Edgar Filing: METLIFE INC

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Form 10-Q

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 MARCH 31, 2012

¨	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. (Check one):

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 May 2, 2012, 1,062,029,784 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, 2012 (Unaudited) and December 31, 2011 and for the Three Months Ended March 31, 2012 and 2011 (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		10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		115
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		175
Item 4.	Controls and Procedures		184

Part II — Other Information			184
Item 1.	Legal Proceedings		184
Item 1A.	Risk Factors		189
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		197
Item 6.	Exhibits		199

Signatures			200

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) concerns over U.S. fiscal policy and the trajectory of the national debt of the U.S., as well as rating agency downgrades of U.S. Treasury securities; (3) uncertainty about the effectiveness of governmental and regulatory actions to stabilize the financial system, the imposition of fees relating thereto, or the promulgation of additional regulations; (4) increased volatility and disruption of the capital and credit markets, which may affect our ability to seek financing or access our credit facilities; (5) impact of comprehensive financial services regulation reform on us; (6) economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (7) 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; (8) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect our ability to raise capital, 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; (9) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (10) investment losses and defaults, and changes to investment valuations; (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) 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; (15) 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; (16) the dilutive impact on our stockholders resulting from the settlement of common equity units issued in connection with the acquisition of ALICO or otherwise; (17) 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; (18) downgrades in our claims paying ability, financial strength or credit ratings; (19) ineffectiveness of risk management policies and procedures; (20) availability and effectiveness of reinsurance or indemnification arrangements, as well as default or failure of counterparties to perform; (21) discrepancies between actual claims experience and assumptions used in setting prices for our products and establishing the liabilities for our obligations for future policy benefits and claims; (22) catastrophe losses; (23) heightened competition, including

with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, distribution of amounts available under U.S. government programs, and for personnel; (24) unanticipated changes in industry trends; (25) changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (26) changes in accounting standards, practices and/or policies; (27) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (28) 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; (29) deterioration in the experience of the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company; (30) adverse results or other consequences from litigation, arbitration or regulatory investigations; (31) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (32) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (33) regulatory, legislative or tax changes relating to our insurance, banking, 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; (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 our disaster recovery systems, cyber- or other information security systems and management continuity planning; (35) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; and (36) 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, 2012 (Unaudited) and December 31, 2011

(In millions, except share and per share data)


	March 31, 2012			December 31, 2011
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $332,981 and $329,811, respectively; includes $3,296 and $3,225, respectively, relating to variable interest entities)	$	354,451		$	350,271
Equity securities available-for-sale, at estimated fair value (cost: $3,063 and $3,208, respectively)		3,043			3,023
Trading and other securities, at estimated fair value (includes $544 and $473, respectively, of actively traded securities; and $249 and $280, respectively, relating to variable interest entities)		19,026			18,268
Mortgage loans:
Held-for-investment, principally at amortized cost (net of valuation allowances of $446 and $481, respectively; includes $3,073 and $3,187, respectively, at estimated fair value, relating to variable interest entities)		56,641			56,915
Held-for-sale, principally at estimated fair value (includes $9,204 and $10,716, respectively, under the fair value option)		11,947			15,178

Mortgage loans, net		68,588			72,093
Policy loans		11,896			11,892
Real estate and real estate joint ventures (includes $10 and $15, respectively, relating to variable interest entities)		8,472			8,563
Other limited partnership interests (includes $242 and $259, respectively, relating to variable interest entities)		6,487			6,378
Short-term investments, principally at estimated fair value		11,801			17,310
Other invested assets, principally at estimated fair value (includes $98 and $98, respectively, relating to variable interest entities)		20,172			23,581

Total investments		503,936			511,379
Cash and cash equivalents, principally at estimated fair value (includes $120 and $176, respectively, relating to variable interest entities)		18,667			10,461
Accrued investment income (includes $15 and $16, respectively, relating to variable interest entities)		4,612			4,344
Premiums, reinsurance and other receivables (includes $3 and $12, respectively, relating to variable interest entities)		23,759			22,481
Deferred policy acquisition costs and value of business acquired		25,105			24,619
Goodwill		11,903			11,935
Other assets (includes $5 and $5, respectively, relating to variable interest entities)		9,647			7,984
Separate account assets		221,975			203,023

Total assets	$	819,604		$	796,226

Liabilities and Equity
Liabilities
Future policy benefits	$	184,141		$	184,275
Policyholder account balances		220,813			217,700
Other policy-related balances		16,029			15,599
Policyholder dividends payable		761			774
Policyholder dividend obligation		2,700			2,919
Payables for collateral under securities loaned and other transactions		32,496			33,716
Bank deposits		10,478			10,507
Short-term debt		101			686
Long-term debt (includes $2,916 and $3,068, respectively, at estimated fair value, relating to variable interest entities)		23,389			23,692
Collateral financing arrangements		4,647			4,647
Junior subordinated debt securities		3,192			3,192
Current income tax payable		239			193
Deferred income tax liability		6,375			6,395
Other liabilities (includes $52 and $60, respectively, relating to variable interest entities; and $8,252 and $7,626, respectively, under the fair value option)		33,144			30,914
Separate account liabilities		221,975			203,023

Total liabilities		760,480			738,232

Contingencies, Commitments and Guarantees (Note 10)
Redeemable noncontrolling interests in partially owned consolidated subsidiaries		114			105

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; 1,064,057,907 and 1,061,150,915 shares issued at March 31, 2012 and December 31, 2011, respectively; 1,060,864,020 and 1,057,957,028 shares outstanding at March 31, 2012 and December 31, 2011, respectively		11			11
Additional paid-in capital		26,920			26,782
Retained earnings		24,640			24,814
Treasury stock, at cost; 3,193,887 shares at March 31, 2012 and December 31, 2011		(172	)		(172	)
Accumulated other comprehensive income (loss)		7,266			6,083

Total MetLife, Inc.’s stockholders’ equity		58,666			57,519
Noncontrolling interests		344			370

Total equity		59,010			57,889

Total liabilities and equity	$	819,604		$	796,226

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, 2012 and 2011 (Unaudited)

(In millions, except per share data)


	Three Months Ended March 31,
	2012			2011
Revenues
Premiums	$	9,129		$	8,554
Universal life and investment-type product policy fees		2,078			1,889
Net investment income		6,200			5,313
Other revenues		597			566
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(135	)		(132	)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)		2			9
Other net investment gains (losses)		23			24

Total net investment gains (losses)		(110	)		(99	)
Net derivative gains (losses)		(1,978	)		(315	)

Total revenues		15,916			15,908

Expenses
Policyholder benefits and claims		9,104			8,237
Interest credited to policyholder account balances		2,557			1,924
Policyholder dividends		343			372
Other expenses		4,321			4,090

Total expenses		16,325			14,623

Income (loss) from continuing operations before provision for income tax		(409	)		1,285
Provision for income tax expense (benefit)		(275	)		361

Income (loss) from continuing operations, net of income tax		(134	)		924
Income (loss) from discontinued operations, net of income tax		14			(40	)

