10-Q 1 y90044te10vq.htm FORM 10-Q e10vq
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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, 2011
OR
o
  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
(State or other jurisdiction of
incorporation or organization)
  13-4075851
(I.R.S. Employer
Identification No.)
     
200 Park Avenue, New York, N.Y.
(Address of principal executive offices)
  10166-0188
(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 o
 
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 o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
     
Large accelerated filer þ
  Accelerated filer o
Non-accelerated filer o  (Do not check if a smaller reporting company)
  Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ
 
At May 2, 2011, 1,057,040,484 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.
 


 

 
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As used in this Form 10-Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999 (the “Holding Company”), 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) increased volatility and disruption of the capital and credit markets, which may affect our ability to seek financing or access our credit facilities; (3) uncertainty about the effectiveness of the U.S. government’s programs to stabilize the financial system, the imposition of fees relating thereto, or the promulgation of additional regulations; (4) impact of comprehensive financial services regulation reform on us; (5) exposure to financial and capital market risk; (6) 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; (7) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (8) investment losses and defaults, and changes to investment valuations; (9) impairments of goodwill and realized losses or market value impairments to illiquid assets; (10) defaults on our mortgage loans; (11) the impairment of other financial institutions that could adversely affect our investments or business; (12) our ability to address unforeseen liabilities, asset impairments, loss of key contractual relationships, or rating actions arising from acquisitions or dispositions, including our acquisition of American Life Insurance Company (“American Life”), a subsidiary of AM Holdings LLC (formerly known as ALICO Holdings LLC) (“AM Holdings”), and Delaware American Life Insurance Company (“DelAm” together with American Life, collectively, “ALICO”) (“the Acquisition”) and to successfully integrate and manage the growth of acquired businesses with minimal disruption; (13) uncertainty with respect to the outcome of the closing agreement entered into with the United States Internal Revenue Service in connection with the Acquisition; (14) uncertainty with respect to any incremental tax benefits resulting from the planned elections for ALICO and certain of its subsidiaries under Section 338 of the U.S. Internal Revenue Code of 1986, as amended; (15) the dilutive impact on our stockholders resulting from the issuance of equity securities in connection with the Acquisition or otherwise; (16) economic, political, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (17) our primary reliance, as a holding company, on dividends from our 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,


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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 accounting standards, practices and/or policies; (26) changes in assumptions related to deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (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, impair our ability to attract and retain talented and experienced management and other employees, or increase the cost or administrative burdens of providing benefits to employees; (34) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes, including any related impact on our disaster recovery systems and management continuity planning which could impair our ability to conduct business effectively; (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
 
In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or affiliates, or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
 
  •  should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
 
  •  have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
 
  •  may apply standards of materiality in a way that is different from what may be viewed as material to investors; and
 
  •  were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
 
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife, Inc., its subsidiaries and affiliates may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife, Inc.’s other public filings, which are available without charge through the SEC website at www.sec.gov.


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Part I — Financial Information
 
Item 1.   Financial Statements
 
MetLife, Inc.
 
 
(In millions, except share and per share data)
 
                 
    March 31,
    December 31,
 
    2011     2010  
 
Assets
               
Investments:
               
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $327,052 and $317,617, respectively; includes $3,312 and $3,330, respectively, relating to variable interest entities)
  $ 333,664     $ 324,797  
Equity securities available-for-sale, at estimated fair value (cost: $3,513 and $3,621, respectively)
    3,584       3,602  
Trading and other securities, at estimated fair value (includes: $572 and $463, of actively traded securities, respectively; and $359 and $387, respectively, relating to variable interest entities)
    19,365       18,589  
Mortgage loans:
               
Held-for-investment, principally at amortized cost (net of valuation allowances of $621 and $664, respectively; includes $6,771 and $6,840, respectively, at estimated fair value, relating to variable interest entities)
    59,397       58,976  
Held-for-sale, principally at estimated fair value
    2,435       3,321  
                 
Mortgage loans, net
    61,832       62,297  
Policy loans
    11,872       11,761  
Real estate and real estate joint ventures (includes $15 and $10, respectively, relating to variable interest entities)
    8,042       8,030  
Other limited partnership interests (includes $311 and $298, respectively, relating to variable interest entities)
    6,409       6,416  
Short-term investments, principally at estimated fair value
    8,822       9,384  
Other invested assets, principally at estimated fair value (includes $103 and $104, respectively, relating to variable interest entities)
    13,693       15,430  
                 
Total investments
    467,283       460,306  
Cash and cash equivalents, principally at estimated fair value (includes $231 and $69, respectively, relating to variable interest entities)
    10,692       12,957  
Accrued investment income (includes $32 and $34, respectively, relating to variable interest entities)
    4,478       4,328  
Premiums, reinsurance and other receivables (includes $2 and $2, respectively, relating to variable interest entities)
    20,315       19,799  
Deferred policy acquisition costs and value of business acquired
    27,979       27,092  
Goodwill
    11,946       11,781  
Other assets (includes $7 and $6, respectively, relating to variable interest entities)
    9,321       8,174  
Assets of subsidiaries held-for-sale
    3,413       3,331  
Separate account assets
    195,914       183,138  
                 
Total assets
  $ 751,341     $ 730,906  
                 
Liabilities and Equity
               
Liabilities
               
Future policy benefits
  $ 172,987     $ 170,912  
Policyholder account balances
    214,641       210,757  
Other policy-related balances
    15,641       15,750  
Policyholder dividends payable
    820       830  
Policyholder dividend obligation
    793       876  
Payables for collateral under securities loaned and other transactions
    28,625       27,272  
Bank deposits
    9,313       10,316  
Short-term debt
    572       306  
Long-term debt (includes $6,718 and $6,902, respectively, at estimated fair value, relating to variable interest entities)
    27,604       27,586  
Collateral financing arrangements
    5,297       5,297  
Junior subordinated debt securities
    3,191       3,191  
Current income tax payable
    113       297  
Deferred income tax liability
    2,238       1,856  
Other liabilities (includes $112 and $93, respectively, relating to variable interest entities)
    20,037       20,366  
Liabilities of subsidiaries held-for-sale
    3,206       3,043  
Separate account liabilities
    195,914       183,138  
                 
Total liabilities
    700,992       681,793  
                 
Contingencies, Commitments and Guarantees (Note 8)
               
Redeemable noncontrolling interests in partially owned consolidated subsidiaries
    128       117  
                 
Equity
               
MetLife, Inc.’s stockholders’ equity:
               
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized:
               
Preferred stock, 84,000,000 shares issued and outstanding; $2,100 aggregate liquidation preference
    1       1  
Convertible preferred stock, 0 and 6,857,000 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
           
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,059,276,399 and 989,031,704 shares issued at March 31, 2011 and December 31, 2010, respectively; 1,056,082,512 and 985,837,817 shares outstanding at March 31, 2011 and December 31, 2010, respectively
    11       10  
Additional paid-in capital
    26,668       26,423  
Retained earnings
    22,193       21,363  
Treasury stock, at cost; 3,193,887 shares at March 31, 2011 and December 31, 2010
    (172 )     (172 )
Accumulated other comprehensive income (loss)
    1,115       1,000  
                 
Total MetLife, Inc.’s stockholders’ equity
    49,816       48,625  
Noncontrolling interests
    405       371  
                 
Total equity
    50,221       48,996  
                 
Total liabilities and equity
  $ 751,341     $ 730,906  
                 
 
See accompanying notes to the interim condensed consolidated financial statements.


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MetLife, Inc.
 
 
(In millions, except per share data)
 
                 
    Three Months
 
    Ended
 
    March 31,  
    2011     2010  
 
Revenues
               
Premiums
  $ 8,554     $ 6,788  
Universal life and investment-type product policy fees
    1,889       1,405  
Net investment income
    5,317       4,321  
Other revenues
    566       513  
Net investment gains (losses):
               
Other-than-temporary impairments on fixed maturity securities
    (132 )     (151 )
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)
    9       59  
Other net investment gains (losses)
    24       124  
                 
Total net investment gains (losses)
    (99 )     32  
Net derivative gains (losses)
    (315 )     41  
                 
Total revenues
    15,912       13,100  
                 
Expenses
               
Policyholder benefits and claims
    8,231       7,464  
Interest credited to policyholder account balances
    1,924       1,142  
Policyholder dividends
    372       377  
Other expenses
    3,902       2,932  
                 
Total expenses
    14,429       11,915  
                 
Income (loss) from continuing operations before provision for income tax
    1,483       1,185  
Provision for income tax expense (benefit)
    428       356  
                 
Income (loss) from continuing operations, net of income tax
    1,055       829  
Income (loss) from discontinued operations, net of income tax
    (42 )     5  
                 
Net income (loss)
    1,013       834  
Less: Net income (loss) attributable to noncontrolling interests
    7       (1 )
                 
Net income (loss) attributable to MetLife, Inc. 
    1,006       835  
Less: Preferred stock dividends
    30       30  
Preferred stock redemption premium
    146        
                 
Net income (loss) available to MetLife, Inc.’s common shareholders
  $ 830     $ 805  
                 
Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
               
Basic
  $ 0.82     $ 0.97  
                 
Diluted
  $ 0.82     $ 0.96  
                 
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
               
Basic
  $ 0.78     $ 0.98  
                 
Diluted
  $ 0.78     $ 0.97  
                 
 
See accompanying notes to the interim condensed consolidated financial statements.


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MetLife, Inc.
 
