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Condensed Financial Information (Parent Company)
 12 Months Ended
Dec. 31, 2015
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Financial Information (Parent Company)
MetLife, Inc.
Schedule II
Condensed Financial Information
(Parent Company Only)
December 31, 2015 and 2014
(In millions, except share and per share data)
 
2015
 
2014
Condensed Balance Sheets
 
 
 
Assets
 
 
 
Investments:
 
 
 
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $5,023 and $5,037, respectively)
$
5,028

 
$
5,088

Short-term investments, principally at estimated fair value
268

 
378

Other invested assets, at estimated fair value
830

 
1,336

Total investments
6,126

 
6,802

Cash and cash equivalents
421

 
443

Accrued investment income
76

 
46

Investment in subsidiaries
85,977

 
88,152

Loans to subsidiaries
1,200

 
1,709

Other assets
1,177

 
1,406

Total assets
$
94,977

 
$
98,558

Liabilities and Stockholders’ Equity
 
 
 
Liabilities
 
 
 
Payables for collateral under derivatives transactions
$
227

 
$
349

Long-term debt — unaffiliated
16,994

 
15,317

Long-term debt — affiliated
3,314

 
3,600

Collateral financing arrangements
2,797

 
2,797

Junior subordinated debt securities
1,748

 
1,748

Payables to subsidiaries
147

 
459

Other liabilities
1,801

 
2,235

Total liabilities
27,028

 
26,505

Stockholders’ Equity
 
 
 
Preferred stock, par value $0.01 per share; $2,100 aggregate liquidation preference
—

 
1

Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,159,590,766 and 1,153,998,144 shares issued, respectively; 1,098,028,525 and 1,131,927,894 shares outstanding, respectively
12

 
12

Additional paid-in capital
30,749

 
30,543

Retained earnings
35,519

 
32,020

Treasury stock, at cost; 61,562,241 and 22,070,250 shares, respectively
(3,102
)
 
(1,172
)
Accumulated other comprehensive income (loss)
4,771

 
10,649

Total stockholders’ equity
67,949

 
72,053

Total liabilities and stockholders’ equity
$
94,977

 
$
98,558

See accompanying notes to the condensed financial information.
MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2015, 2014 and 2013
(In millions)
 
2015
 
2014
 
2013
Condensed Statements of Operations
 
 
 
 
 
Revenues
 
 
 
 
 
Equity in earnings of subsidiaries
$
5,985

 
$
6,907

 
$
4,163

Net investment income
170

 
371

 
304

Other revenues
124

 
128

 
155

Net investment gains (losses)
12

 
(287
)
 
(80
)
Net derivative gains (losses)
(7
)
 
165

 
(99
)
Total revenues
6,284

 
7,284

 
4,443

Expenses
 
 
 
 
 
Interest expense
1,171

 
1,151

 
1,122

Other expenses
180

 
197

 
373

Total expenses
1,351

 
1,348

 
1,495

Income (loss) before provision for income tax
4,933

 
5,936

 
2,948

Provision for income tax expense (benefit)
(377
)
 
(373
)
 
(420
)
Net income (loss)
5,310

 
6,309

 
3,368

Less: Preferred stock dividends
116

 
122

 
122

Preferred stock repurchase premium
42

 
—

 
—

Net income (loss) available to common shareholders
$
5,152

 
$
6,187

 
$
3,246

Comprehensive income (loss)
$
(568
)
 
$
11,854

 
$
(2,925
)
See accompanying notes to the condensed financial information.

MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2015, 2014 and 2013
(In millions)
 
2015
 
2014
 
2013
Condensed Statements of Cash Flows
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
Net income (loss)
$
5,310

 
$
6,309

 
$
3,368

Earnings of subsidiaries
(5,985
)
 
(6,907
)
 
(4,163
)
Dividends from subsidiaries
2,335

 
2,388

 
2,734

Other, net
(54
)
 
825

 
(74
)
Net cash provided by (used in) operating activities
1,606


2,615


1,865

Cash flows from investing activities
 
 
 
 
 
Sales of fixed maturity securities
7,952

 
6,611

 
5,108

Purchases of fixed maturity securities
(7,957
)
 
(7,181
)
 
(4,795
)
Sales of equity securities
—

 
—

 
13

Cash received in connection with freestanding derivatives
930

 
438

 
424

Cash paid in connection with freestanding derivatives
(510
)
 
(281
)
 
(465
)
Sales of businesses
—

 
7

 
17

Expense paid on behalf of subsidiaries
(40
)
 
(54
)
 
(85
)
Receipts on loans to subsidiaries
761

 
832

 
645

Issuances of loans to subsidiaries
(300
)
 
(370
)
 
(1,942
)
Redemption of preferred stock of subsidiary
—

 
—

 
300

Returns of capital from subsidiaries
5

 
—

 
267

Capital contributions to subsidiaries
(667
)
 
(1,262
)
 
(748
)
Net change in short-term investments
110

 
182

 
(265
)
Other, net
2

 
101

 
(49
)
Net cash provided by (used in) investing activities
286


(977
)

(1,575
)
Cash flows from financing activities
 
 
 
 
 
Net change in payables for collateral under derivative transactions
(122
)
 
264

 
85

Long-term debt issued
2,739

 
1,000

 
994

Long-term debt repaid
(1,000
)
 
(1,550
)
 
(750
)
Common stock issued, net of issuance costs
—

 
1,000

 
1,000

Treasury stock acquired in connection with share repurchases
(1,930
)
 
(1,000
)
 
—

Preferred stock issued, net of issuance costs
1,483

 
—

 
—

Repurchase of preferred stock
(1,460
)
 
—

 
—

Preferred stock repurchase premium
(42
)
 
—

 
—

Dividends on preferred stock
(116
)
 
(122
)
 
(122
)
Dividends on common stock
(1,653
)
 
(1,499
)
 
(1,119
)
Other, net
187

 
64

 
82

Net cash provided by (used in) financing activities
(1,914
)

(1,843
)

170

Change in cash and cash equivalents
(22
)

(205
)

460

Cash and cash equivalents, beginning of year
443

 
648

 
188

Cash and cash equivalents, end of year
$
421


$
443


$
648

MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2015, 2014 and 2013
(In millions)
 
2015
 
2014
 
2013
Supplemental disclosures of cash flow information
 
 
 
 
 
Net cash paid (received) for:
 
 
 
 
 
Interest
$
1,133

 
$
1,138

 
$
1,100

Income tax
 
 
 
 
 
Amounts paid to (received from) subsidiaries, net
$
(226
)
 
$
(1,247
)
 
$
69

Income tax paid (received) by MetLife, Inc., net
55

 
385

 
—

Total income tax, net
$
(171
)
 
$
(862
)
 
$
69

Non-cash transactions:
 
 
 
 
 