Net income (loss)		(120	)		884
Less: Net income (loss) attributable to noncontrolling interests		24			7

Net income (loss) attributable to MetLife, Inc		(144	)		877
Less: Preferred stock dividends		30			30
Preferred stock redemption premium		—			146

Net income (loss) available to MetLife, Inc.’s common shareholders	$	(174	)	$	701

Comprehensive income (loss)	$	1,054		$	974
Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income tax		15			(2	)

Comprehensive income (loss) attributable to MetLife, Inc	$	1,039		$	976

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
Basic	$	(0.17	)	$	0.70

Diluted	$	(0.17	)	$	0.70

Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	(0.16	)	$	0.66

Diluted	$	(0.16	)	$	0.66

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, 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 Equity — (Continued)

For the Three Months Ended March 31, 2011 (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, 2010	$	1	$	10	$	26,423		$	21,363		$	(172	)	$	3,356		$	(366	)	$	(541	)	$	(1,449	)	$	48,625		$	371		$	48,996
Cumulative effect of change in accounting principle, net of income tax (Note 1)									(1,917	)					132						13						(1,772	)		(6	)		(1,778	)

Balance at January 1, 2011		1		10		26,423			19,446			(172	)		3,488			(366	)		(528	)		(1,449	)		46,853			365			47,218
Redemption of convertible preferred stock						(2,805	)																				(2,805	)					(2,805	)
Preferred stock redemption premium									(146	)																	(146	)					(146	)
Common stock issuance — newly issued shares				1		2,949																					2,950						2,950
Stock-based compensation						101																					101						101
Dividends on preferred stock									(30	)																	(30	)					(30	)
Change in equity of noncontrolling interests																														36			36
Net income (loss)									877																		877			(3	)		874
Other comprehensive income (loss), net of income tax															(360	)		27			413			19			99			1			100

Balance at March 31, 2011	$	1	$	11	$	26,668		$	20,147		$	(172	)	$	3,128		$	(339	)	$	(115	)	$	(1,430	)	$	47,899		$	399		$	48,298

(1)	Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially owned consolidated subsidiaries of $10 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, 2012 and 2011 (Unaudited)

(In millions)


	Three Months Ended March 31,
	2012			2011
Net cash provided by operating activities	$	5,758		$	3,499

Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		25,815			25,149
Equity securities		166			473
Mortgage loans		2,160			2,411
Real estate and real estate joint ventures		251			106
Other limited partnership interests		188			320
Purchases of:
Fixed maturity securities		(27,657	)		(32,954	)
Equity securities		(108	)		(271	)
Mortgage loans		(1,802	)		(2,678	)
Real estate and real estate joint ventures		(117	)		(159	)
Other limited partnership interests		(278	)		(211	)
Cash received in connection with freestanding derivatives		417			1,070
Cash paid in connection with freestanding derivatives		(1,566	)		(1,916	)
Net change in securitized reverse residential mortgage loans		(561	)		—
Net change in policy loans		(53	)		(87	)
Net change in short-term investments		5,522			774
Net change in other invested assets		(170	)		(66	)
Other, net		(40	)		(53	)

Net cash provided by (used in) investing activities		2,167			(8,092	)

Cash flows from financing activities
Policyholder account balances:
Deposits		25,069			25,042
Withdrawals		(23,247	)		(23,363	)
Net change in payables for collateral under securities loaned and other transactions		(1,220	)		1,353
Net change in bank deposits		(50	)		(1,027	)
Net change in short-term debt		(585	)		266
Long-term debt issued		—			280
Long-term debt repaid		(349	)		(249	)
Net change in liability for securitized reverse residential mortgage loans		561			—
Common stock issued, net of issuance costs		—			2,950
Stock options exercised		75			47
Redemption of convertible preferred stock		—			(2,805	)
Preferred stock redemption premium		—			(146	)
Dividends on preferred stock		(30	)		(30	)
Other, net		16			(56	)

Net cash provided by financing activities		240			2,262

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

Change in cash and cash equivalents		8,206			(2,238	)
Cash and cash equivalents, beginning of period		10,461			13,046

Cash and cash equivalents, end of period	$	18,667		$	10,808

Cash and cash equivalents, subsidiaries held-for-sale, beginning of period	$	—		$	89

Cash and cash equivalents, subsidiaries held-for-sale, end of period	$	—		$	116

Cash and cash equivalents, from continuing operations, beginning of period	$	10,461		$	12,957

Cash and cash equivalents, from continuing operations, end of period	$	18,667		$	10,692

Supplemental disclosures of cash flow information:
Net cash paid during the period for:
Interest	$	266		$	333

Income tax	$	83		$	415

Non-cash transactions during the period:
Real estate and real estate joint ventures acquired in satisfaction of debt	$	123		$	—

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. 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, the Middle East and Africa. Through its subsidiaries and affiliates, 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 Products; Group, Voluntary and Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, “The Americas”); Asia; and Europe, the Middle East and Africa (“EMEA”). See Note 15 for further information on the reorganization of the Company’s segments in the first quarter of 2012, 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 in the interim condensed consolidated financial statements.

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 29, 2012 and the operating results of such subsidiaries for the three months ended February 29, 2012 and February 28, 2011.

In applying the Company’s accounting policies, management makes subjective and complex judgments that frequently require estimates 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 these 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. 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. See Note 9. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting for investments in equity securities in which it has a significant influence or more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor ownership interest or more than a minor influence over the joint venture’s or partnership’s operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint venture’s or the partnership’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 2012 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements. See “— Adoption of New Accounting Pronouncements” for discussion of an adoption in the first quarter of 2012, which was retrospectively applied.

MetLife, Inc.

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

The accompanying interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at March 31, 2012, its consolidated results of operations and comprehensive income for the three months ended March 31, 2012 and 2011, its consolidated statements of equity for the three months ended March 31, 2012 and 2011, and its consolidated statements of cash flows for the three months ended March 31, 2012 and 2011, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2011 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, 2011 (the “2011 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), 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 2011 Annual Report.

Summary of Significant Accounting Policies and Critical Accounting Estimates

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report for the Summary of Significant Accounting Policies and Critical Accounting Estimates. Described below are the significant changes to such policies based on the adoption of new guidance.

Deferred Policy Acquisition Costs and Value of Business Acquired

The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are deferred as deferred policy acquisition costs (“DAC”). Such costs include: (1) incremental direct costs of contract acquisition, such as commissions, (2) the portion of an employee’s total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed, (3) other direct costs essential to contract acquisition that would not have been incurred had a policy not been acquired or renewed, and (4) in limited circumstances, the costs of direct-response advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and that results in probable future benefits. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred.

The Company’s policies relating to the establishment of value of business acquired (“VOBA”), amortization of DAC and VOBA, review of estimated gross margin and profit projections, and internal replacements are described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report.

Adoption of New Accounting Pronouncements

Effective January 1, 2012, the Company adopted new guidance regarding comprehensive income that defers the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income. The amendments in this guidance are being made to allow the Financial Accounting Standards Board (“FASB”) time to re-deliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. All other requirements in the new comprehensive income standard are not affected by this guidance, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements on an annual basis.

