524	$	332,387
Group, Voluntary & Worksite Benefits		45,158		44,138
Corporate Benefit Funding		227,839		217,352
Latin America		25,640		23,272
Asia		124,510		131,138
EMEA		23,080		23,474
Corporate & Other		52,934		65,020

Total	$	841,685	$	836,781

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolio adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

Acquisitions and Dispositions

2013 Pending Acquisition

Provida

On February 1, 2013, MetLife, Inc. announced that it has entered into a definitive agreement with Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”) and BBVA Inversiones Chile S.A. (“BBVA Inversiones,” and, together with BBVA, the “BBVA Sellers”) to acquire Administradora de Fondos de Pensiones Provida S.A. (“Provida”), the largest private pension fund administrator in Chile by assets under management and number of contributors. Under the terms of the agreement, MetLife will conduct a public cash tender offer for all of the outstanding shares of Provida, and the BBVA Sellers have agreed to transfer their 64.3% stake to MetLife. Assuming all publicly-held shares are tendered, the purchase price, which MetLife, Inc. and certain of its subsidiaries will fund from their existing cash balances, would be approximately $2 billion. The transaction is anticipated to close in the third quarter of 2013, subject to receipt of certain regulatory approvals and other customary conditions.

2013 Disposition

MetLife Bank

On January 11, 2013, MetLife Bank and MetLife, Inc. completed the sale of MetLife Bank’s $6.4 billion of deposits to GE Capital Retail Bank for $6.4 billion in net consideration paid. On February 14, 2013, MetLife, Inc. announced that it had received the required approvals from both the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve (the “Federal Reserve Board”) to de-register as a bank holding company.

MetLife Bank has sold or has otherwise committed to exit substantially all of its operations. In conjunction with exiting its businesses (the “MetLife Bank Divestiture”), for the three months ended March 31, 2013 and 2012, the Company recorded net gains (losses) of ($59) million and $7 million, respectively, net of income tax, related to the gain on disposal of the depository business and other costs related to MetLife Bank’s businesses. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report. The Company expects to incur additional charges of $80 million to $105 million, net of income tax, exclusive of incremental legal settlements, related to exiting MetLife Bank’s businesses. See Note 13.

Each of the businesses that were exited could not be separated from the rest of the MetLife Bank operations since the Company did not separately manage or report the businesses as a reportable segment, operating segment, or reporting unit. As a result, the businesses have not been reported as discontinued operations in the consolidated financial statements.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2010 Acquisition

American Life Insurance Company

Branch Restructuring

During the first quarter of 2013, and in accordance with the closing agreement, American Life Insurance Company (“American Life”) entered into on March 4, 2010 (the “Closing Agreement”) with the Commissioner of the Internal Revenue Service (see Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report), the Company transferred the business of Portugal and Spain to wholly-owned subsidiaries. The deferred tax asset valuation allowance associated with this branch restructuring was reduced from $25 million at December 31, 2012 to $0 at March 31, 2013. For further information, see Note 19 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report.

A liability of $277 million was recognized in purchase accounting at November 1, 2010 for the anticipated and estimated costs associated with restructuring American Life’s foreign branches into subsidiaries in connection with the Closing Agreement. This liability has been reduced based on payments and revised estimates through March 31, 2013 resulting in a liability of $56 million at March 31, 2013.

Japan Income Tax Refund

In December 2012, the Tokyo District Court ruled in favor of the Japan branch of American Life in a tax case related to the deduction of unrealized foreign exchange losses on certain securities held by American Life prior to its acquisition by MetLife. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report. During the first quarter of 2013, American Life received a refund of ¥16 billion ($176 million) related to income tax, interest and penalties. Under the indemnification provisions of the stock purchase agreement dated March 7, 2010, as amended, by and among MetLife, Inc., American International Group, Inc. (“AIG”) and AM Holdings LLC (formerly known as ALICO Holdings LLC), MetLife Inc. is required to remit the refund to AIG, net of certain amounts it can retain as a counter claim. The receipt of the refund, net of obligations to AIG with related foreign currency exchange impact and corresponding U.S. tax effects, resulted in a net charge of $24 million in the interim condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2013, which was comprised of a $154 million charge included in other expenses, an $11 million gain included in other net investment gains (losses) and a $119 million benefit included in provision for income tax expense (benefit).