Dividends from subsidiaries
$
—

 
$
81

 
$
32

Returns of capital from subsidiaries
$
4,284

 
$
6,308

 
$
—

Capital contributions to subsidiaries
$
4,120

 
$
6,388

 
$
121

Payables to subsidiaries for future capital contributions
$
120

 
$
445

 
$
—

Issuance of long-term debt to subsidiary
$
—

 
$
—

 
$
350

Issuance of loan to subsidiary
$
—

 
$
—

 
$
350

Allocation of interest expense to subsidiary
$
28

 
$
27

 
$
28

Allocation of interest income to subsidiary
$
57

 
$
65

 
$
68


MetLife, Inc.
Schedule II
Notes to the Condensed Financial Information
(Parent Company Only)
1. Basis of Presentation
The condensed financial information of MetLife, Inc. (the “Parent Company”) should be read in conjunction with the consolidated financial statements of MetLife, Inc. and its subsidiaries and the notes thereto (the “Consolidated Financial Statements”). These condensed unconsolidated financial statements reflect the results of operations, financial position and cash flows for MetLife, Inc. Investments in subsidiaries are accounted for using the equity method of accounting.
The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and assumptions relate to the fair value measurements, the accounting for goodwill and identifiable intangible assets and the provision for potential losses that may arise from litigation and regulatory proceedings and tax audits, which may affect the amounts reported in the condensed unconsolidated financial statements and accompanying notes. Actual results could differ from these estimates.
2. Investment in Subsidiaries
In December 2015, MetLife, Inc. accrued $50 million, $45 million and $25 million in capital contributions payable to the following captive reinsurers: MRV, MRD and MRSC, respectively, which were included in payables to subsidiaries at December 31, 2015. The payables were settled for cash in February 2016. See Note 6.
In December 2014, MetLife, Inc. accrued $350 million and $95 million in capital contributions payable to MRV and MRD, respectively, which were included in payables to subsidiaries at December 31, 2014. The payables were settled for cash in February 2015.
In 2014, in connection with the mergers into MetLife USA of certain of its affiliates and a subsidiary, MetLife, Inc. recorded $5.7 billion in non-cash returns of capital from subsidiaries, including $2.0 billion of Exeter’s preferred stock, and correspondingly recorded $5.7 billion of non-cash capital contributions to subsidiaries. In November 2014, upon the consummation of the mergers, the $2.0 billion of outstanding preferred stock of Exeter was canceled. Consequently, MetLife, Inc.’s preferred capital stock investment was added to its common capital stock investment in MetLife USA.
3. Loans to Subsidiaries
MetLife, Inc. lends funds, as necessary, to its subsidiaries, some of which are regulated, to meet their capital requirements. Payments of interest and principal on surplus notes of regulated subsidiaries, which are subordinate to all other obligations of the issuing company, may be made only with the prior approval of the insurance department of the state of domicile.
In May 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June 2015. The short-term note bore interest at six-month LIBOR plus 1.00%.
In April 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in May 2015. The short-term note bore interest at six-month LIBOR plus 0.875%.
In December 2014, American Life issued a $100 million surplus note to MetLife, Inc. The surplus note bears interest at a fixed rate of 3.17%, payable semi-annually and matures in June 2020.
In August 2014, American Life issued a $120 million short-term note to MetLife, Inc. which was repaid in December 2014. In February 2014, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June 2014. Both short-term notes bore interest at six-month LIBOR plus 0.875%.
In December 2013, MRD issued a $350 million surplus note to MetLife, Inc. due December 2033. The surplus note bears interest at a fixed rate of 6.00%, payable semi-annually. MetLife, Inc. issued a $350 million senior note to MRD in exchange for the surplus note (see Note 4).
In July 2013, MetLife Ireland Treasury Limited (“MITL”) borrowed the Chilean peso equivalent of $1.5 billion from MetLife, Inc., which was due July 2023. The loan bore interest at a fixed rate of 8.5%, payable annually. In December, September and June 2015, MITL made loan payments of the Chilean peso equivalent of $77 million, $153 million and $231 million, respectively. In December 2014 and June 2014, MITL made loan payments of the Chilean peso equivalent of $493 million and $69 million, respectively. In December 2013, MITL made a loan payment of the Chilean peso equivalent of $245 million. At December 31, 2015, the loan was fully paid.
In January 2013, MetLife Bank both drew down and repaid $400 million under an 18-month agreement with MetLife, Inc., which bore interest at a rate of three-month LIBOR plus 1.75%. On October 29, 2013, MetLife, Inc. and MLHL agreed to terminate the agreement. There were no loans outstanding at such date.
Interest income earned on loans to subsidiaries of $91 million, $155 million and $103 million for the years ended December 31, 2015, 2014 and 2013, respectively, is included in net investment income.
4. Long-term Debt
Long-term debt outstanding was as follows:
 
Interest Rates (1)
 
 
 
December 31,
 
Range
 
Weighted
Average
 
Maturity
 
2015
 
2014
 
 
 
 
 
 
 
