(Mark One) | ||
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE TRANSITION PERIOD FROM TO |
Delaware | 13-4075851 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
200 Park Avenue, New York, N.Y.
|
10166-0188 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer
þ
|
Accelerated filer o | |
Non-accelerated filer
o (Do
not check if a smaller reporting company)
|
Smaller reporting company o |
Page | ||||||||
5 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
9 | ||||||||
10 | ||||||||
126 | ||||||||
197 | ||||||||
205 | ||||||||
205 | ||||||||
205 | ||||||||
208 | ||||||||
223 | ||||||||
224 | ||||||||
225 | ||||||||
E-1 | ||||||||
EX-10.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
3
| should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; | |
| have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; | |
| may apply standards of materiality in a way that is different from what may be viewed as material to investors; and | |
| were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
4
Item 1. | Financial Statements |
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
Assets
|
||||||||
Investments:
|
||||||||
Fixed maturity securities
available-for-sale,
at estimated fair value (amortized cost: $330,903 and $317,617,
respectively;
includes $3,357 and $3,330, respectively, relating to variable interest entities) |
$ | 341,744 | $ | 324,797 | ||||
Equity securities
available-for-sale,
at estimated fair value (cost: $3,128 and $3,621, respectively)
|
3,238 | 3,602 | ||||||
Trading and other securities, at estimated fair value (includes
$560 and $463, respectively, of actively traded securities;
and $359 and $387, respectively, relating to variable interest entities) |
19,700 | 18,589 | ||||||
Mortgage loans:
|
||||||||
Held-for-investment,
principally at amortized cost (net of valuation allowances of
$566 and $664, respectively; includes
$6,697 and $6,840, respectively, at estimated
fair value, relating to variable interest entities)
|
60,819 | 58,976 | ||||||
Held-for-sale,
principally at estimated fair value
|
2,805 | 3,321 | ||||||
Mortgage loans, net
|
63,624 | 62,297 | ||||||
Policy loans
|
11,858 | 11,761 | ||||||
Real estate and real estate joint ventures (includes $15 and
$10, respectively, relating to variable interest entities)
|
8,234 | 8,030 | ||||||
Other limited partnership interests (includes $331 and $298,
respectively, relating to variable interest entities)
|
6,453 | 6,416 | ||||||
Short-term investments, principally at estimated fair value
|
12,419 | 9,384 | ||||||
Other invested assets, principally at estimated fair value
(includes $98 and $104, respectively, relating to variable
interest entities)
|
14,900 | 15,430 | ||||||
Total investments
|
482,170 | 460,306 | ||||||
Cash and cash equivalents, principally at estimated fair value
(includes $65 and $69, respectively, relating to variable
interest entities)
|
9,628 | 12,957 | ||||||
Accrued investment income (includes $34 and $34, respectively,
relating to variable interest entities)
|
4,341 | 4,328 | ||||||
Premiums, reinsurance and other receivables (includes $2 and $2,
respectively, relating to variable interest entities)
|
21,070 | 19,799 | ||||||
Deferred policy acquisition costs and value of business acquired
|
28,241 | 27,092 | ||||||
Goodwill
|
12,036 | 11,781 | ||||||
Other assets (includes $7 and $6, respectively, relating to
variable interest entities)
|
8,246 | 8,174 | ||||||
Assets of subsidiaries
held-for-sale
|
3,369 | 3,331 | ||||||
Separate account assets
|
202,382 | 183,138 | ||||||
Total assets
|
$ | 771,483 | $ | 730,906 | ||||
Liabilities and Equity
|
||||||||
Liabilities
|
||||||||
Future policy benefits
|
$ | 176,353 | $ | 170,912 | ||||
Policyholder account balances
|
217,597 | 210,757 | ||||||
Other policy-related balances
|
15,456 | 15,750 | ||||||
Policyholder dividends payable
|
853 | 830 | ||||||
Policyholder dividend obligation
|
1,281 | 876 | ||||||
Payables for collateral under securities loaned and other
transactions
|
30,079 | 27,272 | ||||||
Bank deposits
|
10,022 | 10,316 | ||||||
Short-term debt
|
102 | 306 | ||||||
Long-term debt (includes $6,569 and $6,902, respectively, at
estimated fair value, relating to variable interest entities)
|
28,269 | 27,586 | ||||||
Collateral financing arrangements
|
5,297 | 5,297 | ||||||
Junior subordinated debt securities
|
3,192 | 3,191 | ||||||
Current income tax payable
|
133 | 297 | ||||||
Deferred income tax liability
|
3,764 | 1,856 | ||||||
Other liabilities (includes $82 and $93, respectively, relating
to variable interest entities)
|
19,707 | 20,366 | ||||||
Liabilities of subsidiaries
held-for-sale
|
3,163 | 3,043 | ||||||
Separate account liabilities
|
202,382 | 183,138 | ||||||
Total liabilities
|
717,650 | 681,793 | ||||||
Contingencies, Commitments and Guarantees (Note 8)
|
||||||||
Redeemable noncontrolling interests in partially owned
consolidated subsidiaries
|
124 | 117 | ||||||
Equity
|
||||||||
MetLife, Inc.s stockholders equity:
|
||||||||
Preferred stock, par value $0.01 per share;
200,000,000 shares authorized:
|
||||||||
Preferred stock, 84,000,000 shares issued and outstanding;
$2,100 aggregate liquidation preference
|
1 | 1 | ||||||
Convertible preferred stock, 0 and 6,857,000 shares issued
and outstanding at June 30, 2011 and December 31,
2010,
respectively |
| | ||||||
Common stock, par value $0.01 per share;
3,000,000,000 shares authorized; 1,060,584,995 and
989,031,704 shares issued
at June 30, 2011 and December 31,
2010, respectively; 1,057,391,108 and 985,837,817 shares
outstanding at June 30, 2011 and
December 31, 2010, respectively |
11 | 10 | ||||||
Additional paid-in capital
|
26,714 | 26,423 | ||||||
Retained earnings
|
23,399 | 21,363 | ||||||
Treasury stock, at cost; 3,193,887 shares at June 30,
2011 and December 31, 2010
|
(172 | ) | (172 | ) | ||||
Accumulated other comprehensive income (loss)
|
3,356 | 1,000 | ||||||
Total MetLife, Inc.s stockholders equity
|
53,309 | 48,625 | ||||||
Noncontrolling interests
|
400 | 371 | ||||||
Total equity
|
53,709 | 48,996 | ||||||
Total liabilities and equity
|
$ | 771,483 | $ | 730,906 | ||||
5
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues
|
||||||||||||||||
Premiums
|
$ | 9,294 | $ | 6,584 | $ | 17,848 | $ | 13,372 | ||||||||
Universal life and investment-type product policy fees
|
1,969 | 1,482 | 3,858 | 2,887 | ||||||||||||
Net investment income
|
5,098 | 4,061 | 10,414 | 8,381 | ||||||||||||
Other revenues
|
592 | 544 | 1,158 | 1,057 | ||||||||||||
Net investment gains (losses):
|
||||||||||||||||
Other-than-temporary
impairments on fixed maturity securities
|
(298 | ) | (244 | ) | (430 | ) | (395 | ) | ||||||||
Other-than-temporary
impairments on fixed maturity securities transferred to other
comprehensive income (loss)
|
175 | 98 | 184 | 157 | ||||||||||||
Other net investment gains (losses)
|
(32 | ) | 132 | (8 | ) | 256 | ||||||||||
Total net investment gains (losses)
|
(155 | ) | (14 | ) | (254 | ) | 18 | |||||||||
Net derivative gains (losses)
|
352 | 1,481 | 37 | 1,522 | ||||||||||||
Total revenues
|
17,150 | 14,138 | 33,061 | 27,237 | ||||||||||||
Expenses
|
||||||||||||||||
Policyholder benefits and claims
|
9,119 | 6,930 | 17,350 | 14,394 | ||||||||||||
Interest credited to policyholder account balances
|
1,442 | 1,048 | 3,366 | 2,190 | ||||||||||||
Policyholder dividends
|
374 | 388 | 746 | 765 | ||||||||||||
Other expenses
|
4,495 | 3,409 | 8,397 | 6,341 | ||||||||||||
Total expenses
|
15,430 | 11,775 | 29,859 | 23,690 | ||||||||||||
Income (loss) from continuing operations before provision for
income tax
|
1,720 | 2,363 | 3,202 | 3,547 | ||||||||||||
Provision for income tax expense (benefit)
|
519 | 827 | 947 | 1,183 | ||||||||||||
Income (loss) from continuing operations, net of income tax
|
1,201 | 1,536 | 2,255 | 2,364 | ||||||||||||
Income (loss) from discontinued operations, net of income tax
|
29 | 11 | (12 | ) | 17 | |||||||||||
Net income (loss)
|
1,230 | 1,547 | 2,243 | 2,381 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
(7 | ) | (10 | ) | | (11 | ) | |||||||||
Net income (loss) attributable to MetLife, Inc.
|
1,237 | 1,557 | 2,243 | 2,392 | ||||||||||||
Less: Preferred stock dividends
|
31 | 31 | 61 | 61 | ||||||||||||
Preferred stock redemption premium
|
| | 146 | | ||||||||||||
Net income (loss) available to MetLife, Inc.s common
shareholders
|
$ | 1,206 | $ | 1,526 | $ | 2,036 | $ | 2,331 | ||||||||
Income (loss) from continuing operations, net of income tax,
available to MetLife, Inc.s common shareholders per common
share:
|
||||||||||||||||
Basic
|
$ | 1.11 | $ | 1.84 | $ | 1.93 | $ | 2.81 | ||||||||
Diluted
|
$ | 1.10 | $ | 1.83 | $ | 1.91 | $ | 2.79 | ||||||||
Net income (loss) available to MetLife, Inc.s common
shareholders per common share:
|
||||||||||||||||
Basic
|
$ | 1.14 | $ | 1.85 | $ | 1.92 | $ | 2.83 | ||||||||
Diluted
|
$ | 1.13 | $ | 1.84 | $ | 1.90 | $ | 2.81 | ||||||||
6
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net |
Foreign |
Defined |
Total |
|||||||||||||||||||||||||||||||||||||||||||||||||
Convertible |
Additional |
Treasury |
Unrealized |
Other-Than- |
Currency |
Benefit |
MetLife, Inc.s |
|||||||||||||||||||||||||||||||||||||||||||||
Preferred |
Preferred |
Common |
Paid-in |
Retained |
Stock |
Investment |
Temporary |
Translation |
Plans |
Stockholders |
Noncontrolling |
Total |
||||||||||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Capital | Earnings | at Cost | Gains (Losses) | Impairments | Adjustments | Adjustment | Equity | Interests (1) | Equity | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2010
|
$ | 1 | $ | | $ | 10 | $ | 26,423 | $ | 21,363 | $ | (172 | ) | $ | 3,356 | $ | (366 | ) | $ | (541 | ) | $ | (1,449 | ) | $ | 48,625 | $ | 371 | $ | 48,996 | ||||||||||||||||||||||
Redemption of convertible preferred stock
|
| (2,805 | ) | (2,805 | ) | (2,805 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock redemption premium
|
(146 | ) | (146 | ) | (146 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issuance newly issued shares
|
1 | 2,949 | 2,950 | 2,950 | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation
|
147 | 147 | 147 | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock
|
(61 | ) | (61 | ) | (61 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Change in equity of noncontrolling interests
|
38 | 38 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
2,243 | 2,243 | (4 | ) | 2,239 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on derivative instruments, net of
income tax
|
(69 | ) | (69 | ) | (69 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized investment gains (losses), net of related offsets and
income tax
|
1,837 | (94 | ) | 1,743 | (5 | ) | 1,738 | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of income tax
|
639 | 639 | 639 | |||||||||||||||||||||||||||||||||||||||||||||||||
Defined benefit plans adjustment, net of income tax
|
43 | 43 | 43 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
2,356 | (5 | ) | 2,351 | ||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss)
|
4,599 | (9 | ) | 4,590 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2011
|
$ | 1 | $ | | $ | 11 | $ | 26,714 | $ | 23,399 | $ | (172 | ) | $ | 5,124 | $ | (460 | ) | $ | 98 | $ | (1,406 | ) | $ | 53,309 | $ | 400 | $ | 53,709 | |||||||||||||||||||||||
(1) | Net income (loss) attributable to noncontrolling interests excludes gains (losses) of redeemable noncontrolling interests in partially owned consolidated subsidiaries of $4 million. |
7
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net |
Foreign |
Defined |
Total |
|||||||||||||||||||||||||||||||||||||||||||||
Additional |
Treasury |
Unrealized |
Other-Than- |
Currency |
Benefit |
MetLife, Inc.s |
||||||||||||||||||||||||||||||||||||||||||
Preferred |
Common |
Paid-in |
Retained |
Stock |
Investment |
Temporary |
Translation |
Plans |
Stockholders |
Noncontrolling |
Total |
|||||||||||||||||||||||||||||||||||||
Stock | Stock | Capital | Earnings | at Cost | Gains (Losses) | Impairments | Adjustments | Adjustment | Equity | Interests | Equity | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2009
|
$ | 1 | $ | 8 | $ | 16,859 | $ | 19,501 | $ | (190 | ) | $ | (817 | ) | $ | (513 | ) | $ | (183 | ) | $ | (1,545 | ) | $ | 33,121 | $ | 377 | $ | 33,498 | |||||||||||||||||||
Cumulative effect of change in accounting principle, net of
income tax
|
(12 | ) | 31 | 11 | 30 | 30 | ||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2010
|
1 | 8 | 16,859 | 19,489 | (190 | ) | (786 | ) | (502 | ) | (183 | ) | (1,545 | ) | 33,151 | 377 | 33,528 | |||||||||||||||||||||||||||||||
Stock-based compensation
|
37 | 18 | 55 | 55 | ||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock
|
(61 | ) | (61 | ) | (61 | ) | ||||||||||||||||||||||||||||||||||||||||||
Change in equity of noncontrolling interests
|
(18 | ) | (18 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
2,392 | 2,392 | (11 | ) | 2,381 | |||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on derivative instruments, net of
income tax
|
435 | 435 | 435 | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized investment gains (losses), net of related offsets and
income tax
|
3,469 | 16 | 3,485 | 3,485 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of income tax
|
(151 | ) | (151 | ) | 1 | (150 | ) | |||||||||||||||||||||||||||||||||||||||||
Defined benefit plans adjustment, net of income tax
|
69 | 69 | 69 | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
3,838 | 1 | 3,839 | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss)
|
6,230 | (10 | ) | 6,220 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2010
|
$ | 1 | $ | 8 | $ | 16,896 | $ | 21,820 | $ | (172 | ) | $ | 3,118 | $ | (486 | ) | $ | (334 | ) | $ | (1,476 | ) | $ | 39,375 | $ | 349 | $ | 39,724 | ||||||||||||||||||||
8
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Net cash provided by operating activities
|
$ | 6,793 | $ | 3,928 | ||||
Cash flows from investing activities
|
||||||||
Sales, maturities and repayments of:
|
||||||||
Fixed maturity securities
|
54,958 | 38,035 | ||||||
Equity securities
|
1,027 | 690 | ||||||
Mortgage loans
|
5,152 | 2,715 | ||||||
Real estate and real estate joint ventures
|
268 | 87 | ||||||
Other limited partnership interests
|
676 | 251 | ||||||
Purchases of:
|
||||||||
Fixed maturity securities
|
(66,861 | ) | (47,014 | ) | ||||
Equity securities
|
(489 | ) | (364 | ) | ||||
Mortgage loans
|
(6,686 | ) | (2,878 | ) | ||||
Real estate and real estate joint ventures
|
(417 | ) | (305 | ) | ||||
Other limited partnership interests
|
(576 | ) | (452 | ) | ||||
Cash received in connection with freestanding derivatives
|
1,470 | 986 | ||||||
Cash paid in connection with freestanding derivatives
|
(2,632 | ) | (1,077 | ) | ||||
Sale of interest in joint venture
|
269 | | ||||||
Net change in policy loans
|
(77 | ) | (119 | ) | ||||
Net change in short-term investments
|
(2,896 | ) | (1,334 | ) | ||||
Net change in other invested assets
|
(6 | ) | 754 | |||||
Other, net
|
(78 | ) | (95 | ) | ||||
Net cash used in investing activities
|
(16,898 | ) | (10,120 | ) | ||||
Cash flows from financing activities
|
||||||||
Policyholder account balances:
|
||||||||
Deposits
|
44,671 | 34,213 | ||||||
Withdrawals
|
(40,842 | ) | (32,390 | ) | ||||
Net change in payables for collateral under securities loaned
and other transactions
|
2,807 | 5,576 | ||||||
Net change in bank deposits
|
(341 | ) | (497 | ) | ||||
Net change in short-term debt
|
(204 | ) | (33 | ) | ||||
Long-term debt issued
|
1,221 | 678 | ||||||
Long-term debt repaid
|
(715 | ) | (511 | ) | ||||
Cash received in connection with collateral financing
arrangements
|
100 | | ||||||
Debt issuance costs
|
(1 | ) | (1 | ) | ||||
Common stock issued, net of issuance costs
|
2,950 | | ||||||
Stock options exercised
|
73 | 26 | ||||||
Redemption of convertible preferred stock
|
(2,805 | ) | | |||||
Preferred stock redemption premium
|
(146 | ) | | |||||
Dividends on preferred stock
|
(61 | ) | (61 | ) | ||||
Other, net
|
(121 | ) | (139 | ) | ||||
Net cash provided by financing activities
|
6,586 | 6,861 | ||||||
Effect of change in foreign currency exchange rates on cash and
cash equivalents balances
|
146 | (79 | ) | |||||
Change in cash and cash equivalents
|
(3,373 | ) | 590 | |||||
Cash and cash equivalents, beginning of period
|
13,046 | 10,112 | ||||||
Cash and cash equivalents, end of period
|
$ | 9,673 | $ | 10,702 | ||||
Cash and cash equivalents, subsidiaries
held-for-sale,
beginning of period
|
$ | 89 | $ | 88 | ||||
Cash and cash equivalents, subsidiaries
held-for-sale,
end of period
|
$ | 45 | $ | 38 | ||||
Cash and cash equivalents, from continuing operations, beginning
of period
|
$ | 12,957 | $ | 10,024 | ||||
Cash and cash equivalents, from continuing operations, end of
period
|
$ | 9,628 | $ | 10,664 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Net cash paid (received) during the period for:
|
||||||||
Interest
|
$ | 834 | $ | 744 | ||||
Income tax
|
$ | 586 | $ | (11 | ) | |||
Non-cash transactions during the period:
|
||||||||
Real estate and real estate joint ventures acquired in
satisfaction of debt
|
$ | 74 | $ | 10 | ||||
9
1. | Business, Basis of Presentation and Summary of Significant Accounting Policies |
10
| Reclassification from other net investment gains (losses) of $1,481 million and $1,522 million to net derivative gains (losses) in the interim condensed consolidated statements of operations for the three months and six months ended June 30, 2010, respectively; | |
| Realignment that affected assets, liabilities and results of operations on a segment basis with no impact to the consolidated results. See Note 13; | |
| Reclassifications related to operating revenues and expenses that affected results of operations on a segment and consolidated basis. See Note 13; and | |
| Reclassifications related to discontinued operations. See Note 14. |
11
12
2. | Acquisitions and Dispositions |
| Fixed Annuities - This block of business provides a fixed rate of return to the policyholders. A decrease in market interest rates since the time of issuance was the primary driver that resulted in the fair value of the liabilities associated with this block being significantly greater than the initial policy reserves assumed at the Acquisition Date. |
13
| Interest Sensitive Whole Life and Retirement Savings Products - These contracts contain guaranteed minimum benefit features. The recorded reserves for these guarantees increase ratably over the life of the policies in relation to future gross revenues. In contrast, the fair value of the guaranteed minimum benefit component of the initial policy reserves assumed represents the amount that would be required to be transferred to a market participant to assume the full liability at the acquisition date, implicitly incorporating market participant views as to all expected future cash flows. This results in a fair value significantly in excess of the initial guaranteed minimum benefit liability assumed at the Acquisition Date. |
14
Three Months |