Insurance

Guarantees

As discussed in Notes 1 and 4 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report, the Company issues variable annuity products with guaranteed minimum benefits. The non-life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”) and the portion of certain GMIBs that does not require annuitization are accounted for as embedded derivatives in PABs and are further discussed in Note 7.

The Company also issues annuity contracts that apply a lower rate of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize (“two tier annuities”). These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.

Based on the type of guarantee, the Company defines net amount at risk as listed below. These amounts include direct and assumed business, but exclude offsets from hedging or reinsurance, if any.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Variable Annuity Guarantees

In the Event of Death

Defined as the guaranteed minimum death benefit less the total contract account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.

At Annuitization

Defined as the amount (if any) that would be required to be added to the total contract account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that only allow annuitization of the guaranteed amount after the 10th anniversary of the contract, which not all contractholders have achieved.

Two Tier Annuities

Defined as the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date. These contracts apply a lower rate of funds if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize.

Universal and Variable Life Contracts

Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.

Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts was as follows at:


	March 31, 2013				December 31, 2012
	In the Event of Death		At Annuitization		In the Event of Death		At Annuitization
	(In millions)
*Annuity Contracts* (1)
Variable Annuity Guarantees
Total contract account value (2)	$	191,877	$	94,429	$	184,095	$	89,137
Separate account value	$	152,741	$	89,992	$	143,893	$	84,354
Net amount at risk	$	6,279	$	2,978	$	9,501	$	4,593
Average attained age of contractholders		63 years		64 years		62 years		62 years

Two Tier Annuities
General account value		N/A	$	856		N/A	$	848
Net amount at risk		N/A	$	224		N/A	$	232
Average attained age of contractholders		N/A		52 years		N/A		51 years

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	March 31, 2013				December 31, 2012
	Secondary Guarantees		Paid-Up Guarantees		Secondary Guarantees		Paid-Up Guarantees
	(In millions)
*Universal and Variable Life Contracts* (1)
Account value (general and separate account)	$	14,743	$	3,790	$	14,256	$	3,828
Net amount at risk	$	187,848	$	22,835	$	189,197	$	23,276
Average attained age of policyholders		55 years		60 years		54 years		60 years

(1)	The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.

(2)	Includes amounts, which are not reported in the consolidated balance sheets, from assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan.

Closed Block

On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the “Plan”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain individual life insurance policies of MLIC.

Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of the closed block.

Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Information regarding the closed block liabilities and assets designated to the closed block was as follows:


	March 31, 2013		December 31, 2012
	(In millions)
Closed Block Liabilities
Future policy benefits	$	42,366	$	42,586
Other policy-related balances		310		298
Policyholder dividends payable		480		466
Policyholder dividend obligation		3,599		3,828
Current income tax payable		14		—
Other liabilities		646		602

Total closed block liabilities		47,415		47,780

Assets Designated to the Closed Block
Investments:
Fixed maturity securities available-for-sale, at estimated fair value		30,109		30,546
Equity securities available-for-sale, at estimated fair value		91		41
Mortgage loans		6,068		6,192
Policy loans		4,661		4,670
Real estate and real estate joint ventures		460		459
Other invested assets		1,198		953

Total investments		42,587		42,861
Cash and cash equivalents		321		381
Accrued investment income		506		481
Premiums, reinsurance and other receivables		85		107
Current income tax recoverable		—		2
Deferred income tax assets		320		319

Total assets designated to the closed block		43,819		44,151

Excess of closed block liabilities over assets designated to the closed block		3,596		3,629

Amounts included in AOCI:
Unrealized investment gains (losses), net of income tax		2,714		2,891
Unrealized gains (losses) on derivatives, net of income tax		17		9
Allocated to policyholder dividend obligation, net of income tax		(2,339)		(2,488)

