Condensed Financial Information (Parent Company)

12 Months Ended

Dec. 31, 2017

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, 2017 and 2016

(In millions, except share and per share data)

	2017			2016
Condensed Balance Sheets
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $4,520 and $3,900, respectively)	$	4,510		$	3,894
Fair value option securities, at estimated fair value	1,357			—
Short-term investments, principally at estimated fair value	30			148
Other invested assets, at estimated fair value	127			499
Total investments	6,024			4,541
Cash and cash equivalents	516			334
Accrued investment income	24			74
Investment in subsidiaries	73,274			85,429
Loans to subsidiaries	100			1,200
Other assets	1,153			1,529
Total assets	$	81,091		$	93,107
Liabilities and Stockholders’ Equity
Liabilities
Payables for collateral under derivatives transactions	$	36		$	147
Long-term debt — unaffiliated	14,599			15,505
Long-term debt — affiliated	2,000			3,100
Collateral financing arrangement	—			2,797
Junior subordinated debt securities	2,454			1,734
Other liabilities	3,326			2,294
Total liabilities	22,415			25,577
Stockholders’ Equity
Preferred stock, par value $0.01 per share; $2,100 aggregate liquidation preference	—			—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,168,710,101 and 1,164,029,985 shares issued, respectively; 1,043,588,396 and 1,095,519,005 shares outstanding, respectively	12			12
Additional paid-in capital	31,111			30,944
Retained earnings	26,527			34,683
Treasury stock, at cost; 125,121,705 and 68,510,980 shares, respectively	(6,401		)	(3,474		)
Accumulated other comprehensive income (loss)	7,427			5,366
Total stockholders’ equity	58,676			67,531
Total liabilities and stockholders’ equity	$	81,091		$	93,108

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, 2017, 2016 and 2015

(In millions)

	2017			2016			2015
Condensed Statements of Operations
Revenues
Equity in earnings of subsidiaries	$	7,162		$	1,833		$	6,048
Net investment income	101			129			170
Other revenues	59			151			124
Net investment gains (losses)	(1,142		)	86			12
Net derivative gains (losses)	(186		)	(68		)	(7		)
Total revenues	5,994			2,131			6,347
Expenses
Interest expense	1,108			1,152			1,171
Goodwill impairment	—			147			—
Termination of financing arrangements	294			2			—
Other expenses	657			388			180
Total expenses	2,059			1,689			1,351
Income (loss) before provision for income tax	3,935			442			4,996
Provision for income tax expense (benefit)	(75		)	(408		)	(377		)
Net income (loss)	4,010			850			5,373
Less: Preferred stock dividends	103			103			116
Preferred stock repurchase premium	—			—			42
Net income (loss) available to common shareholders	$	3,907		$	747		$	5,215
Comprehensive income (loss)	$	7,391		$	1,449		$	(574	)

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, 2017, 2016 and 2015

(In millions)

	2017			2016			2015
Condensed Statements of Cash Flows
Cash flows from operating activities
Net income (loss)	$	4,010		$	850		$	5,373
Earnings of subsidiaries	(7,162		)	(1,833		)	(6,048		)
Dividends from subsidiaries	6,745			4,470			2,335
(Gains) losses on investments and from sales of businesses, net	1,142			(86		)	(12		)
Goodwill impairment	—			147			—
Tax separation agreement charge	1,093			—			—
Other, net	634			199			(42		)
Net cash provided by (used in) operating activities	6,462			3,747			1,606
Cash flows from investing activities
Sales of fixed maturity securities	7,217			8,603			7,952
Purchases of fixed maturity securities	(7,733		)	(7,409		)	(7,957		)
Cash received in connection with freestanding derivatives	452			311			930
Cash paid in connection with freestanding derivatives	(629		)	(561		)	(510		)
Sales of businesses	—			291			—
Expense paid on behalf of subsidiaries	(42		)	(68		)	(40		)
Receipts on loans to subsidiaries	—			140			761
Issuances of loans to subsidiaries	—			(140		)	(300		)
Returns of capital from subsidiaries	610			80			5
Capital contributions to subsidiaries	(339		)	(1,733		)	(667		)
Net change in short-term investments	118			120			110
Other, net	(14		)	(18		)	2
Net cash provided by (used in) investing activities	(360		)	(384		)	286
Cash flows from financing activities
Net change in payables for collateral under derivative transactions	(111		)	(80		)	(122		)
Long-term debt issued	—			—			2,739
Long-term debt repaid	(1,000		)	(1,250		)	(1,000		)
Fees paid for the termination of a committed facility related to Separation	(244		)	(2		)	—
Treasury stock acquired in connection with share repurchases	(2,927		)	(372		)	(1,930		)
Preferred stock issued, net of issuance costs	—			—			1,483
Repurchase of preferred stock	—			—			(1,460		)
Preferred stock repurchase premium	—			—			(42		)
Dividends on preferred stock	(103		)	(103		)	(116		)
Dividends on common stock	(1,717		)	(1,736		)	(1,653		)
Other, net	182			93			187
Net cash provided by (used in) financing activities	(5,920		)	(3,450		)	(1,914		)
Change in cash and cash equivalents	182			(87		)	(22		)
Cash and cash equivalents, beginning of year	334			421			443
Cash and cash equivalents, end of year	$	516		$	334		$	421

MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)

(Parent Company Only)

For the Years Ended December 31, 2017, 2016 and 2015

(In millions)

	2017			2016			2015
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	1,096		$	1,146		$	1,133
Income tax:
Amounts paid to (received from) subsidiaries, net	$	(1,552	)	$	(569	)	$	(226	)
Amounts paid to Brighthouse in accordance with the tax separation agreement	729			—			—
Income tax paid (received) by MetLife, Inc., net	(37		)	136			55
Total income tax, net	$	(860	)	$	(433	)	$	(171	)
Non-cash transactions:
Dividends from subsidiary	$	—		$	2,652		$	—
Returns of capital from subsidiaries	$	17,518		$	372		$	4,284
Capital contributions to subsidiaries	$	15,655		$	157		$	4,120
Distribution of Brighthouse	$	10,346		$	—		$	—
Payables to subsidiaries for future capital contributions	$	—		$	—		$	120
Allocation of interest expense to subsidiary	$	15		$	39		$	28
Allocation of interest income to subsidiary	$	4		$	54		$	57

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.

See Note 1 of the Notes to the Consolidated Financial Statements for information on prior period revisions.

The impact of the revisions is shown in the tables below:

	December 31, 2016
Condensed Balance Sheets	As Previously Reported		Revisions		As Revised
	(In millions)
Assets
Investment in subsidiaries	$	85,207	$	222	$	85,429
Total assets	$	92,885	$	222	$	93,107
Stockholders’ Equity
Retained earnings	$	34,480	$	203	$	34,683
Accumulated other comprehensive income (loss)	$	5,347	$	19	$	5,366
Total stockholders’ equity	$	67,309	$	222	$	67,531
Total liabilities and stockholders’ equity	$	92,886	$	222	$	93,108

	For the Years Ended December 31,
	2016						2015
Condensed Statements of Operations	As Previously Reported		Revisions		As Revised		As Previously Reported			Revisions			As Revised
	(In millions)
Revenues
Equity in earnings of subsidiaries	$	1,783	$	50	$	1,833	$	5,985		$	63		$	6,048
Total revenues	$	2,081	$	50	$	2,131	$	6,284		$	63		$	6,347
Income (loss) before provision for income tax	$	392	$	50	$	442	$	4,933		$	63		$	4,996
Net income (loss)	$	800	$	50	$	850	$	5,310		$	63		$	5,373
Net income (loss) available to common shareholders	$	697	$	50	$	747	$	5,152		$	63		$	5,215
Comprehensive income (loss)	$	1,376	$	73	$	1,449	$	(568	)	$	(6	)	$	(574	)

	For the Years Ended December 31,
	2016									2015
Condensed Statements of Cash Flows	As Previously Reported			Revisions			As Revised			As Previously Reported			Revisions			As Revised
	(In millions)
Cash flows from operating activities
Net income (loss)	$	800		$	50		$	850		$	5,310		$	63		$	5,373
Earnings of subsidiaries	$	(1,783	)	$	(50	)	$	(1,833	)	$	(5,985	)	$	(63	)	$	(6,048	)

2. Investment in Subsidiaries

On August 3, 2017, Brighthouse Financial, Inc. paid a cash dividend to MetLife, Inc. of $1.8 billion in connection with the Separation.

In December 2016, MLIC transferred the issued and outstanding shares of the common stock of each of NELICO and GALIC to MetLife, Inc. in the form of a non-cash extraordinary dividend of $2.7 billion.

In February 2016, MetLife, Inc. paid a cash capital contribution of $1.5 billion to Brighthouse Insurance in connection with the Separation.

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.

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.

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 April 2017, in connection with the Separation, MetLife, Inc. repaid $750 million and $350 million senior notes to MRD due September 2032 and December 2033, respectively, in an exchange transaction. The $750 million senior note bore interest at a fixed rate of 4.21% and the $350 million senior note bore interest at a fixed rate of 5.10%. Simultaneously, MRD repaid $750 million and $350 million surplus notes to MetLife, Inc. The $750 million surplus note bore interest at a fixed rate of 5.13% and the $350 million surplus note bore interest at a fixed rate of 6.00% (the “MRD Notes Exchange”).

In April 2016, American Life issued a $140 million short-term note to MetLife, Inc. which was repaid in July 2016. The short-term note bore interest at six-month LIBOR plus 1.00%.

