Investments

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Investments

8. Investments

See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies.

Investment Risks and Uncertainties

Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements.

The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available.

The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities (“ABS”), certain structured investment transactions and FVO Securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned.

Fixed Maturity Securities AFS

Fixed Maturity Securities AFS by Sector

The following table presents the fixed maturity securities AFS by sector. Municipals includes taxable and tax-exempt revenue bonds, and to a much lesser extent, general obligations of states, municipalities and political subdivisions. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities AFS. Included within fixed maturity securities AFS are structured securities including RMBS, ABS and commercial mortgage-backed securities (“CMBS”) (collectively, “Structured Securities”).

	December 31, 2018											December 31, 2017
	Amortized Cost		Gross Unrealized							Estimated Fair Value		Amortized Cost		Gross Unrealized							Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses (1)							Gains		Temporary Losses		OTTI Losses (1)
	(In millions)
U.S. corporate	$	77,761	$	3,467	$	2,280	$	—		$	78,948	$	76,005	$	7,007	$	351	$	—		$	82,661
Foreign government	56,353		6,406		471		—			62,288		55,351		6,495		312		—			61,534
Foreign corporate	56,290		2,438		2,025		—			56,703		52,409		3,836		676		—			55,569
U.S. government and agency	37,030		2,756		464		—			39,322		43,446		4,227		279		—			47,394
RMBS	27,409		920		394		(26		)	27,961		27,846		1,145		233		(42		)	28,800
ABS	12,552		74		153		1			12,472		12,213		116		39		(1		)	12,291
Municipals	10,376		1,228		71		—			11,533		10,752		1,717		13		1			12,455
CMBS	9,045		115		122		—			9,038		8,047		222		42		—			8,227
Total fixed maturity securities AFS	$	286,816	$	17,404	$	5,980	$	(25	)	$	298,265	$	286,069	$	24,765	$	1,945	$	(42	)	$	308,931

__________________

(1) Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”

The Company held non-income producing fixed maturity securities AFS with an estimated fair value of $15 million and $6 million with unrealized gains (losses) of ($1) million and ($4) million at December 31, 2018 and 2017, respectively.

Methodology for Amortization of Premium and Accretion of Discount on Structured Securities

Amortization of premium and accretion of discount on Structured Securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for Structured Securities are estimated using inputs obtained from third-party specialists and based on management’s knowledge of the current market. For credit-sensitive and certain prepayment-sensitive Structured Securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis.

Maturities of Fixed Maturity Securities AFS

The amortized cost and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at December 31, 2018:

	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Securities		Total Fixed Maturity Securities AFS
	(In millions)
Amortized cost	$	12,704	$	54,663	$	59,986	$	110,457	$	49,006	$	286,816
Estimated fair value	$	12,734	$	55,876	$	61,116	$	119,068	$	49,471	$	298,265

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity.

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at:

	December 31, 2018								December 31, 2017
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(Dollars in millions)
U.S. corporate	$	32,430	$	1,663	$	5,826	$	617	$	5,604	$	92	$	4,115	$	259
Foreign government	4,392		243		2,902		228		4,234		83		3,251		229
Foreign corporate	19,564		1,230		5,765		795		4,422		99		6,802		577
U.S. government and agency	6,813		58		8,937		406		18,273		93		3,560		186
RMBS	6,506		120		6,423		248		6,359		50		4,159		141
ABS	8,230		138		392		16		1,695		7		729		31
Municipals	1,380		46		349		25		182		2		346		12
CMBS	3,893		67		707		55		1,174		9		413		33
Total fixed maturity securities AFS	$	83,208	$	3,565	$	31,301	$	2,390	$	41,943	$	435	$	23,375	$	1,468
Total number of securities in an unrealized loss position	6,913				2,335				2,598				1,955

Evaluation of Fixed Maturity Securities AFS for OTTI and Evaluating Temporarily Impaired Fixed Maturity Securities AFS

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below amortized cost; (ii) the potential for impairments when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted natural resources; (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to Structured Securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating agencies.

The methodology and significant inputs used to determine the amount of credit loss are as follows:

• The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment.

• When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies.

• Additional considerations are made when assessing the unique features that apply to certain Structured Securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for the following types of securities: U.S. and foreign corporate, foreign government and municipals, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described above, as well as any private and public sector programs to restructure such securities.

With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security’s cost and its estimated fair value with a corresponding charge to earnings.

The amortized cost of securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value.

In periods subsequent to the recognition of OTTI on a security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the security in a prospective manner based on the amount and timing of estimated future cash flows.

Current Period Evaluation

Based on the Company’s current evaluation of its 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 concluded that these securities were not other-than-temporarily impaired at December 31, 2018. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation and foreign currency exchange rates. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities AFS increased $4.1 billion during the year ended December 31, 2018 to $6.0 billion. The increase in gross unrealized losses for the year ended December 31, 2018 was primarily attributable to increases in interest rates, widening credit spreads and, to a lesser extent, the impact of weakening of certain foreign currencies on non-functional currency denominated fixed maturity securities AFS.

At December 31, 2018, $155 million of the total $6.0 billion of gross unrealized losses were from 42 fixed maturity securities AFS with an unrealized loss position of 20% or more of amortized cost for six months or greater.

Investment Grade Fixed Maturity Securities AFS

Of the $155 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $91 million, or 59%, were related to gross unrealized losses on 20 investment grade fixed maturity securities AFS. Unrealized losses on investment grade fixed maturity securities AFS are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities AFS, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities AFS

Of the $155 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $64 million, or 41%, were related to gross unrealized losses on 22 below investment grade fixed maturity securities AFS. Unrealized losses on below investment grade fixed maturity securities AFS are principally related to U.S. and foreign corporate securities (primarily industrial and utility securities) and CMBS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers and evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security.

Equity Securities

Equity securities are summarized as follows at:

	December 31, 2018				December 31, 2017
	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
	(Dollars in millions)
Common stock	$	1,037	72.0	%	$	2,035	81.0	%
Non-redeemable preferred stock	403		28.0		478		19.0
Total equity securities	$	1,440	100.0	%	$	2,513	100.0	%

In connection with the adoption of new guidance related to the recognition and measurement of financial instruments (see Note 1), effective January 1, 2018, the Company has reclassified its investment in common stock in FHLB from equity securities to other invested assets. These investments are carried at redemption value and are considered restricted investments until redeemed by the respective FHLBanks. The carrying value of these investments at December 31, 2017 was $792 million.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2018					2017
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	48,463		64.0	%	$	44,375		64.6	%
Agricultural	14,905			19.7		13,014			18.9
Residential	12,427			16.4		11,136			16.2
Total recorded investment	75,795			100.1		68,525			99.7
Valuation allowances	(342		)	(0.5	)	(314		)	(0.5	)
Subtotal mortgage loans, net	75,453			99.6		68,211			99.2
Residential — FVO	299			0.4		520			0.8
Total mortgage loans, net	$	75,752		100.0	%	$	68,731		100.0	%

Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential mortgage loans — FVO is presented in Note 10. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis.

The amount of net discounts, included within total recorded investment, is primarily attributable to residential mortgage loans, and at December 31, 2018 and 2017 was $944 million and $1.1 billion, respectively.

The carrying value of foreclosed mortgage loans included in real estate and real estate joint ventures was $45 million and $48 million at December 31, 2018 and 2017, respectively.

Purchases of mortgage loans, primarily residential, were $3.5 billion, $3.1 billion and $2.9 billion for the years ended December 31, 2018, 2017 and 2016, respectively.

Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment

Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:

	Evaluated Individually for Credit Losses										Evaluated Collectively for Credit Losses				Impaired Loans
	Impaired Loans with a Valuation Allowance						Impaired Loans without a Valuation Allowance
	Unpaid Principal Balance		Recorded Investment		Valuation Allowances		Unpaid Principal Balance		Recorded Investment		Recorded Investment		Valuation Allowances		Carrying Value		Average Recorded Investment
	(In millions)
December 31, 2018
Commercial	$	—	$	—	$	—	$	—	$	—	$	48,463	$	238	$	—	$	—
Agricultural	31		31		3		169		169		14,705		43		197		123
Residential	—		—		—		431		386		12,041		58		386		358
Total	$	31	$	31	$	3	$	600	$	555	$	75,209	$	339	$	583	$	481
December 31, 2017
Commercial	$	—	$	—	$	—	$	—	$	—	$	44,375	$	214	$	—	$	5
Agricultural	22		21		2		27		27		12,966		39		46		32
Residential	—		—		—		358		324		10,812		59		324		285
Total	$	22	$	21	$	2	$	385	$	351	$	68,153	$	312	$	370	$	322

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $90 million, $49 million and $188 million, respectively, for the year ended December 31, 2016.

Valuation Allowance Rollforward by Portfolio Segment

The changes in the valuation allowance, by portfolio segment, were as follows:

	Commercial			Agricultural			Residential			Total
	(In millions)
Balance at January 1, 2016	$	188		$	37		$	56		$	281
Provision (release) (1)	157			3			23			183
Charge-offs, net of recoveries (1)	(143		)	(1		)	(16		)	(160		)
Balance at December 31, 2016	202			39			63			304
Provision (release)	12			4			8			24
Charge-offs, net of recoveries	—			(2		)	(12		)	(14		)
Balance at December 31, 2017	214			41			59			314
Provision (release)	24			5			7			36
Charge-offs, net of recoveries	—			—			(8		)	(8		)
Balance at December 31, 2018	$	238		$	46		$	58		$	342

__________________

(1) In connection with an acquisition in 2010, certain impaired commercial mortgage loans were acquired and accordingly, were not originated by the Company. Such commercial mortgage loans have been accounted for as purchased credit impaired (“PCI”) commercial mortgage loans. Decreases in cash flows expected to be collected on PCI commercial mortgage loans can result in provisions for losses on mortgage loans. For the year ended December 31,2016, in connection with the maturity of an acquired PCI commercial mortgage loan, an increase to the commercial mortgage loan valuation allowance of$143 millionwas recorded and charged-off upon maturity. The Company has recovered a substantial portion of the loss on the loan incurred through an indemnification agreement entered into in connection with the acquisition in 2010.

Valuation Allowance Methodology

Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan’s original effective interest rate, (ii) the estimated fair value of the loan’s underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan’s observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company’s experience with loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available.

Commercial and Agricultural Mortgage Loan Portfolio Segments

The Company typically uses several years of historical experience in establishing non-specific valuation allowances which capture multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for commercial and agricultural mortgage loans.

All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio.

For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.

For agricultural mortgage loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company’s historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

Credit Quality of Commercial Mortgage Loans

The credit quality of commercial mortgage loans was as follows at:

	Recorded Investment										Estimated Fair Value		% of Total
	Debt Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x
	(Dollars in millions)
December 31, 2018
Loan-to-value ratios:
Less than 65%	$	40,360	$	827	$	101	$	41,288	85.2	%	$	41,599	85.3	%
65% to 75%	5,790		—		25		5,815		12.0		5,849		12.0
76% to 80%	423		209		56		688		1.4		664		1.4
Greater than 80%	496		176		—		672		1.4		635		1.3
Total	$	47,069	$	1,212	$	182	$	48,463	100.0	%	$	48,747	100.0	%
December 31, 2017
Loan-to-value ratios:
Less than 65%	$	37,073	$	1,483	$	201	$	38,757	87.4	%	$	39,528	87.7	%
65% to 75%	4,183		98		119		4,400		9.9		4,408		9.8
76% to 80%	235		210		57		502		1.1		476		1.0
Greater than 80%	401		168		147		716		1.6		672		1.5
Total	$	41,892	$	1,959	$	524	$	44,375	100.0	%	$	45,084	100.0	%

Credit Quality of Agricultural Mortgage Loans

The credit quality of agricultural mortgage loans was as follows at:

	December 31,
	2018				2017
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	13,704	92.0	%	$	12,347	94.9	%
65% to 75%	1,145		7.7		618		4.7
76% to 80%	33		0.2		40		0.3
Greater than 80%	23		0.1		9		0.1
Total	$	14,905	100.0	%	$	13,014	100.0	%

The estimated fair value of agricultural mortgage loans was $14.9 billion and $13.1 billion at December 31, 2018 and 2017, respectively.

Credit Quality of Residential Mortgage Loans

The credit quality of residential mortgage loans was as follows at:

	December 31,
	2018				2017
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	11,956	96.2	%	$	10,622	95.4	%
Nonperforming (1)	471		3.8		514		4.6
Total	$	12,427	100.0	%	$	11,136	100.0	%

__________________

(1) Includes residential mortgage loans in process of foreclosure of $140 million and $133 million at December 31, 2018 and 2017, respectively.

The estimated fair value of residential mortgage loans was $12.7 billion and $11.6 billion at December 31, 2018 and 2017, respectively.

Past Due and Nonaccrual Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both December 31, 2018 and 2017. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:

	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual
	December 31, 2018		December 31, 2017		December 31, 2018		December 31, 2017		December 31, 2018		December 31, 2017
	(In millions)
Commercial	$	9	$	—	$	9	$	—	$	176	$	—
Agricultural	204		134		109		125		105		36
Residential	471		514		35		33		436		481
Total	$	684	$	648	$	153	$	158	$	717	$	517

Mortgage Loans Modified in a Troubled Debt Restructuring

The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concessions granted are considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring.

For the year ended December 31, 2018, the Company had 440 residential mortgage loans modified in a troubled debt restructuring with carrying value of $96 million and $92 million pre-modification and post-modification, respectively. For the year ended December 31, 2017, the Company had 500 residential mortgage loans modified in a troubled debt restructuring with carrying value of $120 million and $108 million pre-modification and post-modification, respectively. For the years ended December 31, 2018 and 2017, the Company did not have a significant amount of agricultural mortgage loans and no commercial mortgage loans modified in a troubled debt restructuring.

For both the years ended December 31, 2018 and 2017, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring with subsequent payment default.

Other Invested Assets

Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), tax credit and renewable energy partnerships, annuities funding structured settlement claims, leveraged and direct financing leases and operating joint ventures.

Tax Credit Partnerships

The carrying value of tax credit partnerships was $1.7 billion and $1.8 billion at December 31, 2018 and 2017, respectively. Losses from tax credit partnerships included within net investment income were $257 million, $259 million, and $167 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Leveraged and Direct Financing Leases

Investment in leveraged and direct financing leases consisted of the following at:

	December 31,
	2018						2017
	Leveraged Leases			Direct Financing Leases			Leveraged Leases			Direct Financing Leases
	(In millions)
Rental receivables, net	$	715		$	1,855		$	912		$	2,303
Estimated residual values	807			42			838			42
Subtotal	1,522			1,897			1,750			2,345
Unearned income	(414		)	(705		)	(472		)	(1,022		)
Investment in leases	$	1,108		$	1,192		$	1,278		$	1,323

Rental receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 15 years but in certain circumstances can be over 25 years, while the payment periods for direct financing leases generally range from one to 25 years but in certain circumstances can be over 25 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At both December 31, 2018 and 2017, all leveraged lease receivables were performing and over 99% of direct financing rental receivables were performing.

The Company’s deferred income tax liability related to leveraged leases was $519 million and $934 million at December 31, 2018 and 2017, respectively.

The components of income from investment in leveraged and direct financing leases, excluding net investment gains (losses), were as follows:

	Years Ended December 31,
	2018				2017				2016
	Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases
	(In millions)
Lease investment income	$	47	$	95	$	19	$	89	$	51	$	51
Less: Income tax expense	10		20		7		31		18		18
Lease investment income, net of income tax	$	37	$	75	$	12	$	58	$	33	$	33

Cash Equivalents

The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $9.0 billion and $6.2 billion at December 31, 2018 and 2017, respectively.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities AFS, equity securities and derivatives and the effect on DAC, VOBA, DSI, future policy benefits and the policyholder dividend obligation that would result from the realization of the unrealized gains (losses) are included in net unrealized investment gains (losses) in AOCI.

The components of net unrealized investment gains (losses) included in AOCI were as follows:

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Fixed maturity securities AFS	$	11,356		$	22,645		$	20,330
Fixed maturity securities AFS with noncredit OTTI losses included in AOCI	25			41			8
Total fixed maturity securities AFS	11,381			22,686			20,338
Equity securities	—			421			485
Derivatives	2,127			1,453			2,923
Other	290			46			23
Subtotal	13,798			24,606			23,769
Amounts allocated from:
Future policy benefits	31			(77		)	(1,114		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	—			—			(3		)
DAC, VOBA and DSI	(1,231		)	(1,768		)	(1,430		)
Policyholder dividend obligation	(428		)	(2,121		)	(1,931		)
Subtotal	(1,628		)	(3,966		)	(4,478		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(3		)	(12		)	(1		)
Deferred income tax benefit (expense)	(3,502		)	(6,958		)	(6,634		)
Net unrealized investment gains (losses)	8,665			13,670			12,656
Net unrealized investment gains (losses) attributable to noncontrolling interests	(10		)	(8		)	(6		)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	8,655		$	13,662		$	12,650

Net unrealized investment gains (losses) attributable to MetLife, Inc. in the above table include, on a net of income tax basis, $1,250 million for the year ended December 31, 2016, related to assets and liabilities of a disposed subsidiary.

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

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Balance at January 1,	$	13,662		$	12,650		$	11,769
Cumulative effects of changes in accounting principles, net of income tax (Note 1)	1,258			—			—
Fixed maturity securities AFS on which noncredit OTTI losses have been recognized	(16		)	33			84
Unrealized investment gains (losses) during the year	(10,367		)	804			2,544
Unrealized investment gains (losses) relating to:
Future policy benefits	108			1,037			(951		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	—			3			(3		)
DAC, VOBA and DSI	537			(338		)	(157		)
Policyholder dividend obligation	1,693			(190		)	(148		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	9			(11		)	(28		)
Deferred income tax benefit (expense)	1,773			(324		)	(485		)
Net unrealized investment gains (losses)	8,657			13,664			12,625
Net unrealized investment gains (losses) attributable to noncontrolling interests	(2		)	(2		)	25
Balance at December 31,	$	8,655		$	13,662		$	12,650
Change in net unrealized investment gains (losses)	$	(5,005	)	$	1,014		$	856
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	(2		)	(2		)	25
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(5,007	)	$	1,012		$	881

Net unrealized investment gains (losses) attributable to MetLife, Inc. in the above table include, on a net of income tax basis, ($304) million for the year ended December 31, 2016, related to assets and liabilities of a disposed subsidiary.

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, were in fixed income securities of the Japanese government and its agencies with an estimated fair value of $30.2 billion and $27.5 billion at December 31, 2018 and 2017, respectively, and in fixed income securities of the South Korean government and its agencies with an estimated fair value of $7.1 billion and $6.5 billion at December 31, 2018 and 2017, respectively.

Securities Lending and Repurchase Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of the securities lending and repurchase agreements transactions is as follows:

	December 31,
	2018								2017
	Securities on Loan (1)								Securities on Loan (1)
	Amortized Cost		Estimated Fair Value		Cash Collateral Received from Counterparties (2) (3)		Reinvestment Portfolio at Estimated Fair Value		Amortized Cost		Estimated Fair Value		Cash Collateral Received from Counterparties (2) (3)		Reinvestment Portfolio at Estimated Fair Value
							(In millions)
Securities lending	$	16,969	$	17,724	$	18,005	$	18,074	$	17,801	$	19,028	$	19,417	$	19,508
Repurchase agreements	$	1,033	$	1,093	$	1,067	$	1,069	$	994	$	1,141	$	1,102	$	1,102

__________________

(1) Securities on loan in connection with securities lending are included within fixed maturities securities AFS and securities on loan in connection with repurchase agreements are included within fixed maturities securities AFS, cash equivalents and short-term investments.

(2) In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $78 million and $19 millionat December 31, 2018 and 2017, respectively, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.

(3) The securities lending liability for cash collateral is included within payables for collateral under securities loaned and other transactions, and the repurchase agreements liability for cash collateral is included within payables for collateral under securities loaned and other transactions and other liabilities.

Contractual Maturities

A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follow:

	December 31,
	2018								2017
	Remaining Maturities of the Agreements								Remaining Maturities of the Agreements
	Open (1)		1 Month or Less		Over  1 to 6 Months		Total		Open (1)		1 Month or Less		Over 1 to 6 Months		Total
	(In millions)
Cash collateral liability by loaned security type:
Securities lending:
U.S. government and agency	$	2,736	$	8,995	$	5,220	$	16,951	$	3,753	$	6,031	$	8,607	$	18,391
Foreign government	—		214		761		975		—		192		834		1,026
Agency RMBS	—		79		—		79		—		—		—		—
Total	$	2,736	$	9,288	$	5,981	$	18,005	$	3,753	$	6,223	$	9,441	$	19,417
Repurchase agreements:
U.S. government and agency	$	—	$	1,000	$	—	$	1,000	$	—	$	1,005	$	—	$	1,005
All other corporate and government	—		—		67		67		—		44		53		97
Total	$	—	$	1,000	$	67	$	1,067	$	—	$	1,049	$	53	$	1,102

__________________

(1) The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2018 was $2.7 billion, all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement.

The securities lending and repurchase agreements reinvestment portfolios acquired with the cash collateral consisted principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or held in cash. If the securities on loan 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 on loan are put back to the Company.

FHLB of Boston Advance Agreements

At December 31, 2018 and 2017, a subsidiary of the Company had pledged municipals with an estimated fair value of $1.2 billion and $564 million, respectively, as collateral and received $800 million and $300 million, respectively, in cash advances under short-term advance agreements with the FHLB of Boston. The liability to return the cash advances is included within payables for collateral under securities loaned and other transactions. The estimated fair value of the reinvestment portfolio acquired with the cash advances was $799 million and $300 million at December 31, 2018 and 2017, respectively, and consisted primarily of U.S. government and agency securities and Structured Securities. At December 31, 2018 and 2017, the reinvestment portfolio also included a $33 million and $12 million, at redemption value, required investment in FHLB of Boston common stock. The subsidiary is permitted to withdraw any portion of the pledged collateral over the minimum collateral requirement at any time, other than in the event of a default by the subsidiary.

The cash advance liability by loaned security type and remaining contractual maturities of the agreements was as follows at:

	December 31, 2018								December 31, 2017
	Remaining Maturities of the Agreements								Remaining Maturities of the Agreements
	1 Month or Less		Over 1 to 6 Months		6 Months to 1 Year		Total		1 Month or Less		Over 1 to 6 Months		6 Months to 1 Year		Total
	(In millions)
Cash advance liability by loaned security type:
Municipals	$	150	$	650	$	—	$	800	$	—	$	300	$	—	$	300

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:

	December 31,
	2018		2017
	(In millions)
Invested assets on deposit (regulatory deposits)	$	1,788	$	1,879
Invested assets held in trust (collateral financing arrangement and reinsurance agreements)	2,971		2,490
Invested assets pledged as collateral (1)	24,168		24,174
Total invested assets on deposit, held in trust and pledged as collateral	$	28,927	$	28,543

__________________

(1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4), derivative transactions (see Note 9), secured debt (see Note 12), and a collateral financing arrangement (see Note 13).

See “— Securities Lending and Repurchase Agreements” for information regarding securities supporting securities lending and repurchase agreement transactions and Note 7 for information regarding investments designated to the closed block. In addition, the restricted investment in FHLB common stock was $793 million and $792 million, at redemption value, at December 31, 2018 and 2017, respectively (see Note 1).

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as PCI investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If, subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI.

The Company’s PCI investments had an outstanding principal balance of $4.0 billion and $4.8 billion at December 31,2018 and 2017, respectively, which represents the contractually required principal and accrued interest payments whether or not currently due and a carrying value (estimated fair value of the investments plus accrued interest) of $3.3 billion and $4.0 billion at December 31, 2018 and 2017, respectively. Accretion of accretable yield on PCI investments recognized in earnings in net investment income was $275 million and $281 million for the years ended December 31, 2018 and 2017, respectively. Purchases of PCI investments were insignificant in both of the years ended December 31, 2018 and 2017.

Collectively Significant Equity Method Investments

The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $14.7 billion at December 31, 2018. The Company’s maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $5.3 billion at December 31, 2018. Except for certain real estate joint ventures and certain funds, the Company’s investments in its remaining real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities.

As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company’s consolidated pre-tax income (loss) from continuing operations for two of the three most recent annual periods: 2017 and 2016. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company’s proportionate share of the assets, liabilities, or earnings of such entities.

The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2018, 2017 and 2016. Aggregate total assets of these entities totaled $529.1 billion and $505.6 billion at December 31, 2018 and 2017, respectively. Aggregate total liabilities of these entities totaled $65.5 billion and $68.9 billion at December 31, 2018 and 2017, respectively. Aggregate net income (loss) of these entities totaled $52.5 billion, $37.9 billion and $26.8 billion for the years ended December 31, 2018, 2017 and 2016, respectively, with $270 million related to Brighthouse for the year ended December 31, 2016. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses).

Variable Interest Entities

The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to investment related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:

	December 31,
	2018				2017
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Renewable energy partnership (1)	$	102	$	—	$	116	$	3
Investment funds (2)	79		1		—		—
Other investments (1)	21		5		32		6
Total	$	202	$	6	$	148	$	9

__________________

(1) Assets of the renewable energy partnership and other investments primarily consisted of other invested assets.

(2) Assets of the investment funds primarily consisted of cash and cash equivalents.

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:

	December 31,
	2018				2017
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured Securities (2)	$	47,874	$	47,874	$	47,614	$	47,614
U.S. and foreign corporate	932		932		1,560		1,560
Other limited partnership interests	5,641		9,888		4,834		8,543
Other invested assets	1,906		2,063		2,291		2,625
Other investments	296		300		82		87
Total	$	56,649	$	61,057	$	56,381	$	60,429

__________________

(1) The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $94 million and $117 million at December 31, 2018 and 2017, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2) For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

As described in Note 20, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during each of the years ended December 31, 2018, 2017 and 2016.

During 2018 and 2017, the Company securitized certain residential mortgage loans and acquired an interest in the related RMBS issued. While the Company has a variable interest in the issuer of the securities, it is not the primary beneficiary of the issuer of the securities since it does not have any rights to remove the servicer or veto rights over the servicer’s actions. The carrying value and the estimated fair value of mortgage loans were $451 million and $478 million, respectively, for loans sold during 2018, and $319 million and $339 million, respectively, for loans sold during 2017. Gains on securitizations of $27 million and $20 million during the years ended December 31, 2018 and 2017, respectively, were included within net investment gains (losses). The estimated fair value of RMBS acquired in connection with the securitizations was $98 million and $52 million at December 31, 2018 and 2017, respectively, which was included in the carrying amount and maximum exposure to loss for Structured Securities presented above. See Note 10 for information on how the estimated fair value of mortgage loans and RMBS is determined, the valuation approaches and key inputs, their placement in the fair value hierarchy, and for certain RMBS, quantitative information about the significant unobservable inputs and the sensitivity of their estimated fair value to changes in those inputs.

Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2018			2017		2016
	(In millions)
Investment income:
Fixed maturity securities AFS	$	11,946		$	11,497	$	11,721
Equity securities	64			129		121
FVO Securities (1)	51			68		37
Mortgage loans	3,340			3,082		2,858
Policy loans	506			517		511
Real estate and real estate joint ventures	694			646		652
Other limited partnership interests	731			798		478
Cash, cash equivalents and short-term investments	387			228		153
Operating joint ventures	51			28		33
Other	364			192		248
Subtotal	18,134			17,185		16,812
Less: Investment expenses	1,285			1,122		972
Subtotal, net	16,849			16,063		15,840
Unit-linked investments (1)	(683		)	1,300		950
Net investment income	$	16,166		$	17,363	$	16,790

__________________

(1) Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods included in net investment income were principally from Unit-linked investments, and were ($771) million, $662 million and $427 million for the years ended December 31, 2018, 2017, and 2016, respectively.

The Company invests in real estate joint ventures, other limited partnership interests and tax credit and renewable energy partnerships, and also does business through certain operating joint ventures, the majority of which are accounted for under the equity method. Net investment income from other limited partnership interests and operating joint ventures, accounted for under the equity method; and real estate joint ventures and tax credit and renewable energy partnerships, primarily accounted for under the equity method, totaled $592 million, $495 million and $337 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

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

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Total gains (losses) on fixed maturity securities AFS:
Total OTTI losses recognized — by sector and industry:
U.S. and foreign corporate securities — by industry:
Consumer	$	(20	)	$	(4	)	$	—
Finance	(9		)	—			—
Industrial	(2		)	—			(63		)
Utility	—			—			(21		)
Communications	—			—			(3		)
Total U.S. and foreign corporate securities	(31		)	(4		)	(87		)
Foreign government	(9		)	—			—
ABS	—			(3		)	(2		)
RMBS	—			—			(18		)
Municipals	—			(3		)	—
OTTI losses on fixed maturity securities AFS recognized in earnings	(40		)	(10		)	(107		)
Fixed maturity securities AFS — net gains (losses) on sales and disposals (1)	45			328			251
Total gains (losses) on fixed maturity securities AFS	5			318			144
Total gains (losses) on equity securities:
Total OTTI losses recognized — by security type:
Common stock	—			(24		)	(75		)
Non-redeemable preferred stock	—			(1		)	—
OTTI losses on equity securities recognized in earnings	—			(25		)	(75		)
Equity securities — net gains (losses) on sales and disposals	118			117			19
Change in estimated fair value of equity securities (2)	(193		)	—			—
Total gains (losses) on equity securities	(75		)	92			(56		)
Mortgage loans (1)	(56		)	14			(231		)
Real estate and real estate joint ventures	326			603			182
Other limited partnership interests	9			(59		)	(64		)
Other	(169		)	(113		)	(130		)
Subtotal	40			855			(155		)
Change in estimated fair value of other limited partnership interests and real estate joint ventures	12			—			—
Non-investment portfolio gains (losses) (3), (4), (5)	(350		)	(1,162		)	471
Other	—			(1		)	1
Subtotal	(338		)	(1,163		)	472
Total net investment gains (losses)	$	(298	)	$	(308	)	$	317

__________________

(1) Fixedmaturity securities AFS — net gains (losses) on sales and disposals and mortgage loans for the year endedDecember 31, 2017, included$276 millionand$47 million, respectively, in previously deferred gains on prior period transfers of such investments to Brighthouse. Such gains are no longer eliminated in consolidation after the Separation. SeeNote 3.

(2) Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were ($81) million for the year ended December 31, 2018. See Note 1.

(3) Non-investment portfolio gains (losses) for the year ended December 31, 2018 includes a loss of$327 million which represents both the change in estimated fair value of FVO Brighthouse Common Stock held by the Company through the date of disposal and the loss on disposal in June 2018. Non-investment portfolio gains (losses) for the year ended December 31, 2017 included (i) a loss of $1,016 million which represents a mark-to-market loss on the Company’s retained investment in Brighthouse Financial, Inc. at Separation and (ii) a loss of $95 million which represents the change in estimated fair value of FVO Brighthouse Common Stock held by the Company from the date of Separation to December 31, 2017. See Note 3.

(4) Non-investment portfolio gains (losses) for the year ended December 31, 2017 includes a $98 million loss due to the disposition of MetLife Afore. See Note 3.

(5) Non-investment portfolio gains (losses) for the year ended December 31, 2016 includes a gain of $102 million in connection with the U.S. Retail Advisor Force Divestiture. See Note 3.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($16) million, ($6) million and $225 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Sales or Disposals and Impairments of Fixed Maturity Securities AFS

Sales of securities are determined on a specific identification basis. Proceeds from sales or disposals and the components of net investment gains (losses) were as shown in the table below:

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Proceeds	$	85,058		$	56,509		$	86,179
Gross investment gains	$	856		$	753		$	1,048
Gross investment losses	(811		)	(425		)	(797		)
OTTI losses	(40		)	(10		)	(107		)
Net investment gains (losses)	$	5		$	318		$	144

Credit Loss Rollforward

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities AFS still held for which a portion of the OTTI loss was recognized in OCI:

	Years Ended December 31,
	2018			2017
	(In millions)
Balance at January 1,	$	138		$	187
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI	(47		)	(48		)
Increase in cash flows — accretion of previous credit loss OTTI	(2		)	(1		)
Balance at December 31,	$	89		$	138