Total amounts included in AOCI		392		412

Maximum future earnings to be recognized from closed block assets and liabilities	$	3,988	$	4,041

Information regarding the closed block policyholder dividend obligation was as follows:


	Three Months Ended March 31, 2013		Year Ended December 31, 2012
	(In millions)
Balance, beginning of period	$	3,828	$	2,919
Change in unrealized investment and derivative gains (losses)		(229)		909

Balance, end of period	$	3,599	$	3,828

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Information regarding the closed block revenues and expenses was as follows:


	Three Months Ended March 31,
	2013		2012
	(In millions)
Revenues
Premiums	$	464	$	498
Net investment income		533		550
Net investment gains (losses)		3		11
Net derivative gains (losses)		8		(9)

Total revenues		1,008		1,050

Expenses
Policyholder benefits and claims		643		662
Policyholder dividends		242		268
Other expenses		42		45

Total expenses		927		975

Revenues, net of expenses before provision for income tax expense (benefit)		81		75
Provision for income tax expense (benefit)		27		27

Revenues, net of expenses and provision for income tax expense (benefit) from continuing operations		54		48
Revenues, net of expenses and provision for income tax expense (benefit) from discontinued operations		—		4

Revenues, net of expenses and provision for income tax expense (benefit)	$	54	$	52

MLIC charges the closed block with federal income taxes, state and local premium taxes and other additive state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan. MLIC also charges the closed block for expenses of maintaining the policies included in the closed block.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Investments

Fixed Maturity and Equity Securities Available-for-Sale

Fixed Maturity and Equity Securities Available-for-Sale by Sector

The following table presents the fixed maturity and equity securities available-for-sale (“AFS”) by sector. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairments (“OTTI”) losses. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”).


	March 31, 2013										December 31, 2012
	Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value
	Cost or Amortized Cost		Gains		Temporary Losses		OTTI Losses		Estimated Fair Value		Cost or Amortized Cost		Gains		Temporary Losses		OTTI Losses		Estimated Fair Value
	(In millions)
Fixed maturity securities:
U.S. corporate	$	102,086	$	11,364	$	444	$	—	$	113,006	$	102,669	$	11,887	$	430	$	—	$	114,126
Foreign corporate (1)		61,067		5,322		305		(2)		66,086		61,806		5,654		277		(1)		67,184
Foreign government		49,951		5,552		68		—		55,435		51,967		5,440		71		—		57,336
U.S. Treasury and agency		49,258		5,229		30		—		54,457		41,874		6,104		11		—		47,967
RMBS		34,403		2,391		198		249		36,347		35,666		2,477		315		349		37,479
CMBS		17,015		935		53		—		17,897		18,177		1,009		57		—		19,129
ABS		15,841		423		137		13		16,114		15,762		404		156		13		15,997
State and political subdivision		12,912		2,110		70		—		14,952		12,949		2,169		70		—		15,048

Total fixed maturity securities	$	342,533	$	33,326	$	1,305	$	260	$	374,294	$	340,870	$	35,144	$	1,387	$	361	$	374,266

Equity securities:
Common stock	$	1,985	$	305	$	8	$	—	$	2,282	$	2,034	$	147	$	19	$	—	$	2,162
Non-redeemable preferred stock		913		71		78		—		906		804		65		140		—		729

Total equity securities	$	2,898	$	376	$	86	$	—	$	3,188	$	2,838	$	212	$	159	$	—	$	2,891

(1)

OTTI losses, as presented above, represent the noncredit portion of OTTI losses that is included in AOCI. OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities was in an unrealized gain position of $2 million and $1 million at March 31, 2013 and December 31, 2012, respectively, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”

The Company held non-income producing fixed maturity securities with an estimated fair value of $80 million and $85 million with unrealized gains (losses) of $19 million and $11 million at March 31, 2013 and December 31, 2012, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at:


	March 31, 2013				December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	23,879	$	24,118	$	24,177	$	24,394
Due after one year through five years		70,432		74,386		66,973		70,759
Due after five years through ten years		80,420		89,648		82,376		91,975
Due after ten years		100,543		115,784		97,739		114,533

Subtotal		275,274		303,936		271,265		301,661
Structured securities (RMBS, CMBS and ABS)		67,259		70,358		69,605		72,605

Total fixed maturity securities	$	342,533	$	374,294	$	340,870	$	374,266

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately, as they are not due at a single maturity.

Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. The unrealized loss amounts include the noncredit component of OTTI loss.


	March 31, 2013								December 31, 2012
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(In millions, except number of securities)
Fixed maturity securities:
U.S. corporate	$	5,868	$	171	$	2,663	$	273	$	3,799	$	88	$	3,695	$	342
Foreign corporate		4,884		146		2,144		157		2,783		96		2,873		180
Foreign government		1,428		28		462		40		1,431		22		543		49
U.S. Treasury and agency		2,645		30		—		—		1,951		11		—		—
RMBS		1,284		42		3,235		405		735		31		4,098		633
CMBS		1,440		16		401		37		842		11		577		46
ABS		2,356		43		1,015		107		1,920		30		1,410		139
State and political subdivision		525		10		243		60		260		4		251		66

Total fixed maturity securities	$	20,430	$	486	$	10,163	$	1,079	$	13,721	$	293	$	13,447	$	1,455

Equity securities:
Common stock	$	67	$	7	$	12	$	1	$	201	$	18	$	14	$	1
Non-redeemable preferred stock		56		1		274		77		—		—		295		140

Total equity securities	$	123	$	8	$	286	$	78	$	201	$	18	$	309	$	141

Total number of securities in an unrealized loss position		2,188				1,070				1,941				1,335

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities

As described more fully in Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report, the Company performs a regular evaluation of all investment classes for impairment, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy, in order to evaluate whether such investments are other-than-temporarily impaired.

Current Period Evaluation

Based on the Company’s current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are not other-than-temporarily impaired at March 31, 2013. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities in an unrealized loss position decreased $183 million during the three months ended March 31, 2013 from $1.7 billion to $1.6 billion. The decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2013, was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates.

At March 31, 2013, $364 million of the total $1.6 billion of gross unrealized losses were from 116 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater.

Investment Grade Fixed Maturity Securities

Of the $364 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $179 million, or 49%, are related to gross unrealized losses on 51 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads and, with respect to fixed rate fixed maturity securities, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities

Of the $364 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $185 million, or 51%, are related to gross unrealized losses on 65 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to non-agency RMBS (primarily alternative residential mortgage loans), ABS (primarily foreign ABS) and foreign government securities (primarily European sovereign bonds) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over unemployment levels, sovereign debt levels and valuations of residential real estate supporting non-agency RMBS. Management evaluates foreign government securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuer; and evaluates non-agency RMBS and ABS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security.

Equity Securities

Equity securities in an unrealized loss position decreased $73 million during the three months ended March 31, 2013 from $159 million to $86 million. Of the $86 million, $54 million were from 10 equity securities with gross unrealized

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

losses of 20% or more of cost for 12 months or greater, all of which were financial services industry investment grade non-redeemable preferred stock, of which 65% were rated A, AA, or AAA.

Fair Value Option and Trading Securities

See Note 8 for tables that present the categories of securities that comprise fair value option (“FVO”) and trading securities. See “— Net Investment Income” and “— Net Investment Gains (Losses)” for the net investment income recognized on FVO and trading securities and the related changes in estimated fair value subsequent to purchase included in net investment income and net investment gains (losses) for securities still held as of the end of the respective periods, as applicable.

