Condensed Financial Information (Parent Company)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information (Parent Company)

MetLife, Inc.

Schedule II

Condensed Financial Information

(Parent Company Only)

December 31, 2019 and 2018

(In millions, except share and per share data)

	2019			2018
Condensed Balance Sheets
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $3,062 and $2,745, respectively)	$	3,073		$	2,726
Short-term investments, principally at estimated fair value	2			16
Other invested assets, at estimated fair value	120			87
Total investments	3,195			2,829
Cash and cash equivalents	377			376
Accrued investment income	12			53
Investment in subsidiaries	79,571			66,567
Loans to subsidiaries	100			100
Other assets	747			843
Total assets	$	84,002		$	70,768
Liabilities and Stockholders’ Equity
Liabilities
Payables for collateral under derivatives transactions	$	16		$	9
Long-term debt — unaffiliated	12,379			11,844
Long-term debt — affiliated	1,976			1,957
Junior subordinated debt securities	2,458			2,456
Other liabilities	1,029			1,761
Total liabilities	17,858			18,027
Stockholders’ Equity
Preferred stock, par value $0.01 per share; $3,405 aggregate liquidation preference	—			—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,177,680,299 and 1,171,824,242 shares issued, respectively; 915,338,098 and 958,613,542 shares outstanding, respectively	12			12
Additional paid-in capital	32,680			32,474
Retained earnings	33,078			28,926
Treasury stock, at cost; 262,342,201 and 213,210,700 shares, respectively	(12,678		)	(10,393		)
Accumulated other comprehensive income (loss)	13,052			1,722
Total stockholders’ equity	66,144			52,741
Total liabilities and stockholders’ equity	$	84,002		$	70,768

See accompanying notes to the condensed financial information.

MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)

(Parent Company Only)

For the Years Ended December 31, 2019, 2018 and 2017

(In millions)

	2019			2018			2017
Condensed Statements of Operations
Revenues
Equity in earnings of subsidiaries	$	6,301		$	6,466		$	7,162
Net investment income	77			87			101
Other revenues	27			19			59
Net investment gains (losses)	(40		)	(277		)	(1,142		)
Net derivative gains (losses)	(45		)	(56		)	(186		)
Total revenues	6,320			6,239			5,994
Expenses
Interest expense	850			1,009			1,108
Termination of financing arrangements	—			—			294
Other expenses	153			158			657
Total expenses	1,003			1,167			2,059
Income (loss) before provision for income tax	5,317			5,072			3,935
Provision for income tax expense (benefit)	(582		)	(51		)	(75		)
Net income (loss)	5,899			5,123			4,010
Less: Preferred stock dividends	178			141			103
Net income (loss) available to common shareholders	$	5,721		$	4,982		$	3,907
Comprehensive income (loss)	$	17,208		$	(1,494	)	$	7,391

See accompanying notes to the condensed financial information.

MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)

(Parent Company Only)

For the Years Ended December 31, 2019, 2018 and 2017

(In millions)

	2019			2018			2017
Condensed Statements of Cash Flows
Cash flows from operating activities
Net income (loss)	$	5,899		$	5,123		$	4,010
Earnings of subsidiaries	(6,301		)	(6,466		)	(7,162		)
Dividends from subsidiaries	4,790			7,367			6,745
(Gains) losses on investments and from sales of businesses, net	40			277			1,142
Tax separation agreement charge	—			—			1,093
Other, net	(251		)	(807		)	634
Net cash provided by (used in) operating activities	4,177			5,494			6,462
Cash flows from investing activities
Sales of fixed maturity securities available-for-sale	3,153			9,635			7,217
Purchases of fixed maturity securities available-for-sale	(3,380		)	(8,178		)	(7,733		)
Cash received in connection with freestanding derivatives	101			227			452
Cash paid in connection with freestanding derivatives	(392		)	(237		)	(629		)
Expense paid on behalf of subsidiaries	(13		)	(14		)	(42		)
Returns of capital from subsidiaries	10			87			610
Capital contributions to subsidiaries	(75		)	(767		)	(339		)
Net change in short-term investments	14			14			118
Other, net	28			(3		)	(14		)
Net cash provided by (used in) investing activities	(554		)	764			(360		)
Cash flows from financing activities
Net change in payables for collateral under derivative transactions	7			(27		)	(111		)
Long-term debt issued	1,382			—			—
Long-term debt repaid	(877		)	(1,759		)	(1,000		)
Fees paid for the termination of a committed facility related to Separation	—			—			(244		)
Treasury stock acquired in connection with share repurchases	(2,285		)	(3,992		)	(2,927		)
Preferred stock issued, net of issuance costs	—			1,274			—
Dividends on preferred stock	(178		)	(141		)	(103		)
Dividends on common stock	(1,643		)	(1,678		)	(1,717		)
Other, net	(28		)	(75		)	182
Net cash provided by (used in) financing activities	(3,622		)	(6,398		)	(5,920		)
Change in cash and cash equivalents	1			(140		)	182
Cash and cash equivalents, beginning of year	376			516			334
Cash and cash equivalents, end of year	$	377		$	376		$	516

MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)

(Parent Company Only)

For the Years Ended December 31, 2019, 2018 and 2017

(In millions)

	2019			2018			2017
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	864		$	1,040		$	1,096
Income tax:
Amounts paid to (received from) subsidiaries, net	$	(152	)	$	(33	)	$	(1,552	)
Amounts paid to Brighthouse in accordance with the tax separation agreement	—			909			729
Income tax paid (received) by MetLife, Inc., net	(3		)	1			(37		)
Total income tax, net	$	(155	)	$	877		$	(860	)
Non-cash transactions
Returns of capital from subsidiaries	$	29		$	3,844		$	17,518
Capital contributions to subsidiaries	$	30		$	3,844		$	15,655
Distribution of Brighthouse	$	—		$	—		$	10,346
Allocation of interest expense to subsidiary	$	—		$	—		$	15
Allocation of interest income to subsidiary	$	—		$	—		$	4
Brighthouse common stock exchange transaction (Note 3):
Reduction of long-term debt	$	—		$	944		$	—
Reduction of fair value option securities	$	—		$	1,030		$	—

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information

(Parent Company Only)

1. Basis of Presentation

The condensed financial information of MetLife, Inc. (parent company only) should be read in conjunction with the consolidated financial statements of MetLife, Inc. and its subsidiaries and the notes thereto (the “Consolidated Financial Statements”). These condensed unconsolidated financial statements reflect the results of operations, financial position and cash flows for MetLife, Inc. Investments in subsidiaries are accounted for using the equity method of accounting.

The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and assumptions relate to the fair value measurements, the accounting for goodwill and identifiable intangible assets and the provision for potential losses that may arise from litigation and regulatory proceedings and tax audits, which may affect the amounts reported in the condensed unconsolidated financial statements and accompanying notes. Actual results could differ from these estimates.

2. Investment in Subsidiaries

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

3. Loans to Subsidiaries

MetLife, Inc. lends funds as necessary, through credit agreements or otherwise to its subsidiaries, some of which are regulated, to meet their capital requirements or to provide liquidity. Payments of interest and principal on surplus notes of regulated subsidiaries, which are subordinate to all other obligations of the issuing company, may be made only with the prior approval of the insurance department of the state of domicile.

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

Interest income earned on loans to subsidiaries of $3 million, $3 million and $44 million for the years ended December 31, 2019, 2018 and 2017, respectively, is included in net investment income.

4. Long-term Debt

Long-term debt outstanding was as follows:

	Interest Rates (1)							December 31,
	Range			Weighted Average	Maturity			2019		2018
	(Dollars in millions)
Senior notes — unaffiliated (2)	0.50%	-	6.50%	4.72%	2022	-	2046	$	12,379	$	11,844
Senior notes — affiliated	0.82%	-	3.14%	2.25%	2020	-	2029	1,976		1,957
Total								$	14,355	$	13,801

__________________

(1) Range of interest rates and weighted average interest rates are for the year ended December 31, 2019.

(2) Net of $81 million and $79 million of unamortized issuance costs and net premiums and discounts at December 31, 2019 and 2018, respectively.

See Note 13 of the Notes to the Consolidated Financial Statements.

The aggregate maturities of long-term debt at December 31, 2019 for the next five years and thereafter are $244 million in 2020, $997 million in 2021, $500 million in 2022, $1.3 billion in 2023, $1.5 billion in 2024 and $9.8 billion thereafter.

Senior Notes – Affiliated

In May 2018, $500 million in senior notes previously issued by MetLife, Inc. to MLIC and other subsidiaries were redenominated to new ¥54.6 billion senior notes. The ¥54.6 billion senior notes mature in December 2021 and bear interest at a rate per annum of 3.14%, payable semi-annually.

In April 2018, $500 million in senior notes previously issued by MetLife, Inc. to MLIC and other subsidiaries were redenominated to new ¥53.7 billion senior notes. The ¥53.7 billion senior notes mature in July 2021 and bear interest at a rate per annum of 2.97%, payable semi-annually.

In March 2018, three senior notes previously issued by MetLife, Inc. to MLIC were redenominated to Japanese yen, two of which have been refinanced upon maturity.