 
(In millions)
 
                                                                                                         
                                        Accumulated Other Comprehensive Income (Loss)                    
                                        Net
          Foreign
    Defined
    Total
             
          Convertible
          Additional
          Treasury
    Unrealized
    Other-Than-
    Currency
    Benefit
    MetLife, Inc.’s
             
    Preferred
    Preferred
    Common
    Paid-in
    Retained
    Stock
    Investment
    Temporary
    Translation
    Plans
    Stockholders’
    Noncontrolling
    Total
 
    Stock     Stock     Stock     Capital     Earnings     at Cost     Gains (Losses)     Impairments     Adjustments     Adjustment     Equity     Interests (1)     Equity  
 
Balance at December 31, 2010
  $ 1     $     $ 10     $ 26,423     $ 21,363     $ (172 )   $ 3,356     $ (366 )   $ (541 )   $ (1,449 )   $ 48,625     $ 371     $ 48,996  
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  
Comprehensive income (loss):
                                                                                                       
Net income (loss)
                                    1,006                                               1,006       (3 )     1,003  
Other comprehensive income (loss):
                                                                                                       
Unrealized gains (losses) on derivative instruments, net of income tax
                                                    (116 )                             (116 )             (116 )
Unrealized investment gains (losses), net of related offsets and income tax
                                                    (240 )     27                       (213 )           (213 )
Foreign currency translation adjustments, net of income tax
                                                                    425               425       1       426  
Defined benefit plans adjustment, net of income tax
                                                                            19       19               19  
                                                                                                         
                                                                                                         
Other comprehensive income (loss)
                                                                                    115       1       116  
                                                                                                         
Comprehensive income (loss)
                                                                                    1,121       (2 )     1,119  
                                                                                                         
Balance at March 31, 2011
  $ 1     $     $ 11     $ 26,668     $ 22,193     $ (172 )   $ 3,000     $ (339 )   $ (116 )   $ (1,430 )   $ 49,816     $ 405     $ 50,221  
                                                                                                         
 
 
(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.


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MetLife, Inc.
 
Interim Condensed Consolidated Statements of Equity  — (Continued)
For the Three Months Ended March 31, 2010 (Unaudited)
 
(In millions)
 
                                                                                                 
                                  Accumulated Other Comprehensive Income (Loss)                    
                                  Net
          Foreign
    Defined
    Total
             
                Additional
          Treasury
    Unrealized
    Other-Than-
    Currency
    Benefit
    MetLife, Inc.’s
             
    Preferred
    Common
    Paid-in
    Retained
    Stock
    Investment
    Temporary
    Translation
    Plans
    Stockholders’
    Noncontrolling
    Total
 
    Stock     Stock     Capital     Earnings     at Cost     Gains (Losses)     Impairments     Adjustments     Adjustment     Equity     Interests     Equity  
 
Balance at December 31, 2009
  $ 1     $ 8     $ 16,859     $ 19,501     $ (190 )   $ (817 )   $ (513 )   $ (183 )   $ (1,545 )   $ 33,121     $ 377     $ 33,498  
Cumulative effect of change in accounting principle, net of income tax
                            (12 )             31       11                       30               30  
                                                                                                 
Balance at January 1, 2010
    1       8       16,859       19,489       (190 )     (786 )     (502 )     (183 )     (1,545 )     33,151       377       33,528  
Stock-based compensation
                    12               18                                       30               30  
Dividends on preferred stock
                            (30 )                                             (30 )             (30 )
Change in equity of noncontrolling interests
                                                                                    (14 )     (14 )
Comprehensive income (loss):
                                                                                               
Net income (loss)
                            835                                               835       (1 )     834  
Other comprehensive income (loss):
                                                                                               
Unrealized gains (losses) on derivative instruments, net of income tax
                                            78                               78               78  
Unrealized investment gains (losses), net of related offsets and income tax
                                            1,696       (29 )                     1,667       (1 )     1,666  
Foreign currency translation adjustments, net of income tax
                                                            61               61       7       68  
Defined benefit plans adjustment, net of income tax
                                                                    19       19               19  
                                                                                                 
Other comprehensive income (loss)
                                                                            1,825       6       1,831  
                                                                                                 
Comprehensive income (loss)
                                                                            2,660       5       2,665  
                                                                                                 
Balance at March 31, 2010
  $ 1     $ 8     $ 16,871     $ 20,294     $ (172 )   $ 988     $ (531 )   $ (122 )   $ (1,526 )   $ 35,811     $ 368     $ 36,179  
                                                                                                 
 
See accompanying notes to the interim condensed consolidated financial statements.
 


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Table of Contents

 
(In millions)
 
                 
    Three Months
 
    Ended
 
    March 31,  
    2011     2010  
 
Net cash provided by operating activities
  $ 3,501     $ 2,871  
                 
Cash flows from investing activities
               
Sales, maturities and repayments of:
               
Fixed maturity securities
    25,149       14,896  
Equity securities
    473       255  
Mortgage loans
    2,411       1,152  
Real estate and real estate joint ventures
    106       18  
Other limited partnership interests
    320       97  
Purchases of:
               
Fixed maturity securities
    (32,954 )     (22,518 )
Equity securities
    (271 )     (134 )
Mortgage loans
    (2,678 )     (1,156 )
Real estate and real estate joint ventures
    (159 )     (176 )
Other limited partnership interests
    (211 )     (166 )
Cash received in connection with freestanding derivatives
    1,070       465  
Cash paid in connection with freestanding derivatives
    (1,916 )     (725 )
Net change in policy loans
    (87 )     (85 )
Net change in short-term investments
    774       386  
Net change in other invested assets
    (68 )     128  
Other, net
    (53 )     (35 )
                 
Net cash used in investing activities
    (8,094 )     (7,598 )
                 
Cash flows from financing activities
               
Policyholder account balances:
               
Deposits
    25,042       17,321  
Withdrawals
    (23,363 )     (14,194 )
Net change in payables for collateral under securities loaned and other transactions
    1,353       1,786  
Net change in bank deposits
    (1,027 )     (218 )
Net change in short-term debt
    266       (594 )
Long-term debt issued
    280       163  
Long-term debt repaid
    (249 )     (322 )
Common stock issued, net of issuance costs
    2,997        
Redemption of convertible preferred stock
    (2,805 )      
Preferred stock redemption premium
    (146 )      
Dividends on preferred stock
    (30 )     (30 )
Other, net
    (56 )     (67 )
                 
Net cash provided by financing activities
    2,262       3,845  
                 
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
    93       (28 )
                 
Change in cash and cash equivalents
    (2,238 )     (910 )
Cash and cash equivalents, beginning of period
    13,046       10,112  
                 
Cash and cash equivalents, end of period
  $ 10,808     $ 9,202  
                 
Cash and cash equivalents, subsidiaries held-for-sale, beginning of period
  $ 89     $ 88  
                 
Cash and cash equivalents, subsidiaries held-for-sale, end of period
  $ 116     $ 85  
                 
Cash and cash equivalents, from continuing operations, beginning of period
  $ 12,957     $ 10,024  
                 
Cash and cash equivalents, from continuing operations, end of period
  $ 10,692     $ 9,117  
                 
Supplemental disclosures of cash flow information:
               
Net cash paid during the period for:
               
Interest
  $ 333     $ 258  
                 
Income tax
  $ 415     $ (88 )
                 
Non-cash transactions during the period:
               
Real estate and real estate joint ventures acquired in satisfaction of debt
  $     $ 8  
                 
 
See accompanying notes to the interim condensed consolidated financial statements.


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Table of Contents

MetLife, Inc.
 
 
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 (the “Holding Company”), its subsidiaries and affiliates. MetLife is a leading global provider of insurance, annuities and employee benefit programs throughout the United States (“U.S.”), Japan, Latin America, Asia Pacific, Europe and the Middle East. Through its subsidiaries and affiliates, MetLife offers life insurance, annuities, auto and homeowners insurance, mortgage and deposit products 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: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home (collectively, “U.S. Business”), and Japan and Other International Regions (collectively, “International”). See Note 13 for further business segment information.
 
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.
 
On November 1, 2010 (the “Acquisition Date”), MetLife, Inc. completed the acquisition of American Life Insurance Company (“American Life”) from AM Holdings LLC (formerly known as ALICO Holdings LLC) (“AM Holdings”), a subsidiary of American International Group, Inc. (“AIG”), and Delaware American Life Insurance Company (“DelAm”) from AIG, (American Life, together with DelAm, collectively, “ALICO”) (the “Acquisition”). The Acquisition was accounted for using the acquisition method of accounting. ALICO’s fiscal year-end is November 30. Accordingly, the Company’s interim condensed consolidated financial statements reflect the assets and liabilities of ALICO as of February 28, 2011 and the operating results of ALICO for the quarter ended February 28, 2011. The accounting policies of ALICO were conformed to those of MetLife upon the Acquisition. See Note 2.
 
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 businesses and operations. Actual results could differ from these estimates.
 
The accompanying interim condensed consolidated financial statements include the accounts of the Holding Company 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 6. 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 equity 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 period’s interim condensed consolidated financial statements have been reclassified to conform with the 2011 presentation. Such reclassifications include:
 
  •  Reclassification from other net investment gains (losses) of $41 million to net derivative gains (losses) in the consolidated statements of operations for the three months ended March 31, 2010;


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
  •  Realignment that affected assets, liabilities and results of operations on a segment basis with no impact to the consolidated results. See Note 13;
 
  •  Reclassifications related to operating revenues and expenses that affected results of operations on a segment and consolidated basis. See Note 13; and
 
  •  Reclassifications related to discontinued operations. See Note 14.
 