Effective January 1, 2012, the Company adopted new guidance regarding comprehensive income that provides companies with the option to present the total of comprehensive income, components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or

MetLife, Inc.

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

in two separate but consecutive statements in annual financial statements. The objective of the standard is to increase the prominence of items reported in other comprehensive income and to facilitate convergence of GAAP and International Financial Reporting Standards (“IFRS”). The standard eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this guidance do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified in net income.

Effective January 1, 2012, the Company adopted new guidance on goodwill impairment testing that simplifies how an entity tests goodwill for impairment. This new guidance allows an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it needs to perform the quantitative two-step goodwill impairment test. Only if an entity determines, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will it be required to calculate the fair value of the reporting unit. The adoption did not have a material impact on the Company’s consolidated financial statements.

Effective January 1, 2012, the Company adopted new guidance regarding fair value measurements that establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRS. Some of the amendments clarify the FASB’s intent on the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The adoption did not have a material impact on the Company’s consolidated financial statements. See also expanded disclosures in Note 5.

Effective January 1, 2012, the Company adopted new guidance regarding effective control in repurchase agreements. The guidance removes from the assessment of effective control, the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The adoption did not have a material impact on the Company’s consolidated financial statements.

Effective January 1, 2012, the Company adopted new guidance regarding accounting for DAC. The guidance specifies that only costs related directly to successful acquisition of new or renewal contracts can be capitalized as DAC; all other acquisition-related costs must be expensed as incurred. Under the new guidance, advertising costs may only be included in DAC if the capitalization criteria in the direct-response advertising guidance in Subtopic 340-20, Other Assets and Deferred Costs—Capitalized Advertising Costs, are met. As a result, certain direct marketing, sales manager compensation and administrative costs previously capitalized by the Company will no longer be deferred.

MetLife, Inc.

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

The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company’s previously reported consolidated balance sheet:


	December 31, 2011
	As Previously Reported		Adjustment			As Adjusted
	(In millions)
Assets
Other invested assets, principally at estimated fair value	$	23,628	$	(47	)	$	23,581
Deferred policy acquisition costs and value of business acquired (1)	$	27,971	$	(3,352	)	$	24,619
Liabilities
Future policy benefits	$	184,252	$	23		$	184,275
Deferred income tax liability	$	7,535	$	(1,140	)	$	6,395
Equity
Retained earnings	$	27,289	$	(2,475	)	$	24,814
Accumulated other comprehensive income (loss)	$	5,886	$	197		$	6,083
Total MetLife, Inc.’s stockholders’ equity	$	59,797	$	(2,278	)	$	57,519
Noncontrolling interests	$	374	$	(4	)	$	370
Total equity	$	60,171	$	(2,282	)	$	57,889

(1)	Value of business acquired was not impacted by the adoption of this guidance.

MetLife, Inc.

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

The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company’s previously reported consolidated statement of operations and comprehensive income:


	Three Months Ended March 31, 2011
	As Previously Reported			Adjustment			As Adjusted
	(In millions)
Revenues
Net investment income	$	5,315	(1)	$	(2	)	$	5,313
Expenses
Policyholder benefits and claims	$	8,231		$	6		$	8,237
Other expenses	$	3,902		$	188		$	4,090
Income (loss) from continuing operations before provision for income tax	$	1,481	(1)	$	(196	)	$	1,285
Provision for income tax expense (benefit)	$	428		$	(67	)	$	361
Income (loss) from continuing operations, net of income tax	$	1,053	(1)	$	(129	)	$	924
Net income (loss)	$	1,013		$	(129	)	$	884
Net income (loss) attributable to MetLife, Inc	$	1,006		$	(129	)	$	877
Net income (loss) available to MetLife, Inc.’s common shareholders	$	830		$	(129	)	$	701
Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.82		$	(0.12	)	$	0.70
Diluted	$	0.82		$	(0.12	)	$	0.70
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.78		$	(0.12	)	$	0.66
Diluted	$	0.78		$	(0.12	)	$	0.66

(1)	Amounts in the table above differ from the amounts previously reported in the consolidated statement of operations and comprehensive income due to the inclusion of the impact of discontinued real estate operations of $2 million.

The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company’s previously reported consolidated statement of cash flows:


	Three Months Ended March 31, 2011
	As Previously Reported			Adjustment			As Adjusted
	(In millions)
Net cash provided by operating activities	$	3,501		$	(2	)	$	3,499
Net change in other invested assets	$	(68	)	$	2		$	(66	)

Future Adoption of New Accounting Pronouncements

In December 2011, the FASB issued new guidance regarding balance sheet offsetting disclosures (Accounting Standards Update (“ASU”) 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities), effective for annual reporting periods beginning on or after January 1, 2013, and interim periods

MetLife, Inc.

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

within those annual periods. The guidance should be applied retrospectively for all comparative periods presented. The amendments in ASU 2011-11 require an entity to disclose information about offsetting and related arrangements 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 ASU 2011-11 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 IFRS. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In December 2011, the FASB issued new guidance regarding derecognition of in substance real estate (ASU 2011-10 Property, Plant and Equipment (Topic 360): Derecognition of in Substance Real Estate — a Scope Clarification (a consensus of the FASB Emerging Issues Task Force), effective for fiscal years, and interim periods within those fiscal years, beginning on or after June 15, 2012. The amendments should be applied prospectively to deconsolidation events occurring after the effective date. Under the amendments in ASU 2011-10, when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of a default on the subsidiary’s nonrecourse debt, the reporting entity should apply the guidance in Subtopic 360-20 to determine whether it should derecognize the in substance real estate. Generally, a reporting entity would not satisfy the requirements to derecognize in substance real estate before the legal transfer of the real estate to the lender and the extinguishment of the related nonrecourse indebtedness. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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.

2. Acquisitions and Dispositions

2012 Pending Dispositions

In December 2011, MetLife Bank National Association (“MetLife Bank”) and MetLife, Inc. entered into a definitive agreement to sell most of the depository business of MetLife Bank to GE Capital Financial Inc. The transaction is subject to the receipt of regulatory approvals from the Office of the Comptroller of the Currency (the “OCC”), the Federal Deposit Insurance Corporation (the “FDIC”) and the Utah Department of Financial Institutions (the “Utah DFI”) and to the satisfaction of other customary closing conditions. GE Capital Financial Inc. has filed applications with the FDIC and the Utah DFI seeking approval of the assumption of the deposits to be transferred to it, and MetLife Bank has filed applications with the OCC seeking approval to change the composition of substantially all of MetLife Bank’s assets and with the FDIC to terminate MetLife Bank’s FDIC deposit insurance contingent upon certification that MetLife Bank has no remaining deposits (which is dependent on the assumption by GE Capital Financial Inc. of the deposits to be transferred to it). The parties have responded to questions on their applications from the staff of the OCC, the FDIC and the Utah DFI, and are awaiting action by these regulators on their applications. In January 2012, MetLife, Inc. announced it is exiting the business of originating forward residential mortgages. In conjunction with these events, for the three months ended March 31, 2012, the Company recorded a net gain of

MetLife, Inc.