Six Months |
|||||||
Ended |
Ended |
|||||||
June 30, | June 30, | |||||||
2011 | 2011 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | 13 | $ | 10 | ||||
Restructuring charges
|
7 | 24 | ||||||
Cash payments
|
(11 | ) | (25 | ) | ||||
Balance, end of period
|
$ | 9 | $ | 9 | ||||
Restructuring charges incurred in current period
|
$ | 7 | $ | 24 | ||||
Total restructuring charges incurred since inception of program
|
$ | 34 | $ | 34 | ||||
15
3. | Investments |
June 30, 2011 | ||||||||||||||||||||||||
Cost or |
Gross Unrealized |
Estimated |
||||||||||||||||||||||
Amortized |
Temporary |
OTTI |
Fair |
% of |
||||||||||||||||||||
Cost | Gains | Losses | Losses | Value | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
U.S. corporate securities
|
$ | 92,677 | $ | 5,244 | $ | 1,124 | $ | | $ | 96,797 | 28.3 | % | ||||||||||||
Foreign corporate securities (1)
|
67,518 | 3,877 | 858 | (1 | ) | 70,538 | 20.6 | |||||||||||||||||
Foreign government securities
|
47,750 | 2,046 | 389 | 161 | 49,246 | 14.4 | ||||||||||||||||||
Residential mortgage-backed securities (RMBS)
|
42,845 | 1,870 | 652 | 513 | 43,550 | 12.8 | ||||||||||||||||||
U.S. Treasury and agency securities
|
34,691 | 1,462 | 588 | | 35,565 | 10.4 | ||||||||||||||||||
Commercial mortgage-backed securities (CMBS) (1)
|
18,782 | 906 | 176 | (6 | ) | 19,518 | 5.7 | |||||||||||||||||
Asset-backed securities (ABS)
|
15,082 | 330 | 483 | 72 | 14,857 | 4.4 | ||||||||||||||||||
State and political subdivision securities
|
11,554 | 443 | 328 | | 11,669 | 3.4 | ||||||||||||||||||
Other fixed maturity securities
|
4 | | | | 4 | | ||||||||||||||||||
Total fixed maturity securities (2),(3)
|
$ | 330,903 | $ | 16,178 | $ | 4,598 | $ | 739 | $ | 341,744 | 100.0 | % | ||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Common stock
|
$ | 1,959 | $ | 142 | $ | 11 | $ | | $ | 2,090 | 64.5 | % | ||||||||||||
Non-redeemable preferred stock (2)
|
1,169 | 83 | 104 | | 1,148 | 35.5 | ||||||||||||||||||
Total equity securities
|
$ | 3,128 | $ | 225 | $ | 115 | $ | | $ | 3,238 | 100.0 | % | ||||||||||||
16
December 31, 2010 | ||||||||||||||||||||||||
Cost or |
Gross Unrealized |
Estimated |
||||||||||||||||||||||
Amortized |
Temporary |
OTTI |
Fair |
% of |
||||||||||||||||||||
Cost | Gains | Losses | Losses | Value | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
U.S. corporate securities
|
$ | 88,905 | $ | 4,469 | $ | 1,602 | $ | | $ | 91,772 | 28.3 | % | ||||||||||||
Foreign corporate securities
|
65,487 | 3,326 | 925 | | 67,888 | 20.9 | ||||||||||||||||||
Foreign government securities
|
40,871 | 1,733 | 602 | | 42,002 | 12.9 | ||||||||||||||||||
RMBS
|
44,468 | 1,652 | 917 | 470 | 44,733 | 13.8 | ||||||||||||||||||
U.S. Treasury and agency securities
|
32,469 | 1,394 | 559 | | 33,304 | 10.2 | ||||||||||||||||||
CMBS
|
20,213 | 740 | 266 | 12 | 20,675 | 6.4 | ||||||||||||||||||
ABS
|
14,722 | 274 | 590 | 119 | 14,287 | 4.4 | ||||||||||||||||||
State and political subdivision securities
|
10,476 | 171 | 518 | | 10,129 | 3.1 | ||||||||||||||||||
Other fixed maturity securities
|
6 | 1 | | | 7 | | ||||||||||||||||||
Total fixed maturity securities (2),(3)
|
$ | 317,617 | $ | 13,760 | $ | 5,979 | $ | 601 | $ | 324,797 | 100.0 | % | ||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Common stock
|
$ | 2,059 | $ | 146 | $ | 12 | $ | | $ | 2,193 | 60.9 | % | ||||||||||||
Non-redeemable preferred stock (2)
|
1,562 | 76 | 229 | | 1,409 | 39.1 | ||||||||||||||||||
Total equity securities
|
$ | 3,621 | $ | 222 | $ | 241 | $ | | $ | 3,602 | 100.0 | % | ||||||||||||
(1) | OTTI losses as presented above represent the noncredit portion of OTTI losses that is included in accumulated other comprehensive income (loss). OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities and CMBS were in an unrealized gain (loss) position of $1 million and $6 million, respectively, at June 30, 2011 due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also Net Unrealized Investment Gains (Losses). | |
(2) | Upon acquisition, the Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more debt-like characteristics; while those with more equity-like characteristics, are classified as equity securities within non-redeemable preferred stock. Many of such securities have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as perpetual hybrid securities. The following table presents the perpetual hybrid securities held by the Company at: |
June 30, 2011 | December 31, 2010 | |||||||||||
Estimated |
Estimated |
|||||||||||
Classification |
Fair |
Fair |
||||||||||
Consolidated Balance Sheets | Sector Table | Primary Issuers | Value | Value | ||||||||
(In millions) | ||||||||||||
Fixed maturity securities
|
Foreign corporate securities | Non-U.S. financial institutions | $ | 1,094 | $ | 2,008 | ||||||
Fixed maturity securities
|
U.S. corporate securities | U.S. financial institutions | $ | 77 | $ | 83 | ||||||
Equity securities
|
Non-redeemable preferred stock | Non-U.S. financial institutions | $ | 841 | $ | 1,043 | ||||||
Equity securities
|
Non-redeemable preferred stock | U.S. financial institutions | $ | 227 | $ | 236 |
(3) | The Companys holdings in redeemable preferred stock with stated maturity dates, commonly referred to as capital securities, were primarily issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $2.2 billion and $2.7 billion at estimated fair value of such securities at June 30, 2011 and December 31, 2010, respectively, which are included in the U.S. and foreign corporate securities sectors within fixed maturity securities. |
17
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Below investment grade or non-rated fixed maturity securities:
|
||||||||
Estimated fair value
|
$ | 25,941 | $ | 24,870 | ||||
Net unrealized gains (losses)
|
$ | (819 | ) | $ | (696 | ) | ||
Non-income producing fixed maturity securities:
|
||||||||
Estimated fair value
|
$ | 43 | $ | 130 | ||||
Net unrealized gains (losses)
|
$ | (32 | ) | $ | (23 | ) |
18
June 30, 2011 | December 31, 2010 | |||||||
Carrying Value (1) | ||||||||
(In millions) | ||||||||
Government and agency fixed maturity securities:
|
||||||||
United States
|
$ | 35,565 | $ | 33,304 | ||||
Japan
|
$ | 18,216 | $ | 15,591 | ||||
Mexico
|
$ | 5,573 | $ | 5,050 | ||||
U.S. Treasury and agency fixed-income securities included in:
|
||||||||
Short-term investments
|
$ | 8,616 | $ | 4,048 | ||||
Cash equivalents
|
$ | 1,570 | $ | 5,762 |
(1) | Represents estimated fair value for fixed maturity securities; amortized cost, which approximates estimated fair value or estimated fair value, if available, for short-term investments; and amortized cost, which approximates estimated fair value, for cash equivalents. |
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of |
Fair |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
Corporate fixed maturity securities by sector:
|
||||||||||||||||
Foreign corporate fixed maturity securities (1)
|
$ | 70,538 | 42.2 | % | $ | 67,888 | 42.5 | % | ||||||||
U.S. corporate fixed maturity securities by industry:
|
||||||||||||||||
Industrial
|
24,270 | 14.5 | 22,070 | 13.8 | ||||||||||||
Consumer
|
22,910 | 13.7 | 21,482 | 13.5 | ||||||||||||
Finance
|
20,397 | 12.2 | 20,785 | 13.0 | ||||||||||||
Utility
|
18,242 | 10.9 | 16,902 | 10.6 | ||||||||||||
Communications
|
7,733 | 4.6 | 7,335 | 4.6 | ||||||||||||
Other
|
3,245 | 1.9 | 3,198 | 2.0 | ||||||||||||
Total
|
$ | 167,335 | 100.0 | % | $ | 159,660 | 100.0 | % | ||||||||
(1) | Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity securities. |
19
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of Total |
Fair |
% of Total |
|||||||||||||
Value | Investments | Value | Investments | |||||||||||||
(In millions) | ||||||||||||||||
Concentrations within corporate fixed maturity securities:
|
||||||||||||||||
Largest exposure to a single issuer
|
$ | 2,207 | 0.5 | % | $ | 2,291 | 0.5 | % | ||||||||
Holdings in ten issuers with the largest exposures
|
$ | 13,328 | 2.8 | % | $ | 14,247 | 3.1 | % |
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of |
Fair |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
By security type:
|
||||||||||||||||
Collateralized mortgage obligations
|
$ | 23,011 | 52.8 | % | $ | 22,303 | 49.9 | % | ||||||||
Pass-through securities
|
20,539 | 47.2 | 22,430 | 50.1 | ||||||||||||
Total RMBS
|
$ | 43,550 | 100.0 | % | $ | 44,733 | 100.0 | % | ||||||||
By risk profile:
|
||||||||||||||||
Agency
|
$ | 32,774 | 75.3 | % | $ | 34,254 | 76.6 | % | ||||||||
Prime
|
6,016 | 13.8 | 6,258 | 14.0 | ||||||||||||
Alternative residential mortgage loans
|
4,760 | 10.9 | 4,221 | 9.4 | ||||||||||||
Total RMBS
|
$ | 43,550 | 100.0 | % | $ | 44,733 | 100.0 | % | ||||||||
Rated Aaa/AAA
|
$ | 34,105 | 78.3 | % | $ | 36,085 | 80.7 | % | ||||||||
Rated NAIC 1
|
$ | 37,484 | 86.1 | % | $ | 38,984 | 87.1 | % | ||||||||
20
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of |
Fair |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
Vintage Year:
|
||||||||||||||||
2005 & Prior
|
$ | 1,704 | 35.8 | % | $ | 1,576 | 37.3 | % | ||||||||
2006
|
1,376 | 28.9 | 1,013 | 24.0 | ||||||||||||
2007
|
1,016 | 21.3 | 922 | 21.8 | ||||||||||||
2008
|
| | 7 | 0.2 | ||||||||||||
2009 (1)
|
627 | 13.2 | 671 | 15.9 | ||||||||||||
2010 (1)
|
37 | 0.8 | 32 | 0.8 | ||||||||||||
2011
|
| | | | ||||||||||||
Total
|
$ | 4,760 | 100.0 | % | $ | 4,221 | 100.0 | % | ||||||||
(1) | All of the Companys Alt-A RMBS holdings in the 2009 and 2010 vintage years are resecuritization of real estate mortgage investment conduit (Re-REMIC) Alt-A RMBS that were purchased in 2009 and 2010 and are comprised of original issue vintage year 2005 through 2007 Alt-A RMBS. All of the Companys Re-REMIC Alt-A RMBS holdings are NAIC 1 rated. |
June 30, 2011 | December 31, 2010 | |||||||||||||||
% of |
% of |
|||||||||||||||
Amount | Total | Amount | Total | |||||||||||||
(In millions) | ||||||||||||||||
Net unrealized gains (losses)
|
$ | (680 | ) | $ | (670 | ) | ||||||||||
Rated Aa/AA or better
|
12.4 | % | 15.9 | % | ||||||||||||
Rated NAIC 1
|
39.4 | % | 39.5 | % | ||||||||||||
Distribution of holdings at estimated fair
value by collateral type:
|
||||||||||||||||
Fixed rate mortgage loans collateral
|
92.3 | % | 90.7 | % | ||||||||||||
Hybrid adjustable rate mortgage loans collateral
|
7.7 | 9.3 | ||||||||||||||
Total Alt-A RMBS
|
100.0 | % | 100.0 | % | ||||||||||||
21
June 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
Below |
||||||||||||||||||||||||||||||||||||||||||||||||
Investment |
||||||||||||||||||||||||||||||||||||||||||||||||
Aaa | Aa | A | Baa | Grade | Total | |||||||||||||||||||||||||||||||||||||||||||
Estimated |
Estimated |
Estimated |
Estimated |
Estimated |
Estimated |
|||||||||||||||||||||||||||||||||||||||||||
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
|||||||||||||||||||||||||||||||||||||
Cost | Value | Cost | Value | Cost | Value | Cost | Value | Cost | Value | Cost | Value | |||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
2003 & Prior
|
$ | 6,311 | $ | 6,481 | $ | 184 | $ | 186 | $ | 105 | $ | 103 | $ | 63 | $ | 61 | $ | 21 | $ | 20 | $ | 6,684 | $ | 6,851 | ||||||||||||||||||||||||
2004
|
3,693 | 3,858 | 462 | 483 | 117 | 115 | 91 | 92 | 76 | 66 | 4,439 | 4,614 | ||||||||||||||||||||||||||||||||||||
2005
|
2,905 | 3,141 | 363 | 389 | 307 | 325 | 169 | 175 | 37 | 29 | 3,781 | 4,059 | ||||||||||||||||||||||||||||||||||||
2006
|
1,480 | 1,584 | 155 | 157 | 86 | 94 | 153 | 165 | 157 | 155 | 2,031 | 2,155 | ||||||||||||||||||||||||||||||||||||
2007
|
674 | 687 | 369 | 342 | 155 | 151 | 43 | 44 | 117 | 115 | 1,358 | 1,339 | ||||||||||||||||||||||||||||||||||||
2008
|
| | | | | | | | 26 | 30 | 26 | 30 | ||||||||||||||||||||||||||||||||||||
2009
|
2 | 2 | | | | | | | | | 2 | 2 | ||||||||||||||||||||||||||||||||||||
2010
|
3 | 3 | | | 56 | 61 | | | | | 59 | 64 | ||||||||||||||||||||||||||||||||||||
2011
|
402 | 404 | | | | | | | | | 402 | 404 | ||||||||||||||||||||||||||||||||||||
Total
|
$ | 15,470 | $ | 16,160 | $ | 1,533 | $ | 1,557 | $ | 826 | $ | 849 | $ | 519 | $ | 537 | $ | 434 | $ | 415 | $ | 18,782 | $ | 19,518 | ||||||||||||||||||||||||
Ratings Distribution
|
82.8 | % | 8.0 | % | 4.3 | % | 2.8 | % | 2.1 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||
Below |
||||||||||||||||||||||||||||||||||||||||||||||||
Investment |
||||||||||||||||||||||||||||||||||||||||||||||||
Aaa | Aa | A | Baa | Grade | Total | |||||||||||||||||||||||||||||||||||||||||||
Estimated |
Estimated |
Estimated |
Estimated |
Estimated |
Estimated |
|||||||||||||||||||||||||||||||||||||||||||
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
Amortized |
Fair |
|||||||||||||||||||||||||||||||||||||
Cost | Value | Cost | Value | Cost | Value | Cost | Value | Cost | Value | Cost | Value | |||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
2003 & Prior
|
$ | 7,411 | $ | 7,640 | $ | 282 | $ | 282 | $ | 228 | $ | 227 | $ | 74 | $ | 71 | $ | 28 | $ | 24 | $ | 8,023 | $ | 8,244 | ||||||||||||||||||||||||
2004
|
3,489 | 3,620 | 277 | 273 | 216 | 209 | 181 | 175 | 91 | 68 | 4,254 | 4,345 | ||||||||||||||||||||||||||||||||||||
2005
|
3,113 | 3,292 | 322 | 324 | 286 | 280 | 263 | 255 | 73 | 66 | 4,057 | 4,217 | ||||||||||||||||||||||||||||||||||||
2006
|
1,463 | 1,545 | 159 | 160 | 168 | 168 | 385 | 398 | 166 | 156 | 2,341 | 2,427 | ||||||||||||||||||||||||||||||||||||
2007
|
840 | 791 | 344 | 298 | 96 | 95 | 119 | 108 | 122 | 133 | 1,521 | 1,425 | ||||||||||||||||||||||||||||||||||||
2008
|
2 | 2 | | | | | | | | | 2 | 2 | ||||||||||||||||||||||||||||||||||||
2009
|
3 | 3 | | | | | | | | | 3 | 3 | ||||||||||||||||||||||||||||||||||||
2010
|
8 | 8 | | | 4 | 4 | | | | | 12 | 12 | ||||||||||||||||||||||||||||||||||||
Total
|
$ | 16,329 | $ | 16,901 | $ | 1,384 | $ | 1,337 | $ | 998 | $ | 983 | $ | 1,022 | $ | 1,007 | $ | 480 | $ | 447 | $ | 20,213 | $ | 20,675 | ||||||||||||||||||||||||
Ratings Distribution
|
81.7 | % | 6.4 | % | 4.8 | % | 4.9 | % | 2.2 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||
June 30, 2011 | December 31, 2010 | |||||||
NAIC 1
|
94.1 | % | 93.7 | % | ||||
NAIC 2
|
3.7 | % | 3.2 | % | ||||
NAIC 3
|
1.2 | % | 1.8 | % | ||||
NAIC 4
|
0.9 | % | 1.0 | % | ||||
NAIC 5
|
0.1 | % | 0.3 | % | ||||
NAIC 6
|
| % | | % |
22
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of |
Fair |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
By collateral type:
|
||||||||||||||||
Credit card loans
|
$ | 5,202 | 35.0 | % | $ | 6,027 | 42.2 | % | ||||||||
Student loans
|
2,903 | 19.5 | 2,416 | 16.9 | ||||||||||||
Collateralized debt obligations
|
2,447 | 16.5 | 1,798 | 12.6 | ||||||||||||
RMBS backed by
sub-prime
mortgage loans
|
1,065 | 7.2 | 1,119 | 7.8 | ||||||||||||
Automobile loans
|
836 | 5.6 | 605 | 4.2 | ||||||||||||
Other loans
|
2,404 | 16.2 | 2,322 | 16.3 | ||||||||||||
Total
|
$ | 14,857 | 100.0 | % | $ | 14,287 | 100.0 | % | ||||||||
Rated Aaa/AAA
|
$ | 9,809 | 66.0 | % | $ | 10,411 | 72.9 | % | ||||||||
Rated NAIC 1
|
$ | 13,683 | 92.1 | % | $ | 13,133 | 91.9 | % | ||||||||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Amortized |
Fair |
Amortized |
Fair |
|||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(In millions) | ||||||||||||||||
Due in one year or less
|
$ | 10,716 | $ | 10,857 | $ | 8,580 | $ | 8,702 | ||||||||
Due after one year through five years
|
69,032 | 71,319 | 65,143 | 66,796 | ||||||||||||
Due after five years through ten years
|
82,006 | 86,268 | 76,508 | 79,571 | ||||||||||||
Due after ten years
|
92,440 | 95,375 | 87,983 | 90,033 | ||||||||||||
Subtotal
|
254,194 | 263,819 | 238,214 | 245,102 | ||||||||||||
RMBS, CMBS and ABS
|
76,709 | 77,925 | 79,403 | 79,695 | ||||||||||||
Total fixed maturity securities
|
$ | 330,903 | $ | 341,744 | $ | 317,617 | $ | 324,797 | ||||||||
23
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Fixed maturity securities
|
$ | 11,576 | $ | 7,817 | ||||
Fixed maturity securities with noncredit OTTI losses in
accumulated other comprehensive income (loss)
|
(739 | ) | (601 | ) | ||||
Total fixed maturity securities
|
10,837 | 7,216 | ||||||
Equity securities
|
132 | (3 | ) | |||||
Derivatives
|
(165 | ) | (59 | ) | ||||
Other
|
(5 | ) | 42 | |||||
Subtotal
|
10,799 | 7,196 | ||||||
Amounts allocated from:
|
||||||||
Insurance liability loss recognition
|
(1,061 | ) | (672 | ) | ||||
DAC and VOBA related to noncredit OTTI losses recognized in
accumulated other comprehensive income (loss)
|
34 | 38 | ||||||
DAC and VOBA
|
(1,430 | ) | (1,205 | ) | ||||
Policyholder dividend obligation
|
(1,281 | ) | (876 | ) | ||||
Subtotal
|
(3,738 | ) | (2,715 | ) | ||||
Deferred income tax benefit (expense) related to noncredit OTTI
losses recognized in accumulated other comprehensive income
(loss)
|
245 | 197 | ||||||
Deferred income tax benefit (expense)
|
(2,651 | ) | (1,692 | ) | ||||
Net unrealized investment gains (losses)
|
4,655 | 2,986 | ||||||
Net unrealized investment gains (losses) attributable to
noncontrolling interests
|
9 | 4 | ||||||
Net unrealized investment gains (losses) attributable to
MetLife, Inc.
|
$ | 4,664 | $ | 2,990 | ||||
24
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | (601 | ) | $ | (859 | ) | ||
Noncredit OTTI losses recognized (1)
|
(184 | ) | (212 | ) | ||||
Transferred to retained earnings (2)
|
| 16 | ||||||
Securities sold with previous noncredit OTTI loss
|
77 | 137 | ||||||
Subsequent changes in estimated fair value
|
(31 | ) | 317 | |||||
Balance, end of period
|
$ | (739 | ) | $ | (601 | ) | ||
(1) | Noncredit OTTI losses recognized, net of deferred policy acquisition costs (DAC), were ($188) million and ($202) million for the periods ended June 30, 2011 and December 31, 2010, respectively. | |
(2) | Amounts transferred to retained earnings were in connection with the adoption of guidance related to the consolidation of VIEs as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report. |
Six Months |
||||
Ended |
||||
June 30, 2011 | ||||
(In millions) | ||||
Balance, beginning of period
|
$ | 2,990 | ||
Fixed maturity securities on which noncredit OTTI losses have
been recognized
|
(138 | ) | ||
Unrealized investment gains (losses) during the period
|
3,741 | |||
Unrealized investment gains (losses) relating to:
|
||||
Insurance liability gain (loss) recognition
|
(389 | ) | ||
DAC and VOBA related to noncredit OTTI losses recognized in
accumulated other comprehensive income (loss)
|
(4 | ) | ||
DAC and VOBA
|
(225 | ) | ||
Policyholder dividend obligation
|
(405 | ) | ||
Deferred income tax benefit (expense) related to noncredit OTTI
losses recognized in accumulated other comprehensive income
(loss)
|
48 | |||
Deferred income tax benefit (expense)
|
(959 | ) | ||
Net unrealized investment gains (losses)
|
4,659 | |||
Net unrealized investment gains (losses) attributable to
noncontrolling interests
|
5 | |||
Balance, end of period
|
$ | 4,664 | ||
Change in net unrealized investment gains (losses)
|
$ | 1,669 | ||
Change in net unrealized investment gains (losses) attributable
to noncontrolling interests
|
5 | |||
Change in net unrealized investment gains (losses) attributable
to MetLife, Inc.