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, 2011, its consolidated results of operations for the three months ended March 31, 2011 and 2010, its consolidated cash flows for the three months ended March 31, 2011 and 2010, and its consolidated statements of equity for the three months ended March 31, 2011 and 2010, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2010 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, 2010, as amended by MetLife, Inc.’s Form 10-K/A dated March 1, 2011 (as amended, the “2010 Annual Report”), filed with the U.S. Securities and Exchange Commission (“SEC”), which includes 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 2010 Annual Report.
 
Adoption of New Accounting Pronouncements
 
Effective January 1, 2011, the Company adopted new guidance that addresses when a business combination should be assumed to have occurred for the purpose of providing pro forma disclosure. Under the new guidance, if an entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the supplemental pro forma disclosures to include additional narratives. The adoption did not have an impact on the Company’s consolidated financial statements.
 
Effective January 1, 2011, the Company adopted new guidance regarding goodwill impairment testing. This guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity would be required to perform Step 2 of the test if qualitative factors indicate that it is more likely than not that goodwill impairment exists. The adoption did not have an impact on the Company’s consolidated financial statements.
 
Effective January 1, 2011, the Company adopted new guidance regarding accounting for investment funds determined to be VIEs. Under this guidance, an insurance entity would not be required to consolidate a voting-interest investment fund when it holds the majority of the voting interests of the fund through its separate accounts. In addition, an insurance entity would not consider the interests held through separate accounts for the benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contractholder is a related party. The adoption did not have a material impact on the Company’s consolidated financial statements.
 
Future Adoption of New Accounting Pronouncements
 
In April 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance regarding effective control in repurchase agreements (Accounting Standards Update (“ASU”) 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements), effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The amendments in this ASU remove from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
In April 2011, the FASB issued new guidance regarding accounting for troubled debt restructuring (ASU 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring), effective for the first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. This guidance clarifies whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for the purpose of determining when a restructuring constitutes a troubled debt restructuring. The Company is currently evaluating the impact this guidance would have on its consolidated financial statements and related disclosures.
 
In October 2010, the FASB issued new guidance regarding accounting for deferred acquisition costs (ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts) effective for the first quarter of 2012. This guidance clarifies the costs that should be deferred by insurance entities when issuing and renewing insurance contracts. The guidance also specifies that only costs related directly to successful acquisition of new or renewal contracts can be capitalized. All other acquisition-related costs should be expensed as incurred. The Company is currently evaluating the impact this guidance would have on its consolidated financial statements and related disclosures.
 
2.   Acquisitions and Dispositions
 
2010 Acquisition of ALICO
 
Description of Transaction
 
On the Acquisition Date, MetLife, Inc. acquired all of the issued and outstanding capital stock of American Life from AM Holdings, a subsidiary of AIG, and DelAm from AIG for a total purchase price of $16.4 billion. The Acquisition has significantly broadened the Company’s diversification by product, distribution and geography, will meaningfully accelerate MetLife’s global growth strategy, and creates the opportunity to build an international franchise leveraging the key strengths of ALICO.
 
On March 8, 2011, AM Holdings sold, in public offering transactions, all the shares of common stock and common equity units it received as consideration from MetLife in connection with the Acquisition. The Company did not receive any of the proceeds from the sale of either the shares of common stock held by AM Holdings or the common equity units owned by AM Holdings. On March 8, 2011, MetLife, Inc. issued 68,570,000 shares of common stock for gross proceeds of $3.0 billion, which were used to repurchase and cancel 6,857,000 shares of convertible preferred stock received by AM Holdings from MetLife in connection with the Acquisition. See Note 10 herein and Note 2 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report.
 
Goodwill
 
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired and liabilities assumed that could not be individually identified. The goodwill recorded as part of the Acquisition includes the expected synergies and other benefits that management believes will result from combining the operations of ALICO with the operations of MetLife, including further diversification in geographic mix and product offerings and an increase in distribution strength. Of the $7.0 billion in goodwill resulting from the Acquisition, $5.2 billion was allocated to reporting units in the Japan segment and $1.8 billion was allocated to reporting units in the Other International Regions segment.
 
Contingent Consideration
 
American Life has guaranteed that the fair value of a fund of assets backing certain United Kingdom 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 AIG will pay the difference to American Life and conversely, if the shortfall at July 1, 2012 is less than £106 million American Life will pay the difference to AIG. The Company believes that the fair value of the fund will equal or exceed the guaranteed amount by July 1, 2012. The contingent consideration liability was $127 million at March 31, 2011. The increase in the contingent


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
consideration liability amount during the three months ended March 31, 2011 was recorded in net derivative gains (losses) in the interim condensed consolidated statement of operations.
 
Current and Deferred Income Tax
 
The future tax effects of temporary differences between financial reporting and tax bases of assets and liabilities are measured at the balance sheet dates and are recorded as deferred income tax assets and liabilities, with certain exceptions such as certain temporary differences relating to goodwill under purchase accounting.
 
For federal income tax purposes, MetLife, Inc. and AM Holdings are expected to make elections under Section 338 of the U.S. Internal Revenue Code of 1986, as amended (the “Section 338 Elections”) with respect to American Life and certain of its subsidiaries. In addition, MetLife, Inc. and AIG are expected to make a Section 338 Election with respect to DelAm. Under such elections, the U.S. tax basis of the assets deemed acquired and liabilities assumed of ALICO were adjusted as of the Acquisition Date to reflect the consequences of the Section 338 Elections.
 
At March 31, 2011, ALICO’s current and deferred income tax liabilities are provisional and not yet finalized. Current income taxes may be adjusted pending the resolution of the amount of taxes resulting from the Section 338 Elections and the filing of income tax returns. Deferred income taxes may be adjusted as a result of changes in estimates and assumptions relating to the reversal of U.S. temporary differences prior to the completion of the anticipated restructuring of American Life’s foreign branches, the filing of income tax returns and as additional information becomes available during the measurement period. We expect to finalize these amounts as soon as possible but no later than one year from the Acquisition Date.
 
Costs Related to Acquisition
 
Transaction and Integration-Related Expenses.  The Company incurred $2 million and $27 million of transaction costs for the three months ended March 31, 2011 and 2010, respectively. Transaction costs represent costs directly related to effecting the Acquisition and primarily include banking and legal expenses. Such costs have been expensed as incurred and are included in other expenses. These expenses have been reported within Banking, Corporate & Other.
 
Integration-related expenses incurred were $68 million and $2 million for the three months ended March 31, 2011 and 2010, respectively, and are included in other expenses. Integration costs represent incremental costs directly related to integrating ALICO, including expenses for consulting, rebranding and the integration of information systems. As the integration of ALICO is an enterprise-wide initiative, these expenses have been reported within Banking, Corporate & Other.
 
Restructuring Costs and Other Charges.  As part of the integration of ALICO’s operations, management has initiated restructuring plans focused on increasing productivity and improving the efficiency of the Company’s operations. For the three months ended March 31, 2011, the Company recognized a severance-related restructuring charge of $17 million associated with the termination of certain employees in connection with this initiative which was reflected within other expenses. Total severance-related restructuring charges incurred since inception and through March 31, 2011 were $27 million. The Company made cash payments of $14 million related to these severance costs during the three months ended March 31, 2011. The balance at March 31, 2011 related to severance-related restructuring costs was $13 million. These expenses have been reported within Banking, Corporate & Other.
 
Estimated restructuring costs may change as management continues to execute its restructuring plans. Management anticipates further restructuring charges including severance, contract termination costs and other associated costs through the year ended December 31, 2011. However, such restructuring plans are not sufficiently developed to enable the Company to make an estimate of such restructuring charges at March 31, 2011.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
2011 Disposition
 
On April 1, 2011, the Company sold its 50% interest in Mitsui Sumitomo MetLife Insurance Co., Ltd. (“MSI MetLife”), a Japan domiciled life insurance company, to its joint venture partner, MS&AD Insurance Group Holdings, Inc., for $267 million (¥22.5 billion) in cash consideration. During the three months ended March 31, 2011, the Company recorded an additional loss of $52 million, net of income tax, in net investment gains (losses) within the interim condensed consolidated statement of operations. The Company’s operating earnings relating to its investment in MSI MetLife were included in the Other International Regions segment.
 
2011 Pending Disposition
 
During the first quarter of 2011, the Company entered into a definitive agreement with a third party to sell its wholly-owned subsidiary, MetLife Taiwan Insurance Company Limited (“MetLife Taiwan”) for $180 million in cash consideration. The transaction is expected to close no later than December 31, 2011. As a part of the sale agreement, the Company received a deposit of $10 million from the third party which is included in other liabilities in the interim condensed consolidated balance sheet at March 31, 2011. The deposit, which is refundable in certain cases, will be applied against the final purchase price. As a result of recording MetLife Taiwan’s net assets at the lower of cost or fair value as assets and liabilities held-for-sale, the Company recognized a net investment loss in discontinued operations of $67 million, net of income tax, for the three months ended March 31, 2011. Income from the operations of MetLife Taiwan of $6 million and $3 million, net of income tax, for the three months ended March 31, 2011 and 2010, respectively, were also recorded in discontinued operations.
 