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

$7 million, net of income tax, which included gains on securities and mortgage loans sold, partially offset by impairments on mortgage loans, lease impairments and other employee-related charges. Additionally, in April 2012, MetLife, Inc. announced that it is exiting the reverse mortgage origination business and that it and MetLife Bank entered into a definitive agreement to sell MetLife Bank’s reverse mortgage servicing portfolio. The transaction is subject to certain regulatory approvals and other customary closing conditions. The Company expects to incur additional charges of $77 million to $115 million, net of income tax, during the remainder of 2012, related to exiting these three businesses. The total assets and liabilities recorded in the consolidated balance sheets related to these businesses were approximately $19.5 billion and $18.6 billion at March 31, 2012, respectively, and $19.3 billion and $18.2 billion at December 31, 2011, respectively. These businesses did not qualify for discontinued operations accounting treatment under GAAP.

In November 2011, the Company entered into an agreement to sell its insurance operations in the Caribbean region, Panama and Costa Rica (the “Caribbean Business”). The total assets and liabilities recorded in the consolidated balance sheets related to these insurance operations were $786 million and $625 million at March 31, 2012, respectively, and $859 million and $707 million at December 31, 2011, respectively. The sale is expected to close in the third quarter of 2012, subject to regulatory approval and other customary closing conditions. The results of the Caribbean Business are included in continuing operations.

2010 Acquisition

Contingent Consideration

Related to the 2010 acquisition of American Life Insurance Company (“American Life”), the Company has guaranteed that the fair value of a fund of assets backing certain U.K. unit-linked contracts will have a value of at least £1 per unit on July 1, 2012. If the shortfall between the aggregate guaranteed amount and the fair value of the fund exceeds £106 million (as adjusted for withdrawals), American International Group, Inc. (“AIG”) will pay the difference to the Company and, conversely, if the shortfall at July 1, 2012 is less than £106 million, the Company will pay the difference to AIG. The Company believes that the fair value of the fund will equal or exceed the aggregate guaranteed amount by July 1, 2012. The contingent consideration liability was $121 million at March 31, 2012 and $109 million at December 31, 2011. The increase in the contingent consideration liability amount from December 31, 2011 to March 31, 2012 was recorded in net derivative gains (losses) in the consolidated statement of operations and comprehensive income. See Note 2 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report.

MetLife, Inc.

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

3. Investments

Fixed Maturity and Equity Securities Available-for-Sale

Presented below is certain information about fixed maturity and equity securities for the periods shown. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairment (“OTTI”) losses:


	March 31, 2012
	Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value		% of Total
	Cost or Amortized Cost		Gains		Temporary Losses		OTTI Losses		Estimated Fair Value		% of Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	97,827	$	8,327	$	881	$	—	$	105,273		29.7	%
Foreign corporate securities		61,857		4,149		651		1		65,354		18.4
Foreign government securities		52,086		3,428		176		—		55,338		15.6
U.S. Treasury and agency securities		37,187		4,316		87		—		41,416		11.7
Residential mortgage-backed securities (“RMBS”)		40,487		2,243		805		646		41,279		11.7
Commercial mortgage-backed securities (“CMBS”)		17,980		863		108		3		18,732		5.3
State and political subdivision securities		12,425		1,604		113		—		13,916		3.9
Asset-backed securities (“ABS”)		13,132		273		244		18		13,143		3.7

Total fixed maturity securities	$	332,981	$	25,203	$	3,065	$	668	$	354,451		100.0	%

Equity Securities:
Common stock	$	2,155	$	109	$	22	$	—	$	2,242		73.7	%
Non-redeemable preferred stock		908		48		155		—		801		26.3

Total equity securities	$	3,063	$	157	$	177	$	—	$	3,043		100.0	%


	December 31, 2011
	Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value		% of Total
	Cost or Amortized Cost		Gains		Temporary Losses		OTTI Losses		Estimated Fair Value		% of Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	98,621	$	8,544	$	1,380	$	—	$	105,785		30.2	%
Foreign corporate securities		61,568		3,789		1,338		1		64,018		18.3
Foreign government securities		49,840		3,053		357		—		52,536		15.0
U.S. Treasury and agency securities		34,132		5,882		2		—		40,012		11.4
RMBS		42,092		2,281		1,033		703		42,637		12.2
CMBS		18,565		730		218		8		19,069		5.4
State and political subdivision securities		11,975		1,416		156		—		13,235		3.8
ABS		13,018		278		305		12		12,979		3.7

Total fixed maturity securities	$	329,811	$	25,973	$	4,789	$	724	$	350,271		100.0	%

Equity Securities:
Common stock	$	2,219	$	83	$	97	$	—	$	2,205		72.9	%
Non-redeemable preferred stock		989		31		202		—		818		27.1

Total equity securities	$	3,208	$	114	$	299	$	—	$	3,023		100.0	%

MetLife, Inc.

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

The Company held non-income producing fixed maturity securities with an estimated fair value of $22 million and $62 million with unrealized gains (losses) of ($9) million and ($19) million at March 31, 2012 and December 31, 2011, respectively.

Concentrations of Credit Risk — Summary. The Company was not exposed to any concentrations of credit risk of any single issuer within its fixed maturity securities and equity securities greater than 10% of the Company’s equity, other than the government and agency securities summarized in the table below at:


	March 31, 2012		December 31, 2011
	Carrying Value (1)
	(In millions)
U.S. Treasury and agency securities included in:
Fixed maturity securities	$	41,416	$	40,012
Short-term investments		10,023		15,775
Cash equivalents		3,072		1,748

Total U.S. Treasury and agency securities	$	54,511	$	57,535

Japan government and agency securities included in:
Fixed maturity securities	$	20,562	$	21,003
Short-term investments		62		—
Cash equivalents		395		—

Total Japan government and agency securities	$	21,019	$	21,003

(1)	Represents estimated fair value for fixed maturity securities, and for short-term investments and cash equivalents, estimated fair value or amortized cost, which approximates estimated fair value.

Maturities of Fixed Maturity Securities. The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), were as follows at:


	March 31, 2012				December 31, 2011
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
			(In millions)
Due in one year or less	$	19,016	$	19,154	$	16,747	$	16,862
Due after one year through five years		63,283		65,588		62,819		64,414
Due after five years through ten years		82,469		89,080		82,694		88,036
Due after ten years		96,614		107,475		93,876		106,274

Subtotal		261,382		281,297		256,136		275,586
RMBS, CMBS and ABS		71,599		73,154		73,675		74,685

Total fixed maturity securities	$	332,981	$	354,451	$	329,811	$	350,271

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 included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately in the table, as they are not due at a single maturity.

MetLife, Inc.

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

Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, 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.

