Edgar Filing: METLIFE INC

Document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

(Mark One)



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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016



¨	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) 578-9500

(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. (Check one):



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 October 31, 2016, 1,099,135,417 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 September 30, 2016 (Unaudited) and December 31, 2015 and for the Three Months and Nine Months Ended September 30, 2016 and 2015 (Unaudited))	3
	Interim Condensed Consolidated Balance Sheets	3
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	4
	Interim Condensed Consolidated Statements of Equity	5
	Interim Condensed Consolidated Statements of Cash Flows	6
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	7
	Note 2 — Segment Information	9
	Note 3 — Disposition	18
	Note 4 — Insurance	18
	Note 5 — Deferred Policy Acquisition Costs and Value of Business Acquired	20
	Note 6 — Closed Block	20
	Note 7 — Investments	23
	Note 8 — Derivatives	37
	Note 9 — Fair Value	54
	Note 10 — Goodwill	76
	Note 11 — Equity	77
	Note 12 — Other Expenses	81
	Note 13 — Employee Benefit Plans	82
	Note 14 — Earnings Per Common Share	83
	Note 15 — Contingencies, Commitments and Guarantees	83
	Note 16 — Subsequent Event	91
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	92
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	181
Item 4.	Controls and Procedures	182

Part II — Other Information
Item 1.	Legal Proceedings	183
Item 1A.	Risk Factors	185
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	188
Item 6.	Exhibits	189

Signatures		190

Exhibit Index		E - 1

Table of Contents

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, or are tied to future periods, 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. These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the global 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 global financial and capital market risks, including as a result of the pending withdrawal of the United Kingdom from the European Union, other disruption in Europe and possible withdrawal of one or more countries from the Euro zone; (4) impact on us of comprehensive financial services regulation reform, including potential regulation of MetLife, Inc. as a 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) unanticipated developments that could delay, prevent or otherwise adversely affect the separation of Brighthouse Financial; (9) our ability to address difficulties, unforeseen liabilities, asset impairments, or rating agency actions arising from (a) business acquisitions and integrating and managing the growth of such acquired businesses, (b) dispositions of businesses via sale, initial public offering, spin-off or otherwise, including failure to achieve projected operational benefit from such transactions; (c) entry into joint ventures, or (d) legal entity reorganizations; (10) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; including any separated business’ incurrence of debt in connection with such a separation; (11) investment losses and defaults, and changes to investment valuations; (12) changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (13) impairments of goodwill and realized losses or market value impairments to illiquid assets; (14) defaults on our mortgage loans; (15) the defaults or deteriorating credit of other financial institutions that could adversely affect us; (16) economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (17) downgrades in our claims paying ability, financial strength or credit ratings; (18) a deterioration in the experience of the closed block established in connection with the reorganization of Metropolitan Life Insurance Company; (19) availability and effectiveness of reinsurance, hedging or indemnification arrangements, as well as any default or failure of counterparties to perform; (20) differences between actual claims experience and underwriting and reserving assumptions; (21) ineffectiveness of risk management policies and procedures; (22) catastrophe losses; (23) increasing cost and limited market capacity for statutory life insurance reserve financings; (24) 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; (25) 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 any adjustment for nonperformance risk; (26) legal, regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (27) MetLife, Inc.’s and its subsidiary holding companies’ primary reliance, as holding companies, on dividends from its subsidiaries to meet its free cash flow targets and debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (28) the possibility that MetLife, Inc.’s Board of Directors may influence the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; (29) changes in accounting standards, practices and/or policies; (30) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (31) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (32) difficulties in marketing and distributing products through our distribution channels; (33) provisions of laws and our incorporation documents may delay, deter or prevent takeovers and corporate combinations involving MetLife; (34) 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; (35) any failure to protect the confidentiality of client information; (36) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; (37) restrictions, liabilities, losses or indemnification obligations arising from any transitional services or tax arrangements related to the separation of any business, or from the failure of such a separation to qualify for any intended tax-free treatment; and (38) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission.