|
$ | 1,674 | ||
25
June 30, 2011 | ||||||||||||||||||||||||
Equal to or Greater |
||||||||||||||||||||||||
Less than 12 Months | than 12 Months | Total | ||||||||||||||||||||||
Estimated |
Gross |
Estimated |
Gross |
Estimated |
Gross |
|||||||||||||||||||
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In millions, except number of securities) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
U.S. corporate securities
|
$ | 15,021 | $ | 289 | $ | 6,662 | $ | 835 | $ | 21,683 | $ | 1,124 | ||||||||||||
Foreign corporate securities
|
17,137 | 592 | 1,953 | 265 | 19,090 | 857 | ||||||||||||||||||
Foreign government securities
|
21,463 | 539 | 153 | 11 | 21,616 | 550 | ||||||||||||||||||
RMBS
|
5,742 | 159 | 5,540 | 1,006 | 11,282 | 1,165 | ||||||||||||||||||
U.S. Treasury and agency securities
|
11,586 | 562 | 108 | 26 | 11,694 | 588 | ||||||||||||||||||
CMBS
|
1,606 | 32 | 926 | 138 | 2,532 | 170 | ||||||||||||||||||
ABS
|
2,212 | 22 | 2,723 | 533 | 4,935 | 555 | ||||||||||||||||||
State and political subdivision securities
|
2,684 | 96 | 1,000 | 232 | 3,684 | 328 | ||||||||||||||||||
Other fixed maturity securities
|
2 | | | | 2 | | ||||||||||||||||||
Total fixed maturity securities
|
$ | 77,453 | $ | 2,291 | $ | 19,065 | $ | 3,046 | $ | 96,518 | $ | 5,337 | ||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Common stock
|
$ | 96 | $ | 11 | $ | 23 | $ | | $ | 119 | $ | 11 | ||||||||||||
Non-redeemable preferred stock
|
174 | 6 | 462 | 98 | 636 | 104 | ||||||||||||||||||
Total equity securities
|
$ | 270 | $ | 17 | $ | 485 | $ | 98 | $ | 755 | $ | 115 | ||||||||||||
Total number of securities in an
|
||||||||||||||||||||||||
unrealized loss position
|
4,834 | 1,351 | ||||||||||||||||||||||
26
December 31, 2010 | ||||||||||||||||||||||||
Equal to or Greater |
||||||||||||||||||||||||
Less than 12 Months | than 12 Months | Total | ||||||||||||||||||||||
Estimated |
Gross |
Estimated |
Gross |
Estimated |
Gross |
|||||||||||||||||||
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In millions, except number of securities) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
U.S. corporate securities
|
$ | 22,954 | $ | 447 | $ | 8,319 | $ | 1,155 | $ | 31,273 | $ | 1,602 | ||||||||||||
Foreign corporate securities
|
22,415 | 410 | 3,976 | 515 | 26,391 | 925 | ||||||||||||||||||
Foreign government securities
|
26,659 | 585 | 189 | 17 | 26,848 | 602 | ||||||||||||||||||
RMBS
|
7,588 | 212 | 6,700 | 1,175 | 14,288 | 1,387 | ||||||||||||||||||
U.S. Treasury and agency securities
|
13,401 | 530 | 118 | 29 | 13,519 | 559 | ||||||||||||||||||
CMBS
|
3,787 | 29 | 1,363 | 249 | 5,150 | 278 | ||||||||||||||||||
ABS
|
2,713 | 42 | 3,026 | 667 | 5,739 | 709 | ||||||||||||||||||
State and political subdivision securities
|
5,061 | 246 | 988 | 272 | 6,049 | 518 | ||||||||||||||||||
Other fixed maturity securities
|
1 | | | | 1 | | ||||||||||||||||||
Total fixed maturity securities
|
$ | 104,579 | $ | 2,501 | $ | 24,679 | $ | 4,079 | $ | 129,258 | $ | 6,580 | ||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Common stock
|
$ | 89 | $ | 12 | $ | 1 | $ | | $ | 90 | $ | 12 | ||||||||||||
Non-redeemable preferred stock
|
191 | 9 | 824 | 220 | 1,015 | 229 | ||||||||||||||||||
Total equity securities
|
$ | 280 | $ | 21 | $ | 825 | $ | 220 | $ | 1,105 | $ | 241 | ||||||||||||
Total number of securities in an
|
||||||||||||||||||||||||
unrealized loss position
|
5,609 | 1,704 | ||||||||||||||||||||||
27
June 30, 2011 | ||||||||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized Losses | Number of Securities | ||||||||||||||||||||||
Less than |
20% or |
Less than |
20% or |
Less than |
20% or |
|||||||||||||||||||
20% | more | 20% | more | 20% | more | |||||||||||||||||||
(In millions, except number of securities) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
Less than six months
|
$ | 26,453 | $ | 2,874 | $ | 367 | $ | 825 | 1,963 | 167 | ||||||||||||||
Six months or greater but less than nine months
|
50,011 | 420 | 1,329 | 104 | 2,639 | 31 | ||||||||||||||||||
Nine months or greater but less than twelve months
|
1,985 | 186 | 130 | 64 | 260 | 12 | ||||||||||||||||||
Twelve months or greater
|
16,861 | 3,065 | 1,489 | 1,029 | 1,025 | 196 | ||||||||||||||||||
Total
|
$ | 95,310 | $ | 6,545 | $ | 3,315 | $ | 2,022 | ||||||||||||||||
Percentage of amortized cost
|
3 | % | 31 | % | ||||||||||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Less than six months
|
$ | 132 | $ | 8 | $ | 6 | $ | 4 | 74 | 16 | ||||||||||||||
Six months or greater but less than nine months
|
144 | 1 | 6 | | 32 | 9 | ||||||||||||||||||
Nine months or greater but less than twelve months
|
| 1 | | | | 4 | ||||||||||||||||||
Twelve months or greater
|
355 | 229 | 30 | 69 | 23 | 11 | ||||||||||||||||||
Total
|
$ | 631 | $ | 239 | $ | 42 | $ | 73 | ||||||||||||||||
Percentage of cost
|
7 | % | 31 | % | ||||||||||||||||||||
28
December 31, 2010 | ||||||||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized Losses | Number of Securities | ||||||||||||||||||||||
Less than |
20% or |
Less than |
20% or |
Less than |
20% or |
|||||||||||||||||||
20% | more | 20% | more | 20% | more | |||||||||||||||||||
(In millions, except number of securities) | ||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||
Less than six months
|
$ | 105,301 | $ | 1,403 | $ | 2,348 | $ | 368 | 5,320 | 121 | ||||||||||||||
Six months or greater but less than nine months
|
1,125 | 376 | 29 | 102 | 104 | 29 | ||||||||||||||||||
Nine months or greater but less than twelve months
|
371 | 89 | 28 | 27 | 50 | 9 | ||||||||||||||||||
Twelve months or greater
|
21,627 | 5,546 | 1,863 | 1,815 | 1,245 | 311 | ||||||||||||||||||
Total
|
$ | 128,424 | $ | 7,414 | $ | 4,268 | $ | 2,312 | ||||||||||||||||
Percentage of amortized cost
|
3 | % | 31 | % | ||||||||||||||||||||
Equity Securities:
|
||||||||||||||||||||||||
Less than six months
|
$ | 247 | $ | 94 | $ | 10 | $ | 22 | 106 | 33 | ||||||||||||||
Six months or greater but less than nine months
|
29 | 65 | 5 | 16 | 3 | 2 | ||||||||||||||||||
Nine months or greater but less than twelve months
|
6 | 47 | | 16 | 3 | 2 | ||||||||||||||||||
Twelve months or greater
|
518 | 340 | 56 | 116 | 35 | 14 | ||||||||||||||||||
Total
|
$ | 800 | $ | 546 | $ | 71 | $ | 170 | ||||||||||||||||
Percentage of cost
|
9 | % | 31 | % | ||||||||||||||||||||
29
June 30, 2011 | December 31, 2010 | |||||||
Sector:
|
||||||||
RMBS
|
21 | % | 20 | % | ||||
U.S. corporate securities
|
21 | 23 | ||||||
Foreign corporate securities
|
16 | 14 | ||||||
U.S. Treasury and agency securities
|
11 | 8 | ||||||
ABS
|
10 | 10 | ||||||
Foreign government securities
|
10 | 9 | ||||||
State and political subdivision securities
|
6 | 8 | ||||||
CMBS
|
3 | 4 | ||||||
Other
|
2 | 4 | ||||||
Total
|
100 | % | 100 | % | ||||
Industry:
|
||||||||
Mortgage-backed
|
24 | % | 24 | % | ||||
Finance
|
15 | 21 | ||||||
U.S. Treasury and agency securities
|
11 | 8 | ||||||
Asset-backed
|
10 | 10 | ||||||
Foreign government securities
|
10 | 9 | ||||||
Utility
|
10 | 5 | ||||||
State and political subdivision securities
|
6 | 8 | ||||||
Consumer
|
4 | 4 | ||||||
Communications
|
2 | 2 | ||||||
Industrial
|
1 | 2 | ||||||
Other
|
7 | 7 | ||||||
Total
|
100 | % | 100 | % | ||||
30
June 30, 2011 | December 31, 2010 | |||||||||||||||
Fixed Maturity |
Equity |
Fixed Maturity |
Equity |
|||||||||||||
Securities | Securities | Securities | Securities | |||||||||||||
(In millions, except number of securities) | ||||||||||||||||
Number of securities
|
88 | 3 | 107 | 6 | ||||||||||||
Total gross unrealized losses
|
$ | 1,846 | $ | 43 | $ | 2,014 | $ | 103 | ||||||||
Percentage of total gross unrealized losses
|
35 | % | 37 | % | 31 | % | 43 | % |
Non-Redeemable Preferred Stock | ||||||||||||||||||||||||||||||||
All Types of |
||||||||||||||||||||||||||||||||
All Equity |
Non-Redeemable |
Investment Grade | ||||||||||||||||||||||||||||||
Securities | Preferred Stock | All Industries | Financial Services Industry | |||||||||||||||||||||||||||||
Gross |
Gross |
% of All |
Gross |
% of All |
Gross |
% A |
||||||||||||||||||||||||||
Unrealized |
Unrealized |
Equity |
Unrealized |
Non-Redeemable |
Unrealized |
% of All |
Rated or |
|||||||||||||||||||||||||
Losses | Losses | Securities | Losses | Preferred Stock | Losses | Industries | Better | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Less than six months
|
$ | 4 | $ | | | % | $ | | | % | $ | | | % | | % | ||||||||||||||||
Six months or greater but less than twelve months
|
| | | % | | | % | | | % | | % | ||||||||||||||||||||
Twelve months or greater
|
69 | 69 | 100 | % | 69 | 100 | % | 69 | 100 | % | 72 | % | ||||||||||||||||||||
All equity securities with gross unrealized losses of 20% or more
|
$ | 73 | $ | 69 | 95 | % | $ | 69 | 100 | % | $ | 69 | 100 | % | 72 | % | ||||||||||||||||
31
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Total gains (losses) on fixed maturity securities:
|
||||||||||||||||
Total OTTI losses recognized
|
$ | (298 | ) | $ | (244 | ) | $ | (430 | ) | $ | (395 | ) | ||||
Less: Noncredit portion of OTTI losses transferred to and
recognized in other comprehensive income (loss)
|
175 | 98 | 184 | 157 | ||||||||||||
Net OTTI losses on fixed maturity securities recognized in
earnings
|
(123 | ) | (146 | ) | (246 | ) | (238 | ) | ||||||||
Fixed maturity securities net gains (losses) on
sales and disposals
|
18 | 19 | (22 | ) | 45 | |||||||||||
Total gains (losses) on fixed maturity securities
|
(105 | ) | (127 | ) | (268 | ) | (193 | ) | ||||||||
Other net investment gains (losses):
|
||||||||||||||||
Equity securities
|
(70 | ) | 74 | (34 | ) | 101 | ||||||||||
Mortgage loans
|
68 | 11 | 115 | (17 | ) | |||||||||||
Real estate and real estate joint ventures
|
4 | (27 | ) | 5 | (49 | ) | ||||||||||
Other limited partnership interests
|
5 | (10 | ) | 8 | (11 | ) | ||||||||||
Other investment portfolio gains (losses)
|
(6 | ) | 17 | (2 | ) | 76 | ||||||||||
Subtotal investment portfolio gains (losses)
|
(104 | ) | (62 | ) | (176 | ) | (93 | ) | ||||||||
Fair value option (FVO) consolidated securitization
entities changes in estimated fair value:
|
||||||||||||||||
Commercial mortgage loans
|
7 | 172 | 25 | 653 | ||||||||||||
Securities
|
39 | (17 | ) | (1 | ) | (21 | ) | |||||||||
Long-term debt related to commercial mortgage loans
|
(8 | ) | (156 | ) | (8 | ) | (635 | ) | ||||||||
Long-term debt related to securities
|
(54 | ) | (1 | ) | (7 | ) | 11 | |||||||||
Other gains (losses) (1)
|
(35 | ) | 50 | (87 | ) | 103 | ||||||||||
Subtotal FVO consolidated securitization entities and other
gains (losses)
|
(51 | ) | 48 | (78 | ) | 111 | ||||||||||
Total net investment gains (losses)
|
$ | (155 | ) | $ | (14 | ) | $ | (254 | ) | $ | 18 | |||||
32
(1) | Other gains (losses) for the three months and six months ended June 30, 2011 includes a loss of $7 million and $87 million, respectively, related to the sale of the Companys investment in MSI MetLife. See Note 2. |
Three Months Ended June 30, | ||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Fixed Maturity Securities | Equity Securities | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Proceeds
|
$ | 19,316 | $ | 13,466 | $ | 489 | $ | 298 | $ | 19,805 | $ | 13,764 | ||||||||||||
Gross investment gains
|
$ | 235 | $ | 214 | $ | 26 | $ | 76 | $ | 261 | $ | 290 | ||||||||||||
Gross investment losses
|
(217 | ) | (195 | ) | (49 | ) | (1 | ) | (266 | ) | (196 | ) | ||||||||||||
Total OTTI losses recognized in earnings:
|
||||||||||||||||||||||||
Credit-related
|
(70 | ) | (146 | ) | | | (70 | ) | (146 | ) | ||||||||||||||
Other (1)
|
(53 | ) | | (47 | ) | (1 | ) | (100 | ) | (1 | ) | |||||||||||||
Total OTTI losses recognized in earnings
|
(123 | ) | (146 | ) | (47 | ) | (1 | ) | (170 | ) | (147 | ) | ||||||||||||
Net investment gains (losses)
|
$ | (105 | ) | $ | (127 | ) | $ | (70 | ) | $ | 74 | $ | (175 | ) | $ | (53 | ) | |||||||
Six Months Ended June 30, | ||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Fixed Maturity Securities | Equity Securities | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Proceeds
|
$ | 35,848 | $ | 21,838 | $ | 805 | $ | 443 | $ | 36,653 | $ | 22,281 | ||||||||||||
Gross investment gains
|
$ | 428 | $ | 378 | $ | 74 | $ | 107 | $ | 502 | $ | 485 | ||||||||||||
Gross investment losses
|
(450 | ) | (333 | ) | (55 | ) | (4 | ) | (505 | ) | (337 | ) | ||||||||||||
Total OTTI losses recognized in earnings:
|
||||||||||||||||||||||||
Credit-related
|
(113 | ) | (232 | ) | | | (113 | ) | (232 | ) | ||||||||||||||
Other (1)
|
(133 | ) | (6 | ) | (53 | ) | (2 | ) | (186 | ) | (8 | ) | ||||||||||||
Total OTTI losses recognized in earnings
|
(246 | ) | (238 | ) | (53 | ) | (2 | ) | (299 | ) | (240 | ) | ||||||||||||
Net investment gains (losses)
|
$ | (268 | ) | $ | (193 | ) | $ | (34 | ) | $ | 101 | $ | (302 | ) | $ | (92 | ) | |||||||
(1) | Other OTTI losses recognized in earnings include impairments on equity securities, impairments on perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and fixed maturity securities where there is an |
33
intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value. |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Sector:
|
||||||||||||||||
U.S. and foreign corporate securities by industry:
|
||||||||||||||||
Finance
|
$ | 40 | $ | 20 | $ | 41 | $ | 28 | ||||||||
Consumer
|
27 | 1 | 29 | 23 | ||||||||||||
Communications
|
1 | | 14 | 3 | ||||||||||||
Utility
|
| 3 | 1 | 3 | ||||||||||||
Total U.S. and foreign corporate securities
|
68 | 24 | 85 | 57 | ||||||||||||
Foreign government securities
|
13 | | 89 | | ||||||||||||
RMBS
|
36 | 27 | 54 | 57 | ||||||||||||
ABS
|
6 | 44 | 15 | 63 | ||||||||||||
CMBS
|
| 51 | 3 | 61 | ||||||||||||
Total
|
$ | 123 | $ | 146 | $ | 246 | $ | 238 | ||||||||
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Sector:
|
||||||||||||||||
Non-redeemable preferred stock
|
$ | 38 | $ | | $ | 38 | $ | | ||||||||
Common stock
|
9 | 1 | 15 | 2 | ||||||||||||
Total
|
$ | 47 | $ | 1 | $ | 53 | $ | 2 | ||||||||
Industry:
|
||||||||||||||||
Financial services industry perpetual hybrid
securities
|
$ | 38 | $ | | $ | 38 | $ | | ||||||||
Other industries
|
9 | 1 | 15 | 2 | ||||||||||||
Total
|
$ | 47 | $ | 1 | $ | 53 | $ | 2 | ||||||||
34
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Balance, beginning of period
|
$ | 389 | $ | 424 | $ | 443 | $ | 581 | ||||||||
Additions:
|
||||||||||||||||
Initial impairments credit loss OTTI recognized on
securities not previously impaired
|
18 | 62 | 26 | 81 | ||||||||||||
Additional impairments credit loss OTTI recognized
on securities previously impaired
|
24 | 39 | 40 | 70 | ||||||||||||
Reductions:
|
||||||||||||||||
Due to sales (maturities, pay downs or prepayments) during the
period of securities previously credit loss OTTI impaired
|
(26 | ) | (30 | ) | (55 | ) | (134 | ) | ||||||||
Due to securities de-recognized in connection with the adoption
of new guidance related to the consolidation of VIEs
|
| | | (100 | ) | |||||||||||
Due to securities impaired to net present value of expected
future cash flows
|
| | (44 | ) | | |||||||||||
Due to increases in cash flows accretion of previous
credit loss OTTI
|
(4 | ) | (4 | ) | (9 | ) | (7 | ) | ||||||||
Balance, end of period
|
$ | 401 | $ | 491 | $ | 401 | $ | 491 | ||||||||
35
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Investment income:
|
||||||||||||||||
Fixed maturity securities
|
$ | 3,791 | $ | 3,013 | $ | 7,474 | $ | 6,066 | ||||||||
Equity securities
|
48 | 39 | 78 | 64 | ||||||||||||
Trading and other securities Actively Traded
Securities and FVO general account securities (1)
|
16 | (4 | ) | 44 | 11 | |||||||||||
Mortgage loans
|
766 | 695 | 1,525 | 1,368 | ||||||||||||
Policy loans
|
160 | 157 | 320 | 333 | ||||||||||||
Real estate and real estate joint ventures
|
200 | 135 | 354 | 179 | ||||||||||||
Other limited partnership interests
|
159 | 161 | 402 | 426 | ||||||||||||
Cash, cash equivalents and short-term investments
|
44 | 20 | 90 | 38 | ||||||||||||
International joint ventures (2)
|
9 | (97 | ) | (10 | ) | (80 | ) | |||||||||
Other
|
101 | 102 | 69 | 188 | ||||||||||||
Subtotal
|
5,294 | 4,221 | 10,346 | 8,593 | ||||||||||||
Less: Investment expenses
|
260 | 217 | 511 | 442 | ||||||||||||
Subtotal, net
|
5,034 | 4,004 | 9,835 | 8,151 | ||||||||||||
Trading and other securities FVO
contractholder-directed unit-linked investments (1)
|
(32 | ) | (52 | ) | 387 | 12 | ||||||||||
FVO consolidated securitization entities:
|
||||||||||||||||
Commercial mortgage loans
|
96 | 105 | 191 | 210 | ||||||||||||
Securities
|
| 4 | 1 | 8 | ||||||||||||
Subtotal
|
64 | 57 | 579 | 230 | ||||||||||||
Net investment income
|
$ | 5,098 | $ | 4,061 | $ | 10,414 | $ | 8,381 | ||||||||
(1) | Changes in estimated fair value subsequent to purchase included in net investment income were: |
Trading and other securities Actively Traded
Securities and FVO general account securities
|
$ | | $ | (19 | ) | $ | 21 | $ | (15 | ) | ||||||
Trading and other securities FVO
contractholder-directed unit-linked investments
|
$ | (84 | ) | $ | (71 | ) | $ | 232 | $ | (14 | ) |
(2) | Amounts are presented net of changes in estimated fair value of derivatives related to economic hedges of the Companys investment in these equity method international joint venture investments that do not qualify for hedge accounting of less than $1 million and $23 million for the three months and six months ended June 30, 2011, respectively, and $109 million and $77 million for the three months and six months ended June 30, 2010, respectively. |
36
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Securities on loan:
|
||||||||
Amortized cost
|
$ | 25,336 | $ | 23,715 | ||||
Estimated fair value
|
$ | 25,938 | $ | 24,230 | ||||
Aging of cash collateral liability:
|
||||||||
Open (1)
|
$ | 3,477 | $ | 2,752 | ||||
Less than thirty days
|
15,609 | 12,301 | ||||||
Thirty days or greater but less than sixty days
|
5,351 | 4,399 | ||||||
Sixty days or greater but less than ninety days
|
1,020 | 2,291 | ||||||
Ninety days or greater
|
1,124 | 2,904 | ||||||
Total cash collateral liability
|
$ | 26,581 | $ | 24,647 | ||||
Security collateral on deposit from counterparties
|
$ | 22 | $ | | ||||
Reinvestment portfolio estimated fair value
|
$ | 26,482 | $ | 24,177 | ||||
(1) | Open meaning that the related loaned security could be returned to the Company on the next business day requiring the Company to immediately return the cash collateral. |