Mortgage Loans

Mortgage Loans Held-for-Investment and Held-for-Sale by Portfolio Segment

Mortgage loans are summarized as follows at:


	March 31, 2013					December 31, 2012
	Carrying Value		% of Total			Carrying Value		% of Total
	(In millions)					(In millions)
Mortgage loans held-for-investment:
Commercial	$	39,605		71.2	%	$	40,472		71.0	%
Agricultural		12,669		22.8			12,843		22.5
Residential		994		1.8			958		1.7

Subtotal (1)		53,268		95.8			54,273		95.2
Valuation allowances		(332)		(0.6)			(347)		(0.6)

Subtotal mortgage loans held-for-investment, net		52,936		95.2			53,926		94.6
Commercial mortgage loans held by CSEs		2,407		4.3			2,666		4.7

Total mortgage loans held-for-investment, net		55,343		99.5			56,592		99.3

Mortgage loans held-for-sale:
Residential — FVO		2		—			49		0.1
Mortgage loans — lower of amortized cost or estimated fair value		269		0.5			365		0.6

Total mortgage loans held-for-sale		271		0.5			414		0.7

Total mortgage loans, net	$	55,614		100.0	%	$	57,006		100.0	%

(1)	Purchases of mortgage loans were $50 million for the three months ended March 31, 2013. There were no mortgage loan purchases for the three months ended March 31, 2012.

See “— Variable Interest Entities” for discussion of consolidated securitization entities (“CSEs”).

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Mortgage Loans and Valuation Allowance by Portfolio Segment

The carrying value prior to valuation allowance (“recorded investment”) in mortgage loans held-for-investment, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, were as follows:


	March 31, 2013								December 31, 2012
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Mortgage loans:
Evaluated individually for credit losses	$	533	$	156	$	14	$	703	$	539	$	181	$	13	$	733
Evaluated collectively for credit losses		39,072		12,513		980		52,565		39,933		12,662		945		53,540

Total mortgage loans		39,605		12,669		994		53,268		40,472		12,843		958		54,273

Valuation allowances:
Specific credit losses		61		19		2		82		94		21		2		117
Non-specifically identified credit losses		214		35		1		250		199		31		—		230

Total valuation allowances		275		54		3		332		293		52		2		347

Mortgage loans, net of valuation allowance	$	39,330	$	12,615	$	991	$	52,936	$	40,179	$	12,791	$	956	$	53,926

Valuation Allowance Rollforward by Portfolio Segment

The changes in the valuation allowance, by portfolio segment, were as follows:


	Commercial		Agricultural		Residential		Total
	(In millions)
For the Three Months Ended March 31, 2013:
Balance, beginning of period	$	293	$	52	$	2	$	347
Provision (release)		(18)		6		1		(11)
Charge-offs, net of recoveries		—		(4)		—		(4)

Balance, end of period	$	275	$	54	$	3	$	332

For the Three Months Ended March 31, 2012:
Balance, beginning of period	$	398	$	81	$	2	$	481
Provision (release)		(30)		(6)		1		(35)
Charge-offs, net of recoveries		—		—		—		—

Balance, end of period	$	368	$	75	$	3	$	446

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Credit Quality of Commercial Mortgage Loans

Information about the credit quality of commercial mortgage loans held-for-investment is presented below at:


	Recorded Investment											Estimated Fair Value		% of Total
	Debt Service Coverage Ratios								% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x		Total		% of Total
	(In millions)											(In millions)
March 31, 2013:
Loan-to-value ratios:
Less than 65%	$	29,872	$	701	$	363	$	30,936		78.1	%	$	33,682		79.2	%
65% to 75%		4,864		645		158		5,667		14.3			5,912		13.9
76% to 80%		918		297		341		1,556		3.9			1,582		3.7
Greater than 80%		1,066		183		197		1,446		3.7			1,342		3.2

Total	$	36,720	$	1,826	$	1,059	$	39,605		100.0	%	$	42,518		100.0	%


December 31, 2012:
Loan-to-value ratios:
Less than 65%	$	29,839	$	730	$	722	$	31,291		77.3	%	$	33,730		78.3	%
65% to 75%		5,057		672		153		5,882		14.6			6,129		14.2
76% to 80%		938		131		316		1,385		3.4			1,436		3.3
Greater than 80%		1,085		552		277		1,914		4.7			1,787		4.2

Total	$	36,919	$	2,085	$	1,468	$	40,472		100.0	%	$	43,082		100.0	%

Credit Quality of Agricultural Mortgage Loans

Information about the credit quality of agricultural mortgage loans held-for-investment is presented below at:


	March 31, 2013					December 31, 2012
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Loan-to-value ratios:
Less than 65%	$	11,676		92.2	%	$	11,908		92.7	%
65% to 75%		679		5.4			590		4.6
76% to 80%		79		0.6			92		0.7
Greater than 80%		235		1.8			253		2.0

Total	$	12,669		100.0	%	$	12,843		100.0	%

The estimated fair value of agricultural mortgage loans held-for-investment was $13.1 billion and $13.3 billion at March 31, 2013 and December 31, 2012, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Credit Quality of Residential Mortgage Loans

Information about the credit quality of residential mortgage loans held-for-investment is presented below at:


	March 31, 2013					December 31, 2012
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Performance indicators:
Performing	$	967		97.3	%	$	929		97.0	%
Nonperforming		27		2.7			29		3.0

Total	$	994		100.0	%	$	958		100.0	%

The estimated fair value of residential mortgage loans held-for-investment was $1.0 billion at both March 31, 2013 and December 31, 2012.

Past Due and Interest Accrual Status of Mortgage Loans

The Company has a high quality, well performing, mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both March 31, 2013 and December 31, 2012. The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial and residential mortgage loans — 60 days; and agricultural mortgage loans — 90 days. The recorded investment in mortgage loans held-for-investment, prior to valuation allowances, past due according to these aging categories, greater than 90 days past due and still accruing interest and in nonaccrual status, by portfolio segment, were as follows at:


	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual Status
	March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012
	(In millions)
Commercial	$	—	$	2	$	—	$	—	$	223	$	84
Agricultural		105		116		44		53		75		67
Residential		27		29		—		—		18		18

Total	$	132	$	147	$	44	$	53	$	316	$	169

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Impaired Mortgage Loans

Information regarding impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, by portfolio segment, were as follows at:


	Loans with a Valuation Allowance								Loans without a Valuation Allowance				All Impaired Loans
	Unpaid Principal Balance		Recorded Investment		Valuation Allowances		Carrying Value		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Carrying Value
	(In millions)
March 31, 2013:
Commercial	$	261	$	245	$	61	$	184	$	302	$	288	$	563	$	472
Agricultural		91		90		19		71		71		66		162		137
Residential		12		12		2		10		2		2		14		12

Total	$	364	$	347	$	82	$	265	$	375	$	356	$	739	$	621

December 31, 2012:
Commercial	$	445	$	436	$	94	$	342	$	103	$	103	$	548	$	445
Agricultural		110		107		21		86		79		74		189		160
Residential		13		13		2		11		—		—		13		11

Total	$	568	$	556	$	117	$	439	$	182	$	177	$	750	$	616

Unpaid principal balance is generally prior to any charge-offs.

The average recorded investment in impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, and the related interest income, which is primarily recognized on a cash basis, by portfolio segment, was:


	Impaired Mortgage Loans
	Average Recorded Investment		Interest Income
	(In millions)
For the Three Months Ended March 31, 2013:
Commercial	$	536	$	3
Agricultural		169		1
Residential		14		—

Total	$	719	$	4

For the Three Months Ended March 31, 2012:
Commercial	$	273	$	3
Agricultural		229		1
Residential		14		—

Total	$	516	$	4

Mortgage Loans Modified in a Troubled Debt Restructuring

At March 31, 2013 and 2012, the Company had no mortgage loans modified during the period in a troubled debt restructuring.

During the three months ended March 31, 2013, the Company had no mortgage loans with subsequent payment defaults that were modified in a troubled debt restructuring during the previous 12 months. During the three months ended March 31, 2012, the Company had one agricultural mortgage loan that had a payment default with a carrying value after specific valuation

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

allowance of $8 million, which was modified as a troubled debt restructuring during the previous 12 months. Payment default is determined in the same manner as delinquency status — when interest and principal payments are past due as described above.

Cash Equivalents

The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $6.3 billion and $6.1 billion at March 31, 2013 and December 31, 2012, respectively.