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 U.S. Securities and Exchange Commission.

Corporate Information

We announce financial and other information about MetLife to our investors through the MetLife Investor Relations web page at www.metlife.com, as well as U.S. Securities and Exchange Commission filings, news releases, public conference calls and webcasts. MetLife encourages investors to visit the Investor Relations web page from time to time, as information is updated and new information is posted. The information found on our website is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the U.S. Securities and Exchange Commission, and any references to our website are intended to be inactive textual references only.

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.

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Part I — Financial Information

Item 1. Financial Statements

MetLife, Inc.

Interim Condensed Consolidated Balance Sheets

September 30, 2016 (Unaudited) and December 31, 2015

(In millions, except share and per share data)



	September 30, 2016			December 31, 2015
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $353,913 and $332,964, respectively; includes $3,533 and $4,277, respectively, relating to variable interest entities)	$	390,442		$	351,402
Equity securities available-for-sale, at estimated fair value (cost: $2,838 and $2,997, respectively)	3,289			3,321
Fair value option and trading securities, at estimated fair value (includes $0 and $404, respectively, of actively traded securities; and $9 and $13, respectively, relating to variable interest entities)	14,730			15,024
Mortgage loans (net of valuation allowances of $330 and $318, respectively; includes $143 and $172, respectively, at estimated fair value, relating to variable interest entities; includes $481 and $314, respectively, under the fair value option)	71,156			67,102
Policy loans (includes $0 and $4, respectively, relating to variable interest entities)	11,177			11,258
Real estate and real estate joint ventures (includes $33 and $47, respectively, of real estate held-for-sale)	9,186			8,433
Other limited partnership interests (includes $15 and $27, respectively, relating to variable interest entities)	6,878			7,096
Short-term investments, principally at estimated fair value (includes $0 and $26, respectively, relating to variable interest entities)	11,655			9,299
Other invested assets, principally at estimated fair value (includes $31 and $43, respectively, relating to variable interest entities)	30,278			22,524
Total investments	548,791			495,459
Cash and cash equivalents, principally at estimated fair value (includes $0 and $85, respectively, relating to variable interest entities)	15,883			12,752
Accrued investment income (includes $1 and $23, respectively, relating to variable interest entities)	4,197			3,988
Premiums, reinsurance and other receivables (includes $4 and $21, respectively, relating to variable interest entities)	26,178			22,702
Deferred policy acquisition costs and value of business acquired (includes $0 and $240, respectively, relating to variable interest entities)	24,748			24,130
Current income tax recoverable	—			161
Goodwill	9,592			9,477
Other assets (includes $3 and $148, respectively, relating to variable interest entities)	7,867			7,666
Separate account assets (includes $0 and $1,022, respectively, relating to variable interest entities)	315,648			301,598
Total assets	$	952,904		$	877,933
Liabilities and Equity
Liabilities
Future policy benefits (includes $0 and $716, respectively, relating to variable interest entities)	$	208,561		$	191,879
Policyholder account balances (includes $0 and $21, respectively, relating to variable interest entities)	216,192			202,722
Other policy-related balances (includes $0 and $238, respectively, relating to variable interest entities)	14,857			14,255
Policyholder dividends payable	763			720
Policyholder dividend obligation	3,352			1,783
Payables for collateral under securities loaned and other transactions	44,422			36,871
Short-term debt	201			100
Long-term debt (includes $38 and $63, respectively, at estimated fair value, relating to variable interest entities)	16,553			18,023
Collateral financing arrangements	4,084			4,139
Junior subordinated debt securities	3,168			3,194
Current income tax payable	151			—
Deferred income tax liability	14,359			10,592
Other liabilities (includes $0 and $81, respectively, relating to variable interest entities)	32,127			23,561
Separate account liabilities (includes $0 and $1,022, respectively, relating to variable interest entities)	315,648			301,598
Total liabilities	874,438			809,437
Contingencies, Commitments and Guarantees (Note 15)
Redeemable noncontrolling interests in partially-owned consolidated subsidiaries	—			77
Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $2,100 aggregate liquidation preference	—			—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,161,994,036 and 1,159,590,766 shares issued, respectively; 1,098,985,931 and 1,098,028,525 shares outstanding, respectively	12			12
Additional paid-in capital	30,797			30,749
Retained earnings	37,054			35,519
Treasury stock, at cost; 63,008,105 and 61,562,241 shares, respectively	(3,172		)	(3,102		)
Accumulated other comprehensive income (loss)	13,595			4,771
Total MetLife, Inc.’s stockholders’ equity	78,286			67,949
Noncontrolling interests	180			470
Total equity	78,466			68,419
Total liabilities and equity	$	952,904		$	877,933