• A $500 million senior note was redenominated to a new ¥53.3 billion senior note. The ¥53.3 billion senior note bore interest at a rate per annum of 1.45%, payable semi-annually. In July 2019, this note matured and was refinanced with a ¥37.3 billion 1.602% senior note due July 2023 and a ¥16.0 billion 1.637% senior note due July 2026, both issued to MLIC and payable semi-annually.

• A $250 million senior note was redenominated to a new ¥26.5 billion senior note. The ¥26.5 billion senior note bore interest at a rate per annum of 1.72% payable semi-annually. In October 2019, this note matured and was refinanced with a ¥26.5 billion 1.81% senior note due October 2029 issued to MLIC, payable semi-annually.

• A $250 million senior note was also redenominated to a new ¥26.5 billion senior note. The ¥26.5 billion senior note matures in September 2020 and bears interest at a rate per annum of 0.82%, payable semi-annually.

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

Interest Expense

Interest expense was comprised of the following:

	Years Ended December 31,
	2019		2018		2017
	(In millions)
Long-term debt — unaffiliated	$	591	$	755	$	774
Long-term debt — affiliated	48		45		112
Collateral financing arrangements	6		6		27
Junior subordinated debt securities	205		203		195
Total	$	850	$	1,009	$	1,108

See Notes 14 and 15 of the Notes to the Consolidated Financial Statements for information about the collateral financing arrangement and junior subordinated debt securities.

5. Support Agreements

MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations.

MetLife, Inc. guarantees the obligations of its subsidiary, Missouri Reinsurance, Inc. (“MoRe”), under a retrocession agreement with RGA Reinsurance (Barbados) Inc., pursuant to which MoRe retrocedes a portion of the closed block liabilities associated with industrial life and ordinary life insurance policies that it assumed from MLIC.

MetLife, Inc. guarantees the obligations of MetLife Reinsurance Company of Bermuda, Ltd. (“MrB”), a Bermuda insurance affiliate and an indirect, wholly-owned subsidiary of MetLife, Inc. under a reinsurance agreement with Mitsui Sumitomo Primary Life Insurance Co., Ltd. (“Mitsui”), a former affiliate that is now an unaffiliated third party, under which MrB reinsures certain variable annuity business written by Mitsui.

MetLife, Inc. guarantees the obligations of MrB in an aggregate amount up to $1.0 billion, under a reinsurance agreement with MetLife Europe d.a.c. under which MrB reinsured the guaranteed living benefits and guaranteed death benefits associated with certain unit-linked variable annuity type liability contracts issued by MetLife Europe d.a.c.

MetLife, Inc., in connection with MRV’s reinsurance of certain universal life and term life insurance risks, committed to the Vermont Department of Banking, Insurance, Securities and Health Care Administration to take necessary action to cause the two protected cells of MRV to maintain total adjusted capital in an amount that is equal to or greater than 200% of each such protected cell’s authorized control level RBC, as defined in Vermont state insurance statutes. See Note 13 of the Notes to the Consolidated Financial Statements.

MetLife, Inc., in connection with the collateral financing arrangement associated with MRC’s reinsurance of a portion of the liabilities associated with the closed block, committed to the South Carolina Department of Insurance to make capital contributions, if necessary, to MRC so that MRC may at all times maintain its total adjusted capital in an amount that is equal to or greater than 200% of the Company Action Level RBC, as defined in South Carolina state insurance statutes as in effect on the date of determination or December 31, 2007, whichever calculation produces the greater capital requirement, or as otherwise required by the South Carolina Department of Insurance. See Note 14 of the Notes to the Consolidated Financial Statements.

MetLife, Inc. guarantees obligations arising from OTC-bilateral derivatives of the following subsidiaries: MrB, MetLife International Holdings, LLC and MetLife Worldwide Holdings, LLC. These subsidiaries are exposed to various risks relating to their ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. These subsidiaries use a variety of strategies to manage these risks, including the use of derivatives. Further, all of the subsidiaries’ derivatives are subject to industry standard netting agreements and collateral agreements that limit the unsecured portion of any open derivative position. On a net counterparty basis at December 31, 2019 and 2018, derivative transactions with positive mark-to-market values (in-the-money) were $360 million and $302 million, respectively, and derivative transactions with negative mark-to-market values (out-of-the-money) were $197 million and $84 million, respectively. To secure the obligations represented by the out of-the-money transactions, the subsidiaries had provided collateral to their counterparties with an estimated fair value of $196 million and $84 million at December 31, 2019 and 2018, respectively. Accordingly, unsecured derivative liabilities guaranteed by MetLife, Inc. were $1 million and $0 at December 31, 2019 and 2018, respectively.

MetLife, Inc. also guarantees the obligations of certain of its subsidiaries under committed facilities with third-party banks. See Note 13 of the Notes to the Consolidated Financial Statements.