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in AOCI, were as follows at:


	March 31, 2013		December 31, 2012
	(In millions)
Fixed maturity securities	$	31,932	$	33,641
Fixed maturity securities with noncredit OTTI losses in AOCI		(260)		(361)

Total fixed maturity securities		31,672		33,280
Equity securities		341		97
Derivatives		1,393		1,274
Other		(16)		(30)

Subtotal		33,390		34,621

Amounts allocated from:
Insurance liability loss recognition		(5,613)		(6,049)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI		9		19
DAC and VOBA		(2,242)		(2,485)
Policyholder dividend obligation		(3,599)		(3,828)

Subtotal		(11,445)		(12,343)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI		87		119
Deferred income tax benefit (expense)		(7,788)		(7,973)

Net unrealized investment gains (losses)		14,244		14,424
Net unrealized investment gains (losses) attributable to noncontrolling interests		(7)		(5)

Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	14,237	$	14,419

The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:


	Three Months Ended March 31, 2013		Year Ended December 31, 2012
	(In millions)
Balance, beginning of period	$	(361)	$	(724)
Noncredit OTTI losses and subsequent changes recognized (1)		31		(29)
Securities sold with previous noncredit OTTI loss		54		177
Subsequent changes in estimated fair value		16		215

Balance, end of period	$	(260)	$	(361)

(1)	Noncredit OTTI losses and subsequent changes recognized, net of DAC, were $24 million and ($21) million for the three months ended March 31, 2013 and year ended December 31, 2012, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The changes in net unrealized investment gains (losses) were as follows:


	Three Months Ended March 31, 2013
	(In millions)
Balance, beginning of period	$	14,419
Fixed maturity securities on which noncredit OTTI losses have been recognized		101
Unrealized investment gains (losses) during the period		(1,332)
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		436
DAC and VOBA related to noncredit OTTI losses recognized in AOCI		(10)
DAC and VOBA		243
Policyholder dividend obligation		229
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI		(32)
Deferred income tax benefit (expense)		185

Net unrealized investment gains (losses)		14,239
Net unrealized investment gains (losses) attributable to noncontrolling interests		(2)

Balance, end of period	$	14,237

Change in net unrealized investment gains (losses)	$	(180)
Change in net unrealized investment gains (losses) attributable to noncontrolling interests		(2)

Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(182)

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, were in fixed income securities of the Japanese and Mexican governments and their agencies with an estimated fair value, at March 31, 2013, of $20.6 billion and $6.6 billion, respectively, and in fixed income securities of the Japanese government and its agencies with an estimated fair value, at December 31, 2012, of $22.4 billion. The Company’s investment in fixed maturity and equity securities to counterparties that primarily conduct business in Japan, including Japan government and agency fixed maturity securities, was $26.6 billion and $28.7 billion at March 31, 2013 and December 31, 2012, respectively.

Securities Lending

The Company participates in a securities lending program. Elements of the securities lending program are presented below at:


	March 31, 2013		December 31, 2012
	(In millions)
Securities on loan: (1)
Amortized cost	$	27,034	$	23,380
Estimated fair value	$	29,605	$	27,077
Cash collateral on deposit from counterparties (2)	$	30,284	$	27,727
Security collateral on deposit from counterparties (3)	$	23	$	104
Reinvestment portfolio — estimated fair value	$	30,776	$	28,112

(1)	Included within fixed maturity securities, short-term investments, equity securities and cash and cash equivalents.

(2)	Included within payables for collateral under securities loaned and other transactions.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

(3)	Security collateral on deposit from counterparties may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for cash and cash equivalents, short-term investments, fixed maturity and equity securities, and FVO and trading securities, and at carrying value for mortgage loans.


	March 31, 2013		December 31, 2012
	(In millions)
Invested assets on deposit (regulatory deposits)	$	2,335	$	2,362
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)		11,702		12,434
Invested assets pledged as collateral (1)		23,763		23,251

Total invested assets on deposit, held in trust and pledged as collateral	$	37,800	$	38,047

(1)