3.   Investments
 
Fixed Maturity and Equity Securities Available-for-Sale
 
The following tables present the cost or amortized cost, gross unrealized gains and losses, estimated fair value of the Company’s fixed maturity and equity securities and the percentage that each sector represents by the respective total holdings for the periods shown. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairment (“OTTI”) losses:
 
                                                 
    March 31, 2011  
    Cost or
    Gross Unrealized     Estimated
       
    Amortized
          Temporary
    OTTI
    Fair
    % of
 
    Cost     Gains     Losses     Losses     Value     Total  
    (In millions)  
 
Fixed Maturity Securities:
                                               
U.S. corporate securities
  $ 90,810     $ 4,277     $ 1,538     $     $ 93,549       28.0 %
Foreign corporate securities (1)
    66,414       3,289       1,007       (1 )     68,697       20.6  
Foreign government securities
    44,288       1,584       683             45,189       13.6  
Residential mortgage-backed securities (“RMBS”)
    44,627       1,542       703       459       45,007       13.5  
U.S. Treasury and agency securities
    35,158       1,179       858             35,479       10.6  
Commercial mortgage-backed securities (“CMBS”) (1)
    19,135       838       196       (8 )     19,785       5.9  
Asset-backed securities (“ABS”)
    15,308       306       524       100       14,990       4.5  
State and political subdivision securities
    11,306       192       537             10,961       3.3  
Other fixed maturity securities
    6       1                   7        
                                                 
Total fixed maturity securities (2),(3)
  $ 327,052     $ 13,208     $ 6,046     $ 550     $ 333,664       100.0 %
                                                 
Equity Securities:
                                               
Common stock
  $ 1,939     $ 193     $ 20     $     $ 2,112       58.9 %
Non-redeemable preferred stock (2)
    1,574       90       192             1,472       41.1  
                                                 
Total equity securities
  $ 3,513     $ 283     $ 212     $     $ 3,584       100.0 %
                                                 


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
                                                 
    December 31, 2010  
    Cost or
    Gross Unrealized     Estimated
       
    Amortized
          Temporary
    OTTI
    Fair
    % of
 
    Cost     Gains     Losses     Losses     Value     Total  
    (In millions)  
 
Fixed Maturity Securities:
                                               
U.S. corporate securities
  $ 88,905     $ 4,469     $ 1,602     $     $ 91,772       28.3 %
Foreign corporate securities
    65,487       3,326       925             67,888       20.9  
Foreign government securities
    40,871       1,733       602             42,002       12.9  
RMBS
    44,468       1,652       917       470       44,733       13.8  
U.S. Treasury and agency securities
    32,469       1,394       559             33,304       10.2  
CMBS
    20,213       740       266       12       20,675       6.4  
ABS
    14,722       274       590       119       14,287       4.4  
State and political subdivision securities
    10,476       171       518             10,129       3.1  
Other fixed maturity securities
    6       1                   7        
                                                 
Total fixed maturity securities (2),(3)
  $ 317,617     $ 13,760     $ 5,979     $ 601     $ 324,797       100.0 %
                                                 
Equity Securities:
                                               
Common stock
  $ 2,059     $ 146     $ 12     $     $ 2,193       60.9 %
Non-redeemable preferred stock (2)
    1,562       76       229             1,409       39.1  
                                                 
Total equity securities
  $ 3,621     $ 222     $ 241     $     $ 3,602       100.0 %
                                                 
 
 
(1) OTTI losses as presented above represents the noncredit portion of OTTI losses that is included in accumulated other comprehensive income (loss). OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities and CMBS were in an unrealized gain (loss) position of $1 million and $8 million, respectively, at March 31, 2011, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “Net Unrealized Investment Gains (Losses)”.
 
(2) Upon acquisition, the Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more debt-like characteristics; while those with more equity-like characteristics, are classified as equity securities within non-redeemable preferred stock. Many of such securities have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as “perpetual hybrid securities.” The following table presents the perpetual hybrid securities held by the Company at:
 
                         
            March 31, 2011   December 31, 2010
            Estimated
  Estimated
Classification   Fair
  Fair
Consolidated Balance Sheets   Sector Table   Primary Issuers   Value   Value
            (In millions)
 
Equity securities
  Non-redeemable preferred stock   Non-U.S. financial institutions   $ 1,105     $ 1,043  
Equity securities
  Non-redeemable preferred stock   U.S. financial institutions   $ 226     $ 236  
Fixed maturity securities
  Foreign corporate securities   Non-U.S. financial institutions   $ 1,782     $ 2,008  
Fixed maturity securities
  U.S. corporate securities   U.S. financial institutions   $ 75     $ 83  
 
(3) The Company’s holdings in redeemable preferred stock with stated maturity dates, commonly referred to as “capital securities”, were primarily issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $2.2 billion and $2.7 billion at estimated fair value of such securities at March 31, 2011 and December 31, 2010, respectively, which are included in the U.S. and foreign corporate securities sectors within fixed maturity securities.


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
The below investment grade and non-income producing amounts presented below are based on rating agency designations and equivalent designations of the National Association of Insurance Commissioners (“NAIC”), with the exception of certain structured securities described below held by the Company’s insurance subsidiaries that file NAIC statutory financial statements. Non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported within ABS, CMBS and all other ABS held by the Company’s insurance subsidiaries that file NAIC statutory financial statements are presented based on final ratings from the revised NAIC rating methodologies which became effective prior to January 1, 2011 (which may not correspond to rating agency designations). All NAIC designation (e.g., NAIC 1 — 6) amounts and percentages presented herein are based on the revised NAIC methodologies. All rating agency designation (e.g., Aaa/AAA) amounts and percentages presented herein are based on rating agency designations without adjustment for the revised NAIC methodologies described above. Rating agency designations are based on availability of applicable ratings from rating agencies on the NAIC acceptable rating organization list, including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”).
 
The following table presents selected information about certain fixed maturity securities held by the Company at:
 
                 
    March 31, 2011   December 31, 2010
    (In millions)
 
Below investment grade or non-rated fixed maturity securities:
               
Estimated fair value
  $ 25,139     $ 24,870  
Net unrealized gains (losses)
  $ (218 )   $ (696 )
Non-income producing fixed maturity securities:
               
Estimated fair value
  $ 148     $ 130  
Net unrealized gains (losses)
  $ (20 )   $ (23 )
 
Concentrations of Credit Risk (Fixed Maturity Securities) — Summary.  The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings.
 
The Company was not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company’s equity, other than the government securities summarized in the table below. The estimated fair value of the Company’s holdings in sovereign fixed maturity securities of Portugal, Ireland, Italy, Greece and Spain, commonly referred to as “Europe’s perimeter region,” was $1.4 billion and $1.6 billion prior to considering net purchased credit default swap protection at March 31, 2011 and December 31, 2010, respectively. The estimated fair value of these Europe perimeter region sovereign fixed maturity securities was 2.9% and 3.2% of the Company’s equity at March 31, 2011 and December 31, 2010, respectively and 0.3% of total cash and invested assets at both March 31, 2011 and December 31, 2010.
 
Concentrations of Credit Risk (Government and Agency Securities).  The following section contains a summary of the concentrations of credit risk related to government and agency fixed maturity and fixed-income securities holdings, which were greater than 10% of the Company’s equity at:
 
                 
    March 31, 2011   December 31, 2010
    Carrying Value (1)
    (In millions)
 
Government and agency fixed maturity securities:
               
United States
  $ 35,479     $ 33,304  
Japan
  $ 16,596     $ 15,591  
Mexico
  $ 5,306     $ 5,050  
U.S. Treasury and agency fixed-income securities included in:
               
Short-term investments
  $ 4,026     $ 4,048  
Cash equivalents
  $ 4,300     $ 5,762  


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
(1) Represents estimated fair value for fixed maturity securities; amortized cost, which approximates estimated fair value or estimated fair value, if available, for short-term investments; and amortized cost, which approximates estimated fair value for cash equivalents.
 
Concentrations of Credit Risk (Fixed Maturity Securities) — U.S. and Foreign Corporate Securities.  The Company maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have an exposure to any single issuer in excess of 1% of total investments. The tables below present information for U.S. and foreign corporate securities at:
 
                                 
    March 31, 2011     December 31, 2010  
    Estimated
          Estimated
       
    Fair
    % of
    Fair
    % of
 
    Value     Total     Value     Total  
          (In millions)        
 
Corporate fixed maturity securities — by sector:
                               
Foreign corporate fixed maturity securities (1)
  $ 68,697       42.3 %   $ 67,888       42.5 %
U.S. corporate fixed maturity securities — by industry:
                               
Industrial
    22,437       13.8       22,070       13.8  
Consumer
    22,344       13.8       21,482       13.5  
Finance
    20,317       12.5       20,785       13.0  
Utility
    17,668       10.9       16,902       10.6  
Communications
    7,607       4.7       7,335       4.6  
Other
    3,176       2.0       3,198       2.0  
                                 
Total
  $ 162,246       100.0 %   $ 159,660       100.0 %
                                 
 
 
(1) Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity securities.
 
