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Dispositions
 9 Months Ended
Sep. 30, 2018
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure
3. Dispositions
Separation of Brighthouse
On August 4, 2017, MetLife, Inc. completed the separation of Brighthouse. MetLife, Inc. retained the remaining ownership interest of 22,996,436 shares, or 19.2%, of Brighthouse Financial, Inc. common stock outstanding and recognized its investment in Brighthouse Financial, Inc. common stock based on the NASDAQ reported market price. The Company elected to record the investment under the FVO as an observable measure of estimated fair value that is aligned with the Company’s intent to divest of the retained shares as soon as practicable. Subsequent changes in estimated fair value of the investment were recorded to net investment gains (losses). See Note 6 for further information on net investment gains (losses). The estimated fair value of the Brighthouse Financial, Inc. common stock held by the Company (“FVO Brighthouse Common Stock”) at December 31, 2017 was $1.3 billion reported within contractholder-directed equity securities and fair value option securities (“FVO Securities”) (collectively, “Unit-linked and FVO Securities”).
In June 2018, the Company sold FVO Brighthouse Common Stock in exchange for $944 million aggregate principal amount of MetLife, Inc. senior notes, which MetLife, Inc. canceled. The Company recorded $327 million of mark-to-market and disposition losses on the FVO Brighthouse Common Stock to net investment gains (losses) for the nine months ended September 30, 2018. At September 30, 2018, the Company no longer held any shares of Brighthouse Financial, Inc. for its own account; however, certain insurance company separate accounts managed by the Company held shares of Brighthouse Financial, Inc. See Note 9 for further information on this transaction.
See Note 3 of the Notes to the Consolidated Financial Statements included in the 2017 Annual Report for further information regarding the Separation, including Separation-related agreements and ongoing transactions with Brighthouse.
Agreements
In connection with the Separation, MetLife and Brighthouse entered into various agreements. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2017 Annual Report for further information regarding significant agreements.
Tax Agreements
Immediately prior to the Separation, MetLife entered into tax agreements with Brighthouse.
In accordance with the tax separation agreement, at both September 30, 2018 and December 31, 2017, the Company’s current income tax receivable and corresponding payable to Brighthouse, reported in other liabilities, were $726 million.
As part of the tax receivable agreement, MetLife Inc. has the right to receive future payments from Brighthouse for a tax asset that Brighthouse received as a result of restructuring prior to the Separation. Included in other assets at both September 30, 2018 and December 31, 2017, is a receivable from Brighthouse of $333 million related to these future payments.
Ongoing Transactions with Brighthouse
The Company considered all of its continuing involvement with Brighthouse in determining whether to deconsolidate and present Brighthouse results as discontinued operations, including the agreements entered into between MetLife and Brighthouse and the ongoing transactions described below.
The Company entered into reinsurance, committed facility, structured settlement, and contract administrative services transactions with Brighthouse in the normal course of business and such transactions will continue based upon business needs. In addition, prior to and in connection with the Separation, the Company entered into various other agreements, including investment management, transition services and employee matters agreements, with Brighthouse for services necessary for both the Company and Brighthouse to conduct their activities. Intercompany transactions prior to the Separation between the Company and Brighthouse are eliminated and excluded from the interim condensed consolidated statements of operations and comprehensive income (loss). Transactions between the Company and Brighthouse that continue after the Separation are included on the Company’s interim condensed consolidated statements of operations and comprehensive income (loss) and interim condensed consolidated balance sheets.
Reinsurance
The Company entered into reinsurance transactions with Brighthouse in the normal course of business and such transactions will continue based upon business needs. Information regarding the significant effects of reinsurance transactions with Brighthouse was as follows:
 
 
Included on Interim
Condensed Consolidated
Statements of Operations and
Comprehensive Income (Loss)
 
Excluded from Interim
Condensed Consolidated
Statements of Operations and
Comprehensive Income (Loss)
 
 
Three Months
Ended
September 30,
 
Nine Months
Ended
September 30,
 
Three and
Nine Months
Ended
September 30,
 
Three Months
Ended
September 30,
 
Nine Months
Ended
September 30,
 
 
2018 (1)
 
2018 (1)
 
2017 (1)
 
2017 (2)
 
2017 (2)
 
 
(In millions)
Premiums
 
 
 
 
 
 
 
 
 
 
Reinsurance assumed
 
$
96

 
$
297

 
$
70

 
$
36

 
$
248

Reinsurance ceded
 
(3
)
 
(9
)
 
(2
)
 