37
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Invested assets on deposit:
|
||||||||
Regulatory agencies
|
$ | 1,950 | $ | 2,110 | ||||
Invested assets held in trust:
|
||||||||
Collateral financing arrangements
|
5,408 | 5,340 | ||||||
Reinsurance arrangements
|
2,971 | 3,090 | ||||||
Invested assets pledged as collateral:
|
||||||||
Funding agreements and advances Federal Home Loan
Bank (FHLB) of New York
|
20,589 | 21,975 | ||||||
Funding agreements Federal Agricultural Mortgage
Corporation
|
3,160 | 3,159 | ||||||
Funding agreements FHLB of Des Moines
|
850 | | ||||||
Funding agreements FHLB of Boston
|
534 | 211 | ||||||
Federal Reserve Bank of New York
|
1,654 | 1,822 | ||||||
Collateral financing arrangements
|
93 | 112 | ||||||
Derivative transactions
|
971 | 1,726 | ||||||
Short sale agreements
|
568 | 465 | ||||||
Total invested assets on deposit, held in trust and pledged as
collateral
|
$ | 38,748 | $ | 40,010 | ||||
38
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Actively Traded Securities
|
$ | 560 | $ | 463 | ||||
FVO general account securities
|
303 | 131 | ||||||
FVO contractholder-directed unit-linked investments
|
18,690 | 17,794 | ||||||
FVO securities held by consolidated securitization entities
|
147 | 201 | ||||||
Total trading and other securities at estimated fair
value
|
$ | 19,700 | $ | 18,589 | ||||
Actively Traded Securities at estimated fair value
|
$ | 560 | $ | 463 | ||||
Short sale agreement liabilities at estimated fair
value
|
(54 | ) | (46 | ) | ||||
Net long/short position at estimated fair value
|
$ | 506 | $ | 417 | ||||
Investments pledged to secure short sale agreement liabilities
|
$ | 568 | $ | 465 | ||||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying |
% of |
Carrying |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
Mortgage loans
held-for-investment:
|
||||||||||||||||
Commercial
|
$ | 39,050 | 61.4 | % | $ | 37,818 | 60.7 | % | ||||||||
Agricultural
|
12,981 | 20.4 | 12,751 | 20.4 | ||||||||||||
Residential
|
2,657 | 4.2 | 2,231 | 3.7 | ||||||||||||
Subtotal
|
54,688 | 86.0 | 52,800 | 84.8 | ||||||||||||
Valuation allowances
|
(566 | ) | (0.9 | ) | (664 | ) | (1.1 | ) | ||||||||
Subtotal mortgage loans
held-for-investment,
net
|
54,122 | 85.1 | 52,136 | 83.7 | ||||||||||||
Commercial mortgage loans held by consolidated securitization
entities FVO
|
6,697 | 10.5 | 6,840 | 11.0 | ||||||||||||
Total mortgage loans
held-for-investment,
net
|
60,819 | 95.6 | 58,976 | 94.7 | ||||||||||||
Mortgage loans
held-for-sale:
|
||||||||||||||||
Residential FVO
|
1,863 | 2.9 | 2,510 | 4.0 | ||||||||||||
Agricultural and residential mortgage loans lower of
amortized cost or estimated fair value
|
942 | 1.5 | 811 | 1.3 | ||||||||||||
Total mortgage loans
held-for-sale
|
2,805 | 4.4 | 3,321 | 5.3 | ||||||||||||
Total mortgage loans, net
|
$ | 63,624 | 100.0 | % | $ | 62,297 | 100.0 | % | ||||||||
39
Commercial | Agricultural | Residential | Total | |||||||||||||
(In millions) | ||||||||||||||||
June 30, 2011:
|
||||||||||||||||
Mortgage loans:
|
||||||||||||||||
Evaluated individually for credit losses
|
$ | 126 | $ | 128 | $ | 11 | $ | 265 | ||||||||
Evaluated collectively for credit losses
|
38,924 | 12,853 | 2,646 | 54,423 | ||||||||||||
Total mortgage loans
|
39,050 | 12,981 | 2,657 | 54,688 | ||||||||||||
Valuation allowances:
|
||||||||||||||||
Specific credit losses
|
28 | 43 | 1 | 72 | ||||||||||||
Non-specifically identified credit losses
|
441 | 36 | 17 | 494 | ||||||||||||
Total valuation allowances
|
469 | 79 | 18 | 566 | ||||||||||||
Mortgage loans, net of valuation allowance
|
$ | 38,581 | $ | 12,902 | $ | 2,639 | $ | 54,122 | ||||||||
December 31, 2010:
|
||||||||||||||||
Mortgage loans:
|
||||||||||||||||
Evaluated individually for credit losses
|
$ | 120 | $ | 146 | $ | 13 | $ | 279 | ||||||||
Evaluated collectively for credit losses
|
37,698 | 12,605 | 2,218 | 52,521 | ||||||||||||
Total mortgage loans
|
37,818 | 12,751 | 2,231 | 52,800 | ||||||||||||
Valuation allowances:
|
||||||||||||||||
Specific credit losses
|
36 | 52 | | 88 | ||||||||||||
Non-specifically identified credit losses
|
526 | 36 | 14 | 576 | ||||||||||||
Total valuation allowances
|
562 | 88 | 14 | 664 | ||||||||||||
Mortgage loans, net of valuation allowance
|
$ | 37,256 | $ | 12,663 | $ | 2,217 | $ | 52,136 | ||||||||
40
Mortgage Loan Valuation Allowances | ||||||||||||||||
Commercial | Agricultural | Residential | Total | |||||||||||||
(In millions) | ||||||||||||||||
For the Three Months Ended June 30, 2011:
|
||||||||||||||||
Balance, beginning of period
|
$ | 532 | $ | 76 | $ | 13 | $ | 621 | ||||||||
Provision (release)
|
(63 | ) | 3 | 5 | (55 | ) | ||||||||||
Charge-offs, net of recoveries
|
| | | | ||||||||||||
Balance, end of period
|
$ | 469 | $ | 79 | $ | 18 | $ | 566 | ||||||||
For the Three Months Ended June 30, 2010:
|
||||||||||||||||
Balance, beginning of period
|
$ | 624 | $ | 110 | $ | 17 | $ | 751 | ||||||||
Provision (release)
|
(3 | ) | (7 | ) | 2 | (8 | ) | |||||||||
Charge-offs, net of recoveries
|
| (7 | ) | (2 | ) | (9 | ) | |||||||||
Balance, end of period
|
$ | 621 | $ | 96 | $ | 17 | $ | 734 | ||||||||
For the Six Months Ended June 30, 2011:
|
||||||||||||||||
Balance, beginning of period
|
$ | 562 | $ | 88 | $ | 14 | $ | 664 | ||||||||
Provision (release)
|
(93 | ) | (6 | ) | 5 | (94 | ) | |||||||||
Charge-offs, net of recoveries
|
| (3 | ) | (1 | ) | (4 | ) | |||||||||
Balance, end of period
|
$ | 469 | $ | 79 | $ | 18 | $ | 566 | ||||||||
For the Six Months Ended June 30, 2010:
|
||||||||||||||||
Balance, beginning of period
|
$ | 589 | $ | 115 | $ | 17 | $ | 721 | ||||||||
Provision (release)
|
32 | (1 | ) | 2 | 33 | |||||||||||
Charge-offs, net of recoveries
|
| (18 | ) | (2 | ) | (20 | ) | |||||||||
Balance, end of period
|
$ | 621 | $ | 96 | $ | 17 | $ | 734 | ||||||||
41
Commercial | ||||||||||||||||||||||||||||
Recorded Investment | ||||||||||||||||||||||||||||
Debt Service Coverage Ratios |
Estimated |
|||||||||||||||||||||||||||
> 1.20x | 1.00x - 1.20x | < 1.00x | Total | % of Total | Fair Value | % of Total | ||||||||||||||||||||||
(In millions) | (In millions) | |||||||||||||||||||||||||||
June 30, 2011:
|
||||||||||||||||||||||||||||
Loan-to-value
ratios:
|
||||||||||||||||||||||||||||
Less than 65%
|
$ | 20,130 | $ | 480 | $ | 432 | $ | 21,042 | 53.9 | % | $ | 22,463 | 55.2 | % | ||||||||||||||
65% to 75%
|
9,292 | 520 | 478 | 10,290 | 26.4 | 10,811 | 26.6 | |||||||||||||||||||||
76% to 80%
|
2,528 | 131 | 53 | 2,712 | 6.9 | 2,748 | 6.8 | |||||||||||||||||||||
Greater than 80%
|
3,432 | 931 | 643 | 5,006 | 12.8 | 4,638 | 11.4 | |||||||||||||||||||||
Total
|
$ | 35,382 | $ | 2,062 | $ | 1,606 | $ | 39,050 | 100.0 | % | $ | 40,660 | 100.0 | % | ||||||||||||||
December 31, 2010:
|
||||||||||||||||||||||||||||
Loan-to-value
ratios:
|
||||||||||||||||||||||||||||
Less than 65%
|
$ | 16,663 | $ | 125 | $ | 483 | $ | 17,271 | 45.7 | % | $ | 18,183 | 46.9 | % | ||||||||||||||
65% to 75%
|
9,022 | 765 | 513 | 10,300 | 27.2 | 10,685 | 27.6 | |||||||||||||||||||||
76% to 80%
|
3,033 | 304 | 135 | 3,472 | 9.2 | 3,535 | 9.1 | |||||||||||||||||||||
Greater than 80%
|
4,155 | 1,813 | 807 | 6,775 | 17.9 | 6,374 | 16.4 | |||||||||||||||||||||
Total
|
$ | 32,873 | $ | 3,007 | $ | 1,938 | $ | 37,818 | 100.0 | % | $ | 38,777 | 100.0 | % | ||||||||||||||
Agricultural | ||||||||||||||||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Recorded Investment | % of Total | Recorded Investment | % of Total | |||||||||||||
(In millions) | (In millions) | |||||||||||||||
Loan-to-value
ratios:
|
||||||||||||||||
Less than 65%
|
$ | 11,639 | 89.7 | % | $ | 11,483 | 90.1 | % | ||||||||
65% to 75%
|
888 | 6.8 | 885 | 6.9 | ||||||||||||
76% to 80%
|
12 | 0.1 | 48 | 0.4 | ||||||||||||
Greater than 80%
|
442 | 3.4 | 335 | 2.6 | ||||||||||||
Total
|
$ | 12,981 | 100.0 | % | $ | 12,751 | 100.0 | % | ||||||||
42
Residential | ||||||||||||||||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Recorded Investment | % of Total | Recorded Investment | % of Total | |||||||||||||
(In millions) | (In millions) | |||||||||||||||
Performance indicators:
|
||||||||||||||||
Performing
|
$ | 2,584 | 97.3 | % | $ | 2,149 | 96.3 | % | ||||||||
Nonperforming
|
73 | 2.7 | 82 | 3.7 | ||||||||||||
Total
|
$ | 2,657 | 100.0 | % | $ | 2,231 | 100.0 | % | ||||||||
Greater than 90 Days Past Due |
||||||||||||||||||||||||
Past Due | Still Accruing Interest | Nonaccrual Status | ||||||||||||||||||||||
June 30, 2011 | December 31, 2010 | June 30, 2011 | December 31, 2010 | June 30, 2011 | December 31, 2010 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Commercial
|
$ | 161 | $ | 58 | $ | 115 | $ | 1 | $ | 41 | $ | 7 | ||||||||||||
Agricultural
|
161 | 159 | 17 | 13 | 147 | 177 | ||||||||||||||||||
Residential
|
35 | 79 | 10 | 11 | 28 | 25 | ||||||||||||||||||
Total
|
$ | 357 | $ | 296 | $ | 142 | $ | 25 | $ | 216 | $ | 209 | ||||||||||||
Impaired Mortgage Loans | ||||||||||||||||||||||||||||||||
Loans without |
||||||||||||||||||||||||||||||||
Loans with a Valuation Allowance | a Valuation Allowance | All Impaired Loans | ||||||||||||||||||||||||||||||
Unpaid |
Unpaid |
Unpaid |
||||||||||||||||||||||||||||||
Principal |
Recorded |
Valuation |
Carrying |
Principal |
Recorded |
Principal |
Carrying |
|||||||||||||||||||||||||
Balance | Investment | Allowances | Value | Balance | Investment | Balance | Value | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
June 30, 2011:
|
||||||||||||||||||||||||||||||||
Commercial
|
$ | 126 | $ | 126 | $ | 28 | $ | 98 | $ | 105 | $ | 95 | $ | 231 | $ | 193 | ||||||||||||||||
Agricultural
|
131 | 128 | 43 | 85 | 105 | 100 | 236 | 185 | ||||||||||||||||||||||||
Residential
|
11 | 11 | 1 | 10 | 15 | 15 | 26 | 25 | ||||||||||||||||||||||||
Total
|
$ | 268 | $ | 265 | $ | 72 | $ | 193 | $ | 225 | $ | 210 | $ | 493 | $ | 403 | ||||||||||||||||
December 31, 2010:
|
||||||||||||||||||||||||||||||||
Commercial
|
$ | 120 | $ | 120 | $ | 36 | $ | 84 | $ | 99 | $ | 87 | $ | 219 | $ | 171 | ||||||||||||||||
Agricultural
|
146 | 146 | 52 | 94 | 123 | 119 | 269 | 213 | ||||||||||||||||||||||||
Residential
|
3 | 3 | | 3 | 16 | 16 | 19 | 19 | ||||||||||||||||||||||||
Total
|
$ | 269 | $ | 269 | $ | 88 | $ | 181 | $ | 238 | $ | 222 | $ | 507 | $ | 403 | ||||||||||||||||
43
Impaired Mortgage Loans | ||||||||||||
Average Investment | Interest Income Recognized | |||||||||||
Cash Basis | Accrual Basis | |||||||||||
(In millions) | ||||||||||||
For the Three Months Ended June 30, 2011:
|
||||||||||||
Commercial
|
$ | 292 | $ | | $ | | ||||||
Agricultural
|
255 | | 1 | |||||||||
Residential
|
32 | | | |||||||||
Total
|
$ | 579 | $ | | $ | 1 | ||||||
For the Three Months Ended June 30, 2010:
|
||||||||||||
Commercial
|
$ | 182 | $ | 2 | $ | | ||||||
Agricultural
|
278 | 2 | | |||||||||
Residential
|
7 | | | |||||||||
Total
|
$ | 467 | $ | 4 | $ | | ||||||
For the Six Months Ended June 30, 2011:
|
||||||||||||
Commercial
|
$ | 264 | $ | 3 | $ | 1 | ||||||
Agricultural
|
268 | 2 | 1 | |||||||||
Residential
|
28 | | | |||||||||
Total
|
$ | 560 | $ | 5 | $ | 2 | ||||||
For the Six Months Ended June 30, 2010:
|
||||||||||||
Commercial
|
$ | 156 | $ | 4 | $ | 1 | ||||||
Agricultural
|
289 | 3 | | |||||||||
Residential
|
7 | | | |||||||||
Total
|
$ | 452 | $ | 7 | $ | 1 | ||||||
44
Fixed Maturity Securities | Mortgage Loans | |||||||||||||||
June 30, 2011 | December 31, 2010 | June 30, 2011 | December 31, 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Outstanding principal and interest balance (1)
|
$ | 3,360 | $ | 1,548 | $ | 510 | $ | 504 | ||||||||
Carrying value (2)
|
$ | 2,377 | $ | 1,050 | $ | 205 | $ | 195 |
(1) | Represents the contractually required payments which is the sum of contractual principal, whether or not currently due, and accrued interest. | |
(2) | Estimated fair value plus accrued interest for fixed maturity securities and amortized cost, plus accrued interest, less any valuation allowances, for mortgage loans. |
Fixed Maturity Securities | Mortgage Loans | |||||||||||||||
Six Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Contractually required payments (including interest)
|
$ | 4,651 | $ | 1,083 | $ | | $ | | ||||||||
Cash flows expected to be collected (1)
|
$ | 2,724 | $ | 1,021 | $ | | $ | | ||||||||
Fair value of investments acquired
|
$ | 1,503 | $ | 633 | $ | | $ | |
(1) | Represents undiscounted principal and interest cash flow expectations at the date of acquisition. |
Fixed Maturity Securities | Mortgage Loans | |||||||||||||||||||||||||||||||
Three Months |
Six Months |
Three Months |
Six Months |
|||||||||||||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Accretable yield, beginning of period
|
$ | 708 | $ | 70 | $ | 541 | $ | | $ | 176 | $ | | $ | 170 | $ | | ||||||||||||||||
Investments purchased
|
1,089 | 317 | 1,221 | 388 | | | | | ||||||||||||||||||||||||
Accretion recognized in net investment income
|
(32 | ) | (6 | ) | (49 | ) | (7 | ) | (20 | ) | | (32 | ) | | ||||||||||||||||||
Disposals
|
(18 | ) | | (69 | ) | | | | | | ||||||||||||||||||||||
Reclassification (to) from nonaccretable difference
|
144 | (12 | ) | 247 | (12 | ) | 102 | | 120 | | ||||||||||||||||||||||
Accretable yield, end of period
|
$ | 1,891 | $ | 369 | $ | 1,891 | $ | 369 | $ | 258 | $ | | $ | 258 | $ | | ||||||||||||||||
45
June 30, 2011 | December 31, 2010 | |||||||||||||||
Total |
Total |
Total |
Total |
|||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
(In millions) | ||||||||||||||||
Consolidated securitization entities (1)
|
$ | 6,899 | $ | 6,606 | $ | 7,114 | $ | 6,892 | ||||||||
MRSC collateral financing arrangement (2)
|
3,381 | | 3,333 | | ||||||||||||
Other limited partnership interests
|
354 | 26 | 319 | 85 | ||||||||||||
Trading and other securities
|
212 | | 186 | | ||||||||||||
Other invested assets
|
102 | 1 | 108 | 1 | ||||||||||||
Real estate joint ventures
|
17 | 18 | 20 | 17 | ||||||||||||
Total
|
$ | 10,965 | $ | 6,651 | $ | 11,080 | $ | 6,995 | ||||||||
(1) | The Company consolidated former qualified special purpose entities (QSPEs) that are structured as CMBS and former QSPEs that are structured as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company or any of its subsidiaries or affiliates liable for any principal or interest shortfalls should any arise. The Companys exposure was limited to that of its remaining investment in the former QSPEs of $280 million and $201 million at estimated fair value at June 30, 2011 and December 31, 2010, respectively. The long-term debt referred to below bears interest at primarily fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis and is expected to be repaid over the next 7 years. Interest expense related to these obligations, included in other expenses, was $92 million and $184 million for the three months and six months ended June 30, 2011, respectively, and $103 million and $209 million for the three months and six months ended June 30, 2010, respectively. The assets and liabilities of these CSEs were as follows at: |
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Assets:
|
||||||||
Mortgage loans
held-for-investment
(commercial mortgage loans)
|
$ | 6,697 | $ | 6,840 | ||||
Trading and other securities
|
147 | 201 | ||||||
Cash and cash equivalents
|
21 | 39 | ||||||
Accrued investment income
|
34 | 34 | ||||||
Total assets
|
$ | 6,899 | $ | 7,114 | ||||
Liabilities:
|
||||||||
Long-term debt
|
$ | 6,547 | $ | 6,820 | ||||
Other liabilities
|
59 | 72 | ||||||
Total liabilities
|
$ | 6,606 | $ | 6,892 | ||||
46
(2) | See Note 12 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the MetLife Reinsurance Company of South Carolina (MRSC) collateral financing arrangement. These assets consist of the following, at estimated fair value at: |
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Fixed maturity securities
available-for-sale:
|
||||||||
ABS
|
$ | 1,447 | $ | 1,333 | ||||
U.S. corporate securities
|
745 | 893 | ||||||
RMBS
|
547 | 547 | ||||||
CMBS
|
412 | 383 | ||||||
Foreign corporate securities
|
166 | 139 | ||||||
State and political subdivision securities
|
40 | 30 | ||||||
Foreign government securities
|
| 5 | ||||||
Cash and cash equivalents
|
24 | 3 | ||||||
Total
|
$ | 3,381 | $ | 3,333 | ||||
June 30, 2011 | December 31, 2010 | |||||||||||||||
Maximum |
Maximum |
|||||||||||||||
Carrying |
Exposure |
Carrying |
Exposure |
|||||||||||||
Amount | to Loss (1) | Amount | to Loss (1) | |||||||||||||
(In millions) | ||||||||||||||||
Fixed maturity securities
available-for-sale:
|
||||||||||||||||
RMBS (2)
|
$ | 43,550 | $ | 43,550 | $ | 44,733 | $ | 44,733 | ||||||||
CMBS (2)
|
19,518 | 19,518 | 20,675 | 20,675 | ||||||||||||
ABS (2)
|
14,857 | 14,857 | 14,287 | 14,287 | ||||||||||||
Foreign corporate securities
|
3,350 | 3,350 | 2,950 | 2,950 | ||||||||||||
U.S. corporate securities
|
2,610 | 2,610 | 2,435 | 2,435 | ||||||||||||
Other limited partnership interests
|
4,381 | 6,180 | 4,383 | 6,479 | ||||||||||||
Trading and other securities
|
784 | 784 | 789 | 789 | ||||||||||||
Other invested assets
|
582 | 909 | 576 | 773 | ||||||||||||
Mortgage loans
|
475 | 475 | 350 | 350 | ||||||||||||
Real estate joint ventures
|
58 | 104 | 40 | 108 | ||||||||||||
Equity securities
available-for-sale:
|
||||||||||||||||
Non-redeemable preferred stock
|
33 | 33 | | | ||||||||||||
Total
|
$ | 90,198 | $ | 92,370 | $ | 91,218 | $ | 93,579 | ||||||||
(1) | The maximum exposure to loss relating to the fixed maturity, equity and trading and other securities is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. The maximum exposure to loss relating to the mortgage loans is equal to |
47
the carrying amounts plus any unfunded commitments of the Company. For certain of its investments in other invested assets, the Companys return is in the form of income tax credits which are guaranteed by a creditworthy third party. 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 $333 million and $231 million at June 30, 2011 and December 31, 2010, respectively. | ||
(2) | For these variable interests, the Companys involvement is limited to that of a passive investor. |
4. | Derivative Financial Instruments |
48
49
50
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||
Estimated Fair |
Estimated Fair |
|||||||||||||||||||||||||
Primary Underlying |
Notional |
Value (1) |
Notional |
Value (1) | ||||||||||||||||||||||
Risk Exposure | Instrument Type | Amount | Assets | Liabilities | Amount | Assets | Liabilities | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Interest rate