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months and Nine Months Ended September 30, 2016 and 2015 (Unaudited)

(In millions, except per share data)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues
Premiums	$	10,391		$	10,375		$	29,501		$	28,940
Universal life and investment-type product policy fees	2,296			2,346			6,926			7,174
Net investment income	5,464			3,959			14,910			14,367
Other revenues	366			484			1,340			1,497
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities	(8		)	(43		)	(94		)	(51		)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)	(6		)	16			(12		)	4
Other net investment gains (losses)	271			409			644			582
Total net investment gains (losses)	257			382			538			535
Net derivative gains (losses)	(1,051		)	485			(1,815		)	394
Total revenues	17,723			18,031			51,400			52,907
Expenses
Policyholder benefits and claims	10,855			10,334			30,807			28,943
Interest credited to policyholder account balances	1,820			647			4,646			3,940
Policyholder dividends	312			354			951			1,024
Goodwill impairment	260			—			260			—
Other expenses	3,928			4,533			11,366			12,665
Total expenses	17,175			15,868			48,030			46,572
Income (loss) before provision for income tax	548			2,163			3,370			6,335
Provision for income tax expense (benefit)	(25		)	965			480			1,855
Net income (loss)	573			1,198			2,890			4,480
Less: Net income (loss) attributable to noncontrolling interests	(4		)	(5		)	2			4
Net income (loss) attributable to MetLife, Inc.	577			1,203			2,888			4,476
Less: Preferred stock dividends	6			6			58			67
Preferred stock repurchase premium	—			—			—			42
Net income (loss) available to MetLife, Inc.’s common shareholders	$	571		$	1,197		$	2,830		$	4,367
Comprehensive income (loss)	$	(463	)	$	1,653		$	11,809		$	760
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	(3		)	2			97			42
Comprehensive income (loss) attributable to MetLife, Inc.	$	(460	)	$	1,651		$	11,712		$	718



Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.52	$	1.07	$	2.57	$	3.90
Diluted	$	0.51	$	1.06	$	2.55	$	3.86
Cash dividends declared per common share	$	0.400	$	0.375	$	1.175	$	1.100

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Equity

For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)

(In millions)



	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Treasury Stock at Cost			Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity			Noncontrolling Interests (1)			Total Equity
Balance at December 31, 2015	$	—	$	12	$	30,749	$	35,519		$	(3,102	)	$	4,771	$	67,949		$	470		$	68,419
Treasury stock acquired in connection with share repurchases										(70		)			(70		)				(70		)
Stock-based compensation					48										48						48
Dividends on preferred stock							(58		)						(58		)				(58		)
Dividends on common stock							(1,295		)						(1,295		)				(1,295		)
Change in equity of noncontrolling interests															—			(387		)	(387		)
Net income (loss)							2,888								2,888			2			2,890
Other comprehensive income (loss), net of income tax													8,824		8,824			95			8,919
Balance at September 30, 2016	$	—	$	12	$	30,797	$	37,054		$	(3,172	)	$	13,595	$	78,286		$	180		$	78,466