(In millions)
Senior notes — unaffiliated
1.76% - 7.72%
 
5.10%
 
 2016 - 2046
 
$
16,994

 
$
15,317

Senior notes — affiliated
3.54% - 7.44%
 
4.98%
 
2016 - 2033
 
3,100

 
3,100

Other affiliated debt
0.96% - 1.03%
 
0.99%
 
2016
 
214

 
500

Total
 
 
 
 
 
 
$
20,308

 
$
18,917

______________
(1)
Range of interest rates and weighted average interest rates are for the year ended December 31, 2015.
See Note 12 of the Notes to the Consolidated Financial Statements for information about the issuances of senior notes - unaffiliated.
The aggregate maturities of long-term debt at December 31, 2015 for the next five years and thereafter are $1.7 billion in 2016, $1.0 billion in 2017, $1.0 billion in 2018, $1.8 billion in 2019, $587 million in 2020 and $14.2 billion thereafter.
Other Affiliated Debt
In December 2015, MetLife, Inc. repaid $286 million of affiliated long-term debt to MetLife Exchange Trust I, at maturity, in exchange for a return of capital. The long-term note bore interest at three-month LIBOR plus 0.7%.
Senior Notes – Affiliated
In June 2014, a $500 million senior note payable to MLIC matured and, subsequently, MetLife, Inc. issued a new $500 million senior note to MLIC. This note matures in June 2019 and bears interest at a fixed rate of 3.54%, payable semi-annually.
In December 2013, MetLife, Inc. issued a $350 million senior note to MRD due December 2033. The senior note bears interest at a fixed rate of 5.10%, payable semi-annually. MRD issued a $350 million surplus note to MetLife, Inc. in exchange for the senior note.
Interest Expense
Interest expense was comprised of the following:
 