|
Interest rate swaps | $ | 69,893 | $ | 3,112 | $ | 1,349 | $ | 54,803 | $ | 2,654 | $ | 1,516 | |||||||||||||
Interest rate floors | 23,866 | 623 | 78 | 23,866 | 630 | 66 | ||||||||||||||||||||
Interest rate caps | 37,726 | 189 | | 35,412 | 176 | 1 | ||||||||||||||||||||
Interest rate futures | 12,770 | 45 | 36 | 9,385 | 43 | 17 | ||||||||||||||||||||
Interest rate options | 16,635 | 186 | 49 | 8,761 | 144 | 23 | ||||||||||||||||||||
Interest rate forwards | 8,637 | 31 | 125 | 10,374 | 106 | 135 | ||||||||||||||||||||
Synthetic GICs | 4,392 | | | 4,397 | | | ||||||||||||||||||||
Foreign currency
|
Foreign currency swaps | 17,455 | 1,404 | 1,391 | 17,626 | 1,616 | 1,282 | |||||||||||||||||||
Foreign currency forwards | 10,038 | 80 | 84 | 10,443 | 119 | 91 | ||||||||||||||||||||
Currency futures | 525 | 4 | 4 | 493 | 2 | | ||||||||||||||||||||
Currency options | 2,191 | 16 | 1 | 5,426 | 50 | | ||||||||||||||||||||
Non-derivative hedging instruments (2) | | | | 169 | | 185 | ||||||||||||||||||||
Credit
|
Credit default swaps | 12,266 | 159 | 94 | 10,957 | 173 | 104 | |||||||||||||||||||
Credit forwards | 121 | 2 | 3 | 90 | 2 | 3 | ||||||||||||||||||||
Equity market
|
Equity futures | 6,015 | 10 | 94 | 8,794 | 21 | 9 | |||||||||||||||||||
Equity options | 16,330 | 1,679 | 342 | 33,688 | 1,843 | 1,197 | ||||||||||||||||||||
Variance swaps | 18,719 | 152 | 169 | 18,022 | 198 | 118 | ||||||||||||||||||||
Total rate of return swaps | 1,862 | 1 | 2 | 1,547 | | | ||||||||||||||||||||
Total | $ | 259,441 | $ | 7,693 | $ | 3,821 | $ | 254,253 | $ | 7,777 | $ | 4,747 | ||||||||||||||
(1) | The estimated fair value of all derivatives in an asset position is reported within other invested assets in the consolidated balance sheets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the consolidated balance sheets. | |
(2) | The estimated fair value of non-derivative hedging instruments represents the amortized cost of the instruments, as adjusted for foreign currency transaction gains or losses. Non-derivative hedging instruments are reported within policyholder account balances in the consolidated balance sheets. |
51
52
53
54
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Notional |
Estimated Fair Value |
Notional |
Estimated Fair Value | |||||||||||||||||||||
Derivatives Designated as Hedging Instruments | Amount | Assets | Liabilities | Amount | Assets | Liabilities | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Fair value hedges:
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | 3,753 | $ | 951 | $ | 67 | $ | 4,524 | $ | 907 | $ | 145 | ||||||||||||
Interest rate swaps
|
5,310 | 919 | 161 | 5,108 | 823 | 169 | ||||||||||||||||||
Subtotal
|
9,063 | 1,870 | 228 | 9,632 | 1,730 | 314 | ||||||||||||||||||
Cash flow hedges:
|
||||||||||||||||||||||||
Foreign currency swaps
|
6,459 | 168 | 430 | 5,556 | 213 | 347 | ||||||||||||||||||
Interest rate swaps
|
5,060 | 113 | 107 | 3,562 | 102 | 116 | ||||||||||||||||||
Interest rate forwards
|
1,140 | | 101 | 1,140 | | 107 | ||||||||||||||||||
Credit forwards
|
121 | 2 | 3 | 90 | 2 | 3 | ||||||||||||||||||
Subtotal
|
12,780 | 283 | 641 | 10,348 | 317 | 573 | ||||||||||||||||||
Foreign operations hedges:
|
||||||||||||||||||||||||
Foreign currency forwards
|
1,763 | 5 | 17 | 1,935 | 9 | 26 | ||||||||||||||||||
Non-derivative hedging instruments
|
| | | 169 | | 185 | ||||||||||||||||||
Subtotal
|
1,763 | 5 | 17 | 2,104 | 9 | 211 | ||||||||||||||||||
Total qualifying hedges
|
$ | 23,606 | $ | 2,158 | $ | 886 | $ | 22,084 | $ | 2,056 | $ | 1,098 | ||||||||||||
55
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Derivatives Not Designated or Not |
Notional |
Estimated Fair Value |
Notional |
Estimated Fair Value | ||||||||||||||||||||
Qualifying as Hedging Instruments | Amount | Assets | Liabilities | Amount | Assets | Liabilities | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Interest rate swaps
|
$ | 59,523 | $ | 2,080 | $ | 1,081 | $ | 46,133 | $ | 1,729 | $ | 1,231 | ||||||||||||
Interest rate floors
|
23,866 | 623 | 78 | 23,866 | 630 | 66 | ||||||||||||||||||
Interest rate caps
|
37,726 | 189 | | 35,412 | 176 | 1 | ||||||||||||||||||
Interest rate futures
|
12,770 | 45 | 36 | 9,385 | 43 | 17 | ||||||||||||||||||
Interest rate options
|
16,635 | 186 | 49 | 8,761 | 144 | 23 | ||||||||||||||||||
Interest rate forwards
|
7,497 | 31 | 24 | 9,234 | 106 | 28 | ||||||||||||||||||
Synthetic GICs
|
4,392 | | | 4,397 | | | ||||||||||||||||||
Foreign currency swaps
|
7,243 | 285 | 894 | 7,546 | 496 | 790 | ||||||||||||||||||
Foreign currency forwards
|
8,275 | 75 | 67 | 8,508 | 110 | 65 | ||||||||||||||||||
Currency futures
|
525 | 4 | 4 | 493 | 2 | | ||||||||||||||||||
Currency options
|
2,191 | 16 | 1 | 5,426 | 50 | | ||||||||||||||||||
Credit default swaps
|
12,266 | 159 | 94 | 10,957 | 173 | 104 | ||||||||||||||||||
Equity futures
|
6,015 | 10 | 94 | 8,794 | 21 | 9 | ||||||||||||||||||
Equity options
|
16,330 | 1,679 | 342 | 33,688 | 1,843 | 1,197 | ||||||||||||||||||
Variance swaps
|
18,719 | 152 | 169 | 18,022 | 198 | 118 | ||||||||||||||||||
Total rate of return swaps
|
1,862 | 1 | 2 | 1,547 | | | ||||||||||||||||||
Total non-designated or non-qualifying derivatives
|
$ | 235,835 | $ | 5,535 | $ | 2,935 | $ | 232,169 | $ | 5,721 | $ | 3,649 | ||||||||||||
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Derivatives and hedging gains (losses) (1)
|
$ | 746 | $ | 3,680 | $ | (512 | ) | $ | 3,199 | |||||||
Embedded derivatives
|
(394 | ) | (2,199 | ) | 549 | (1,677 | ) | |||||||||
Total net derivative gains (losses)
|
$ | 352 | $ | 1,481 | $ | 37 | $ | 1,522 | ||||||||
(1) | Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedge relationships, which are not presented elsewhere in this note. |
56
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Qualifying hedges:
|
||||||||||||||||
Net investment income
|
$ | 20 | $ | 18 | $ | 42 | $ | 41 | ||||||||
Interest credited to policyholder account balances
|
57 | 52 | 118 | 113 | ||||||||||||
Other expenses
|
| (2 | ) | (1 | ) | (4 | ) | |||||||||
Non-qualifying hedges:
|
||||||||||||||||
Net investment income
|
(3 | ) | (2 | ) | (4 | ) | (2 | ) | ||||||||
Other revenues
|
18 | 27 | 33 | 56 | ||||||||||||
Net derivative gains (losses)
|
32 | 143 | 5 | 173 | ||||||||||||
Policyholder benefits and claims
|
(2 | ) | | | | |||||||||||
Total
|
$ | 122 | $ | 236 | $ | 193 | $ | 377 | ||||||||
57
Net Derivative |
Net Derivative |
Ineffectiveness |
||||||||||||
Gains (Losses) |
Gains (Losses) |
Recognized in |
||||||||||||
Derivatives in Fair Value |
Hedged Items in Fair Value |
Recognized |
Recognized for |
Net Derivative |
||||||||||
Hedging Relationships | Hedging Relationships | for Derivatives | Hedged Items | Gains (Losses) | ||||||||||
(In millions) | ||||||||||||||
For the Three Months Ended June 30, 2011:
|
||||||||||||||
Interest rate swaps:
|
Fixed maturity securities | $ | (16 | ) | $ | 15 | $ | (1 | ) | |||||
Policyholder account balances (1) | 157 | (150 | ) | 7 | ||||||||||
Foreign currency swaps:
|
Foreign-denominated fixed maturity securities | | | | ||||||||||
Foreign-denominated policyholder account balances (2) | 158 | (155 | ) | 3 | ||||||||||
Total
|
$ | 299 | $ | (290 | ) | $ | 9 | |||||||
For the Three Months Ended June 30, 2010:
|
||||||||||||||
Interest rate swaps:
|
Fixed maturity securities | $ | (20 | ) | $ | 19 | $ | (1 | ) | |||||
Policyholder account balances (1) | 433 | (421 | ) | 12 | ||||||||||
Foreign currency swaps:
|
Foreign-denominated fixed maturity securities | 5 | (6 | ) | (1 | ) | ||||||||
Foreign-denominated policyholder account balances (2) | (209 | ) | 195 | (14 | ) | |||||||||
Total
|
$ | 209 | $ | (213 | ) | $ | (4 | ) | ||||||
For the Six Months Ended June 30, 2011:
|
||||||||||||||
Interest rate swaps:
|
Fixed maturity securities | $ | (5 | ) | $ | 5 | $ | | ||||||
Policyholder account balances (1) | 43 | (34 | ) | 9 | ||||||||||
Foreign currency swaps:
|
Foreign-denominated fixed maturity securities | (1 | ) | 1 | | |||||||||
Foreign-denominated policyholder account balances (2) | 235 | (242 | ) | (7 | ) | |||||||||
Total
|
$ | 272 | $ | (270 | ) | $ | 2 | |||||||
For the Six Months Ended June 30, 2010:
|
||||||||||||||
Interest rate swaps:
|
Fixed maturity securities | $ | (25 | ) | $ | 25 | $ | | ||||||
Policyholder account balances (1) | 466 | (454 | ) | 12 | ||||||||||
Foreign currency swaps:
|
Foreign-denominated fixed maturity securities | 16 | (17 | ) | (1 | ) | ||||||||
Foreign-denominated policyholder account balances (2) | (368 | ) | 344 | (24 | ) | |||||||||
Total
|
$ | 89 | $ | (102 | ) | $ | (13 | ) | ||||||
(1) | Fixed rate liabilities. | |
(2) | Fixed rate or floating rate liabilities. |
58
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Accumulated other comprehensive income (loss), balance at
beginning of period
|
$ | (237 | ) | $ | 44 | $ | (59 | ) | $ | (76 | ) | |||||
Gains (losses) deferred in other comprehensive income (loss) on
the effective portion of cash flow hedges
|
82 | 566 | (103 | ) | 617 | |||||||||||
Amounts reclassified to net derivative gains (losses)
|
(12 | ) | (17 | ) | (8 | ) | 51 | |||||||||
Amounts reclassified to net investment income
|
| 1 | 1 | 2 | ||||||||||||
Amounts reclassified to other expenses
|
2 | (1 | ) | 4 | (1 | ) | ||||||||||
Accumulated other comprehensive income (loss), balance at end of
period
|
$ | (165 | ) | $ | 593 | $ | (165 | ) | $ | 593 | ||||||
59
Amount of Gains |
Amount and Location |
|||||||||||||||||||||||
(Losses) Deferred |
of Gains (Losses) |
Amount and Location |
||||||||||||||||||||||
in Accumulated Other |
Reclassified from |
of Gains (Losses) |
||||||||||||||||||||||
Derivatives in Cash Flow |
Comprehensive Income |
Accumulated Other Comprehensive |
Recognized in Income (Loss) |
|||||||||||||||||||||
Hedging Relationships | (Loss) on Derivatives | Income (Loss) into Income (Loss) | on Derivatives | |||||||||||||||||||||
(Ineffective Portion and |
||||||||||||||||||||||||
Amount Excluded from |
||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | Effectiveness Testing) | ||||||||||||||||||||||
Net Derivative |
Net Investment |
Other |
Net Derivative |
Net Investment |
||||||||||||||||||||
Gains (Losses) | Income | Expenses | Gains (Losses) | Income | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
For the Three Months Ended June 30, 2011:
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | 80 | $ | 1 | $ | 1 | $ | (2 | ) | $ | 2 | $ | | |||||||||||
Foreign currency swaps
|
(36 | ) | (11 | ) | (1 | ) | | (1 | ) | | ||||||||||||||
Interest rate forwards
|
33 | 22 | | | (13 | ) | | |||||||||||||||||
Credit forwards
|
5 | | | | | | ||||||||||||||||||
Total
|
$ | 82 | $ | 12 | $ | | $ | (2 | ) | $ | (12 | ) | $ | | ||||||||||
For the Three Months Ended June 30, 2010:
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | 275 | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Foreign currency swaps
|
292 | 6 | (1 | ) | 1 | 2 | | |||||||||||||||||
Interest rate forwards
|
(15 | ) | 11 | | | | | |||||||||||||||||
Credit forwards
|
14 | | | | | | ||||||||||||||||||
Total
|
$ | 566 | $ | 17 | $ | (1 | ) | $ | 1 | $ | 2 | $ | | |||||||||||
For the Six Months Ended June 30, 2011:
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | 17 | $ | 1 | $ | 1 | $ | (4 | ) | $ | 2 | $ | | |||||||||||
Foreign currency swaps
|
(140 | ) | (15 | ) | (3 | ) | 1 | (2 | ) | | ||||||||||||||
Interest rate forwards
|
18 | 22 | 1 | (1 | ) | (11 | ) | | ||||||||||||||||
Credit forwards
|
2 | | | | | | ||||||||||||||||||
Total
|
$ | (103 | ) | $ | 8 | $ | (1 | ) | $ | (4 | ) | $ | (11 | ) | $ | | ||||||||
For the Six Months Ended June 30, 2010:
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | 276 | $ | | $ | | $ | | $ | 2 | $ | | ||||||||||||
Foreign currency swaps
|
339 | (62 | ) | (3 | ) | 1 | 3 | | ||||||||||||||||
Interest rate forwards
|
(15 | ) | 11 | 1 | | | | |||||||||||||||||
Credit forwards
|
17 | | | | | | ||||||||||||||||||
Total
|
$ | 617 | $ | (51 | ) | $ | (2 | ) | $ | 1 | $ | 5 | $ | | ||||||||||
60
Amount and Location |
||||||||
of Gains (Losses) |
||||||||
Reclassified From Accumulated Other |
||||||||
Amount of Gains (Losses) |
Comprehensive Income |
|||||||
Deferred in Accumulated |
(Loss) into Income (Loss) |
|||||||
Derivatives and Non-Derivative Hedging Instruments in Net |
Other Comprehensive Income (Loss) |
(Effective Portion) | ||||||
Investment Hedging Relationships (1),(2) | (Effective Portion) | Net Investment Gains (Losses) | ||||||
(In millions) | ||||||||
For the Three Months Ended June 30, 2011:
|
||||||||
Foreign currency forwards
|
$ | (57 | ) | $ | | |||
Non-derivative hedging instruments
|
| | ||||||
Total
|
$ | (57 | ) | $ | | |||
For the Three Months Ended June 30, 2010:
|
||||||||
Foreign currency forwards
|
$ | 37 | $ | | ||||
Non-derivative hedging instruments
|
| | ||||||
Total
|
$ | 37 | $ | | ||||
For the Six Months Ended June 30, 2011:
|
||||||||
Foreign currency forwards
|
$ | (113 | ) | $ | | |||
Non-derivative hedging instruments
|
6 | | ||||||
Total
|
$ | (107 | ) | $ | | |||
For the Six Months Ended June 30, 2010:
|
||||||||
Foreign currency forwards
|
$ | 27 | $ | | ||||
Non-derivative hedging instruments
|
| | ||||||
Total
|
$ | 27 | $ | | ||||
(1) | During the six months ended June 30, 2011, the Company sold its interest in its Japanese joint venture, which was a hedged item in a net investment hedging relationship. See Note 2. As a result, the Company released losses of $71 million from accumulated other comprehensive income (loss) upon the sale. This release did not impact net income for the three months ended June 30, 2011 as such losses were considered in the overall impairment evaluation of the investment prior to sale. During the three months and six months ended June 30, 2010, there were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from accumulated other comprehensive income (loss) into earnings. | |
(2) | There was no ineffectiveness recognized for the Companys hedges of net investments in foreign operations. |
61
62
Net |
Net |
Policyholder |
||||||||||||||||||
Derivative |
Investment |
Benefits and |
Other |
Other |
||||||||||||||||
Gains (Losses) | Income (1) | Claims (2) | Revenues (3) | Expenses (4) | ||||||||||||||||
(In millions) | ||||||||||||||||||||
For the Three Months Ended June 30, 2011:
|
||||||||||||||||||||
Interest rate swaps
|
$ | 644 | $ | (1 | ) | $ | | $ | 72 | $ | | |||||||||
Interest rate floors
|
107 | | | | | |||||||||||||||
Interest rate caps
|
(73 | ) | | | | | ||||||||||||||
Interest rate futures
|
(47 | ) | | | (4 | ) | | |||||||||||||
Equity futures
|
1 | 10 | (6 | ) | | | ||||||||||||||
Foreign currency swaps
|
(71 | ) | | | | | ||||||||||||||
Foreign currency forwards
|
29 | | | | | |||||||||||||||
Currency futures
|
| | | | | |||||||||||||||
Currency options
|
(13 | ) | | | | | ||||||||||||||
Equity options
|
52 | (4 | ) | | | | ||||||||||||||
Interest rate options
|
13 | | | 6 | | |||||||||||||||
Interest rate forwards
|
| | | (31 | ) | | ||||||||||||||
Variance swaps
|
(14 | ) | | | | | ||||||||||||||
Credit default swaps
|
31 | (1 | ) | | | | ||||||||||||||
Total rate of return swaps
|
1 | | | | | |||||||||||||||
Total
|
$ | 660 | $ | 4 | $ | (6 | ) | $ | 43 | $ | | |||||||||
For the Three Months Ended June 30, 2010:
|
||||||||||||||||||||
Interest rate swaps
|
$ | 962 | $ | 4 | $ | 36 | $ | 199 | $ | | ||||||||||
Interest rate floors
|
281 | | | | | |||||||||||||||
Interest rate caps
|
(98 | ) | | | | | ||||||||||||||
Interest rate futures
|
87 | (1 | ) | | (3 | ) | | |||||||||||||
Equity futures
|
(87 | ) | 21 | 159 | | | ||||||||||||||
Foreign currency swaps
|
288 | | | | | |||||||||||||||
Foreign currency forwards
|
266 | 30 | | | | |||||||||||||||
Currency options
|
14 | | | | | |||||||||||||||
Equity options
|
1,366 | 59 | | | | |||||||||||||||
Interest rate options
|
50 | | | 1 | | |||||||||||||||
Interest rate forwards
|
| | | (53 | ) | | ||||||||||||||
Variance swaps
|
450 | 11 | | | | |||||||||||||||
Credit default swaps
|
12 | 3 | | | | |||||||||||||||
Total rate of return swaps
|
(31 | ) | | | | | ||||||||||||||
Total
|
$ | 3,560 | $ | 127 | $ | 195 | $ | 144 | $ | | ||||||||||
63
Net |
Net |
Policyholder |
||||||||||||||||||
Derivative |
Investment |
Benefits and |
Other |
Other |
||||||||||||||||
Gains (Losses) | Income (1) | Claims (2) | Revenues (3) | Expenses (4) | ||||||||||||||||
(In millions) | ||||||||||||||||||||
For the Six Months Ended June 30, 2011:
|
||||||||||||||||||||
Interest rate swaps
|
$ | 374 | $ | (2 | ) | $ | | $ | 24 | $ | | |||||||||
Interest rate floors
|
(18 | ) | | | | | ||||||||||||||
Interest rate caps
|
(82 | ) | | | | | ||||||||||||||
Interest rate futures
|
(49 | ) | 1 | | (4 | ) | | |||||||||||||
Equity futures
|
55 | 3 | (108 | ) | | | ||||||||||||||
Foreign currency swaps
|
(192 | ) | | | | | ||||||||||||||
Foreign currency forwards
|
(140 | ) | (9 | ) | | | | |||||||||||||
Currency futures
|
9 | | | | | |||||||||||||||
Currency options
|
(45 | ) | | | | | ||||||||||||||
Equity options
|
(367 | ) | (11 | ) | | | | |||||||||||||
Interest rate options
|
(14 | ) | | | (3 | ) | | |||||||||||||
Interest rate forwards
|
| | | (39 | ) | | ||||||||||||||
Variance swaps
|
(91 | ) | (3 | ) | | | | |||||||||||||
Credit default swaps
|
(14 | ) | (1 | ) | | | | |||||||||||||
Total rate of return swaps
|
(1 | ) | | | | | ||||||||||||||
Total
|
$ | (575 | ) | $ | (22 | ) | $ | (108 | ) | $ | (22 | ) | $ | | ||||||
For the Six Months Ended June 30, 2010:
|
||||||||||||||||||||
Interest rate swaps
|
$ | 1,043 | $ | 3 | $ | 39 | $ | 256 | $ | | ||||||||||
Interest rate floors
|
274 | | | | | |||||||||||||||
Interest rate caps
|
(211 | ) | | | | | ||||||||||||||
Interest rate futures
|
67 | (6 | ) | | (3 | ) | | |||||||||||||
Equity futures
|
(169 | ) | 10 | 71 | | | ||||||||||||||
Foreign currency swaps
|
346 | | | | | |||||||||||||||
Foreign currency forwards
|
325 | 38 | | | | |||||||||||||||
Currency options
|
17 | (1 | ) | | | (4 | ) | |||||||||||||
Equity options
|
984 | 37 | | | | |||||||||||||||
Interest rate options
|
50 | | | (1 | ) | | ||||||||||||||
Interest rate forwards
|
8 | | | (86 | ) | | ||||||||||||||
Variance swaps
|
330 | 8 | | | | |||||||||||||||
Credit default swaps
|
15 | 3 | | | | |||||||||||||||
Total rate of return swaps
|
(19 | ) | | | | | ||||||||||||||
Total
|
$ | 3,060 | $ | 92 | $ | 110 | $ | 166 | $ | (4 | ) | |||||||||