	Preferred Stock			Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock at Cost			Accumulated Other Comprehensive Income (Loss)			Total MetLife, Inc.’s Stockholders’ Equity			Noncontrolling Interests (1)			Total Equity
Balance at December 31, 2014	$	1		$	12	$	30,543		$	32,020		$	(1,172	)	$	10,649		$	72,053		$	507		$	72,560
Repurchase of preferred stock	(1		)			(1,459		)										(1,460		)				(1,460		)
Preferred stock repurchase premium									(42		)							(42		)				(42		)
Preferred stock issuance						1,483												1,483						1,483
Treasury stock acquired in connection with share repurchases												(1,107		)				(1,107		)				(1,107		)
Stock-based compensation						159												159						159
Dividends on preferred stock									(67		)							(67		)				(67		)
Dividends on common stock									(1,234		)							(1,234		)				(1,234		)
Change in equity of noncontrolling interests																		—			(64		)	(64		)
Net income (loss)									4,476									4,476			4			4,480
Other comprehensive income (loss), net of income tax															(3,758		)	(3,758		)	38			(3,720		)
Balance at September 30, 2015	$	—		$	12	$	30,726		$	35,153		$	(2,279	)	$	6,891		$	70,503		$	485		$	70,988

__________________


(1)	Net income (loss) attributable to noncontrolling interests did not exclude any gains of redeemable noncontrolling interests in partially-owned consolidated subsidiaries at September 30, 2016. Net income (loss) attributable to noncontrolling interests excluded losses of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than $1 million at September 30, 2015.

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)

(In millions)



	Nine Months Ended September 30,
	2016			2015
Net cash provided by (used in) operating activities	$	9,183		$	9,527
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities	101,614			109,308
Equity securities	1,019			478
Mortgage loans	10,518			9,775
Real estate and real estate joint ventures	323			1,644
Other limited partnership interests	1,025			859
Purchases of:
Fixed maturity securities	(108,418		)	(105,128		)
Equity securities	(802		)	(431		)
Mortgage loans	(14,686		)	(13,814		)
Real estate and real estate joint ventures	(958		)	(977		)
Other limited partnership interests	(806		)	(935		)
Cash received in connection with freestanding derivatives	3,258			2,376
Cash paid in connection with freestanding derivatives	(4,317		)	(2,887		)
Cash received under repurchase agreements (Note 7)	—			199
Cash paid under reverse repurchase agreements (Note 7)	—			(199		)
Sales of businesses, net of cash and cash equivalents disposed of $135 and $0, respectively	156			—
Purchases of investments in operating joint ventures	(39		)	—
Net change in policy loans	201			10
Net change in short-term investments	(2,232		)	(6,644		)
Net change in other invested assets	(58		)	(350		)
Other, net	(384		)	(191		)
Net cash provided by (used in) investing activities	(14,586		)	(6,907		)
Cash flows from financing activities
Policyholder account balances:
Deposits	65,225			69,383
Withdrawals	(61,145		)	(72,940		)
Net change in payables for collateral under securities loaned and other transactions	7,227			2,664
Net change in short-term debt	(3		)	—
Long-term debt issued	—			1,578
Long-term debt repaid	(1,273		)	(1,078		)
Collateral financing arrangements repaid	(55		)	(44		)
Treasury stock acquired in connection with share repurchases	(70		)	(1,107		)
Preferred stock issued, net of issuance costs	—			1,483
Repurchase of preferred stock	—			(1,460		)
Preferred stock repurchase premium	—			(42		)
Dividends on preferred stock	(58		)	(67		)
Dividends on common stock	(1,295		)	(1,234		)
Other, net	(325		)	12
Net cash provided by (used in) financing activities	8,228			(2,852		)
Effect of change in foreign currency exchange rates on cash and cash equivalents balances	306			(360		)
Change in cash and cash equivalents	3,131			(592		)
Cash and cash equivalents, beginning of period	12,752			10,808
Cash and cash equivalents, end of period	$	15,883		$	10,216
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	875		$	836
Income tax	$	464		$	904
Non-cash transactions:
Fixed maturity securities received in connection with pension risk transfer transactions	$	985		$	903
Reduction of fixed maturity securities in connection with a reinsurance transaction	$	224		$	—
Deconsolidation of operating joint venture (Note 7):
Reduction of fixed maturity securities	$	917		$	—
Reduction of noncontrolling interests	$	373		$	—

See accompanying notes to the interim condensed consolidated financial statements.