Years Ended December 31,
 
2015
 
2014
 
2013
 
(In millions)
Long-term debt — unaffiliated
$
833

 
$
809

 
$
790

Long-term debt — affiliated
168

 
173

 
163

Collateral financing arrangements
36

 
35

 
35

Junior subordinated debt securities
134

 
134

 
134

Total
$
1,171

 
$
1,151

 
$
1,122

See Notes 13 and 14 of the Notes to the Consolidated Financial Statements for information about the collateral financing arrangements and junior subordinated debt securities.
5. Support Agreements
MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations.
MetLife, Inc., in connection with MRD’s reinsurance of certain universal life and term life risks, entered into capital maintenance agreements pursuant to which MetLife, Inc. agreed, without limitation as to amount, to cause the first and second protected cells of MRD to maintain total adjusted capital equal to or greater than 200% of each such protected cell’s company action level RBC, as defined in state insurance statutes. In addition, MetLife, Inc. entered into an agreement with the Delaware Department of Insurance to increase such capital maintenance threshold to 300% of each such protected cell’s company action level RBC, in the event of specified downgrades in the senior unsecured debt ratings of MetLife, Inc.
MetLife, Inc. guarantees the obligations of its subsidiary, DelAm, under a stop loss reinsurance agreement with RGA Reinsurance (Barbados) Inc. (“RGARe”), pursuant to which RGARe retrocedes to DelAm a portion of the whole life medical insurance business that RGARe assumed from American Life on behalf of its Japan operations. Also, MetLife, Inc. guarantees the obligations of its subsidiary, Missouri Reinsurance, Inc. (“MoRe”), under a retrocession agreement with RGARe, pursuant to which MoRe retrocedes certain group term life insurance liabilities (which retrocession was terminated effective as of January, 2016) and a portion of the closed block liabilities associated with industrial life and ordinary life insurance policies that it assumed from MLIC.
MetLife, Inc. guarantees the obligations of MetLife Reinsurance Company of Bermuda, Ltd. (“MrB”), a Bermuda insurance affiliate and an indirect, wholly-owned subsidiary of MetLife, Inc. under a reinsurance agreement with Mitsui Sumitomo Primary Life Insurance Co., Ltd. (“Mitsui”), a former affiliate that is now an unaffiliated third party, under which MrB reinsures certain variable annuity business written by Mitsui.
MetLife, Inc. guarantees the obligations of MrB in an aggregate amount up to $1.0 billion, under a reinsurance agreement with MetLife Europe Limited (“MEL”), under which MrB reinsured the guaranteed living benefits and guaranteed death benefits associated with certain unit-linked annuity contracts issued by MEL.
MetLife, Inc., in connection with MRV’s reinsurance of certain universal life and term life insurance risks, committed to the Vermont Department of Banking, Insurance, Securities and Health Care Administration to take necessary action to cause the three protected cells of MRV to maintain total adjusted capital in an amount that is equal to or greater than 200% of each such protected cell’s authorized control level RBC, as defined in Vermont state insurance statutes. See Note 12 of the Notes to the Consolidated Financial Statements.
MetLife, Inc., in connection with the collateral financing arrangement associated with MRC’s reinsurance of a portion of the liabilities associated with the closed block, committed to the South Carolina Department of Insurance to make capital contributions, if necessary, to MRC so that MRC may at all times maintain its total adjusted capital in an amount that is equal to or greater than 200% of the company action level RBC, as defined in South Carolina state insurance statutes as in effect on the date of determination or December 31, 2007, whichever calculation produces the greater capital requirement, or as otherwise required by the South Carolina Department of Insurance. See Note 13 of the Notes to the Consolidated Financial Statements.
MetLife, Inc., in connection with the collateral financing arrangement associated with MRSC’s reinsurance of ULSG, committed to the South Carolina Department of Insurance to take necessary action to cause MRSC to maintain the greater of capital and surplus of $250,000 or total adjusted capital in an amount that is equal to or greater than 100% of authorized control level RBC, as defined in South Carolina state insurance statutes. See Note 13 of the Notes to the Consolidated Financial Statements.
MetLife, Inc. has a net worth maintenance agreement with its insurance subsidiary, First MetLife Investors Insurance Company (“First MetLife”). Under this agreement, as amended, MetLife, Inc. agreed, without limitation as to the amount, to cause First MetLife to have capital and surplus of $10 million, total adjusted capital in an amount that is equal to or greater than 150% of the company action level RBC, as defined by applicable state insurance statutes, and liquidity necessary to enable it to meet its current obligations on a timely basis.
MetLife, Inc. guarantees obligations arising from derivatives of the following subsidiaries: MrB, MetLife International Holdings, LLC and MetLife Worldwide Holdings, LLC. These subsidiaries are exposed to various risks relating to their ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. These subsidiaries use a variety of strategies to manage these risks, including the use of derivatives. Further, all of the subsidiaries’ derivatives are subject to industry standard netting agreements and collateral agreements that limit the unsecured portion of any open derivative position. On a net counterparty basis at December 31, 2015 and 2014, derivative transactions with positive mark-to-market values (in-the-money) were $583 million and $499 million, respectively, and derivative transactions with negative mark-to-market values (out-of-the-money) were $32 million and $102 million, respectively. To secure the obligations represented by the out of-the-money transactions, the subsidiaries had provided collateral to their counterparties with an estimated fair value of $32 million and $96 million at December 31, 2015 and 2014, respectively. Accordingly, unsecured derivative liabilities guaranteed by MetLife, Inc. were $0 and $6 million at December 31, 2015 and 2014, respectively.
MetLife, Inc. also guarantees the obligations of certain of its subsidiaries under committed facilities with third-party banks. See Note 12 of the Notes to the Consolidated Financial Statements.
6. Subsequent Events
On February 16, 2016, MetLife, Inc. paid, in cash, capital contributions of $50 million, $45 million and $25 million to the following captive reinsurers: MRV, MRD and MRSC respectively, which were accrued at December 31, 2015 (see Note 2). On February 24, 2016, MetLife, Inc., paid in cash, a capital contribution of $1.5 billion to MetLife, USA.