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss), were as follows:


	March 31, 2012			December 31, 2011
	(In millions)
Fixed maturity securities	$	22,011		$	21,096
Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss)		(668	)		(724	)

Total fixed maturity securities		21,343			20,372
Equity securities		5			(167	)
Derivatives		1,019			1,514
Other		9			72

Subtotal		22,376			21,791

Amounts allocated from:
Insurance liability loss recognition		(3,454	)		(3,996	)
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		41			47
DAC and VOBA		(1,820	)		(1,800	)
Policyholder dividend obligation		(2,700	)		(2,919	)

Subtotal		(7,933	)		(8,668	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		217			236
Deferred income tax benefit (expense)		(5,150	)		(4,694	)

Net unrealized investment gains (losses)		9,510			8,665
Net unrealized investment gains (losses) attributable to noncontrolling interests		9			9

Net unrealized investment gains (losses) attributable to MetLife, Inc	$	9,519		$	8,674

MetLife, Inc.

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

The changes in fixed maturity securities with noncredit OTTI losses included in accumulated other comprehensive income (loss), were as follows:


	March 31, 2012			December 31, 2011
	(In millions)
Balance, beginning of period	$	(724	)	$	(601	)
Noncredit OTTI losses recognized (1)		(2	)		31
Securities sold with previous noncredit OTTI loss		50			125
Subsequent changes in estimated fair value		8			(279	)

Balance, end of period	$	(668	)	$	(724	)

(1)	Noncredit OTTI losses recognized, net of DAC, were ($8) million and $33 million for the periods ended March 31, 2012 and December 31, 2011, respectively.

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


	Three Months Ended March 31, 2012
	(In millions)
Balance, beginning of period	$	8,674
Fixed maturity securities on which noncredit OTTI losses have been recognized		56
Unrealized investment gains (losses) during the period		529
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		542
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		(6	)
DAC and VOBA		(20	)
Policyholder dividend obligation		219
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		(19	)
Deferred income tax benefit (expense)		(456	)

Net unrealized investment gains (losses)		9,519
Net unrealized investment gains (losses) attributable to noncontrolling interests		—

Balance, end of period	$	9,519

Change in net unrealized investment gains (losses)	$	845
Change in net unrealized investment gains (losses) attributable to noncontrolling interests		—

Change in net unrealized investment gains (losses) attributable to MetLife, Inc	$	845

MetLife, Inc.

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

Continuous Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale by Sector

Presented below is certain information about the estimated fair value and gross unrealized losses of fixed maturity and equity securities in an unrealized loss position. The unrealized loss amounts presented below include the noncredit component of OTTI loss. Fixed maturity securities on which a noncredit OTTI loss has been recognized in accumulated other comprehensive income (loss) are categorized by length of time as being “less than 12 months” or “equal to or greater than 12 months” in a continuous unrealized loss position based on the point in time that the estimated fair value initially declined to below the amortized cost basis and not the period of time since the unrealized loss was deemed a noncredit OTTI loss.


	March 31, 2012
	Less than 12 Months				Equal to or Greater than 12 Months				Total
	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 securities	$	10,097	$	293	$	4,125	$	588	$	14,222	$	881
Foreign corporate securities		8,410		265		4,719		387		13,129		652
Foreign government securities		4,831		84		1,322		92		6,153		176
U.S. Treasury and agency securities		8,512		83		37		4		8,549		87
RMBS		4,698		406		4,565		1,045		9,263		1,451
CMBS		1,189		33		714		78		1,903		111
State and political subdivision securities		352		5		544		108		896		113
ABS		3,810		80		1,343		182		5,153		262

Total fixed maturity securities	$	41,899	$	1,249	$	17,369	$	2,484	$	59,268	$	3,733

Equity Securities:
Common stock	$	347	$	22	$	4	$	—	$	351	$	22
Non-redeemable preferred stock		62		9		326		146		388		155

Total equity securities	$	409	$	31	$	330	$	146	$	739	$	177

Total number of securities in an unrealized loss position		3,555				1,674

MetLife, Inc.

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


	December 31, 2011
	Less than 12 Months				Equal to or Greater than 12 Months				Total
	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 securities	$	15,642	$	590	$	5,135	$	790	$	20,777	$	1,380
Foreign corporate securities		12,618		639		5,957		700		18,575		1,339
Foreign government securities		11,227		230		1,799		127		13,026		357
U.S. Treasury and agency securities		2,611		1		50		1		2,661		2
RMBS		4,040		547		4,724		1,189		8,764		1,736
CMBS		2,825		135		678		91		3,503		226
State and political subdivision securities		177		2		1,007		154		1,184		156
ABS		4,972		103		1,316		214		6,288		317

Total fixed maturity securities	$	54,112	$	2,247	$	20,666	$	3,266	$	74,778	$	5,513

Equity Securities:
Common stock	$	581	$	96	$	5	$	1	$	586	$	97
Non-redeemable preferred stock		204		30		370		172		574		202

Total equity securities	$	785	$	126	$	375	$	173	$	1,160	$	299

Total number of securities in an unrealized loss position		3,978				1,963

MetLife, Inc.

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

Aging of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale

Presented below is certain information about the aging and severity of gross unrealized losses on fixed maturity and equity securities, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss) at:


	March 31, 2012
	Cost or Amortized Cost				Gross Unrealized Losses						Number of Securities
	Less than 20%		20% or more		Less than 20%			20% or more			Less than 20%		20% or more
	(In millions, except number of securities)
Fixed Maturity Securities:
Less than six months	$	27,651	$	971	$	441		$	258			2,367		118
Six months or greater but less than nine months		11,280		1,549		367			452			820		84
Nine months or greater but less than twelve months		3,306		791		149			237			292		43
Twelve months or greater		15,271		2,182		1,006			823			1,340		162

Total	$	57,508	$	5,493	$	1,963		$	1,770

Percentage of amortized cost						3	%		32	%

Equity Securities:
Less than six months	$	139	$	46	$	5		$	14			64		16
Six months or greater but less than nine months		233		112		17			32			50		7
Nine months or greater but less than twelve months		49		—		3			—			17		1
Twelve months or greater		114		223		8			98			20		19

Total	$	535	$	381	$	33		$	144

Percentage of cost						6	%		38	%

MetLife, Inc.

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


	December 31, 2011
	Cost or Amortized Cost				Gross Unrealized Losses						Number of Securities
	Less than 20%		20% or more		Less than 20%			20% or more			Less than 20%		20% or more
	(In millions, except number of securities)
Fixed Maturity Securities:
Less than six months	$	49,249	$	4,736	$	1,346		$	1,332			3,260		320
Six months or greater but less than nine months		4,104		1,049		279			349			375		63
Nine months or greater but less than twelve months		1,160		288		55			93			143		14
Twelve months or greater		17,590		2,115		1,216			843			1,523		167

Total	$	72,103	$	8,188	$	2,896		$	2,617

Percentage of amortized cost						4	%		32	%

Equity Securities:
Less than six months	$	714	$	376	$	64		$	123			154		42
Six months or greater but less than nine months		22		8		2			4			19		3
Nine months or greater but less than twelve months		18		—		2			—			8		—
Twelve months or greater		98		223		8			96			24		20

Total	$	852	$	607	$	76		$	223

Percentage of cost						9	%		37	%

Equity securities with gross unrealized losses of 20% or more for twelve months or greater increased from $96 million at December 31, 2011 to $98 million at March 31, 2012. As shown in the section “— Evaluating Temporarily Impaired Available-for-Sale Securities” below, all of the equity securities with gross unrealized losses of 20% or more for twelve months or greater at March 31, 2012 were financial services industry investment grade non-redeemable preferred stock, of which 72% were rated A or better.