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MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is a global provider of life insurance, annuities, employee benefits and asset management. In anticipation of the Company’s plan to separate a substantial portion of its former Retail segment, as well as certain portions of its former Corporate Benefit Funding segment and Corporate & Other (the “Separation”), in the third quarter of 2016, MetLife reorganized its businesses into six segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); MetLife Holdings; and Brighthouse Financial. See Note 2 for further information on the reorganization of the Company’s segments in the third quarter of 2016, which was applied retrospectively.

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 on 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.

Consolidation

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.

Prior to January 1, 2016, certain international subsidiaries had a fiscal year cutoff of November 30th. Accordingly, the Company’s interim condensed consolidated financial statements reflect the assets and liabilities of such subsidiaries as of November 30, 2015 and the operating results of such subsidiaries for the three months and nine months ended August 31, 2015. Effective January 1, 2016, the Company converted its Japan operations to calendar year-end reporting. The elimination of a one-month reporting lag of a subsidiary is considered a change in accounting principle and requires retrospective application. While the Company believes that eliminating the lag in the reporting of its Japan operations was preferable in order to consistently reflect events, economic conditions and global trends in the financial statements, the Company determined that it was impracticable to apply the effects of the lag elimination to financial reporting periods prior to January 1, 2015. The effect of not retroactively applying this change in accounting, however, was not material to the 2015 or 2016 consolidated financial statements. Therefore, the Company reported the cumulative effect of the change in accounting principle in net income for the three months ended March 31, 2016 and the nine months ended September 30, 2016 and did not retrospectively apply the effects of this change to prior periods. See Note 2.

The Company uses the equity method of accounting for equity securities when it has significant influence or at least 20% interest and for real estate joint ventures and other limited partnership interests (“investees”) when it has more than a minor ownership interest or more than a 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.

Reclassifications

Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the 2016 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.

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MetLife, Inc.

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

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2015 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, 2015 (the “2015 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2015 Annual Report.

Adoption of New Accounting Pronouncement

Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and maximum exposure to loss as of September 30, 2016, disclosed in Note 7, reflect the application of the new guidance.

Future Adoption of New Accounting Pronouncements

In October 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on consolidation evaluation for entities under common control (Accounting Standards Update (“ASU”) 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control). The new guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance does not change the characteristics of a primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held through related parties that are under common control with the reporting entity. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis. Early adoption is permitted in the first interim or annual reporting period. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all periods presented. Early adoption is permitted in any interim or annual period. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The guidance also requires enhanced disclosures. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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MetLife, Inc.

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

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

In March 2016, the FASB issued new guidance on stock compensation (ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting. The new guidance is effective for the fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and requires either a modified retrospective, a retrospective or a prospective transition approach depending upon the type of change. Early adoption is permitted in any interim or annual period. The new guidance changes several aspects of the accounting for share-based payment award transactions, including: (i) income tax consequences when awards vest or are settled; (ii) classification of awards as either equity or liabilities due to statutory tax withholding requirements; and (iii) classification on the statement of cash flows. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In February 2016, the FASB issued new guidance on leasing transactions (ASU 2016-02, Leases - Topic 842). The new guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective transition approach which includes a number of optional practical expedients. Early adoption is permitted. The new guidance requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current guidance, leases would be classified as finance or operating leases. However, unlike current guidance, the new guidance will require both types of leases to be recognized on the balance sheet. Lessor accounting will remain largely unchanged from current guidance except for certain targeted changes. The new guidance will also require new qualitative and quantitative disclosures. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the fair value option (“FVO”) that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In May 2015, the FASB issued new guidance on short-duration insurance contracts (ASU 2015-09, Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts). The amendments in this new guidance are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. The new guidance should be applied retrospectively by providing comparative disclosures for each period presented, except for those requirements that apply only to the current period. The new guidance requires insurance entities to provide users of financial statements with more transparent information about initial claim estimates and subsequent adjustments to these estimates, including information on: (i) reconciling from the claim development table to the balance sheet liability, (ii) methodologies and judgments in estimating claims, and (iii) the timing, and frequency of claims. The adoption will not have an impact on the Company’s consolidated financial statements other than expanded disclosures in Note 4.