(1) | Changes in estimated fair value related to economic hedges of equity method investments in joint ventures; changes in estimated fair value related to derivatives held in relation to trading portfolios; and changes in estimated fair value related to derivatives held within contractholder-directed unit-linked investments. | |
(2) | Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits. | |
(3) | Changes in estimated fair value related to derivatives held in connection with the Companys mortgage banking activities. |
64
(4) | Changes in estimated fair value related to economic hedges of foreign currency exposure associated with the Companys international subsidiaries. |
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Maximum |
Maximum |
|||||||||||||||||||||||
Estimated |
Amount |
Estimated |
Amount |
|||||||||||||||||||||
Fair Value |
of Future |
Weighted |
Fair Value |
of Future |
Weighted |
|||||||||||||||||||
of Credit |
Payments under |
Average |
of Credit |
Payments under |
Average |
|||||||||||||||||||
Rating Agency Designation of Referenced |
Default |
Credit Default |
Years to |
Default |
Credit Default |
Years to |
||||||||||||||||||
Credit Obligations (1) | Swaps | Swaps (2) | Maturity (3) | Swaps | Swaps (2) | Maturity (3) | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Aaa/Aa/A
|
||||||||||||||||||||||||
Single name credit default swaps (corporate)
|
$ | 7 | $ | 740 | 3.9 | $ | 5 | $ | 470 | 3.8 | ||||||||||||||
Credit default swaps referencing indices
|
42 | 2,813 | 3.5 | 45 | 2,928 | 3.7 | ||||||||||||||||||
Subtotal
|
49 | 3,553 | 3.6 | 50 | 3,398 | 3.7 | ||||||||||||||||||
Baa
|
||||||||||||||||||||||||
Single name credit default swaps (corporate)
|
2 | 1,155 | 4.3 | 5 | 735 | 4.3 | ||||||||||||||||||
Credit default swaps referencing indices
|
7 | 1,752 | 5.0 | 7 | 931 | 5.0 | ||||||||||||||||||
Subtotal
|
9 | 2,907 | 4.8 | 12 | 1,666 | 4.7 | ||||||||||||||||||
Ba
|
||||||||||||||||||||||||
Single name credit default swaps (corporate)
|
| 30 | 4.2 | | 25 | 4.4 | ||||||||||||||||||
Credit default swaps referencing indices
|
| | | | | | ||||||||||||||||||
Subtotal
|
| 30 | 4.2 | | 25 | 4.4 | ||||||||||||||||||
Total
|
$ | 58 | $ | 6,490 | 4.1 | $ | 62 | $ | 5,089 | 4.1 | ||||||||||||||
(1) | The rating agency designations are based on availability and the midpoint of the applicable ratings among Moodys, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. | |
(2) | Assumes the value of the referenced credit obligations is zero. |
65
(3) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
66
Estimated Fair Value of |
Fair Value of Incremental |
|||||||||||||||||||
Collateral Provided: | Collateral Provided Upon: | |||||||||||||||||||
Downgrade in the |
||||||||||||||||||||
One Notch |
Companys Credit Rating |
|||||||||||||||||||
Downgrade |
to a Level that Triggers |
|||||||||||||||||||
Estimated |
in the |
Full Overnight |
||||||||||||||||||
Fair Value (1) of |
Companys |
Collateralization or |
||||||||||||||||||
Derivatives in Net |
Fixed Maturity |
Credit |
Termination of |
|||||||||||||||||
Liability Position | Securities (2) | Cash (3) | Rating | the Derivative Position | ||||||||||||||||
(In millions) | ||||||||||||||||||||
June 30, 2011:
|
||||||||||||||||||||
Derivatives subject to credit- contingent provisions
|
$ | 693 | $ | 404 | $ | | $ | 93 | $ | 223 | ||||||||||
Derivatives not subject to credit- contingent provisions
|
4 | 8 | 1 | | | |||||||||||||||
Total
|
$ | 697 | $ | 412 | $ | 1 | $ | 93 | $ | 223 | ||||||||||
December 31, 2010:
|
||||||||||||||||||||
Derivatives subject to credit- contingent provisions
|
$ | 1,167 | $ | 1,024 | $ | | $ | 99 | $ | 231 | ||||||||||
Derivatives not subject to credit- contingent provisions
|
22 | | 43 | | | |||||||||||||||
Total
|
$ | 1,189 | $ | 1,024 | $ | 43 | $ | 99 | $ | 231 | ||||||||||
(1) | After taking into consideration the existence of netting agreements. | |
(2) | Included in fixed maturity securities in the consolidated balance sheets. The counterparties are permitted by contract to sell or repledge this collateral. | |
(3) | Included in premiums, reinsurance and other receivables in the consolidated balance sheets. |
67
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Net embedded derivatives within asset host contracts:
|
||||||||
Ceded guaranteed minimum benefits
|
$ | 194 | $ | 185 | ||||
Options embedded in debt or equity securities
|
(68 | ) | (57 | ) | ||||
Other
|
4 | | ||||||
Net embedded derivatives within asset host contracts
|
$ | 130 | $ | 128 | ||||
Net embedded derivatives within liability host contracts:
|
||||||||
Direct guaranteed minimum benefits
|
$ | (49 | ) | $ | 370 | |||
Assumed guaranteed minimum benefits (1)
|
2,244 | 2,186 | ||||||
Other
|
90 | 78 | ||||||
Net embedded derivatives within liability host contracts
|
$ | 2,285 | $ | 2,634 | ||||
(1) | Assumed reinsurance contracts of guaranteed minimum benefits related to GMWBs and GMABs of the Japanese joint venture interest, which was sold during the second quarter of 2011, have been separately presented in the current period. See Note 2. Comparative prior year balances, which were previously presented in direct guaranteed minimum benefits, have been conformed to the current period presentation. |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Net derivative gains (losses) (1)
|
$ | (394 | ) | $ | (2,199 | ) | $ | 549 | $ | (1,677 | ) | |||||
Policyholder benefits and claims
|
$ | 10 | $ | 67 | $ | (8 | ) | $ | 46 |
(1) | The valuation of guaranteed minimum benefits includes an adjustment for nonperformance risk. The amounts included in net derivative gains (losses), in connection with this adjustment, were $108 million and $34 million for the three months and six months ended June 30, 2011, respectively, and $776 million and $690 million for the three months and six months ended June 30, 2010, respectively. The net derivative gains (losses) for the three months and six months ended June 30, 2010 included ($955) million relating to a refinement for estimating nonperformance risk in fair value measurements implemented at June 30, 2010. See Note 5. |
5. | Fair Value |
68
June 30, 2011 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in |
||||||||||||||||
Active Markets for |
Significant Other |
Significant |
Total |
|||||||||||||
Identical Assets |
Observable |
Unobservable |
Estimated |
|||||||||||||
and Liabilities |
Inputs |
Inputs |
Fair |
|||||||||||||
(Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||
(In millions) | ||||||||||||||||
Assets:
|
||||||||||||||||
Fixed maturity securities:
|
||||||||||||||||
U.S. corporate securities
|
$ | | $ | 89,926 | $ | 6,871 | $ | 96,797 | ||||||||
Foreign corporate securities
|
| 64,694 | 5,844 | 70,538 | ||||||||||||
Foreign government securities
|
82 | 46,003 | 3,161 | 49,246 | ||||||||||||
RMBS
|
| 43,116 | 434 | 43,550 | ||||||||||||
U.S. Treasury and agency securities
|
19,812 | 15,727 | 26 | 35,565 | ||||||||||||
CMBS
|
| 18,737 | 781 | 19,518 | ||||||||||||
ABS
|
| 12,406 | 2,451 | 14,857 | ||||||||||||
State and political subdivision securities
|
| 11,580 | 89 | 11,669 | ||||||||||||
Other fixed maturity securities
|
| 2 | 2 | 4 | ||||||||||||
Total fixed maturity securities
|
19,894 | 302,191 | 19,659 | 341,744 | ||||||||||||
Equity securities:
|
||||||||||||||||
Common stock
|
685 | 1,100 | 305 | 2,090 | ||||||||||||
Non-redeemable preferred stock
|
| 494 | 654 | 1,148 | ||||||||||||
Total equity securities
|
685 | 1,594 | 959 | 3,238 | ||||||||||||
Trading and other securities:
|
||||||||||||||||
Actively Traded Securities
|
| 558 | 2 | 560 | ||||||||||||
FVO general account securities
|
| 249 | 54 | 303 | ||||||||||||
FVO contractholder-directed unit-linked investments
|
7,622 | 10,445 | 623 | 18,690 | ||||||||||||
FVO securities held by consolidated securitization entities
|
| 147 | | 147 | ||||||||||||
Total trading and other securities
|
7,622 | 11,399 | 679 | 19,700 | ||||||||||||
Short-term investments (1)
|
4,265 | 6,764 | 732 | 11,761 | ||||||||||||
Mortgage loans:
|
||||||||||||||||
Mortgage loans held by consolidated securitization entities
|
| 6,697 | | 6,697 | ||||||||||||
Mortgage loans
held-for-sale
(2)
|
| 1,831 | 32 | 1,863 | ||||||||||||
Total mortgage loans
|
| 8,528 | 32 | 8,560 | ||||||||||||
Other invested assets:
|
||||||||||||||||
MSRs
|
| | 964 | 964 | ||||||||||||
Other investments
|
362 | 122 | | 484 | ||||||||||||
Derivative assets: (3)
|
||||||||||||||||
Interest rate contracts
|
55 | 4,087 | 44 | 4,186 | ||||||||||||
Foreign currency contracts
|
4 | 1,451 | 49 | 1,504 | ||||||||||||
Credit contracts
|
| 114 | 47 | 161 | ||||||||||||
Equity market contracts
|
14 | 1,581 | 247 | 1,842 | ||||||||||||
Total derivative assets
|
73 | 7,233 | 387 | 7,693 | ||||||||||||
Total other invested assets
|
435 | 7,355 | 1,351 | 9,141 | ||||||||||||
Net embedded derivatives within asset host contracts (4)
|
| 2 | 196 | 198 | ||||||||||||
Separate account assets (5)
|
28,099 | 172,447 | 1,836 | 202,382 | ||||||||||||
Total assets
|
$ | 61,000 | $ | 510,280 | $ | 25,444 | $ | 596,724 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative liabilities: (3)
|
||||||||||||||||
Interest rate contracts
|
$ | 54 | $ | 1,472 | $ | 111 | $ | 1,637 | ||||||||
Foreign currency contracts
|
4 | 1,476 | | 1,480 | ||||||||||||
Credit contracts
|
| 92 | 5 | 97 | ||||||||||||
Equity market contracts
|
95 | 320 | 192 | 607 | ||||||||||||
Total derivative liabilities
|
153 | 3,360 | 308 | 3,821 | ||||||||||||
Net embedded derivatives within liability host contracts (4)
|
| 15 | 2,270 | 2,285 | ||||||||||||
Long-term debt of consolidated securitization entities
|
| 6,413 | 134 | 6,547 | ||||||||||||
Trading liabilities (6)
|
54 | | | 54 | ||||||||||||
Total liabilities
|
$ | 207 | $ | 9,788 | $ | 2,712 | $ | 12,707 | ||||||||
69
December 31, 2010 | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in |
||||||||||||||||
Active Markets for |
Significant Other |
Significant |
Total |
|||||||||||||
Identical Assets |
Observable |
Unobservable |
Estimated |
|||||||||||||
and Liabilities |
Inputs |
Inputs |
Fair |
|||||||||||||
(Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||
(In millions) | ||||||||||||||||
Assets:
|
||||||||||||||||
Fixed maturity securities:
|
||||||||||||||||
U.S. corporate securities
|
$ | | $ | 84,623 | $ | 7,149 | $ | 91,772 | ||||||||
Foreign corporate securities
|
| 62,162 | 5,726 | 67,888 | ||||||||||||
Foreign government securities
|
149 | 38,719 | 3,134 | 42,002 | ||||||||||||
RMBS
|
274 | 43,037 | 1,422 | 44,733 | ||||||||||||
U.S. Treasury and agency securities
|
14,602 | 18,623 | 79 | 33,304 | ||||||||||||
CMBS
|
| 19,664 | 1,011 | 20,675 | ||||||||||||
ABS
|
| 10,142 | 4,145 | 14,287 | ||||||||||||
State and political subdivision securities
|
| 10,083 | 46 | 10,129 | ||||||||||||
Other fixed maturity securities
|
| 3 | 4 | 7 | ||||||||||||
Total fixed maturity securities
|
15,025 | 287,056 | 22,716 | 324,797 | ||||||||||||
Equity securities:
|
||||||||||||||||
Common stock
|
831 | 1,094 | 268 | 2,193 | ||||||||||||
Non-redeemable preferred stock
|
| 504 | 905 | 1,409 | ||||||||||||
Total equity securities
|
831 | 1,598 | 1,173 | 3,602 | ||||||||||||
Trading and other securities:
|
||||||||||||||||
Actively Traded Securities
|
| 453 | 10 | 463 | ||||||||||||
FVO general account securities
|
| 54 | 77 | 131 | ||||||||||||
FVO contractholder-directed unit-linked investments
|
6,270 | 10,789 | 735 | 17,794 | ||||||||||||
FVO securities held by consolidated securitization entities
|
| 201 | | 201 | ||||||||||||
Total trading and other securities
|
6,270 | 11,497 | 822 | 18,589 | ||||||||||||
Short-term investments (1)
|
3,026 | 4,681 | 858 | 8,565 | ||||||||||||
Mortgage loans:
|
||||||||||||||||
Mortgage loans held by consolidated securitization entities
|
| 6,840 | | 6,840 | ||||||||||||
Mortgage loans
held-for-sale
(2)
|
| 2,486 | 24 | 2,510 | ||||||||||||
Total mortgage loans
|
| 9,326 | 24 | 9,350 | ||||||||||||
Other invested assets:
|
||||||||||||||||
MSRs
|
| | 950 | 950 | ||||||||||||
Other investments
|
373 | 121 | | 494 | ||||||||||||
Derivative assets: (3)
|
||||||||||||||||
Interest rate contracts
|
131 | 3,583 | 39 | 3,753 | ||||||||||||
Foreign currency contracts
|
2 | 1,711 | 74 | 1,787 | ||||||||||||
Credit contracts
|
| 125 | 50 | 175 | ||||||||||||
Equity market contracts
|
23 | 1,757 | 282 | 2,062 | ||||||||||||
Total derivative assets
|
156 | 7,176 | 445 | 7,777 | ||||||||||||
Total other invested assets
|
529 | 7,297 | 1,395 | 9,221 | ||||||||||||
Net embedded derivatives within asset host contracts (4)
|
| | 185 | 185 | ||||||||||||
Separate account assets (5)
|
25,566 | 155,589 | 1,983 | 183,138 | ||||||||||||
Total assets
|
$ | 51,247 | $ | 477,044 | $ | 29,156 | $ | 557,447 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative liabilities: (3)
|
||||||||||||||||
Interest rate contracts
|
$ | 35 | $ | 1,598 | $ | 125 | $ | 1,758 | ||||||||
Foreign currency contracts
|
| 1,372 | 1 | 1,373 | ||||||||||||
Credit contracts
|
| 101 | 6 | 107 | ||||||||||||
Equity market contracts
|
10 | 1,174 | 140 | 1,324 | ||||||||||||
Total derivative liabilities
|
45 | 4,245 | 272 | 4,562 | ||||||||||||
Net embedded derivatives within liability host contracts (4)
|
| 11 | 2,623 | 2,634 | ||||||||||||
Long-term debt of consolidated securitization entities
|
| 6,636 | 184 | 6,820 | ||||||||||||
Trading liabilities (6)
|
46 | | | 46 | ||||||||||||
Total liabilities
|
$ | 91 | $ | 10,892 | $ | 3,079 | $ | 14,062 | ||||||||
(1) | Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because certain short-term investments are not measured at estimated fair value (e.g., time deposits, etc.), and therefore are excluded from the tables presented above. |
70
(2) | Mortgage loans held-for-sale as presented in the tables above differ from the amount presented in the consolidated balance sheets as these tables only include residential mortgage loans held-for-sale measured at estimated fair value on a recurring basis. | |
(3) | Derivative liabilities are presented within other liabilities in the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation in the consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables which follow. At June 30, 2011 and December 31, 2010, certain non-derivative hedging instruments of $0 and $185 million, respectively, which are carried at amortized cost, are included with the liabilities total in Note 4 but excluded from derivative liabilities in the tables above as they are not derivative instruments. | |
(4) | Net embedded derivatives within asset host contracts are presented primarily within premiums, reinsurance and other receivables in the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented primarily within policyholder account balances in the consolidated balance sheets. At June 30, 2011, fixed maturity securities and equity securities also included embedded derivatives of $6 million and ($74) million, respectively. At December 31, 2010, fixed maturity securities and equity securities included embedded derivatives of $5 million and ($62) million, respectively. | |
(5) | Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. | |
(6) | Trading liabilities are presented within other liabilities in the consolidated balance sheets. |
71
72
73
74
75
76
77
78
79
80
81
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||||||||||||||
U.S. |
State and |
Other |
||||||||||||||||||||||||||||||||||
U.S. |
Foreign |
Foreign |
Treasury |
Political |
Fixed |
|||||||||||||||||||||||||||||||
Corporate |
Corporate |
Government |
and Agency |
Subdivision |
Maturity |
|||||||||||||||||||||||||||||||
Securities | Securities | Securities | RMBS | Securities | CMBS | ABS | Securities | Securities | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 6,861 | $ | 5,534 | $ | 3,186 | $ | 271 | $ | 76 | $ | 791 | $ | 4,506 | $ | 46 | $ | 4 | ||||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
2 | (3 | ) | (1 | ) | | | 18 | 8 | | | |||||||||||||||||||||||||
Net investment gains (losses)
|
(15 | ) | (30 | ) | (5 | ) | (1 | ) | | 22 | (10 | ) | | | ||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | |||||||||||||||||||||||||||
Other revenues
|
| | | | | | | | | |||||||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | | |||||||||||||||||||||||||||
Other expenses
|
| | | | | | | | | |||||||||||||||||||||||||||
Other comprehensive income (loss)
|
91 | 105 | (50 | ) | 8 | | (12 | ) | (2 | ) | (6 | ) | | |||||||||||||||||||||||
Purchases (3)
|
434 | 1,553 | 178 | 21 | 1 | 171 | 139 | 43 | | |||||||||||||||||||||||||||
Sales (3)
|
(313 | ) | (960 | ) | (129 | ) | (37 | ) | (1 | ) | (116 | ) | (263 | ) | | (2 | ) | |||||||||||||||||||
Issuances (3)
|
| | | | | | | | | |||||||||||||||||||||||||||
Settlements (3)
|
| | | | | | | | | |||||||||||||||||||||||||||
Transfers into Level 3 (4)
|
64 | 53 | 199 | 298 | | 24 | 108 | 10 | | |||||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(253 | ) | (408 | ) | (217 | ) | (126 | ) | (50 | ) | (117 | ) | (2,035 | ) | (4 | ) | | |||||||||||||||||||
Balance, end of period
|
$ | 6,871 | $ | 5,844 | $ | 3,161 | $ | 434 | $ | 26 | $ | 781 | $ | 2,451 | $ | 89 | $ | 2 | ||||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
$ | 2 | $ | 7 | $ | 9 | $ | | $ | | $ | 17 | $ | 8 | $ | | $ | | ||||||||||||||||||
Net investment gains (losses)
|
$ | (27 | ) | $ | (18 | ) | $ | (1 | ) | $ | (1 | ) | $ | | $ | | $ | (7 | ) | $ | | $ | | |||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
82
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||
Equity Securities: | Trading and Other Securities: | |||||||||||||||||||||||||||||||
FVO |
||||||||||||||||||||||||||||||||
Non- |
FVO |
Contractholder- |
||||||||||||||||||||||||||||||
redeemable |
Actively |
General |
directed |
Mortgage |
||||||||||||||||||||||||||||
Common |
Preferred |
Traded |
Account |
Unit-linked |
Short-term |
Loans Held- |
MSRs |
|||||||||||||||||||||||||
Stock | Stock | Securities | Securities | Investments | Investments | for-sale | (5),(6) | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 359 | $ | 946 | $ | 40 | $ | 62 | $ | 566 | $ | 742 | $ | 25 | $ | 1,029 | ||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||
Net investment income
|
| | | 4 | 22 | 2 | | | ||||||||||||||||||||||||
Net investment gains (losses)
|
3 | (70 | ) | | | | | | | |||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | ||||||||||||||||||||||||
Other revenues
|