                                 
    March 31, 2011   December 31, 2010
    Estimated
      Estimated
   
    Fair
  % of Total
  Fair
  % of Total
    Value   Investments   Value   Investments
    (In millions)
 
Concentrations within corporate fixed maturity securities:
                               
Largest exposure to a single issuer
  $ 2,189       0.5 %   $ 2,291       0.5 %
Holdings in ten issuers with the largest exposures
  $ 13,463       2.9 %   $ 14,247       3.1 %


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS.  The table below presents information on the Company’s RMBS holdings at:
 
                                 
    March 31, 2011     December 31, 2010  
    Estimated
          Estimated
       
    Fair
    % of
    Fair
    % of
 
    Value     Total     Value     Total  
    (In millions)  
 
By security type:
                               
Pass-through securities
  $ 23,275       51.7 %   $ 22,430       50.1 %
Collateralized mortgage obligations
    21,732       48.3       22,303       49.9  
                                 
Total RMBS
  $ 45,007       100.0 %   $ 44,733       100.0 %
                                 
By risk profile:
                               
Agency
  $ 34,856       77.5 %   $ 34,254       76.6 %
Prime
    5,900       13.1       6,258       14.0  
Alternative residential mortgage loans
    4,251       9.4       4,221       9.4  
                                 
Total RMBS
  $ 45,007       100.0 %   $ 44,733       100.0 %
                                 
Rated Aaa/AAA
  $ 36,550       81.2 %   $ 36,085       80.7 %
                                 
Rated NAIC 1
  $ 39,482       87.7 %   $ 38,984       87.1 %
                                 
 
See “Note 3 — Investments — Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the security types and risk profile.
 
The following tables present information on the Company’s investment in alternative residential mortgage loans (“Alt-A”) RMBS at:
 
                                 
    March 31, 2011     December 31, 2010  
    Estimated
          Estimated
       
    Fair
    % of
    Fair
    % of
 
    Value     Total     Value     Total  
    (In millions)  
 
Vintage Year:
                               
2004 & Prior
  $ 91       2.1 %   $ 93       2.2 %
2005
    1,519       35.7       1,483       35.1  
2006
    1,019       24.0       1,013       24.0  
2007
    943       22.2       922       21.8  
2008
    6       0.1       7       0.2  
2009 (1)
    641       15.1       671       15.9  
2010 (1)
    32       0.8       32       0.8  
                                 
Total
  $ 4,251       100.0 %   $ 4,221       100.0 %
                                 
 
 
(1) All of the Company’s Alt-A RMBS holdings in the 2009 and 2010 vintage years are resecuritization of real estate mortgage investment conduit (“Re-REMIC”) Alt-A RMBS that were purchased in 2009 and 2010 and are comprised of original issue vintage year 2005 through 2007 Alt-A RMBS. All of the Company’s Re-REMIC Alt-A RMBS holdings are NAIC 1 rated.
 


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
                                 
    March 31, 2011     December 31, 2010  
          % of
          % of
 
    Amount     Total     Amount     Total  
    (In millions)  
 
Net unrealized gains (losses)
  $ (577 )           $ (670 )        
Rated Aa/AA or better
            14.7 %             15.9 %
Rated NAIC 1
            41.2 %             39.5 %
Distribution of holdings — at estimated fair value — by collateral type:
                               
Fixed rate mortgage loans collateral
            90.8 %             90.7 %
Hybrid adjustable rate mortgage loans collateral
            9.2               9.3  
                                 
Total Alt-A RMBS
            100.0 %             100.0 %
                                 
 
Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS.  The following tables present the Company’s holdings of CMBS by rating agency designation and by vintage year at:
 
                                                                                                 
    March 31, 2011  
                            Below
       
                            Investment
       
    Aaa     Aa     A     Baa     Grade     Total  
          Estimated
          Estimated
          Estimated
          Estimated
          Estimated
          Estimated
 
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
 
    Cost     Value     Cost     Value     Cost     Value     Cost     Value     Cost     Value     Cost     Value  
    (In millions)  
 
2003 & Prior
  $ 6,851     $ 7,032     $ 229     $ 231     $ 155     $ 154     $ 74     $ 72     $ 21     $ 19     $ 7,330     $ 7,508  
2004
    3,452       3,579       508       517       106       104       103       103       91       73       4,260       4,376  
2005
    2,904       3,091       400       430       315       336       201       207       46       42       3,866       4,106  
2006
    1,454       1,536       164       168       88       94       166       178       175       192       2,047       2,168  
2007
    676       689       414       385       173       166       51       53       96       106       1,410       1,399  
2008
                28       35                                           28       35  
2009
    2       2                                                       2       2  
2010
    3       3       56       55                                           59       58  
2011
    133       133                                                       133       133  
                                                                                                 
Total
  $ 15,475     $ 16,065     $ 1,799     $ 1,821     $ 837     $ 854     $ 595     $ 613     $ 429     $ 432     $ 19,135     $ 19,785  
                                                                                                 
Ratings Distribution
            81.2 %             9.2 %             4.3 %             3.1 %             2.2 %             100.0 %
                                                                                                 
 
                                                                                                 
    December 31, 2010  
                            Below
       
                            Investment
       
    Aaa     Aa     A     Baa     Grade     Total  
          Estimated
          Estimated
          Estimated
          Estimated
          Estimated
          Estimated
 
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
    Amortized
    Fair
 
    Cost     Value     Cost     Value     Cost     Value     Cost     Value     Cost     Value     Cost     Value  
    (In millions)  
 
2003 & Prior
  $ 7,411     $ 7,640     $ 282     $ 282     $ 228     $ 227     $ 74     $ 71     $ 28     $ 24     $ 8,023     $ 8,244  
2004
    3,489       3,620       277       273       216       209       181       175       91       68       4,254       4,345  
2005
    3,113       3,292       322       324       286       280       263       255       73       66       4,057       4,217  
2006
    1,463       1,545       159       160       168       168       385       398       166       156       2,341       2,427  
2007
    840       791       344       298       96       95       119       108       122       133       1,521       1,425  
2008
    2       2                                                       2       2  
2009
    3       3                                                       3       3  
2010
    8       8                   4       4                               12       12  
                                                                                                 
Total
  $ 16,329     $ 16,901     $ 1,384     $ 1,337     $ 998     $ 983     $ 1,022     $ 1,007     $ 480     $ 447     $ 20,213     $ 20,675  
                                                                                                 
Ratings Distribution
            81.7 %             6.4 %             4.8 %             4.9 %             2.2 %             100.0 %
                                                                                                 
 
The tables above reflect rating agency designations assigned by nationally recognized rating agencies including Moody’s, S&P, Fitch and Realpoint, LLC.

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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
The NAIC rating distribution of the Company’s holdings of CMBS was as follows at:
 
                 
    March 31, 2011   December 31, 2010
 
NAIC 1
    93.9 %     93.7 %
NAIC 2
    3.3 %     3.2 %
NAIC 3
    1.4 %     1.8 %
NAIC 4
    1.1 %     1.0 %
NAIC 5
    0.3 %     0.3 %
NAIC 6
    %     %
 
Concentrations of Credit Risk (Fixed Maturity Securities) — ABS.  The Company’s ABS are diversified both by collateral type and by issuer. The following table presents information about ABS held by the Company at:
 
                                 
    March 31, 2011     December 31, 2010  
    Estimated
          Estimated
       
    Fair
    % of
    Fair
    % of
 
    Value     Total     Value     Total  
          (In millions)        
 
By collateral type:
                               
Credit card loans
  $ 5,879       39.2 %   $ 6,027       42.2 %
Student loans
    2,648       17.7       2,416       16.9  
Collateralized debt obligations
    1,949       13.0       1,798       12.6  
RMBS backed by sub-prime mortgage loans
    1,113       7.4       1,119       7.8  
Automobile loans
    776       5.2       605       4.2  
Other loans
    2,625       17.5       2,322       16.3  
                                 
Total
  $ 14,990       100.0 %   $ 14,287       100.0 %
                                 
Rated Aaa/AAA
  $ 10,486       70.0 %   $ 10,411       72.9 %
                                 
Rated NAIC 1
  $ 13,805       92.1 %   $ 13,133       91.9 %
                                 
 
The Company had ABS supported by sub-prime mortgage loans with estimated fair values of $1,113 million and $1,119 million and unrealized losses of $274 million and $317 million at March 31, 2011 and December 31, 2010, respectively. Approximately 28% of this portfolio was rated Aa or better, of which 75% was in vintage year 2005 and prior at March 31, 2011. Approximately 54% of this portfolio was rated Aa or better, of which 88% was in vintage year 2005 and prior at December 31, 2010. These older vintages from 2005 and prior benefit from better underwriting, improved enhancement levels and higher residential property price appreciation. Approximately 63% and 66% of this portfolio was rated NAIC 2 or better at March 31, 2011 and December 31, 2010, respectively.
 
Concentrations of Credit Risk (Equity Securities).  The Company was not exposed to any concentrations of credit risk in its equity securities holdings of any single issuer greater than 10% of the Company’s equity or 1% of total investments at March 31, 2011 and December 31, 2010.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
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, 2011     December 31, 2010  
          Estimated
          Estimated
 
    Amortized
    Fair
    Amortized
    Fair
 
    Cost     Value     Cost     Value  
    (In millions)  
 
Due in one year or less
  $ 10,343     $ 10,487     $ 8,580     $ 8,702  
Due after one year through five years
    66,913       68,596       65,143       66,796  
Due after five years through ten years
    79,908       82,766       76,508       79,571  
Due after ten years
    90,818       92,033       87,983       90,033  
                                 
Subtotal
    247,982       253,882       238,214       245,102  
RMBS, CMBS and ABS
    79,070       79,782       79,403       79,695  
                                 
Total fixed maturity securities
  $ 327,052     $ 333,664     $ 317,617     $ 324,797  
                                 
 
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.
 