In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)), effective for fiscal years beginning after December 15, 2016 and interim periods within those years and should be applied retrospectively. In August 2015, the FASB amended the guidance to defer the effective date by one year, effective for the fiscal years beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The new guidance will supersede nearly all existing revenue recognition guidance under GAAP; however, it will not impact the accounting for insurance contracts, leases, financial instruments and guarantees. For those contracts that are impacted by the new guidance, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

2. Segment Information

In anticipation of the Separation, in the third quarter of 2016, MetLife reorganized its businesses into six segments: U.S.; Asia; Latin America; EMEA; MetLife Holdings; and Brighthouse Financial. In addition, the Company reports certain of its results of operations in Corporate & Other. These changes were applied retrospectively and did not have an impact on total consolidated net income (loss) or operating earnings in the prior periods.

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MetLife, Inc.

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

2. Segment Information (continued)

On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. Additionally, on July 21, 2016, MetLife, Inc. announced that following the Separation, the separated business will be rebranded as “Brighthouse Financial.” On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. (“Brighthouse”), filed a registration statement on Form 10 (the “Form 10”) with the U.S. Securities and Exchange Commission (“SEC”). The information statement filed as an exhibit to the Form 10, disclosed that the Company intends to include MetLife Insurance Company USA (“MetLife USA”), New England Life Insurance Company (“NELICO”), First MetLife Investors Insurance Company (“FMLI”), MetLife Advisers, LLC and certain captive reinsurance companies in the proposed separated business and distribute at least 80.1% of the shares of Brighthouse’s common stock on a pro rata basis to the holders of MetLife, Inc. common stock.

The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. The Separation remains subject to certain conditions, including among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service and an opinion from MetLife’s tax advisor regarding certain U.S. federal income tax matters, and an SEC declaration of the effectiveness of the Form 10.

This re-segmentation resulted in a $296 million, net of income tax, charge to earnings in the current period, all in the Brighthouse Financial segment, driven by the segment’s variable and universal life products. This charge is the direct result of the Company, beginning in the third quarter, no longer being able to aggregate, for loss recognition testing, the variable and universal life products of Brighthouse Financial with the variable and universal life products remaining with MetLife Holdings. Of this amount, the Company recorded $254 million, net of income tax, as a one-time charge, which was mostly recognized as a write-off of deferred policy acquisition costs (“DAC”), with the remaining $42 million, net of income tax, recognized as an increase in insurance-related liabilities.

U.S.

The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into three businesses: Group Benefits, Retirement & Income Solutions and Property & Casualty.


•	The Group Benefits business offers insurance products and services which include life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, critical illness, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers.

•

The Retirement & Income Solutions business offers a broad range of annuity and investment products, including guaranteed interest contracts and other stable value products, income annuities and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This business also includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives.


•	The Property & Casualty business offers personal and commercial lines property and casualty insurance, including private passenger automobile, homeowners’ and personal excess liability insurance. In addition, Property & Casualty offers small business owners property, liability and business interruption insurance.

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 & health insurance, fixed and variable annuities, credit insurance and endowment products.

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 & health insurance, group medical, dental, credit insurance, endowment and retirement & savings products.

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MetLife, Inc.

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

2. Segment Information (continued)

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 & health insurance, credit insurance, annuities, endowment and retirement & savings products.

MetLife Holdings

The MetLife Holdings segment consists of operations relating to products and businesses no longer actively marketed by the Company in the U.S. These products and businesses include variable life, universal life, term life, whole life, variable annuities, fixed annuities and index-linked annuities. The MetLife Holdings segment also includes the Company’s discontinued long-term care businesses and the assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan.