| | | | | | (1 | ) | (75 | ) | ||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | ||||||||||||||||||||||||
Other expenses
|
| | | | | | | | ||||||||||||||||||||||||
Other comprehensive income (loss)
|
8 | 71 | | | | 3 | | | ||||||||||||||||||||||||
Purchases (3)
|
27 | 2 | | | 315 | 333 | 1 | | ||||||||||||||||||||||||
Sales (3)
|
(12 | ) | (295 | ) | (23 | ) | (12 | ) | (305 | ) | (351 | ) | | | ||||||||||||||||||
Issuances (3)
|
| | | | | | | 37 | ||||||||||||||||||||||||
Settlements (3)
|
| | | | | | | (27 | ) | |||||||||||||||||||||||
Transfers into Level 3 (4)
|
2 | | | | 35 | 3 | 9 | | ||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(82 | ) | | (15 | ) | | (10 | ) | | (2 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 305 | $ | 654 | $ | 2 | $ | 54 | $ | 623 | $ | 732 | $ | 32 | $ | 964 | ||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | 2 | $ | 23 | $ | 2 | $ | | $ | | ||||||||||||||||
Net investment gains (losses)
|
$ | (4 | ) | $ | (32 | ) | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (1 | ) | $ | (73 | ) | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
83
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Net Derivatives: (7) | ||||||||||||||||||||||||||||
Long-term Debt |
||||||||||||||||||||||||||||
Interest |
Foreign |
Equity |
Net |
Separate |
of Consolidated |
|||||||||||||||||||||||
Rate |
Currency |
Credit |
Market |
Embedded |
Account |
Securitization |
||||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Derivatives (8) | Assets (9) | Entities | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | (89 | ) | $ | 39 | $ | 43 | $ | (16 | ) | $ | (1,538 | ) | $ | 2,004 | $ | (138 | ) | ||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||
Net investment income
|
| | | | | | | |||||||||||||||||||||
Net investment gains (losses)
|
| | | | | (4 | ) | (53 | ) | |||||||||||||||||||
Net derivative gains (losses)
|
5 | 1 | (2 | ) | (17 | ) | (383 | ) | | | ||||||||||||||||||
Other revenues
|
(2 | ) | | | | | | | ||||||||||||||||||||
Policyholder benefits and claims
|
| | | | 10 | | | |||||||||||||||||||||
Other expenses
|
| | | | | | | |||||||||||||||||||||
Other comprehensive income (loss)
|
19 | | 6 | | (50 | ) | | | ||||||||||||||||||||
Purchases (3)
|
| | | 88 | | 160 | | |||||||||||||||||||||
Sales (3)
|
| | | | | (203 | ) | | ||||||||||||||||||||
Issuances (3)
|
| | | | | | | |||||||||||||||||||||
Settlements (3)
|
| | (5 | ) | | (113 | ) | | 57 | |||||||||||||||||||
Transfers into Level 3 (4)
|
| 9 | | | | 1 | | |||||||||||||||||||||
Transfers out of Level 3 (4)
|
| | | | | (122 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | (67 | ) | $ | 49 | $ | 42 | $ | 55 | $ | (2,074 | ) | $ | 1,836 | $ | (134 | ) | |||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Net investment gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (53 | ) | |||||||||||||
Net derivative gains (losses)
|
$ | 4 | $ | 1 | $ | (3 | ) | $ | (17 | ) | $ | (387 | ) | $ | | $ | | |||||||||||
Other revenues
|
$ | 11 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | 10 | $ | | $ | | ||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | |
84
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||||||||||||||
U.S. |
State and |
Other |
||||||||||||||||||||||||||||||||||
U.S. |
Foreign |
Foreign |
Treasury |
Political |
Fixed |
|||||||||||||||||||||||||||||||
Corporate |
Corporate |
Government |
and Agency |
Subdivision |
Maturity |
|||||||||||||||||||||||||||||||
Securities | Securities | Securities | RMBS | Securities | CMBS | ABS | Securities | Securities | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 6,339 | $ | 5,330 | $ | 199 | $ | 1,927 | $ | 36 | $ | 225 | $ | 2,813 | $ | 101 | $ | 6 | ||||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
12 | 3 | 2 | 13 | | | 8 | | | |||||||||||||||||||||||||||
Net investment gains (losses)
|
| (18 | ) | (5 | ) | | | 1 | (20 | ) | | | ||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | |||||||||||||||||||||||||||
Other revenues
|
| | | | | | | | | |||||||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | | |||||||||||||||||||||||||||
Other expenses
|
| | | | | | | | | |||||||||||||||||||||||||||
Other comprehensive income (loss)
|
97 | (139 | ) | 16 | (6 | ) | 2 | 47 | 81 | 3 | 1 | |||||||||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
362 | (371 | ) | 69 | 98 | (1 | ) | (20 | ) | 483 | 19 | (2 | ) | |||||||||||||||||||||||
Transfers into Level 3 (4)
|
518 | 292 | | 31 | | 117 | 130 | | | |||||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(155 | ) | (545 | ) | (24 | ) | (211 | ) | | (100 | ) | (6 | ) | (22 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 7,173 | $ | 4,552 | $ | 257 | $ | 1,852 | $ | 37 | $ | 270 | $ | 3,489 | $ | 101 | $ | 5 | ||||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
$ | 6 | $ | 3 | $ | 2 | $ | 13 | $ | | $ | | $ | 8 | $ | | $ | | ||||||||||||||||||
Net investment gains (losses)
|
$ | (6 | ) | $ | (16 | ) | $ | | $ | | $ | | $ | 1 | $ | (20 | ) | $ | | $ | | |||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
85
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||
Equity Securities: | Trading and Other Securities: | |||||||||||||||||||||||||||||||
FVO |
||||||||||||||||||||||||||||||||
Non- |
FVO |
Contractholder- |
||||||||||||||||||||||||||||||
redeemable |
Actively |
General |
directed |
Mortgage |
||||||||||||||||||||||||||||
Common |
Preferred |
Traded |
Account |
Unit-linked |
Short-term |
Loans Held- |
MSRs |
|||||||||||||||||||||||||
Stock | Stock | Securities | Securities | Investments | Investments | for-sale | (5),(6) | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 159 | $ | 1,005 | $ | 8 | $ | 32 | $ | | $ | 92 | $ | 28 | $ | 859 | ||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||
Net investment income
|
| | | (3 | ) | | | | | |||||||||||||||||||||||
Net investment gains (losses)
|
3 | 46 | | | | | | | ||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | ||||||||||||||||||||||||
Other revenues
|
| | | | | | (1 | ) | (183 | ) | ||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | ||||||||||||||||||||||||
Other expenses
|
| | | | | | | | ||||||||||||||||||||||||
Other comprehensive income (loss)
|
(15 | ) | (51 | ) | | | | | | | ||||||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
22 | (153 | ) | (1 | ) | | | 46 | 1 | (16 | ) | |||||||||||||||||||||
Transfers into Level 3 (4)
|
| | | | | | 6 | | ||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(8 | ) | (2 | ) | | | | (86 | ) | (8 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 161 | $ | 845 | $ | 7 | $ | 29 | $ | | $ | 52 | $ | 26 | $ | 660 | ||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | (3 | ) | $ | | $ | | $ | | $ | | |||||||||||||||
Net investment gains (losses)
|
$ | (1 | ) | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (1 | ) | $ | (155 | ) | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
86
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Net Derivatives: (7) | ||||||||||||||||||||||||||||
Long-term Debt |
||||||||||||||||||||||||||||
Interest |
Foreign |
Equity |
Net |
Separate |
of Consolidated |
|||||||||||||||||||||||
Rate |
Currency |
Credit |
Market |
Embedded |
Account |
Securitization |
||||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Derivatives (8) | Assets (9) | Entities (10) | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 34 | $ | 74 | $ | 47 | $ | 80 | $ | (994 | ) | $ | 1,702 | $ | (220 | ) | ||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||
Net investment income
|
| | | 12 | | | | |||||||||||||||||||||
Net investment gains (losses)
|
| | | | | 1 | (1 | ) | ||||||||||||||||||||
Net derivative gains (losses)
|
21 | (10 | ) | (22 | ) | 535 | (2,216 | ) | | | ||||||||||||||||||
Other revenues
|
33 | | | | | | | |||||||||||||||||||||
Policyholder benefits and claims
|
| | | | 67 | | | |||||||||||||||||||||
Other expenses
|
| | | | | | | |||||||||||||||||||||
Other comprehensive income (loss)
|
(15 | ) | | 15 | 4 | (75 | ) | 1 | | |||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
(12 | ) | (36 | ) | (9 | ) | 2 | (78 | ) | 70 | | |||||||||||||||||
Transfers into Level 3 (4)
|
| | | | | 12 | | |||||||||||||||||||||
Transfers out of Level 3 (4)
|
| | | | | (182 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 61 | $ | 28 | $ | 31 | $ | 633 | $ | (3,296 | ) | $ | 1,604 | $ | (221 | ) | ||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | 11 | $ | | $ | | $ | | ||||||||||||||
Net investment gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (1 | ) | |||||||||||||
Net derivative gains (losses)
|
$ | 22 | $ | (18 | ) | $ | (23 | ) | $ | 534 | $ | (2,218 | ) | $ | | $ | | |||||||||||
Other revenues
|
$ | 51 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | 67 | $ | | $ | | ||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | |
87
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||||||||||||||
U.S. |
State and |
Other |
||||||||||||||||||||||||||||||||||
U.S. |
Foreign |
Foreign |
Treasury |
Political |
Fixed |
|||||||||||||||||||||||||||||||
Corporate |
Corporate |
Government |
and Agency |
Subdivision |
Maturity |
|||||||||||||||||||||||||||||||
Securities | Securities | Securities | RMBS | Securities | CMBS | ABS | Securities | Securities | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 7,149 | $ | 5,726 | $ | 3,134 | $ | 1,422 | $ | 79 | $ | 1,011 | $ | 4,145 | $ | 46 | $ | 4 | ||||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
5 | 3 | 8 | (1 | ) | | 11 | 19 | | | ||||||||||||||||||||||||||
Net investment gains (losses)
|
(12 | ) | (18 | ) | (23 | ) | (1 | ) | | 68 | (24 | ) | | | ||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | |||||||||||||||||||||||||||
Other revenues
|
| | | | | | | | | |||||||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | | |||||||||||||||||||||||||||
Other expenses
|
| | | | | | | | | |||||||||||||||||||||||||||
Other comprehensive income (loss)
|
138 | 186 | 24 | 16 | | 87 | 103 | (7 | ) | | ||||||||||||||||||||||||||
Purchases (3)
|
778 | 1,817 | 385 | 37 | 1 | 171 | 283 | 45 | | |||||||||||||||||||||||||||
Sales (3)
|
(534 | ) | (1,463 | ) | (228 | ) | (57 | ) | (1 | ) | (508 | ) | (419 | ) | (3 | ) | (2 | ) | ||||||||||||||||||
Issuances (3)
|
| | | | | | | | | |||||||||||||||||||||||||||
Settlements (3)
|
| | | | | | | | | |||||||||||||||||||||||||||
Transfers into Level 3 (4)
|
54 | 39 | 133 | 263 | | 45 | 109 | 10 | | |||||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(707 | ) | (446 | ) | (272 | ) | (1,245 | ) | (53 | ) | (104 | ) | (1,765 | ) | (2 | ) | | |||||||||||||||||||
Balance, end of period
|
$ | 6,871 | $ | 5,844 | $ | 3,161 | $ | 434 | $ | 26 | $ | 781 | $ | 2,451 | $ | 89 | $ | 2 | ||||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
$ | 5 | $ | 13 | $ | 16 | $ | (1 | ) | $ | | $ | 11 | $ | 19 | $ | | $ | | |||||||||||||||||
Net investment gains (losses)
|
$ | (27 | ) | $ | (19 | ) | $ | (10 | ) | $ | (1 | ) | $ | | $ | | $ | (15 | ) | $ | | $ | | |||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
88
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||
Equity Securities: | Trading and Other Securities: | |||||||||||||||||||||||||||||||
FVO |
||||||||||||||||||||||||||||||||
Non- |
FVO |
Contractholder- |
||||||||||||||||||||||||||||||
redeemable |
Actively |
General |
directed |
Mortgage |
||||||||||||||||||||||||||||
Common |
Preferred |
Traded |
Account |
Unit-linked |
Short-term |
Loans Held- |
MSRs |
|||||||||||||||||||||||||
Stock | Stock | Securities | Securities | Investments | Investments | for-sale | (5),(6) | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 268 | $ | 905 | $ | 10 | $ | 77 | $ | 735 | $ | 858 | $ | 24 | $ | 950 | ||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||
Net investment income
|
| | | 8 | 54 | 4 | | | ||||||||||||||||||||||||
Net investment gains (losses)
|
5 | (70 | ) | | | | (1 | ) | | | ||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | ||||||||||||||||||||||||
Other revenues
|
| | | | | | (3 | ) | (18 | ) | ||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | ||||||||||||||||||||||||
Other expenses
|
| | | | | | | | ||||||||||||||||||||||||
Other comprehensive income (loss)
|
(13 | ) | 101 | | | | 10 | | | |||||||||||||||||||||||
Purchases (3)
|
67 | 3 | | 1 | 325 | 618 | 1 | | ||||||||||||||||||||||||
Sales (3)
|
(18 | ) | (296 | ) | (8 | ) | (32 | ) | (450 | ) | (754 | ) | | | ||||||||||||||||||
Issuances (3)
|
| | | | | | 1 | 92 | ||||||||||||||||||||||||
Settlements (3)
|
| | | | | | | (60 | ) | |||||||||||||||||||||||
Transfers into Level 3 (4)
|
1 | 11 | | | 124 | 3 | 13 | | ||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(5 | ) | | | | (165 | ) | (6 | ) | (4 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 305 | $ | 654 | $ | 2 | $ | 54 | $ | 623 | $ | 732 | $ | 32 | $ | 964 | ||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | 5 | $ | 47 | $ | 3 | $ | | $ | | ||||||||||||||||
Net investment gains (losses)
|
$ | (4 | ) | $ | (32 | ) | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (3 | ) | $ | (18 | ) | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
89
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Net Derivatives: (7) | ||||||||||||||||||||||||||||
Long-term Debt |
||||||||||||||||||||||||||||
Interest |
Foreign |
Equity |
Net |
Separate |
of Consolidated |
|||||||||||||||||||||||
Rate |
Currency |
Credit |
Market |
Embedded |
Account |
Securitization |
||||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Derivatives (8) | Assets (9) | Entities | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2011:
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | (86 | ) | $ | 73 | $ | 44 | $ | 142 | $ | (2,438 | ) | $ | 1,983 | $ | (184 | ) | |||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||
Net investment income
|
| | | (3 | ) | | | | ||||||||||||||||||||
Net investment gains (losses)
|
| | | | | 46 | (7 | ) | ||||||||||||||||||||
Net derivative gains (losses)
|
12 | (4 | ) | 4 | (110 | ) | 592 | | | |||||||||||||||||||
Other revenues
|
7 | | | | | | | |||||||||||||||||||||
Policyholder benefits and claims
|
| | | | (8 | ) | | | ||||||||||||||||||||
Other expenses
|
| | | | | | | |||||||||||||||||||||
Other comprehensive income (loss)
|
7 | | 2 | | (2 | ) | | | ||||||||||||||||||||
Purchases (3)
|
| 6 | | 106 | | 358 | | |||||||||||||||||||||
Sales (3)
|
| | | | | (364 | ) | | ||||||||||||||||||||
Issuances (3)
|
| | (3 | ) | | | | | ||||||||||||||||||||
Settlements (3)
|
| | (5 | ) | (5 | ) | (218 | ) | | 57 | ||||||||||||||||||
Transfers into Level 3 (4)
|
| | | | | 9 | | |||||||||||||||||||||
Transfers out of Level 3 (4)
|
(7 | ) | (26 | ) | | (75 | ) | | (196 | ) | | |||||||||||||||||
Balance, end of period
|
$ | (67 | ) | $ | 49 | $ | 42 | $ | 55 | $ | (2,074 | ) | $ | 1,836 | $ | (134 | ) | |||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2011 included in
earnings:
|
||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Net investment gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (7 | ) | |||||||||||||
Net derivative gains (losses)
|
$ | 11 | $ | (4 | ) | $ | 4 | $ | (110 | ) | $ | 581 | $ | | $ | | ||||||||||||
Other revenues
|
$ | 12 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | (8 | ) | $ | | $ | | |||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | |
90
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||
Fixed Maturity Securities: | ||||||||||||||||||||||||||||||||||||
U.S. |
State and |
Other |
||||||||||||||||||||||||||||||||||
U.S. |
Foreign |
Foreign |
Treasury |
Political |
Fixed |
|||||||||||||||||||||||||||||||
Corporate |
Corporate |
Government |
and Agency |
Subdivision |
Maturity |
|||||||||||||||||||||||||||||||
Securities | Securities | Securities | RMBS | Securities | CMBS | ABS | Securities | Securities | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 6,694 | $ | 5,244 | $ | 378 | $ | 1,840 | $ | 37 | $ | 139 | $ | 2,703 | $ | 69 | $ | 6 | ||||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
17 | 3 | | 26 | | | 19 | | | |||||||||||||||||||||||||||
Net investment gains (losses)
|
5 | (12 | ) | (6 | ) | | | (1 | ) | (47 | ) | | | |||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | |||||||||||||||||||||||||||
Other revenues
|
| | | | | | | | | |||||||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | | |||||||||||||||||||||||||||
Other expenses
|
| | | | | | | | | |||||||||||||||||||||||||||
Other comprehensive income (loss)
|
322 | 76 | 20 | 13 | 2 | 58 | 197 | 9 | 1 | |||||||||||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
(270 | ) | (502 | ) | 24 | 51 | (2 | ) | (15 | ) | 739 | 23 | (2 | ) | ||||||||||||||||||||||
Transfers into Level 3 (4)
|
602 | 345 | | 54 | | 122 | 91 | | | |||||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(197 | ) | (602 | ) | (159 | ) | (132 | ) | | (33 | ) | (213 | ) | | | |||||||||||||||||||||
Balance, end of period
|
$ | 7,173 | $ | 4,552 | $ | 257 | $ | 1,852 | $ | 37 | $ | 270 | $ | 3,489 | $ | 101 | $ | 5 | ||||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||||||||||
Net investment income
|
$ | 10 | $ | 4 | $ | 4 | $ | 26 | $ | | $ | | $ | 19 | $ | | $ | | ||||||||||||||||||
Net investment gains (losses)
|
$ | (17 | ) | $ | (16 | ) | $ | | $ | | $ | | $ | | $ | (47 | ) | $ | | $ | | |||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
91
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||
Equity Securities: | Trading and Other Securities: | |||||||||||||||||||||||||||||||
FVO |
||||||||||||||||||||||||||||||||
Non- |
FVO |
Contractholder- |
||||||||||||||||||||||||||||||
redeemable |
Actively |
General |
directed |
Mortgage |
||||||||||||||||||||||||||||
Common |
Preferred |
Traded |
Account |
Unit-linked |
Short-term |
Loans Held- |
MSRs |
|||||||||||||||||||||||||
Stock | Stock | Securities | Securities | Investments | Investments | for-sale | (5),(6) | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 136 | $ | 1,102 | $ | 32 | $ | 51 | $ | | $ | 18 | $ | 25 | $ | 878 | ||||||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||||||
Net investment income
|
| | | (4 | ) | | | | | |||||||||||||||||||||||
Net investment gains (losses)
|
3 | 47 | | | | | | | ||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | ||||||||||||||||||||||||
Other revenues
|
| | | | | | (1 | ) | (238 | ) | ||||||||||||||||||||||
Policyholder benefits and claims
|
| | | | | | | | ||||||||||||||||||||||||
Other expenses
|
| | | | | | | | ||||||||||||||||||||||||
Other comprehensive income (loss)
|