1

 
(7
)
Net premiums
 
$
93

 
$
288

 
$
68

 
$
37

 
$
241

Universal life and investment-type product policy fees
 
 
 
 
 
 
 
 
 
 
Reinsurance assumed
 
$
(4
)
 
$
(6
)
 
$
(1
)
 
$
(1
)
 
$
(6
)
Reinsurance ceded
 
(23
)
 
(67
)
 
(22
)
 
(8
)
 
(55
)
Net universal life and investment-type product policy fees
 
$
(27
)
 
$
(73
)
 
$
(23
)
 
$
(9
)
 
$
(61
)
Policyholder benefits and claims
 
 
 
 
 
 
 
 
 
 
Reinsurance assumed
 
$
81

 
$
243

 
$
55

 
$
30

 
$
196

Reinsurance ceded
 
(5
)
 
(15
)
 
(6
)
 
(3
)
 
(16
)
Net policyholder benefits and claims
 
$
76

 
$
228

 
$
49

 
$
27

 
$
180

Interest credited to policyholder account balances
 
 
 
 
 
 
 
 
 
 
Reinsurance assumed
 
$
3

 
$
10

 
$
3

 
$
1

 
$
10

Reinsurance ceded
 
(18
)
 
(53
)
 
(12
)
 
(6
)
 
(42
)
Net interest credited to policyholder account balances
 
$
(15
)
 
$
(43
)
 
$
(9
)
 
$
(5
)
 
$
(32
)
Other expenses
 
 
 
 
 
 
 
 
 
 
Reinsurance assumed
 
$
15

 
$
80

 
$
6

 
$
4

 
$
10

Reinsurance ceded
 
(4
)
 
(22
)
 
(7
)
 
(3
)
 
(28
)
Net other expenses
 
$
11

 
$
58

 
$
(1
)
 
$
1

 
$
(18
)

__________________
(1)
Includes transactions after the Separation.
(2)
Includes transactions prior to the Separation.
Transition Services
In connection with the Separation, the Company entered into a transition services agreement with Brighthouse for services necessary for Brighthouse to conduct its activities. During the three months and nine months ended September 30, 2018, the Company recognized $78 million and $235 million, respectively, as other revenue for transitional services provided under the agreement. After the Separation, during the three months ended September 30, 2017, the Company recognized $60 million as a reduction to other expenses for transitional services provided under the agreement. Prior to the Separation, during the three months and nine months ended September 30, 2017, the Company charged Brighthouse $27 million and $191 million, respectively, for services provided under the agreement, which were intercompany transactions and eliminated and excluded from the interim condensed consolidated statements of operations and comprehensive income (loss).
Discontinued Operations
The following table presents the amounts related to the operations and loss on disposal of Brighthouse that have been reflected in discontinued operations:
 
Three Months
Ended
September 30,
 
Nine Months
Ended
September 30,
 
2017
 
(In millions)
Revenues
 
 
 
Premiums
$
116

 
$
820

Universal life and investment-type product policy fees
320

 
2,201

Net investment income
243

 
1,783

Other revenues
27

 
150

Total net investment gains (losses)
1

 
(50
)
Net derivative gains (losses)
(171
)
 
(1,061
)
Total revenues
536

 
3,843

Expenses
 
 
 
Policyholder benefits and claims
335

 
2,217

Interest credited to policyholder account balances
89

 
620

Policyholder dividends
2

 
16

Other expenses
108

 
853

Total expenses
534

 
3,706

Income (loss) from discontinued operations before provision for income tax and loss on disposal of discontinued operations
2

 
137

Provision for income tax expense (benefit)
(10
)
 
(48
)
Income (loss) from discontinued operations before loss on disposal of discontinued operations, net of income tax
12

 
185

Transaction costs associated with the Separation, net of income tax
(25
)
 
(216
)
Tax charges associated with the Separation
(955
)
 
(955
)
Income (loss) on disposal of discontinued operations, net of income tax
(980
)
 
(1,171
)
Income (loss) from discontinued operations, net of income tax
$
(968
)
 
$
(986
)
In the interim condensed consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified. The following table presents selected financial information regarding cash flows of the discontinued operations.

 
Nine Months
Ended
September 30, 2017
 
 
(In millions)
Net cash provided by (used in):
 
 
Operating activities

$
1,329

Investing activities

$
(2,732
)
Financing activities
 
$
(367
)
Disposition of MetLife Afore, S.A. de C.V.
On February 20, 2018, the Company completed the sale of MetLife Afore, S.A. de C.V., its pension fund management business in Mexico. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2017 Annual Report for further information.