MetLife, Inc.

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

Concentration of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale

The gross unrealized losses related to fixed maturity and equity securities, including the portion of OTTI losses on fixed maturity securities recognized in accumulated other comprehensive income (loss) were $3.9 billion and $5.8 billion at March 31, 2012 and December 31, 2011, respectively. The concentration, calculated as a percentage of gross unrealized losses (including OTTI losses), by sector and industry was as follows at:


	March 31, 2012			December 31, 2011
Sector:
RMBS		37	%		30	%
U.S. corporate securities		23			24
Foreign corporate securities		17			23
ABS		7			5
Foreign government securities		4			6
State and political subdivision securities		3			3
CMBS		3			4
U.S. Treasury and agency securities		2			—
Other		4			5

Total		100	%		100	%

Industry:
Mortgage-backed		40	%		34	%
Finance		20			27
Utility		8			8
Asset-backed		7			5
Consumer		5			6
Foreign government securities		4			6
State and political subdivision securities		3			3
Communications		2			3
U.S. Treasury and agency securities		2			—
Industrial		2			2
Other		7			6

Total		100	%		100	%

Evaluating Temporarily Impaired Available-for-Sale Securities

The following table presents fixed maturity and equity securities, each with gross unrealized losses of greater than $10 million, the number of securities, total gross unrealized losses and percentage of total gross unrealized losses at:


	March 31, 2012						December 31, 2011
	Fixed Maturity Securities			Equity Securities			Fixed Maturity Securities			Equity Securities
	(In millions, except number of securities)
Number of securities		59			4			96			8
Total gross unrealized losses		1,130		$	77		$	1,703		$	117
Percentage of total gross unrealized losses		30	%		44	%		31	%		39	%

MetLife, Inc.

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

Fixed maturity and equity securities, each with gross unrealized losses greater than $10 million, decreased $613 million during the three months ended March 31, 2012. The decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2012 was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates. These securities were included in the Company’s OTTI review process.

As of March 31, 2012, $1.5 billion of unrealized losses were from fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. Of the $1.5 billion, $598 million, or 40%, are related to unrealized losses on investment grade securities. Unrealized losses on investment grade securities are principally related to widening credit spreads or rising interest rates since purchase. Of the $1.5 billion, $914 million, or 60%, are related to unrealized losses on below investment grade securities. Unrealized losses on below investment grade securities are principally related to non-agency RMBS (primarily alternative residential mortgage loans and sub-prime residential mortgage loans), U.S. and foreign corporate securities (primarily utility, financial services and transportation industry securities) and ABS (primarily collateralized debt obligations) and were the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over the financial services sector, unemployment levels and valuations of residential real estate supporting non-agency RMBS. See Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report for the factors management considers in evaluating these corporate and structured securities. See “— Aging of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale” for a discussion of equity securities with an unrealized loss position of 20% or more of cost for 12 months or greater.

In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities are given greater weight and consideration than for fixed maturity securities. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for an equity security, greater weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will recover.

The following table presents certain information about the Company’s equity securities available-for-sale with gross unrealized losses of 20% or more at March 31, 2012:


			Non-Redeemable Preferred Stock
	All Equity Securities		All Types of Non-Redeemable Preferred Stock					Investment Grade
	All Equity Securities		All Types of Non-Redeemable Preferred Stock					All Industries					Financial Services Industry
	Gross Unrealized Losses		Gross Unrealized Losses		% of All Equity Securities			Gross Unrealized Losses		% of All Non-Redeemable Preferred Stock			Gross Unrealized Losses		% of All Industries			% A Rated or Better
	(In millions)							(In millions)					(In millions)
Less than six months	$	14	$	13		93	%	$	2		15	%	$	2		100	%		100	%
Six months or greater but less than twelve months		32		32		100	%		23		72	%		23		100	%		30	%
Twelve months or greater		98		98		100	%		98		100	%		98		100	%		72	%

All equity securities with gross unrealized losses of 20% or more	$	144	$	143		99	%	$	123		86	%	$	123		100	%		65	%

MetLife, Inc.

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

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those in the financial services sector. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred stock with a severe or an extended unrealized loss. The Company also considered whether any issuers of non-redeemable preferred stock with an unrealized loss held by the Company, regardless of credit rating, have deferred any dividend payments. No such dividend payments had been deferred.

With respect to common stock holdings, the Company considered the duration and severity of the unrealized losses for securities in an unrealized loss position of 20% or more; and the duration of unrealized losses for securities in an unrealized loss position of less than 20% in an extended unrealized loss position (i.e., 12 months or greater).

Based on the Company’s current evaluation of available-for-sale 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.

Future OTTIs 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 or any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.

Trading and Other Securities

The table below presents certain information about the Company’s trading securities that are actively purchased and sold (“Actively Traded Securities”) and other securities for which the fair value option (“FVO”) has been elected at:


	March 31, 2012			December 31, 2011
	(In millions)
Actively Traded Securities	$	544		$	473
FVO general account securities		274			267
FVO contractholder-directed unit-linked investments		18,119			17,411
FVO securities held by CSEs		89			117

Total trading and other securities — at estimated fair value	$	19,026		$	18,268

Actively Traded Securities — at estimated fair value	$	544		$	473
Short sale agreement liabilities — at estimated fair value		(169	)		(127	)

Net long/short position — at estimated fair value	$	375		$	346

Investments pledged to secure short sale agreement liabilities	$	624		$	558

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report, for discussion of FVO contractholder-directed unit-linked investments and “— Variable Interest Entities” for discussion of consolidated securitization entities (“CSEs”) included in the table above. See “— Net Investment Income” and “— Net Investment Gains (Losses)” for the net investment income recognized on trading and other securities and the related changes in estimated fair value subsequent to purchase included in earnings for securities still held as of the end of the respective periods.

MetLife, Inc.