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 2010 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.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
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, 2011     December 31, 2010  
    (In millions)  
 
Fixed maturity securities
  $ 7,189     $ 7,817  
Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss)
    (550 )     (601 )
                 
Total fixed maturity securities
    6,639       7,216  
Equity securities
    99       (3 )
Derivatives
    (237 )     (59 )
Other
    4       42  
                 
Subtotal
    6,505       7,196  
                 
Amounts allocated from:
               
Insurance liability loss recognition
    (569 )     (672 )
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)
    31       38  
DAC and VOBA
    (1,187 )     (1,205 )
Policyholder dividend obligation
    (793 )     (876 )
                 
Subtotal
    (2,518 )     (2,715 )
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)
    180       197  
Deferred income tax benefit (expense)
    (1,510 )     (1,692 )
                 
Net unrealized investment gains (losses)
    2,657       2,986  
Net unrealized investment gains (losses) attributable to noncontrolling interests
    4       4  
                 
Net unrealized investment gains (losses) attributable to MetLife, Inc. 
  $ 2,661     $ 2,990  
                 
 
The changes in fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss), were as follows:
 
                 
    March 31, 2011     December 31, 2010  
    (In millions)  
 
Balance, beginning of period
  $ (601 )   $ (859 )
Noncredit OTTI losses recognized (1)
    (9 )     (212 )
Transferred to retained earnings (2)
          16  
Securities sold with previous noncredit OTTI loss
    37       137  
Subsequent increases in estimated fair value
    23       317  
                 
Balance, end of period
  $ (550 )   $ (601 )
                 
 
 
(1) Noncredit OTTI losses recognized, net of deferred policy acquisition costs (“DAC”), were ($13) million and ($202) million for the periods ended March 31, 2011 and December 31, 2010, respectively.
 
(2) Amounts transferred to retained earnings were in connection with the adoption of guidance related to the consolidation of VIEs as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report.


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
The changes in net unrealized investment gains (losses) were as follows:
 
         
    Three Months
 
    Ended
 
    March 31, 2011  
    (In millions)  
 
Balance, beginning of period
  $ 2,990  
Fixed maturity securities on which noncredit OTTI losses have been recognized
    51  
Unrealized investment gains (losses) during the period
    (742 )
Unrealized investment gains (losses) relating to:
       
Insurance liability gain (loss) recognition
    103  
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)
    (7 )
DAC and VOBA
    18  
Policyholder dividend obligation
    83  
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)
    (17 )
Deferred income tax benefit (expense)
    182  
         
Net unrealized investment gains (losses)
    2,661  
Net unrealized investment gains (losses) attributable to noncontrolling interests
     
         
Balance, end of period
  $ 2,661  
         
Change in net unrealized investment gains (losses)
  $ (329 )
Change in net unrealized investment gains (losses) attributable to noncontrolling interests
     
         
Change in net unrealized investment gains (losses) attributable to MetLife, Inc. 
  $ (329 )
         
 
Continuous Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale by Sector
 
The following tables present the estimated fair value and gross unrealized losses of the Company’s fixed maturity and equity securities in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous 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


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
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, 2011  
          Equal to or Greater
       
    Less than 12 Months     than 12 Months     Total  
    Estimated
    Gross
    Estimated
    Gross
    Estimated
    Gross
 
    Fair
    Unrealized
    Fair
    Unrealized
    Fair
    Unrealized
 
    Value     Losses     Value     Losses     Value     Losses  
    (In millions, except number of securities)  
 
Fixed Maturity Securities:
                                               
U.S. corporate securities
  $ 22,680     $ 580     $ 7,608     $ 958     $ 30,288     $ 1,538  
Foreign corporate securities
    23,018       635       3,320       371       26,338       1,006  
Foreign government securities
    26,529       670       172       13       26,701       683  
RMBS
    9,396       257       5,873       905       15,269       1,162  
U.S. Treasury and agency securities
    14,313       827       110       31       14,423       858  
CMBS
    3,187       52       1,061       136       4,248       188  
ABS
    2,999       35       2,767       589       5,766       624  
State and political subdivision securities
    5,036       251       968       286       6,004       537  
Other fixed maturity securities
    1                         1        
                                                 
Total fixed maturity securities
  $ 107,159     $ 3,307     $ 21,879     $ 3,289     $ 129,038     $ 6,596  
                                                 
Equity Securities:
                                               
Common stock
  $ 97     $ 20     $     $     $ 97     $ 20  
Non-redeemable preferred stock
    173       11       828       181       1,001       192  
                                                 
Total equity securities
  $ 270     $ 31     $ 828     $ 181     $ 1,098     $ 212  
                                                 
Total number of securities in an unrealized loss position
    5,882               1,533                          
                                                 
 
                                                 
    December 31, 2010  
          Equal to or Greater
       
    Less than 12 Months     than 12 Months     Total  
    Estimated
    Gross
    Estimated
    Gross
    Estimated
    Gross
 
    Fair
    Unrealized
    Fair
    Unrealized
    Fair
    Unrealized
 
    Value     Losses     Value     Losses     Value     Losses  
    (In millions, except number of securities)  
 
Fixed Maturity Securities:
                                               
U.S. corporate securities
  $ 22,954     $ 447     $ 8,319     $ 1,155     $ 31,273     $ 1,602  
Foreign corporate securities
    22,415       410       3,976       515       26,391       925  
Foreign government securities
    26,659       585       189       17       26,848       602  
RMBS
    7,588       212       6,700       1,175       14,288       1,387  
U.S. Treasury and agency securities
    13,401       530       118       29       13,519       559  
CMBS
    3,787       29       1,363       249       5,150       278  
ABS
    2,713       42       3,026       667       5,739       709  
State and political subdivision securities
    5,061       246       988       272       6,049       518  
Other fixed maturity securities
    1                         1        
                                                 
Total fixed maturity securities
  $ 104,579     $ 2,501     $ 24,679     $ 4,079     $ 129,258     $ 6,580  
                                                 
Equity Securities:
                                               
Common stock
  $ 89     $ 12     $ 1     $     $ 90     $ 12  
Non-redeemable preferred stock
    191       9       824       220       1,015       229  
                                                 
Total equity securities
  $ 280     $ 21     $ 825     $ 220     $ 1,105     $ 241  
                                                 
Total number of securities in an unrealized loss position
    5,609               1,704                          
                                                 


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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
 
The following tables present the cost or amortized cost, gross unrealized losses, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss), gross unrealized losses as a percentage of cost or amortized cost and number of securities for fixed maturity and equity securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:
 
                                                 
    March 31, 2011  
    Cost or Amortized Cost     Gross Unrealized Losses     Number of Securities  
    Less than
    20% or
    Less than
    20% or
    Less than
    20% or
 
    20%     more     20%     more     20%     more  
    (In millions, except number of securities)  
 
Fixed Maturity Securities:
                                               
Less than six months
  $ 106,912     $ 1,821     $ 2,990     $ 446       5,432       123  
Six months or greater but less than nine months
    2,300       186       156       63       291       13  
Nine months or greater but less than twelve months
    740       159       20       53       59       11  
Twelve months or greater
    19,740       3,776       1,640       1,228       1,171       227  
                                                 
Total
  $ 129,692     $ 5,942     $ 4,806     $ 1,790                  
                                                 
Percentage of amortized cost
                    4 %     30 %                
                                                 
Equity Securities:
                                               
Less than six months
  $ 245     $ 43     $ 12     $ 18       96       21  
Six months or greater but less than nine months
    3       1             1       4       5  
Nine months or greater but less than twelve months
    28             4             2        
Twelve months or greater
    604       386       58       119       39       15  
                                                 
Total
  $ 880     $ 430     $ 74     $ 138                  
                                                 
Percentage of cost
                    8 %     32 %                
                                                 
 


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
                                                 
    December 31, 2010  
    Cost or Amortized Cost     Gross Unrealized Losses     Number of Securities  
    Less than
    20% or
    Less than
    20% or
    Less than
    20% or
 
    20%     more     20%     more     20%     more  
    (In millions, except number of securities)  
 
Fixed Maturity Securities:
                                               
Less than six months
  $ 105,301     $ 1,403     $ 2,348     $ 368       5,320       121  
Six months or greater but less than nine months
    1,125       376       29       102       104       29  
Nine months or greater but less than twelve months
    371       89       28       27       50       9  
Twelve months or greater
    21,627       5,546       1,863       1,815       1,245       311  
                                                 
Total
  $ 128,424     $ 7,414     $ 4,268     $ 2,312                  
                                                 
Percentage of amortized cost
                    3 %     31 %                
                                                 
Equity Securities:
                                               
Less than six months
  $ 247     $ 94     $ 10     $ 22       106       33  
Six months or greater but less than nine months
    29       65       5       16       3       2  
Nine months or greater but less than twelve months
    6       47             16       3       2  
Twelve months or greater
    518       340       56       116       35       14  
                                                 
Total
  $ 800     $ 546     $ 71     $ 170                  
                                                 
Percentage of cost
                    9 %     31 %                
                                                 
 
Equity securities with gross unrealized losses of 20% or more for twelve months or greater increased from $116 million at December 31, 2010 to $119 million at March 31, 2011. As shown in the section “— Evaluating Temporarily Impaired Available-for-Sale Securities” below, $119 million of the equity securities with gross unrealized losses of 20% or more for twelve months or greater at March 31, 2011 were non-redeemable preferred stock, of which $118 million were financial services industry investment grade non-redeemable preferred stock, of which 80% were rated A or better.