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 July 2013, MetLife Ireland Treasury d.a.c. (formerly known as MetLife Ireland Treasury Limited) (“MIT”) borrowed the Chilean peso equivalent of $1.5 billion from MetLife, Inc., which was due in July 2023. The loan bore interest at a fixed rate of 8.5%, payable annually. In December, September and June 2015, MIT made loan payments of the Chilean peso equivalent of $77 million, $153 million and $231 million, respectively. At December 31, 2015, the loan was fully paid.

Interest income earned on loans to subsidiaries of $44 million, $64 million and $91 million for the years ended December 31, 2017, 2016 and 2015, 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			2017		2016
	(Dollars in millions)
Senior notes — unaffiliated (2)	3.00%	-	7.72%	4.84%	2018	-	2046	$	14,599	$	15,505
Senior notes — affiliated	3.03%	-	5.86%	4.58%	2019	-	2021	2,000		3,100
Total								$	16,599	$	18,605

__________________

(1) Range of interest rates and weighted average interest rates are for the year ended December 31, 2017.

(2) Net of $86 million and $92 million of unamortized issuance costs and net premiums and discounts at December 31, 2017 and 2016, respectively.

See Note 12 of the Notes to the Consolidated Financial Statements.

The aggregate maturities of long-term debt at December 31, 2017 for the next five years and thereafter are $1.0 billion in 2018, $1.8 billion in 2019, $789 million in 2020, $2.0 billion in 2021, $500 million in 2022 and $10.5 billion thereafter.

Credit Facility – Affiliated

In June 2016, MetLife, Inc. entered into a five-year agreement with an indirect wholly-owned subsidiary, MIT, to borrow up to $1.3 billion on a revolving basis, at interest rates based on the IRS safe harbor interest rate in effect at the time of the borrowing. MetLife, Inc. may borrow funds under the agreement at the lender’s discretion and subject to the availability of funds. There were no outstanding borrowings at December 31, 2017.

Long-term Debt – Affiliated

In June 2016, March 2016 and December 2015, MetLife, Inc. repaid $204 million, $10 million and $286 million, respectively, of affiliated long-term debt to MetLife Exchange Trust I at maturity in exchange for a return of capital. The long-term notes bore interest at three-month LIBOR plus 0.7%.

Senior Notes – Affiliated

In September 2016, a $250 million senior note issued to MLIC matured and, subsequently, in September 2016 MetLife, Inc. issued a new $250 million senior note to MLIC. The senior note matures in September 2020 and bears interest at a rate per annum of 3.03%, payable semi-annually.

See Note 3 for information on the MRD Notes Exchange in 2017.

Interest Expense

Interest expense was comprised of the following:

	Years Ended December 31,
	2017		2016		2015
	(In millions)
Long-term debt — unaffiliated	$	774	$	811	$	833
Long-term debt — affiliated	112		160		168
Collateral financing arrangements	27		47		36
Junior subordinated debt securities	195		134		134
Total	$	1,108	$	1,152	$	1,171

See Notes 13 and 14 of the Notes to the Consolidated Financial Statements for information about the collateral financing arrangement and junior subordinated debt securities. See also Note 3 of the Notes to the Consolidated Financial Statements regarding the termination of the MRSC collateral financing arrangement.

5. Junior Subordinated Debt Securities

In February 2017, in connection with the Separation, MetLife, Inc. exchanged $750 million aggregate principal amount of its 9.250% Fixed-to-Floating Rate Junior Subordinated Debentures due 2068 for $750 million aggregate liquidation preference of the 9.250% Fixed-to-Floating Rate Exchangeable Surplus Trust Securities of MetLife Capital Trust X (the “Trust”). As a result of the exchange, MetLife, Inc. is the sole beneficial owner of the Trust, a special purpose entity which issued the exchangeable surplus trust securities to investors, and is the beneficiary of $750 million of 8.595% surplus notes held by the Trust that were issued by Brighthouse Insurance. In March 2017, MetLife, Inc. dissolved the Trust. In June 2017, MetLife, Inc. forgave Brighthouse Insurance’s obligation to pay the principal amount of $750 million affiliated surplus notes held by MetLife, Inc.

6. 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. guarantees the obligations of its subsidiary, Delaware American Life Insurance Company (“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 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 d.a.c. (“MEL”) (formerly known as MetLife Europe Limited), 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 two 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. 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, 2017 and 2016, derivative transactions with positive mark-to-market values (in-the-money) were $515 million and $495 million, respectively, and derivative transactions with negative mark-to-market values (out-of-the-money) were $126 million and $237 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 $114 million and $233 million at December 31, 2017 and 2016, respectively. Accordingly, unsecured derivative liabilities guaranteed by MetLife, Inc. were $12 million and $4 million at December 31, 2017 and 2016, 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.