Brighthouse Financial

The Brighthouse Financial segment offers a broad range of products and services which include variable annuities, fixed annuities, index-linked annuities, income annuities, term life, whole life, universal life and variable life, as well as certain run-off businesses. These products and services, which exclude the run-off businesses, are actively marketed through various third party retail distribution channels in the U.S.

Corporate & Other

Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges and various start-up businesses (including expatriate benefits insurance and the investment management business through which the Company offers fee-based investment management services to institutional clients, as well as the direct to consumer portion of the U.S. Direct business). 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 affiliated reinsurance and intersegment loans, which bear interest rates commensurate with related borrowings.

Financial Measures and Segment Accounting Policies

Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is also the Company’s GAAP measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for net income (loss). 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 allows analysis of the Company’s performance relative to the Company’s business plan and facilitates comparisons to industry results.

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

The financial measures of operating revenues and operating expenses focus on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and divested businesses and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife and are referred to as divested businesses. In addition, for the three months ended March 31, 2016 and the nine months ended September 30, 2016, operating revenues and operating expenses exclude the financial impact of converting the Company’s Japan operations to calendar year-end reporting without retrospective application of this change to prior periods and is referred to as lag elimination. Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). Operating expenses also excludes goodwill impairments.

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MetLife, Inc.

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

2. Segment Information (continued)

The following additional adjustments are made to 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 investment hedge adjustments which represent earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed unit-linked investments and (iv) 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 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 and other pass through adjustments, (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 earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances 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 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, integration and other 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.

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms

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 and nine months ended September 30, 2016 and 2015. 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, with the exception of the Brighthouse Financial segment, for which equity is reflective of the historical equity of the legal entities which comprise Brighthouse and related companies, which will be eliminated upon Separation. The Brighthouse Financial segment equity is not indicative of Brighthouse and related companies’ equity on a combined standalone basis.

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.

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MetLife, Inc.

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

2. Segment Information (continued)

The Company’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. The Company’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

Segment net investment income, with the exception of the Brighthouse Financial segment, 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, net income (loss) or operating earnings. As noted above, the Brighthouse Financial segment’s net investment income represents that of the legal entities which comprise Brighthouse and related companies on a historical basis, however, may not be indicative of that on a combined standalone basis.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios 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.

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MetLife, Inc.

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

2. Segment Information (continued)



	Operating Results
Three Months Ended September 30, 2016	U.S.			Asia			Latin America			EMEA			MetLife Holdings			Brighthouse Financial			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	5,936		$	1,822		$	653		$	500		$	1,093		$	347		$	40		$	10,391		$	—		$	10,391
Universal life and investment-type product policy fees	245			394			227			104			357			903			(31		)	2,199			97			2,296
Net investment income	1,590			707			311			81			1,537			941			(7		)	5,160			304			5,464
Other revenues	192			12			11			17			105			50			(28		)	359			7			366
Net investment gains (losses)	—			—			—			—			—			—			—			—			257			257
Net derivative gains (losses)	—			—			—			—			—			—			—			—			(1,051		)	(1,051		)
Total revenues	7,963			2,935			1,202			702			3,092			2,241			(26		)	18,109			(386		)	17,723
Expenses
Policyholder benefits and claims and policyholder dividends	5,894			1,363			681			257			1,853			814			10			10,872			295			11,167
Interest credited to policyholder account balances	322			331			85			28			261			288			—			1,315			505			1,820
Goodwill impairment	—			—			—			—			—			—			—			—			260			260
Capitalization of DAC	(124		)	(440		)	(83		)	(103		)	(44		)	(70		)	1			(863		)	—			(863		)
Amortization of DAC and VOBA	117			331			(2		)	106			219			509			2			1,282			(265		)	1,017
Amortization of negative VOBA	—			(46		)	(1		)	(3		)	—			—			—			(50		)	(5		)	(55		)
Interest expense on debt	2			—			1			—			15			32			241			291			1			292
Other expenses	912			930			335			332			401			560			(3		)	3,467			70			3,537
Total expenses	7,123			2,469			1,016			617			2,705			2,133			251			16,314			861			17,175
Provision for income tax expense (benefit)	288			142			53			11			121			40			(287		)	368			(393		)	(25		)
Operating earnings	$	552		$	324		$	133		$	74		$	266		$	68		$	10		1,427
Adjustments to:
Total revenues																						(386		)
Total expenses																						(861		)
Provision for income tax (expense) benefit																						393
Net income (loss)																						$	573					$	573