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Table of Contents

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 Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI losses on fixed maturity securities recognized in accumulated other comprehensive income (loss) of $6.8 billion at both March 31, 2011 and December 31, 2010, were concentrated, calculated as a percentage of gross unrealized losses and OTTI losses, by sector and industry as follows:
 
                 
    March 31, 2011     December 31, 2010  
 
Sector:
               
U.S. corporate securities
    23 %     23 %
RMBS
    17       20  
Foreign corporate securities
    15       14  
U.S. Treasury and agency securities
    13       8  
Foreign government securities
    10       9  
ABS
    9       10  
State and political subdivision securities
    8       8  
CMBS
    3       4  
Other
    2       4  
                 
Total
    100 %     100 %
                 
Industry:
               
Mortgage-backed
    20 %     24 %
Finance
    17       21  
U.S. Treasury and agency securities
    13       8  
Foreign government securities
    10       9  
Asset-backed
    9       10  
State and political subdivision securities
    8       8  
Utility
    6       5  
Consumer
    6       4  
Communications
    2       2  
Industrial
    1       2  
Other
    8       7  
                 
Total
    100 %     100 %
                 
 
Evaluating Temporarily Impaired Available-for-Sale Securities
 
The following table presents the Company’s 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, 2011     December 31, 2010  
    Fixed Maturity
    Equity
    Fixed Maturity
    Equity
 
    Securities     Securities     Securities     Securities  
    (In millions, except number of securities)  
 
Number of securities
    97       6       107       6  
Total gross unrealized losses
  $ 1,885     $ 93     $ 2,014     $ 103  
Percentage of total gross unrealized losses
    29 %     44 %     31 %     43 %


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Table of Contents

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 $139 million during the three months ended March 31, 2011. The decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2011, was primarily attributable to the narrowing of credit spreads. These securities were included in the Company’s OTTI review process. Based upon the Company’s current evaluation of these securities and other 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.
 
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, 2011:
 
                                                                 
          Non-Redeemable Preferred Stock  
          All Types of
             
    All Equity
    Non-Redeemable
    Investment Grade  
    Securities     Preferred Stock     All Industries     Financial Services Industry  
    Gross
    Gross
    % of All
    Gross
    % of All
    Gross
          % A
 
    Unrealized
    Unrealized
    Equity
    Unrealized
    Non-Redeemable
    Unrealized
    % of All
    Rated or
 
    Losses     Losses     Securities     Losses     Preferred Stock     Losses     Industries     Better  
                      (In millions)                    
 
Less than six months
  $ 18     $ 5       28 %   $ 5       100 %   $ 5       100 %     100 %
Six months or greater but less than twelve months
    1             %           %           %     %
Twelve months or greater
    119       119       100 %     118       99 %     118       100 %     80 %
                                                                 
All equity securities with
gross unrealized losses of 20% or more
  $ 138     $ 124       90 %   $ 123       99 %   $ 123       100 %     80 %
                                                                 
 
In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those companies in the financial services industry. 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).
 
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 rating, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.


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Table of Contents

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,  
    2011     2010  
    (In millions)  
 
Total gains (losses) on fixed maturity securities:
               
Total OTTI losses recognized
  $ (132 )   $ (151 )
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive income (loss)
    9       59  
                 
Net OTTI losses on fixed maturity securities recognized in earnings
    (123 )     (92 )
Fixed maturity securities — net gains (losses) on sales and disposals
    (40 )     26  
                 
Total gains (losses) on fixed maturity securities
    (163 )     (66 )
Other net investment gains (losses):
               
Equity securities
    36       27  
Mortgage loans
    47       (28 )
Real estate and real estate joint ventures
    1       (22 )
Other limited partnership interests
    3       (1 )
Other investment portfolio gains (losses)
    4       58  
                 
Subtotal — investment portfolio gains (losses)
    (72 )     (32 )
                 
Fair value option (“FVO”) consolidated securitization entities — changes in estimated fair value included in net investment gains (losses):
               
Commercial mortgage loans
    18       481  
Securities
    (40 )     (4 )
Long-term debt — related to commercial mortgage loans
          (479 )
Long-term debt — related to securities
    47       12  
Other gains (losses) (1)
    (52 )     54  
                 
Subtotal FVO consolidated securitization entities and other gains (losses)
    (27 )     64  
                 
Total net investment gains (losses)
  $ (99 )   $ 32  
                 
 
 
(1) Other gains (losses) for the three months ended March 31, 2011 includes a loss of $80 million related to the sale of the Company’s investment in MSI MetLife. See Note 2.
 
See “— Variable Interest Entities” for discussion of consolidated securitization entities (“CSEs”) included in the table above.
 
Gains (losses) from foreign currency transactions included within net investment gains (losses) were $35 million and $150 million for the three months ended March 31, 2011 and 2010, respectively.
 
Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown below. Investment gains and losses on sales of securities are determined on a specific identification basis.
 


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MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
                                                 
    Three Months Ended March 31,  
    2011     2010     2011     2010     2011     2010  
    Fixed Maturity Securities     Equity Securities     Total  
    (In millions)  
 
Proceeds
  $ 16,532     $ 8,372     $ 316     $ 145     $ 16,848     $ 8,517  
                                                 
Gross investment gains
  $ 193     $ 164     $ 48     $ 31     $ 241     $ 195  
                                                 
Gross investment losses
    (233 )     (138 )     (6 )     (3 )     (239 )     (141 )
                                                 
Total OTTI losses recognized in earnings:
                                               
Credit-related
    (43 )     (86 )                 (43 )     (86 )
Other (1)
    (80 )     (6 )     (6 )     (1 )     (86 )     (7 )
                                                 
Total OTTI losses recognized in earnings
    (123 )     (92 )     (6 )     (1 )     (129 )     (93 )
                                                 
Net investment gains (losses)
  $ (163 )   $ (66 )   $ 36     $ 27     $ (127 )   $ (39 )
                                                 
 
 
(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,  
    2011     2010  
    (In millions)  
 
Sector:
               
U.S. and foreign corporate securities — by industry:
               
Communications
  $ 13     $ 3  
Consumer
    2       22  
Utility
    1        
Finance
    1       8  
                 
Total U.S. and foreign corporate securities
    17       33  
Foreign government securities
    76        
RMBS
    18       30  
ABS
    9       19  
CMBS
    3       10  
                 
Total
  $ 123     $ 92  
                 

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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
Equity security OTTI losses recognized in earnings related to the following sectors and industries:
 
                 
    Three Months
 
    Ended
 
    March 31,  
    2011     2010  
    (In millions)  
 
Sector:
               
Common stock
  $ 6     $ 1  
Industry:
               
Other industries
  $ 6     $ 1  
 
Credit Loss Rollforward — 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)
 
The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held by the Company for which a portion of the OTTI loss was recognized in other comprehensive income (loss):
 
                 
    Three Months
 
    Ended
 
    March 31,  
    2011     2010  
    (In millions)  
 
Balance, beginning of period
  $ 443     $ 581  
Additions:
               
Initial impairments — credit loss OTTI recognized on securities not previously impaired
    8       19  
Additional impairments — credit loss OTTI recognized on securities previously impaired
    16       31  
Reductions:
               
Due to sales (maturities, pay downs or prepayments) during the period of securities previously credit loss OTTI impaired
    (29 )     (104 )
Due to securities de-recognized in connection with the adoption of new guidance related to the consolidation of VIEs
          (100 )
Due to securities impaired to net present value of expected future cash flows
    (44 )      
Due to increases in cash flows — accretion of previous credit loss OTTI
    (5 )     (3 )
                 
Balance, end of period
  $ 389     $ 424  
                 


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Table of Contents

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,  
    2011     2010  
    (In millions)  
 
Investment income:
               
Fixed maturity securities
  $ 3,683     $ 3,053  
Equity securities
    30       25  
Trading and other securities — Actively Traded Securities and FVO general account securities (1)
    28       15  
Mortgage loans
    759       673  
Policy loans
    160       176  
Real estate and real estate joint ventures
    156       46  
Other limited partnership interests
    243       265  
Cash, cash equivalents and short-term investments
    46       18  
International joint ventures (2)
    (19 )     17  
Other
    (32 )     86  
                 
Subtotal
    5,054       4,374  
Less: Investment expenses
    252       226  
                 
Subtotal, net
    4,802       4,148  
                 
Trading and other securities — FVO contractholder-directed unit-linked investments (1)
    419       64  
FVO consolidated securitization entities:
               
Commercial mortgage loans
    95       105  
Securities
    1       4  
                 
Subtotal
    515       173  
                 
Net investment income
  $ 5,317     $ 4,321  
                 
 
 
(1) Changes in estimated fair value subsequent to purchase included in net investment income:
 
                 
Trading and other securities — Actively Traded Securities and FVO general account securities
  $ 21     $ 7  
Trading and other securities— FVO contractholder-directed unit-linked investments
  $   316     $    57  
 
(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 ($23) million and ($32) million for the three months ended March 31, 2011 and 2010, respectively.
 
See “— Variable Interest Entities” for discussion of CSEs included in the table above.
 
Securities Lending
 
The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. The Company generally obtains collateral, generally cash, in an amount equal to 102% of the estimated fair value of the securities loaned, which is obtained at the inception of a loan and maintained at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received.
 
Elements of the securities lending programs are presented below at:
 
                 
    March 31, 2011     December 31, 2010  
    (In millions)  
 
Securities on loan:
               
Amortized cost
  $ 25,689     $ 23,715  
Estimated fair value
  $ 25,893     $ 24,230  
Aging of cash collateral liability:
               
Open (1)
  $ 3,672     $ 2,752  
Less than thirty days
    9,736       12,301  
Thirty days or greater but less than sixty days
    6,496       4,399  
Sixty days or greater but less than ninety days
    4,215       2,291  
Ninety days or greater
    2,346       2,904  
                 
Total cash collateral liability
  $ 26,465     $ 24,647  
                 
Security collateral on deposit from counterparties
  $ 11     $  
                 
Reinvestment portfolio — estimated fair value
  $ 26,188     $ 24,177  
                 
 
 
(1) Open — meaning that the related loaned security could be returned to the Company on the next business day requiring the Company to immediately return the cash collateral.
 