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

Net Investment Gains (Losses)

The components of net investment gains (losses) were as follows:


	Three Months Ended March 31,
	2012			2011
	(In millions)
Total gains (losses) on fixed maturity securities:
Total OTTI losses recognized	$	(135	)	$	(132	)
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive income (loss)		2			9

Net OTTI losses on fixed maturity securities recognized in earnings		(133	)		(123	)
Fixed maturity securities — net gains (losses) on sales and disposals (1)		(7	)		(40	)

Total gains (losses) on fixed maturity securities		(140	)		(163	)
Other net investment gains (losses):
Equity securities		(9	)		36
Trading and other securities — FVO general account securities — changes in estimated fair value subsequent to purchase		4			—
Mortgage loans (1)		36			47
Real estate and real estate joint ventures		(4	)		1
Other limited partnership interests		(2	)		3
Other investment portfolio gains (losses)		(25	)		4

Subtotal — investment portfolio gains (losses)		(140	)		(72	)

FVO CSEs — changes in estimated fair value:
Commercial mortgage loans		6			18
Securities		—			(40	)
Long-term debt — related to securities		(11	)		47
Other gains (losses) (2)		35			(52	)

Subtotal FVO CSEs and other gains (losses)		30			(27	)

Total net investment gains (losses)	$	(110	)	$	(99	)

(1)

Net investment gains (losses) for the three months ended March 31, 2012 includes a net gain of $95 million as a result of the pending disposition of certain operations of MetLife Bank, which is comprised of gains on securities and mortgage loans sold of $102 million, partially offset by impairments on mortgage loans of $7 million. See Note 2.

(2)	Other gains (losses) includes a loss of $80 million for the three months ended March 31, 2011, related to the sale of the Company’s investment in Mitsui Sumitomo MetLife Insurance Co., Ltd. See Note 2 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report.

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $58 million and $35 million for the three months ended March 31, 2012 and 2011, respectively.

MetLife, Inc.

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

Proceeds from sales or disposals of fixed maturity and equity securities resulting in a net investment gain (loss) and the components of fixed maturity and equity securities net investment gains (losses) are as shown in the table below. Investment gains and losses on sales of securities are determined on a specific identification basis.


	Three Months Ended March 31,
	2012			2011			2012			2011			2012			2011
	Fixed Maturity Securities						Equity Securities						Total
	(In millions)
Proceeds	$	19,394		$	16,532		$	125		$	316		$	19,519		$	16,848

Gross investment gains	$	325		$	193		$	10		$	48		$	335		$	241

Gross investment losses		(332	)		(233	)		(4	)		(6	)		(336	)		(239	)

Total OTTI losses recognized in earnings:
Credit-related		(73	)		(43	)		—			—			(73	)		(43	)
Other (1)		(60	)		(80	)		(15	)		(6	)		(75	)		(86	)

Total OTTI losses recognized in earnings		(133	)		(123	)		(15	)		(6	)		(148	)		(129	)

Net investment gains (losses)	$	(140	)	$	(163	)	$	(9	)	$	36		$	(149	)	$	(127	)

(1)

Other OTTI losses recognized in earnings include impairments on equity securities, impairments on perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and fixed maturity securities where there is an intent-to-sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.

Fixed maturity security OTTI losses recognized in earnings related to the following sectors and industries within the U.S. and foreign corporate securities sector:


	Three Months Ended March 31,
	2012		2011
	(In millions)
Sector:
U.S. and foreign corporate securities — by industry:
Utility	$	38	$	1
Finance		32		1
Communications		17		13
Consumer		3		2
Industrial		1		—

Total U.S. and foreign corporate securities		91		17
CMBS		30		3
RMBS (1)		9		24
ABS (1)		2		3
State and political subdivision securities		1		—
Foreign government securities		—		76

Total	$	133	$	123

MetLife, Inc.

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

(1)	See Note 3 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report for discussion of a reclassification from the ABS sector to the RMBS sector for securities backed by sub-prime residential mortgage loans.

Equity security OTTI losses recognized in earnings of $15 million and $6 million for the three months ended March 31, 2012 and 2011, respectively, were all in the common stock sector.

Credit Loss Rollforward

Presented below is a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in other comprehensive income (loss):


	Three Months Ended March 31,
	2012			2011
	(In millions)
Balance, beginning of period	$	471		$	443
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		16			8
Additional impairments — credit loss OTTI recognized on securities previously impaired		6			16
Reductions:
Sales, maturities, pay downs and prepayments during the period of securities previously impaired as credit loss OTTI		(104	)		(29	)
Securities impaired to net present value of expected future cash flows		(8	)		(44	)
Increases in cash flows — accretion of previous credit loss OTTI		—			(5	)

Balance, end of period	$	381		$	389

MetLife, Inc.

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

Net Investment Income

The components of net investment income were as follows:


	Three Months Ended March 31,
	2012		2011
	(In millions)
Investment income:
Fixed maturity securities	$	3,808	$	3,683
Equity securities		32		30
Trading and other securities — Actively Traded Securities and FVO general account securities (1)		45		28
Mortgage loans		830		759
Policy loans		158		160
Real estate and real estate joint ventures		178		147
Other limited partnership interests		182		243
Cash, cash equivalents and short-term investments		36		46
International joint ventures (2)		3		(21	)
Other		41		(32	)

Subtotal		5,313		5,043
Less: Investment expenses		260		245

Subtotal, net		5,053		4,798

Trading and other securities — FVO contractholder-directed unit-linked investments (1)		1,015		419
Securitized reverse residential mortgage loans		85		—
FVO CSEs:
Commercial mortgage loans		45		95
Securities		2		1

Subtotal		1,147		515

Net investment income	$	6,200	$	5,313

(1)	Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods included in net investment income were:


Actively Traded Securities and FVO general account securities	$	29	$	21
FVO contractholder-directed unit-linked investments	$	877	$	316

(2)

Amounts are presented net of changes in estimated fair value of derivatives related to economic hedges of the Company’s investment in these equity method international joint venture investments that do not qualify for hedge accounting of $0 and ($23) million for the three months ended March 31, 2012 and 2011, respectively.

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

MetLife, Inc.

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

Securities Lending

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report, the Company participates in a securities lending program whereby blocks of securities are loaned to third parties. These transactions are treated as financing arrangements and the associated cash collateral received is recorded as a liability. The Company is obligated to return the cash collateral received to its counterparties.

Elements of the securities lending program are presented below at:


	March 31, 2012		December 31, 2011
	(In millions)
Securities on loan: (1)
Amortized cost	$	22,033	$	20,613
Estimated fair value	$	24,629	$	24,072
Cash collateral on deposit from counterparties (2)	$	25,265	$	24,223
Security collateral on deposit from counterparties	$	120	$	371
Reinvestment portfolio — estimated fair value	$	25,208	$	23,940

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

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

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the interim condensed 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 in the table below at estimated fair value for cash and cash equivalents, short-term investments, fixed maturity securities, equity securities, and trading and other securities and at carrying value for mortgage loans.


	March 31, 2012		December 31, 2011
	(In millions)
Invested assets on deposit (1)	$	2,621	$	1,660
Invested assets held in trust (2)		10,936		11,135
Invested assets pledged as collateral (3)		26,894		29,899

Total invested assets on deposit, held in trust and pledged as collateral	$	40,451	$	42,694

(1)	The Company has invested assets on deposit with regulatory agencies consisting primarily of cash and cash equivalents, short-term investments, fixed maturity securities and equity securities.

(2)	The Company held in trust cash and securities, primarily fixed maturity and equity securities, to satisfy requirements under certain collateral financing agreements and certain reinsurance agreements.

(3)

The Company has pledged fixed maturity securities, mortgage loans and cash and cash equivalents in connection with various agreements and transactions, including funding and advances agreements (see Notes 8 and 11 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report),

MetLife, Inc.

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

collateralized borrowings (see Note 11 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report), collateral financing arrangements (see Note 12 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report), derivative transactions (see Note 4), and short sale agreements (see “— Trading and Other Securities”).

Mortgage Loans

Mortgage loans are summarized as follows at:


	March 31, 2012						December 31, 2011
	Carrying Value			% of Total			Carrying Value			% of Total
	(In millions)						(In millions)
Mortgage loans held-for-investment:
Commercial	$	40,329			58.8	%	$	40,440			56.1	%
Agricultural		12,946			18.9			13,129			18.2
Residential		788			1.2			689			1.0

Subtotal		54,063			78.9			54,258			75.3
Valuation allowances		(446	)		(0.7	)		(481	)		(0.7	)

Subtotal mortgage loans held-for-investment, net		53,617			78.2			53,777			74.6
Commercial mortgage loans held by CSEs		3,024			4.4			3,138			4.4

Total mortgage loans held-for-investment, net		56,641			82.6			56,915			79.0

Mortgage loans held-for-sale:
Residential		921			1.3			3,064			4.2
Mortgage loans — lower of amortized cost or estimated fair value		2,743			4.0			4,462			6.2
Securitized reverse residential mortgage loans		8,283			12.1			7,652			10.6

Total mortgage loans held-for-sale		11,947			17.4			15,178			21.0

Total mortgage loans, net	$	68,588			100.0	%	$	72,093			100.0	%

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

Certain of the Company’s real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgage loans were $284 million and $286 million at March 31, 2012 and December 31, 2011, respectively.

MetLife, Inc.

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

The following tables present certain information about mortgage loans held-for-investment and valuation allowances, by portfolio segment, at:


	Commercial		Agricultural		Residential		Total
	(In millions)
March 31, 2012:
Mortgage loans:
Evaluated individually for credit losses	$	113	$	157	$	12	$	282
Evaluated collectively for credit losses		40,216		12,789		776		53,781

Total mortgage loans		40,329		12,946		788		54,063

Valuation allowances:
Specific credit losses		61		43		1		105
Non-specifically identified credit losses		307		32		2		341

Total valuation allowances		368		75		3		446

Mortgage loans, net of valuation allowance	$	39,961	$	12,871	$	785	$	53,617

December 31, 2011:
Mortgage loans:
Evaluated individually for credit losses	$	96	$	159	$	13	$	268
Evaluated collectively for credit losses		40,344		12,970		676		53,990

Total mortgage loans		40,440		13,129		689		54,258

Valuation allowances:
Specific credit losses		59		45		1		105
Non-specifically identified credit losses		339		36		1		376

Total valuation allowances		398		81		2		481

Mortgage loans, net of valuation allowance	$	40,042	$	13,048	$	687	$	53,777

The following tables present the changes in the valuation allowance, by portfolio segment:


	Mortgage Loan Valuation Allowances
	Commercial			Agricultural			Residential			Total
	(In millions)
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

For the Three Months Ended March 31, 2011:
Balance, beginning of period	$	562		$	88		$	14		$	664
Provision (release)		(30	)		(9	)		—			(39	)
Charge-offs, net of recoveries		—			(3	)		(1	)		(4	)

Balance, end of period	$	532		$	76		$	13		$	621

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2011 Annual Report for a discussion of all credit quality indicators presented herein. Recorded investment data presented herein is prior to valuation allowance. Unpaid principal balance data presented herein is generally prior to charge-offs.

MetLife, Inc.

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

Commercial Mortgage Loans — by Credit Quality Indicators with Estimated Fair Value. Presented below is certain information about the credit quality of the commercial mortgage loans held-for-investment at:


	Commercial
	Recorded Investment											Estimated Fair Value		% of Total
	Debt Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x		Total		% of Total
			(In millions)									(In millions)
March 31, 2012:
Loan-to-value ratios:
Less than 65%	$	26,167	$	590	$	538	$	27,295		67.7	%	$	29,059		69.2	%
65% to 75%		7,456		232		280		7,968		19.8			8,354		19.9
76% to 80%		1,036		111		226		1,373		3.4			1,197		2.8
Greater than 80%		2,516		740		437		3,693		9.1			3,411		8.1

Total	$	37,175	$	1,673	$	1,481	$	40,329		100.0	%	$	42,021		100.0	%

December 31, 2011:
Loan-to-value ratios:
Less than 65%	$	24,983	$	448	$	564	$	25,995		64.3	%	$	27,581		65.5	%
65% to 75%		8,275		336		386		8,997		22.3			9,387		22.3
76% to 80%		1,150		98		226		1,474		3.6			1,473		3.5
Greater than 80%		2,714		880		380		3,974		9.8			3,664		8.7

Total	$	37,122	$	1,762	$	1,556	$	40,440		100.0	%	$	42,105		100.0	%

Agricultural Mortgage Loans — by Credit Quality Indicator. Presented below is certain information about the credit quality of agricultural mortgage loans held-for-investment. The estimated fair value of agricultural mortgage loans held-for-investment was $13.4 billion and $13.6 billion at March 31, 2012 and December 31, 2011, respectively.


	Agricultural
	March 31, 2012					December 31, 2011
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Loan-to-value ratios:
Less than 65%	$	11,786		91.0	%	$	11,802		89.9	%
65% to 75%		778		6.0			874		6.7
76% to 80%		13		0.1			76		0.6
Greater than 80%		369		2.9			377		2.8

Total	$	12,946		100.0	%	$	13,129		100.0	%

MetLife, Inc.

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

Residential Mortgage Loans — by Credit Quality Indicator. Presented below is certain information about the credit quality of residential mortgage loans held-for-investment. The estimated fair value of residential mortgage loans held-for-investment was $802 million and $737 million at March 31, 2012 and December 31, 2011, respectively.


	Residential
	March 31, 2012					December 31, 2011
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Performance indicators:
Performing	$	770		97.7	%	$	671		97.4	%
Nonperforming		18		2.3			18		2.6

Total	$	788		100.0	%	$	689		100.0	%

Past Due and Interest Accrual Status of Mortgage Loans. The Company has a high quality, well performing, mortgage loan portfolio, with approximately 99% of all mortgage loans classified as performing at both March 31, 2012 and December 31, 2011. 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 or more and agricultural mortgage loans — 90 days or more. Presented below is the recorded investment of past due and interest accrual status of mortgage loans held-for-investment at:


	Past Due				Greater than 90 Days Past Due Still Accruing Interest				Nonaccrual Status
	March 31, 2012		December 31, 2011		March 31, 2012		December 31, 2011		March 31, 2012		December 31, 2011
					(In millions)
Commercial	$	—	$	63	$	—	$	—	$	—	$	63
Agricultural		151		146		31		29		143		157
Residential		10		8		—		—		18		17

Total	$	161	$	217	$	31	$	29	$	161	$	237