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MetLife, Inc.

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

2. Segment Information (continued)



	Operating Results
Three Months Ended September 30, 2015	U.S.			Asia			Latin America			EMEA			MetLife Holdings			Brighthouse Financial			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	6,023		$	1,736		$	586		$	501		$	1,115		$	468		$	(53	)	$	10,376		$	(1	)	$	10,375
Universal life and investment-type product policy fees	233			382			261			106			370			921			(26		)	2,247			99			2,346
Net investment income	1,522			670			277			82			1,521			862			(85		)	4,849			(890		)	3,959
Other revenues	184			26			10			11			223			99			(58		)	495			(11		)	484
Net investment gains (losses)	—			—			—			—			—			—			—			—			382			382
Net derivative gains (losses)	—			—			—			—			—			—			—			—			485			485
Total revenues	7,962			2,814			1,134			700			3,229			2,350			(222		)	17,967			64			18,031
Expenses
Policyholder benefits and claims and policyholder dividends	5,976			1,331			581			233			1,885			846			(72		)	10,780			(92		)	10,688
Interest credited to policyholder account balances	304			327			88			27			266			313			6			1,331			(684		)	647
Goodwill impairment	—			—			—			—			—			—			—			—			—			—
Capitalization of DAC	(128		)	(435		)	(81		)	(107		)	(101		)	(102		)	(1		)	(955		)	—			(955		)
Amortization of DAC and VOBA	118			309			48			127			173			197			(1		)	971			160			1,131
Amortization of negative VOBA	—			(77		)	—			(5		)	—			—			—			(82		)	(8		)	(90		)
Interest expense on debt	1			—			—			—			13			32			248			294			8			302
Other expenses	908			896			348			352			647			614			361			4,126			19			4,145
Total expenses	7,179			2,351			984			627			2,883			1,900			541			16,465			(597		)	15,868
Provision for income tax expense (benefit)	272			125			(33		)	7			103			103			214			791			174			965
Operating earnings	$	511		$	338		$	183		$	66		$	243		$	347		$	(977	)	711
Adjustments to:
Total revenues																						64
Total expenses																						597
Provision for income tax (expense) benefit																						(174		)
Net income (loss)																						$	1,198					$	1,198

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MetLife, Inc.

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

2. Segment Information (continued)



	Operating Results
Nine Months Ended September 30, 2016	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Brighthouse Financial		Corporate & Other			Total		Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	16,127	$	5,161	$	1,885	$	1,519	$	3,312	$	1,020	$	51		$	29,075	$	426		$	29,501
Universal life and investment-type product policy fees	743		1,114		764		294		1,073		2,622		(87		)	6,523		403			6,926
Net investment income	4,615		2,003		809		244		4,489		2,624		(37		)	14,747		163			14,910
Other revenues	589		45		26		56		512		482		(380		)	1,330		10			1,340
Net investment gains (losses)	—		—		—		—		—		—		—			—		538			538
Net derivative gains (losses)	—		—		—		—		—		—		—			—		(1,815		)	(1,815		)
Total revenues	22,074		8,323		3,484		2,113		9,386		6,748		(453		)	51,675		(275		)	51,400
Expenses
Policyholder benefits and claims and policyholder dividends	16,210		3,923		1,814		801		5,603		2,525		(26		)	30,850		908			31,758
Interest credited to policyholder account balances	967		974		249		87		780		868		5			3,930