The estimated fair value of the securities on loan related to the cash collateral on open at March 31, 2011 was $3.6 billion, of which $3.1 billion were U.S. Treasury and agency securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan was primarily U.S. Treasury and agency securities, and very liquid RMBS. The U.S. Treasury securities on loan are primarily holdings of on-the-run U.S. Treasury securities, the most liquid U.S. Treasury securities available. If these high quality securities that are on loan are put back to the Company, the proceeds from immediately selling these securities can be used to satisfy the related cash requirements. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including RMBS, U.S. corporate securities, U.S. Treasury and agency securities, ABS, foreign corporate securities and CMBS). If the on loan securities or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities are put back to the Company.
 
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 consolidated financial statements.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
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, equity, trading and other securities and at carrying value for mortgage loans.
 
                 
    March 31, 2011     December 31, 2010  
    (In millions)  
 
Invested assets on deposit:
               
Regulatory agencies
  $ 2,085     $ 2,110  
Invested assets held in trust:
               
Collateral financing arrangements
    5,550       5,340  
Reinsurance arrangements
    2,206       3,090  
Invested assets pledged as collateral:
               
Funding agreements and advances — Federal Home Loan Bank (“FHLB”) of New York
    20,878       21,975  
Funding agreements — FHLB of Boston
    600       211  
Funding agreements — FHLB of Des Moines
    859        
Funding agreements — Federal Agricultural Mortgage Corporation
    3,160       3,159  
Federal Reserve Bank of New York
    1,633       1,822  
Collateral financing arrangements
    50       112  
Derivative transactions
    1,296       1,726  
Short sale agreements
    575       465  
                 
Total invested assets on deposit, held in trust and pledged as collateral
  $ 38,892     $ 40,010  
                 
 
See Note 3 “— Investments — Invested Assets on Deposit, Held in Trust and Pledged as Collateral” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the types of invested assets on deposit, held in trust and pledged as collateral and selected other information about the related program or counterparty. The Company has pledged fixed maturity securities in support of its funding agreements with the FHLB of Des Moines. See Note 8 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the nature of these arrangements.
 
See also “— Securities Lending” for the amount of the Company’s cash received from and due back to counterparties pursuant to the Company’s securities lending program. See “— Variable Interest Entities” for assets of certain CSEs that can only be used to settle liabilities of such entities.


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
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 FVO has been elected:
 
                 
    March 31, 2011     December 31, 2010  
    (In millions)  
 
Actively Traded Securities
  $ 572     $ 463  
FVO general account securities
    173       131  
FVO contractholder-directed unit-linked investments
    18,459       17,794  
FVO securities held by consolidated securitization entities
    161       201  
                 
Total trading and other securities — at estimated fair value
  $ 19,365     $ 18,589  
                 
Actively Traded Securities — at estimated fair value
  $ 572     $ 463  
Short sale agreement liabilities — at estimated fair value
    (47 )     (46 )
                 
Net long/short position — at estimated fair value
  $ 525     $ 417  
                 
Investments pledged to secure short sale agreement liabilities
  $ 575     $ 465  
                 
 
See Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for discussion of FVO contractholder-directed unit-linked investments and “— Variable Interest Entities” for discussion of 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 net investment income and net investment gains (losses), as applicable.
 
Mortgage Loans
 
Mortgage loans are summarized as follows at:
 
                                 
    March 31, 2011     December 31, 2010  
    Carrying
    % of
    Carrying
    % of
 
    Value     Total     Value     Total  
    (In millions)  
 
Mortgage loans held-for-investment:
                               
Commercial
  $ 38,087       61.6 %   $ 37,818       60.7 %
Agricultural
    12,761       20.6       12,751       20.4  
Residential
    2,399       3.9       2,231       3.7  
                                 
Subtotal
    53,247       86.1       52,800       84.8  
Valuation allowances
    (621 )     (1.0 )     (664 )     (1.1 )
                                 
Subtotal mortgage loans held-for-investment, net
    52,626       85.1       52,136       83.7  
Commercial mortgage loans held by consolidated securitization entities — FVO
    6,771       11.0       6,840       11.0  
                                 
Total mortgage loans held-for-investment, net
    59,397       96.1       58,976       94.7  
                                 
Mortgage loans held-for-sale:
                               
Residential — FVO
    1,571       2.5       2,510       4.0  
Agricultural and residential mortgage loans — lower of amortized cost or estimated fair value
    864       1.4       811       1.3  
                                 
Total mortgage loans held-for-sale
    2,435       3.9       3,321       5.3  
                                 
Total mortgage loans, net
  $ 61,832       100.0 %   $ 62,297       100.0 %
                                 


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
See “— Variable Interest Entities” for discussion of CSEs included in the table above.
 
Concentration of Credit Risk — The Company diversifies its mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. The Company’s commercial and agricultural mortgage loans are collateralized by properties primarily located in the U.S., at 90%, with the remaining 10% collateralized by properties located outside the U.S., calculated as a percent of total mortgage loans held-for-investment (excluding commercial mortgage loans held by CSEs) at March 31, 2011. The carrying value of the Company’s commercial and agricultural mortgage loans located in California, New York and Texas were 20%, 9% and 7%, respectively, of total mortgage loans held-for-investment (excluding commercial mortgage loans held by CSEs) at March 31, 2011. Additionally, the Company manages risk when originating commercial and agricultural mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate.
 
Certain of the Company’s real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgage loans were $343 million and $283 million at March 31, 2011 and December 31, 2010, respectively.
 
The following tables present the recorded investment in mortgage loans held-for-investment, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, at:
 
                                 
    Commercial     Agricultural     Residential     Total  
    (In millions)  
 
March 31, 2011:
                               
Mortgage loans:
                               
Evaluated individually for credit losses
  $ 160     $ 105     $ 18     $ 283  
Evaluated collectively for credit losses
    37,927       12,656       2,381       52,964  
                                 
Total mortgage loans
    38,087       12,761       2,399       53,247  
                                 
Valuation allowances:
                               
Specific credit losses
    41       39       1       81  
Non-specifically identified credit losses
    491       37       12       540  
                                 
Total valuation allowances
    532       76       13       621  
                                 
Mortgage loans, net of valuation allowance
  $ 37,555     $ 12,685     $ 2,386     $ 52,626  
                                 
December 31, 2010:
                               
Mortgage loans:
                               
Evaluated individually for credit losses
  $ 120     $ 146     $ 13     $ 279  
Evaluated collectively for credit losses
    37,698       12,605       2,218       52,521  
                                 
Total mortgage loans
    37,818       12,751       2,231       52,800  
                                 
Valuation allowances:
                               
Specific credit losses
    36       52             88  
Non-specifically identified credit losses
    526       36       14       576  
                                 
Total valuation allowances
    562       88       14       664  
                                 
Mortgage loans, net of valuation allowance
  $ 37,256     $ 12,663     $ 2,217     $ 52,136  
                                 


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Table of Contents

MetLife, Inc.
 
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)
 
 
The following tables present the changes in the valuation allowance, by portfolio segment:
 
                                 
    Mortgage Loan Valuation Allowances  
    Commercial     Agricultural     Residential     Total  
    (In millions)  
 
Balance at January 1, 2010
  $ 589     $ 115     $ 17     $ 721  
Provision (release)
    35       6             41  
Charge-offs, net of recoveries
          (11 )           (11 )
                                 
Balance at March 31, 2010
  $ 624     $ 110     $ 17     $ 751  
                                 
Balance at January 1, 2011
  $ 562     $ 88     $ 14     $ 664  
Provision (release)
    (30 )     (9 )           (39 )
Charge-offs, net of recoveries
          (3 )     (1 )     (4 )
                                 
Balance at March 31, 2011
  $ 532     $ 76     $ 13     $ 621  
                                 
 
Commercial Mortgage Loans — by Credit Quality Indicators with Estimated Fair Value:  Presented below for the commercial mortgage loans held-for-investment is the recorded investment, prior to valuation allowances, by the indicated loan-to-value ratio categories and debt service coverage ratio categories and estimated fair value of such mortgage loans by the indicated loan-to-value ratio categories at:
 
                                                         
    Recorded Investment              
    Debt Service Coverage Ratios                 Estimated
       
    > 1.20x     1.00x - 1.20x     < 1.00x     Total     % of Total     Fair Value     % of Total  
          (In millions)                 (In millions)        
 
March 31, 2011:
                                                       
                                                         
Loan-to-value ratios:
                                                       
Less than 65%
  $ 17,994     $ 182     $ 338     $ 18,514       48.6 %   $ 19,604       49.9 %
65% to 75%
    9,700       554       598       10,852       28.5       11,276       28.7  
76% to 80%
    2,763       321       109       3,193       8.4       3,268       8.3  
Greater than 80%
    3,858       984       686       5,528       14.5       5,124       13.1  
                                                         
Total
  $ 34,315     $ 2,041     $ 1,731     $ 38,087       100.0 %   $ 39,272       100.0 %
                                                         
                                                         
December 31, 2010:
                                                       
                                                         
Loan-to-value ratios: