Investments

12 Months Ended

Dec. 31, 2019

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. U.S. corporate and foreign corporate sectors include redeemable preferred stock. RMBS includes agency, prime, alternative and sub-prime mortgage-backed securities. ABS includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS and CMBS are collectively, “Structured Products.”

	December 31, 2019											December 31, 2018
	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	$	79,115	$	8,943	$	305	$	—		$	87,753	$	77,761	$	3,467	$	2,280	$	—		$	78,948
Foreign government	58,840		8,710		321		—			67,229		56,353		6,406		471		—			62,288
Foreign corporate	59,342		5,540		717		—			64,165		56,290		2,438		2,025		—			56,703
U.S. government and agency	37,586		4,604		106		—			42,084		37,030		2,756		464		—			39,322
RMBS	27,051		1,535		72		(33		)	28,547		27,409		920		394		(26		)	27,961
ABS	14,547		83		88		—			14,542		12,552		74		153		1			12,472
Municipals	11,081		2,001		29		—			13,053		10,376		1,228		71		—			11,533
CMBS	10,093		396		42		—			10,447		9,045		115		122		—			9,038
Total fixed maturity securities AFS	$	297,655	$	31,812	$	1,680	$	(33	)	$	327,820	$	286,816	$	17,404	$	5,980	$	(25	)	$	298,265

__________________

(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).”

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

Amortization of premium and accretion of discount on Structured Products 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 Products 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 Products, the effective yield is recalculated on a prospective basis. For all other Structured Products, 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, 2019:

	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 Products		Total Fixed Maturity Securities AFS
	(In millions)
Amortized cost	$	17,822	$	48,014	$	58,800	$	121,328	$	51,691	$	297,655
Estimated fair value	$	17,960	$	50,058	$	64,135	$	142,131	$	53,536	$	327,820

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 Products 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 by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position at:

	December 31, 2019								December 31, 2018
	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	$	3,817	$	107	$	2,226	$	198	$	32,430	$	1,663	$	5,826	$	617
Foreign government	3,295		149		1,490		172		4,392		243		2,902		228
Foreign corporate	3,188		133		5,873		584		19,564		1,230		5,765		795
U.S. government and agency	5,391		97		196		9		6,813		58		8,937		406
RMBS	2,341		25		584		14		6,506		120		6,423		248
ABS	3,692		22		4,843		66		8,230		138		392		16
Municipals	1,156		29		1		—		1,380		46		349		25
CMBS	1,926		16		487		26		3,893		67		707		55
Total fixed maturity securities AFS	$	24,806	$	578	$	15,700	$	1,069	$	83,208	$	3,565	$	31,301	$	2,390
Total number of securities in an unrealized loss position	2,153				1,411				6,913				2,335

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 Products, 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 Products 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, 2019. 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 decreased $4.3 billion for the year ended December 31, 2019 to $1.6 billion. The decrease in gross unrealized losses for the year ended December 31, 2019 was primarily attributable to decreases in interest rates, narrowing credit spreads and, to a lesser extent, foreign currency exchange rate movements.

At December 31, 2019, $161 million of the total $1.6 billion of gross unrealized losses were from 70 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 $161 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, $92 million, or 57%, were related to gross unrealized losses on 23 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 $161 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, $69 million, or 43%, were related to gross unrealized losses on 47 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 financial institutions) and foreign government securities which have experienced significantly wider credit spreads 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, financial condition and near-term and long-term prospects of the issuers. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows and financial condition of the issuers and any country-specific economic conditions or public sector programs.

Equity Securities

Equity securities are summarized as follows at:

	December 31, 2019				December 31, 2018
	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
	(Dollars in millions)
Common stock	$	944	70.3	%	$	1,037	72.0	%
Non-redeemable preferred stock	398		29.7		403		28.0
Total equity securities	$	1,342	100.0	%	$	1,440	100.0	%

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2019					2018
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	49,624		61.6	%	$	48,463		64.0	%
Agricultural	16,695			20.7		14,905			19.7
Residential	14,316			17.8		12,427			16.4
Total recorded investment	80,635			100.1		75,795			100.1
Valuation allowances	(353		)	(0.4	)	(342		)	(0.5	)
Subtotal mortgage loans, net	80,282			99.7		75,453			99.6
Residential — FVO (1)	188			0.2		299			0.4
Total mortgage loans held-for-investment, net	80,470			99.9		75,752			100.0
Mortgage loans held-for-sale	59			0.1		—			—
Total mortgage loans, net	$	80,529		100.0	%	$	75,752		100.0	%

____________________

(1) 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, primarily residential, was $867 million and $944 million at December 31, 2019 and 2018, respectively.

Purchases of mortgage loans, primarily residential, were $4.8 billion, $3.5 billion and $3.1 billion for the years ended December 31, 2019, 2018 and 2017, respectively.

Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment

Mortgage loans held-for-investment 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, 2019
Commercial	$	—	$	—	$	—	$	—	$	—	$	49,624	$	246	$	—	$	—
Agricultural	56		56		3		201		201		16,438		49		254		201
Residential	—		—		—		473		427		13,889		55		427		406
Total	$	56	$	56	$	3	$	674	$	628	$	79,951	$	350	$	681	$	607
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

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $5 million, $32 million and $285 million, respectively, for the year ended December 31, 2017.

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, 2017	$	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
Provision (release)	8		11			7			26
Charge-offs, net of recoveries	—		(5		)	(10		)	(15		)
Balance at December 31, 2019	$	246	$	52		$	55		$	353

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 held-for-investment 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, 2019
Loan-to-value ratios:
Less than 65%	$	38,926	$	1,195	$	619	$	40,740	82.1	%	$	42,330	82.4	%
65% to 75%	6,975		54		398		7,427		15.0		7,589		14.8
76% to 80%	564		17		237		818		1.6		805		1.6
Greater than 80%	405		234		—		639		1.3		616		1.2
Total	$	46,870	$	1,500	$	1,254	$	49,624	100.0	%	$	51,340	100.0	%
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	%

Credit Quality of Agricultural Mortgage Loans

The credit quality of agricultural mortgage loans held-for-investment was as follows at:

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	15,618	93.5	%	$	13,704	92.0	%
65% to 75%	963		5.8		1,145		7.7
76% to 80%	71		0.4		33		0.2
Greater than 80%	43		0.3		23		0.1
Total	$	16,695	100.0	%	$	14,905	100.0	%

Credit Quality of Residential Mortgage Loans

The credit quality of residential mortgage loans held-for-investment was as follows at:

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	13,864	96.8	%	$	11,956	96.2	%
Nonperforming (1)	452		3.2		471		3.8
Total	$	14,316	100.0	%	$	12,427	100.0	%

__________________

(1) Includes residential mortgage loans held-for-investment in process of foreclosure of $118 million and $140 million at December 31, 2019 and 2018, 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, 2019 and 2018. 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, 2019		December 31, 2018		December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
	(In millions)
Commercial	$	10	$	9	$	9	$	9	$	176	$	176
Agricultural	129		204		7		109		137		105
Residential	452		471		35		35		418		436
Total	$	591	$	684	$	51	$	153	$	731	$	717

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, 2019, the Company had 396 residential mortgage loans modified in a troubled debt restructuring with carrying value of $97 million and $87 million pre-modification and post-modification, respectively. 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, 2019, the Company had three agricultural mortgage loans modified in a troubled debt restructuring with carrying value of $111 million for both pre-modification and post-modification. For the year ended December 31, 2018, the Company did not have a significant amount of agricultural mortgage loans modified in a troubled debt restructuring. For both years ended December 31, 2019 and 2018, the Company did not have commercial mortgage loans modified in a troubled debt restructuring.

Real Estate and Real Estate Joint Ventures

The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, are as follows at and for the periods indicated:

	December 31, 2019		December 31, 2018		Years Ended December 31,
					2019		2018		2017
	Carrying Value				Income
	(In millions)
Leased real estate investments	$	4,893	$	4,132	$	380	$	399	$	379
Other real estate investments	420		461		192		188		189
Real estate joint ventures	5,428		5,105		104		107		78
Total real estate and real estate joint ventures	$	10,741	$	9,698	$	676	$	694	$	646

The carrying value of real estate investments acquired through foreclosure was $36 million and $45 million at December 31, 2019 and 2018, respectively. Depreciation expense on real estate investments was $100 million, $92 million and $103 million for the years ended December 31, 2019, 2018 and 2017, respectively. Real estate investments were net of accumulated depreciation of $957 million and $931 million at December 31, 2019 and 2018, respectively.

Leases

Leased Real Estate Investments - Operating Leases

The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification, primarily across the United States. Leased real estate investments and income earned, by property type, are as follows at and for the periods indicated:

	December 31, 2019		December 31, 2018		Years Ended December 31,
					2019		2018		2017
	Carrying Value				Income
	(In millions)
Leased real estate investments:
Office	$	1,999	$	1,999	$	175	$	169	$	157
Retail	1,127		1,006		102		95		92
Apartment	778		253		24		70		72
Industrial	306		223		46		38		39
Land	514		489		21		19		13
Hotel	93		94		7		3		2
Other	76		68		5		5		4
Total leased real estate investments	$	4,893	$	4,132	$	380	$	399	$	379

Future contractual receipts under operating leases as of December 31, 2019 are $288 million in 2020, $240 million in 2021, $205 million in 2022, $186 million in 2023, $159 million in 2024, $1.1 billion thereafter, and in total are $2.2 billion.

Leveraged and Direct Financing Leases

The Company has diversified leveraged lease and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated at inception of the lease using available third-party data. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rents to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a third party.

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

	December 31, 2019						December 31, 2018
	Leveraged Leases			Direct Financing Leases			Leveraged Leases			Direct Financing Leases
	(In millions)
Lease receivables, net (1)	$	666		$	1,931		$	715		$	1,855
Estimated residual values	751			42			807			42
Subtotal	1,417			1,973			1,522			1,897
Unearned income	(365		)	(726		)	(414		)	(705		)
Investment in leases	$	1,052		$	1,247		$	1,108		$	1,192

__________________

(1) Future contractual receipts under direct financing leases as of December 31, 2019 are $104 million in 2020, $98 million in 2021, $104 million in 2022, $108 million in 2023, $95 million in 2024, $1.4 billion thereafter, and in total $1.9 billion.

Lease receivables are generally due in periodic installments. The remaining life of the payment periods for leveraged leases generally range from one to 15 years but in certain circumstances can be over 25 years, while the remaining life of the payment periods for direct financing leases generally range from one to 25 years but in certain circumstances can be over 25 years. For lease receivables, the primary credit quality indicator is whether the lease receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming lease receivables as those that are 90 days or more past due. At both December 31, 2019 and 2018, all leveraged lease receivables were performing and 94% of direct financing lease receivables were performing.

The Company’s deferred income tax liability related to leveraged leases was $467 million and $519 million at December 31, 2019 and 2018, 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,
	2019				2018				2017
	Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases		Leveraged Leases		Direct Financing Leases
	(In millions)
Lease investment income	$	48	$	109	$	47	$	95	$	19	$	89
Less: Income tax expense	10		23		10		20		7		31
Lease investment income, net of income tax	$	38	$	86	$	37	$	75	$	12	$	58

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, direct financing and leveraged leases and operating joint ventures.

Tax Credit Partnerships

The carrying value of tax credit partnerships was $1.3 billion and $1.7 billion at December 31, 2019 and 2018, respectively. Losses from tax credit partnerships included within net investment income were $240 million, $257 million and $259 million for the years ended December 31, 2019, 2018 and 2017, respectively.

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 $8.6 billion and $9.0 billion at December 31, 2019 and 2018, 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,
	2019			2018			2017
	(In millions)
Fixed maturity securities AFS	$	30,050		$	11,356		$	22,645
Fixed maturity securities AFS with noncredit OTTI losses included in AOCI	33			25			41
Total fixed maturity securities AFS	30,083			11,381			22,686
Equity securities	—			—			421
Derivatives	2,209			2,127			1,453
Other	310			290			46
Subtotal	32,602			13,798			24,606
Amounts allocated from:
Future policy benefits	(1,019		)	31			(77		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	—			—			—
DAC, VOBA and DSI	(2,716		)	(1,231		)	(1,768		)
Policyholder dividend obligation	(2,020		)	(428		)	(2,121		)
Subtotal	(5,755		)	(1,628		)	(3,966		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(4		)	(3		)	(12		)
Deferred income tax benefit (expense)	(6,846		)	(3,502		)	(6,958		)
Net unrealized investment gains (losses)	19,997			8,665			13,670
Net unrealized investment gains (losses) attributable to noncontrolling interests	(16		)	(10		)	(8		)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	19,981		$	8,655		$	13,662

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

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Balance at January 1,	$	8,655		$	13,662		$	12,650
Cumulative effects of changes in accounting principles, net of income tax (Note 1)	21			1,258			—
Fixed maturity securities AFS on which noncredit OTTI losses have been recognized	8			(16		)	33
Unrealized investment gains (losses) during the year	18,770			(10,367		)	804
Unrealized investment gains (losses) relating to:
Future policy benefits	(1,050		)	108			1,037
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	—			—			3
DAC, VOBA and DSI	(1,485		)	537			(338		)
Policyholder dividend obligation	(1,592		)	1,693			(190		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(1		)	9			(11		)
Deferred income tax benefit (expense)	(3,339		)	1,773			(324		)
Net unrealized investment gains (losses)	19,987			8,657			13,664
Net unrealized investment gains (losses) attributable to noncontrolling interests	(6		)	(2		)	(2		)
Balance at December 31,	$	19,981		$	8,655		$	13,662
Change in net unrealized investment gains (losses)	$	11,332		$	(5,005	)	$	1,014
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	(6		)	(2		)	(2		)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	11,326		$	(5,007	)	$	1,012

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, at estimated fair value at December 31, 2019 and 2018, were in fixed income securities of the Japanese government and its agencies of $33.7 billion and $30.2 billion, respectively, and in fixed income securities of the South Korean government and its agencies of $7.3 billion and $7.1 billion, respectively.

Securities Lending, Repurchase Agreements and FHLB of Boston Advance Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of the outstanding securities lending, repurchase agreements and FHLB of Boston short-term advance agreements is as follows:

	December 31,
	2019						2018
	Securities (1)						Securities (1)
	Estimated Fair Value		Cash Collateral Received from Counterparties (2), (3)		Reinvestment Portfolio at Estimated Fair Value		Estimated Fair Value		Cash Collateral Received from Counterparties (2), (3)		Reinvestment Portfolio at Estimated Fair Value
	(In millions)
Securities lending	$	16,926	$	17,369	$	17,451	$	17,724	$	18,005	$	18,074
Repurchase agreements	$	2,333	$	2,310	$	2,320	$	1,093	$	1,067	$	1,069
FHLB of Boston advance agreements	$	1,083	$	800	$	843	$	1,200	$	800	$	799

__________________

(1) Securities on loan or securities pledged in connection with these programs are included within fixed maturities securities AFS, short-term investments and cash equivalents.

(2) In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $0 and $78 million at December 31, 2019 and 2018, 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 liability for cash collateral for these programs is included within payables for collateral under securities loaned, other transactions and other liabilities.

Contractual Maturities

A summary of the remaining contractual maturities of securities lending, repurchase agreements and FHLB of Boston short-term advance agreements is as follows:

	December 31,
	2019										2018
	Remaining Maturities										Remaining Maturities
	Open (1)		1 Month or Less		Over  1 to 6 Months		Over 6 Months to 1 Year		Total		Open (1)		1 Month or Less		Over 1 to 6 Months		Over 6 Months to 1 Year		Total
	(In millions)
Cash collateral liability by loaned security type:
Securities lending:
U.S. government and agency	$	2,928	$	6,676	$	6,663	$	—	$	16,267	$	2,736	$	8,995	$	5,220	$	—	$	16,951
Foreign government	—		259		767		—		1,026		—		214		761		—		975
Agency RMBS	—		76		—		—		76		—		79		—		—		79
Total securities lending	$	2,928	$	7,011	$	7,430	$	—	$	17,369	$	2,736	$	9,288	$	5,981	$	—	$	18,005
Cash collateral liability by loaned security type:
Repurchase agreements:
U.S. government and agency	$	—	$	2,310	$	—	$	—	$	2,310	$	—	$	1,000	$	—	$	—	$	1,000
All other corporate and government	—		—		—		—		—		—		—		67		—		67
Total repurchase agreements	$	—	$	2,310	$	—	$	—	$	2,310	$	—	$	1,000	$	67	$	—	$	1,067
Cash collateral liability by pledged security type: (2)
FHLB of Boston:
Municipals	$	—	$	250	$	475	$	75	$	800	$	—	$	150	$	650	$	—	$	800

__________________

(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.

(2) The Company 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 Company.

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 securities lending, repurchase agreements and FHLB of Boston short-term advance agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities on loan, securities pledged or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities on loan or securities pledged are put back by the counterparty.

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,
	2019		2018
	(In millions)
Invested assets on deposit (regulatory deposits)	$	2,034	$	1,788
Invested assets held in trust (collateral financing arrangement and reinsurance agreements)	2,991		2,971
Invested assets pledged as collateral (1)	24,493		24,168
Total invested assets on deposit, held in trust and pledged as collateral	$	29,518	$	28,927

__________________

(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 13), and a collateral financing arrangement (see Note 14).

See “— Securities Lending, Repurchase Agreements and FHLB of Boston Advance Agreements” for information regarding securities supporting securities lending, repurchase agreement transactions and FHLB of Boston short-term advance agreements and Note 7 for information regarding investments designated to the closed block. In addition, the Company’s investment in FHLB common stock, which is considered restricted until redeemed by the issuers, was $809 million and $793 million, at redemption value, at December 31, 2019 and 2018, respectively.

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 purchased credit impaired (“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 in 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 in 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 $3.3 billion and $4.0 billion at December 31, 2019 and 2018, 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 $2.7 billion and $3.3 billion at December 31, 2019 and 2018, respectively. Accretion of accretable yield on PCI investments recognized in earnings in net investment income was $178 million and $275 million for the years ended December 31, 2019 and 2018, respectively. Purchases of PCI investments were insignificant in both of the years ended December 31, 2019 and 2018.

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 $15.6 billion at December 31, 2019. 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 $6.1 billion at December 31, 2019. 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: 2019 and 2017. 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, 2019, 2018 and 2017. Aggregate total assets of these entities totaled $585.3 billion and $529.1 billion at December 31, 2019 and 2018, respectively. Aggregate total liabilities of these entities totaled $86.1 billion and $65.5 billion at December 31, 2019 and 2018, respectively. Aggregate net income (loss) of these entities totaled $47.0 billion, $52.5 billion and $37.9 billion for the years ended December 31, 2019, 2018 and 2017, respectively. 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,
	2019				2018
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Renewable energy partnership (1)	$	94	$	—	$	102	$	—
Investment funds (2)	207		1		79		1
Other investments (1)	10		5		21		5
Total	$	311	$	6	$	202	$	6

__________________

(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 other invested assets at December 31, 2019 and cash and cash equivalents at December 31, 2018.

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,
	2019				2018
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured Products (2)	$	51,962	$	51,962	$	47,874	$	47,874
U.S. and foreign corporate	1,764		1,764		932		932
Foreign government	136		136		—		—
Other limited partnership interests	6,674		12,016		5,641		9,888
Other invested assets	1,495		1,621		1,906		2,063
Other investments	450		497		296		300
Total	$	62,481	$	67,996	$	56,649	$	61,057

__________________

(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 $6 million and $94 million at December 31, 2019 and 2018, 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 21, 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 for each of the years ended December 31, 2019, 2018 and 2017.

The Company securitizes certain residential mortgage loans and acquires 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 resulting gain (loss) from the securitization is included within net investment gains (losses). The estimated fair value of the related RMBS acquired in connection with the securitizations is included in the carrying amount and maximum exposure to loss for Structured Products presented in the table above.

The carrying value and the estimated fair value of mortgage loans were $443 million and $467 million, respectively, for loans sold during 2019, and $451 million and $478 million, respectively, for loans sold during 2018. Gains on securitizations of $24 million and $27 million for the years ended December 31, 2019 and 2018, respectively, were included within net investment gains (losses). The estimated fair value of RMBS acquired in connection with the securitizations was $131 million and $98 million at December 31, 2019 and 2018, respectively.

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,
	2019		2018			2017
	(In millions)
Investment income:
Fixed maturity securities AFS	$	11,886	$	11,946		$	11,497
Equity securities	61		64			129
FVO Securities (1)	184		51			68
Mortgage loans	3,782		3,340			3,082
Policy loans	512		506			517
Real estate and real estate joint ventures	676		694			646
Other limited partnership interests	825		731			798
Cash, cash equivalents and short-term investments	457		387			228
Operating joint ventures	84		51			28
Other	348		364			192
Subtotal	18,815		18,134			17,185
Less: Investment expenses	1,422		1,285			1,122
Subtotal, net	17,393		16,849			16,063
Unit-linked investments (1)	1,475		(683		)	1,300
Net investment income	$	18,868	$	16,166		$	17,363

__________________

(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 $1.0 billion, ($771) million and $662 million for the years ended December 31, 2019, 2018 and 2017, 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 (i) from other limited partnership interests and operating joint ventures, accounted for under the equity method, and (ii) real estate joint ventures and tax credit and renewable energy partnerships, primarily accounted for under the equity method, totaled $795 million, $592 million and $495 million for the years ended December 31, 2019, 2018 and 2017, 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,
	2019			2018			2017
	(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	$	(23	)	$	(20	)	$	(4	)
Finance	(1		)	(9		)	—
Industrial	(22		)	(2		)	—
Total U.S. and foreign corporate securities	(46		)	(31		)	(4		)
Foreign government	(81		)	(9		)	—
ABS	—			—			(3		)
RMBS	(2		)	—			—
Municipals	—			—			(3		)
OTTI losses on fixed maturity securities AFS recognized in earnings	(129		)	(40		)	(10		)
Fixed maturity securities AFS — net gains (losses) on sales and disposals (1)	396			45			328
Total gains (losses) on fixed maturity securities AFS	267			5			318
Total gains (losses) on equity securities:
Total OTTI losses recognized — by security type:
Common stock	—			—			(24		)
Non-redeemable preferred stock	—			—			(1		)
OTTI losses on equity securities recognized in earnings	—			—			(25		)
Equity securities — net gains (losses) on sales and disposals	50			118			117
Change in estimated fair value of equity securities (2)	84			(193		)	—
Total gains (losses) on equity securities	134			(75		)	92
Mortgage loans (1)	(11		)	(56		)	14
Real estate and real estate joint ventures	399			326			603
Other limited partnership interests	6			9			(59		)
Other (3)	(142		)	(169		)	(113		)
Subtotal	653			40			855
Change in estimated fair value of other limited partnership interests	(14		)	12			—
Non-investment portfolio gains (losses) (4), (5)	(195		)	(350		)	(1,162		)
Other	—			—			(1		)
Subtotal	(209		)	(338		)	(1,163		)
Total net investment gains (losses)	$	444		$	(298	)	$	(308	)

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(1) Fixed maturity securities AFS — net gains (losses) on sales and disposals and mortgage loans for the year ended December 31, 2017, included $276 million and $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. See Note 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 $122 million and ($81) million for the years ended December 31, 2019 and 2018, respectively.

(3) Other gains (losses) included tax credit partnership impairment losses of $92 million, leveraged lease impairment losses of $30 million and a renewable energy partnership disposal gain of $46 million for the year ended December 31, 2019. Other gains (losses) included renewable energy partnership disposal losses of $83 million and leveraged lease impairment losses of $105 million for the year ended December 31, 2018. Other gains (losses) included leveraged lease impairment losses of $79 million for the year ended December 31, 2017.

(4) 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.

(5) 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.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($124) million, ($16) million and ($6) million for the years ended December 31, 2019, 2018 and 2017, 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,
	2019			2018			2017
	(In millions)
Proceeds	$	51,052		$	85,058		$	56,509
Gross investment gains	$	889		$	856		$	753
Gross investment (losses)	(493		)	(811		)	(425		)
OTTI losses	(129		)	(40		)	(10		)
Net investment gains (losses)	$	267		$	5		$	318

Credit Loss Rollforward of Fixed Maturity Securities AFS

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,
	2019			2018
	(In millions)
Balance at January 1,	$	89		$	138
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI	(16		)	(47		)
Increase in cash flows — accretion of previous credit loss OTTI	(1		)	(2		)
Balance at December 31,	$	72		$	89