(10 | ) | (33 | ) | | | | | | | ||||||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
42 | (265 | ) | (25 | ) | | | 34 | 1 | 20 | ||||||||||||||||||||||
Transfers into Level 3 (4)
|
| | | | | | 7 | | ||||||||||||||||||||||||
Transfers out of Level 3 (4)
|
(10 | ) | (6 | ) | | (18 | ) | | | (6 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 161 | $ | 845 | $ | 7 | $ | 29 | $ | | $ | 52 | $ | 26 | $ | 660 | ||||||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | (4 | ) | $ | | $ | | $ | | $ | | |||||||||||||||
Net investment gains (losses)
|
$ | (1 | ) | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||||||||
Net derivative gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other revenues
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | (1 | ) | $ | (224 | ) | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Other expenses
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
92
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||
Net Derivatives: (7) |
Long-term Debt |
|||||||||||||||||||||||||||
Interest |
Foreign |
Equity |
Net |
Separate |
of Consolidated |
|||||||||||||||||||||||
Rate |
Currency |
Credit |
Market |
Embedded |
Account |
Securitization |
||||||||||||||||||||||
Contracts | Contracts | Contracts | Contracts | Derivatives (8) | Assets (9) | Entities (10) | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2010:
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | 7 | $ | 108 | $ | 42 | $ | 199 | $ | (1,455 | ) | $ | 1,797 | $ | | |||||||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||||||||||||||
Earnings: (1),(2)
|
||||||||||||||||||||||||||||
Net investment income
|
| | | 8 | | | | |||||||||||||||||||||
Net investment gains (losses)
|
| | | | | 48 | 11 | |||||||||||||||||||||
Net derivative gains (losses)
|
34 | (27 | ) | (22 | ) | 412 | (1,676 | ) | | | ||||||||||||||||||
Other revenues
|
47 | | | | | | | |||||||||||||||||||||
Policyholder benefits and claims
|
| | | | 46 | | | |||||||||||||||||||||
Other expenses
|
| (3 | ) | | | | | | ||||||||||||||||||||
Other comprehensive income (loss)
|
(15 | ) | (1 | ) | 17 | 5 | (65 | ) | | | ||||||||||||||||||
Purchases, sales, issuances and settlements (3)
|
(12 | ) | (49 | ) | (6 | ) | 9 | (146 | ) | (68 | ) | (232 | ) | |||||||||||||||
Transfers into Level 3 (4)
|
| | | | | 49 | | |||||||||||||||||||||
Transfers out of Level 3 (4)
|
| | | | | (222 | ) | | ||||||||||||||||||||
Balance, end of period
|
$ | 61 | $ | 28 | $ | 31 | $ | 633 | $ | (3,296 | ) | $ | 1,604 | $ | (221 | ) | ||||||||||||
Changes in unrealized gains (losses) relating to assets and
liabilities still held at June 30, 2010 included in
earnings:
|
||||||||||||||||||||||||||||
Net investment income
|
$ | | $ | | $ | | $ | 8 | $ | | $ | | $ | | ||||||||||||||
Net investment gains (losses)
|
$ | | $ | | $ | | $ | | $ | | $ | | $ | 11 | ||||||||||||||
Net derivative gains (losses)
|
$ | 35 | $ | (29 | ) | $ | (21 | ) | $ | 418 | $ | (1,682 | ) | $ | | $ | | |||||||||||
Other revenues
|
$ | 51 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Policyholder benefits and claims
|
$ | | $ | | $ | | $ | | $ | 46 | $ | | $ | | ||||||||||||||
Other expenses
|
$ | | $ | (1 | ) | $ | | $ | | $ | | $ | | $ | |
(1) | Amortization of premium/discount is included within net investment income. Impairments charged to earnings on securities and certain mortgage loans are included within net investment gains (losses) while changes in estimated fair value of certain mortgage loans and MSRs are recorded in other revenues. Lapses associated with embedded derivatives are included within net derivative gains (losses). | |
(2) | Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. | |
(3) | The amount reported within purchases, sales, issuances and settlements is the purchase or issuance price and the sales or settlement proceeds based upon the actual date purchased or issued and sold or settled, respectively. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For the three months and six months ended June 30, 2011, fees attributed to net embedded derivatives are included within settlements. For the three months and six months ended June 30, 2010, fees attributed to net embedded derivatives are included within purchases, sales, issuances and settlements. | |
(4) | Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward. | |
(5) | The additions for purchases, originations and issuances and the reductions for loan payments, sales and settlements, affecting MSRs were $37 million and ($27) million, respectively, for the three months ended |
93
June 30, 2011 and $92 million and ($60) million, respectively, for the six months ended June 30, 2011. The additions for purchases, originations and issuances and the reductions for loan payments, sales and settlements, affecting MSRs were $47 million and ($63) million, respectively, for the three months ended June 30, 2010 and $106 million and ($86) million, respectively, for the six months ended June 30, 2010. | ||
(6) | The changes in estimated fair value due to changes in valuation model inputs or assumptions and other changes in estimated fair value affecting MSRs were ($75) million and ($18) million for the three months and six months ended June 30, 2011, respectively. The changes in estimated fair value due to changes in valuation model inputs or assumptions and other changes in estimated fair value affecting MSRs were ($183) million and ($238) million for the three months and six months ended June 30, 2010, respectively. | |
(7) | Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. | |
(8) | Embedded derivative assets and liabilities are presented net for purposes of the rollforward. | |
(9) | Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income. For the purpose of this disclosure, these changes are presented within net investment gains (losses). | |
(10) | The long-term debt of the CSEs at January 1, 2010 is reported within the purchases, sales, issuances and settlements caption of the rollforward. |
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Unpaid principal balance
|
$ | 1,799 | $ | 2,473 | ||||
Excess of estimated fair value over unpaid principal balance
|
64 | 37 | ||||||
Carrying value at estimated fair value
|
$ | 1,863 | $ | 2,510 | ||||
Loans in non-accrual status
|
$ | 3 | $ | 2 | ||||
Loans more than 90 days past due
|
$ | 2 | $ | 3 | ||||
Loans in non-accrual status or more than 90 days past due,
or both difference between aggregate estimated fair
value and unpaid principal balance
|
$ | (2 | ) | $ | (1 | ) |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Instrument-specific credit risk based on changes in credit
spreads for non-agency loans and adjustments in individual loan
quality
|
$ | (2 | ) | $ | (1 | ) | $ | (3 | ) | $ | | |||||
Other changes in estimated fair value
|
115 | 134 | 179 | 261 | ||||||||||||
Total gains (losses) recognized in other revenues
|
$ | 113 | $ | 133 | $ | 176 | $ | 261 | ||||||||
94
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Unpaid principal balance
|
$ | 6,468 | $ | 6,636 | ||||
Excess of estimated fair value over unpaid principal balance
|
229 | 204 | ||||||
Carrying value at estimated fair value
|
$ | 6,697 | $ | 6,840 | ||||
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Contractual principal balance
|
$ | 6,329 | $ | 6,619 | ||||
Excess of estimated fair value over contractual principal balance
|
218 | 201 | ||||||
Carrying value at estimated fair value
|
$ | 6,547 | $ | 6,820 | ||||
Three Months Ended June 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Estimated |
Net |
Estimated |
Net |
|||||||||||||||||||||
Carrying |
Fair |
Investment |
Carrying |
Fair |
Investment |
|||||||||||||||||||
Value Prior to |
Value After |
Gains |
Value Prior to |
Value After |
Gains |
|||||||||||||||||||
Measurement | Measurement | (Losses) | Measurement | Measurement | (Losses) | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Mortgage loans: (1)
|
||||||||||||||||||||||||
Held-for-investment
|
$ | 174 | $ | 182 | $ | 8 | $ | 69 | $ | 83 | $ | 14 | ||||||||||||
Held-for-sale
|
47 | 47 | | 90 | 84 | (6 | ) | |||||||||||||||||
Mortgage loans, net
|
$ | 221 | $ | 229 | $ | 8 | $ | 159 | $ | 167 | $ | 8 | ||||||||||||
Other limited partnership interests (2)
|
$ | 13 | $ | 10 | $ | (3 | ) | $ | 25 | $ | 17 | $ | (8 | ) | ||||||||||
Real estate joint ventures (3)
|
$ | | $ | | $ | | $ | 7 | $ | 3 | $ | (4 | ) |
95
Six Months Ended June 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Estimated |
Net |
Estimated |
Net |
|||||||||||||||||||||
Carrying |
Fair |
Investment |
Carrying |
Fair |
Investment |
|||||||||||||||||||
Value Prior to |
Value After |
Gains |
Value Prior to |
Value After |
Gains |
|||||||||||||||||||
Measurement | Measurement | (Losses) | Measurement | Measurement | (Losses) | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Mortgage loans: (1)
|
||||||||||||||||||||||||
Held-for-investment
|
$ | 165 | $ | 182 | $ | 17 | $ | 148 | $ | 138 | $ | (10 | ) | |||||||||||
Held-for-sale
|
48 | 47 | (1 | ) | 89 | 83 | (6 | ) | ||||||||||||||||
Mortgage loans, net
|
$ | 213 | $ | 229 | $ | 16 | $ | 237 | $ | 221 | $ | (16 | ) | |||||||||||
Other limited partnership interests (2)
|
$ | 13 | $ | 10 | $ | (3 | ) | $ | 25 | $ | 17 | $ | (8 | ) | ||||||||||
Real estate joint ventures (3)
|
$ | | $ | | $ | | $ | 33 | $ | 8 | $ | (25 | ) |
(1) | Mortgage loans The impaired mortgage loans presented above were written down to their estimated fair values at the date the impairments were recognized and are reported as losses above. Subsequent improvements in estimated fair value on previously impaired loans recorded through a reduction in the previously established valuation allowance are reported as gains above. Estimated fair values for impaired mortgage loans are based on observable market prices or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, on the estimated fair value of the underlying collateral, or the present value of the expected future cash flows. Impairments to estimated fair value and decreases in previous impairments from subsequent improvements in estimated fair value represent non-recurring fair value measurements that have been categorized as Level 3 due to the lack of price transparency inherent in the limited markets for such mortgage loans. | |
(2) | Other limited partnership interests The impaired investments presented above were accounted for using the cost method. Impairments on these cost method investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several private equity and debt funds that typically invest primarily in a diversified pool of investments using certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. The estimated fair values of these investments have been determined using the NAV of the Companys ownership interest in the partners capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were less than $1 million and $23 million at June 30, 2011 and 2010, respectively. | |
(3) | Real estate joint ventures The impaired investments presented above were accounted for using the cost method. Impairments on these cost method investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several real estate funds that typically invest primarily in commercial real estate. The estimated fair values of these investments have been determined using the NAV of the Companys ownership interest in the partners capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the |
96
underlying assets of the funds will be liquidated over the next 2 to 10 years. There were no unfunded commitments for these investments at June 30, 2011. Unfunded commitments for these investments were $11 million at June 30, 2010. |
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Estimated |
Estimated |
|||||||||||||||||||||||
Notional |
Carrying |
Fair |
Notional |
Carrying |
Fair |
|||||||||||||||||||
Amount | Value | Value | Amount | Value | Value | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Mortgage loans: (1)
|
||||||||||||||||||||||||
Held-for-investment
|
$ | 54,122 | $ | 56,641 | $ | 52,136 | $ | 53,927 | ||||||||||||||||
Held-for-sale
|
942 | 942 | 811 | 811 | ||||||||||||||||||||
Mortgage loans, net
|
$ | 55,064 | $ | 57,583 | $ | 52,947 | $ | 54,738 | ||||||||||||||||
Policy loans
|
$ | 11,858 | $ | 13,381 | $ | 11,761 | $ | 13,253 | ||||||||||||||||
Real estate joint ventures (2)
|
$ | 505 | $ | 558 | $ | 451 | $ | 482 | ||||||||||||||||
Other limited partnership interests (2)
|
$ | 1,364 | $ | 1,651 | $ | 1,539 | $ | 1,619 | ||||||||||||||||
Short-term investments (3)
|
$ | 658 | $ | 658 | $ | 819 | $ | 819 | ||||||||||||||||
Other invested assets (2)
|
$ | 1,480 | $ | 1,480 | $ | 1,490 | $ | 1,490 | ||||||||||||||||
Cash and cash equivalents
|
$ | 9,628 | $ | 9,628 | $ | 12,957 | $ | 12,957 | ||||||||||||||||
Accrued investment income
|
$ | 4,341 | $ | 4,341 | $ | 4,328 | $ | 4,328 | ||||||||||||||||
Premiums, reinsurance and other receivables (2)
|
$ | 3,090 | $ | 3,314 | $ | 3,752 | $ | 4,048 | ||||||||||||||||
Other assets (2)
|
$ | 527 | $ | 501 | $ | 466 | $ | 453 | ||||||||||||||||
Assets of subsidiaries
held-for-sale
(2)
|
$ | 3,204 | $ | 3,204 | $ | 3,068 | $ | 3,068 | ||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||
Policyholder account balances (2)
|
$ | 151,345 | $ | 158,635 | $ | 146,822 | $ | 152,745 | ||||||||||||||||
Payables for collateral under securities loaned and other
transactions
|
$ | 30,079 | $ | 30,079 | $ | 27,272 | $ | 27,272 | ||||||||||||||||
Bank deposits
|
$ | 10,022 | $ | 10,078 | $ | 10,316 | $ | 10,371 | ||||||||||||||||
Short-term debt
|
$ | 102 | $ | 102 | $ | 306 | $ | 306 | ||||||||||||||||
Long-term debt (2),(4)
|
$ | 21,683 | $ | 22,962 | $ | 20,734 | $ | 21,892 | ||||||||||||||||
Collateral financing arrangements
|
$ | 5,297 | $ | 4,867 | $ | 5,297 | $ | 4,757 | ||||||||||||||||
Junior subordinated debt securities
|
$ | 3,192 | $ | 3,588 | $ | 3,191 | $ | 3,461 | ||||||||||||||||
Other liabilities (2)
|
$ | 2,959 | $ | 2,962 | $ | 2,777 | $ | 2,777 | ||||||||||||||||
Separate account liabilities (2)
|
$ | 48,925 | $ | 48,925 | $ | 42,160 | $ | 42,160 | ||||||||||||||||
Liabilities of subsidiaries
held-for-sale
(2)
|
$ | 127 | $ | 127 | $ | 105 | $ | 105 | ||||||||||||||||
Commitments: (5)
|
||||||||||||||||||||||||
Mortgage loan commitments
|
$ | 4,362 | $ | | $ | (20 | ) | $ | 3,754 | $ | | $ | (17 | ) | ||||||||||
Commitments to fund bank credit facilities, bridge loans and
private corporate bond investments
|
$ | 2,342 | $ | | $ | (22 | ) | $ | 2,437 | $ | | $ | |
97
(1) | Mortgage loans held-for-investment as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include commercial mortgage loans held by CSEs, which are accounted for under the FVO. Mortgage loans held-for-sale as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include residential mortgage loans held-for-sale that are accounted for under the FVO. | |
(2) | Carrying values presented herein differ from those presented in the consolidated balance sheets because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions excluded from the table above are not considered financial instruments. | |
(3) | Short-term investments as presented in the table above differ from the amounts presented in the consolidated balance sheets because this table does not include short-term investments that meet the definition of a security, which are measured at estimated fair value on a recurring basis. | |
(4) | Long-term debt as presented in the table above does not include long-term debt of CSEs, which are accounted for under the FVO. | |
(5) | Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. |
98
99
100
101
6. | Closed Block |
102
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Closed Block Liabilities
|
||||||||
Future policy benefits
|
$ | 43,265 | $ | 43,456 | ||||
Other policy-related balances
|
297 | 316 | ||||||
Policyholder dividends payable
|
603 | 579 | ||||||
Policyholder dividend obligation
|
1,281 | 876 | ||||||
Current income tax payable
|
3 | 178 | ||||||
Other liabilities
|
765 | 627 | ||||||
Total closed block liabilities
|
46,214 | 46,032 | ||||||
Assets Designated to the Closed Block
|
||||||||
Investments:
|
||||||||
Fixed maturity securities
available-for-sale,
at estimated fair value (amortized cost: $27,199 and $27,067,
respectively)
|
29,294 | 28,768 | ||||||
Equity securities
available-for-sale,
at estimated fair value (cost: $59 and $110, respectively)
|
61 | 102 | ||||||
Mortgage loans
|
6,021 | 6,253 | ||||||
Policy loans
|
4,623 | 4,629 | ||||||
Real estate and real estate joint ventures
held-for-investment
|
337 | 328 | ||||||
Short-term investments
|
| 1 | ||||||
Other invested assets
|
682 | 729 | ||||||
Total investments
|
41,018 | 40,810 | ||||||
Cash and cash equivalents
|
310 | 236 | ||||||
Accrued investment income
|
520 | 518 | ||||||
Premiums, reinsurance and other receivables
|
87 | 95 | ||||||
Deferred income tax assets
|
452 | 474 | ||||||
Total assets designated to the closed block
|
42,387 | 42,133 | ||||||
Excess of closed block liabilities over assets designated to the
closed block
|
3,827 | 3,899 | ||||||
Amounts included in accumulated other comprehensive income
(loss):
|
||||||||
Unrealized investment gains (losses), net of income tax of $736
and $594, respectively
|
1,366 | 1,101 | ||||||
Unrealized gains (losses) on derivative instruments, net of
income tax of $0 and $5, respectively
|
| 10 | ||||||
Allocated to policyholder dividend obligation, net of income tax
of ($449) and ($307), respectively
|
(832 | ) | (569 | ) | ||||
Total amounts included in accumulated other comprehensive income
(loss)
|
534 | 542 | ||||||
Maximum future earnings to be recognized from closed block
assets and liabilities
|
$ | 4,361 | $ | 4,441 | ||||
Six Months |
Year |
|||||||
Ended |
Ended |
|||||||
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | 876 | $ | | ||||
Change in unrealized investment and derivative gains (losses)
|
405 | 876 | ||||||
Balance, end of period
|
$ | 1,281 | $ | 876 | ||||
103
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Revenues
|
||||||||||||||||
Premiums
|
$ | 568 | $ | 608 | $ | 1,103 | $ | 1,183 | ||||||||
Net investment income
|
581 | 560 | 1,145 | 1,143 | ||||||||||||
Net investment gains (losses):
|
||||||||||||||||
Other-than-temporary
impairments on fixed maturity securities
|
(6 | ) | (18 | ) | (7 | ) | (18 | ) | ||||||||
Other-than-temporary
impairments on fixed maturity securities transferred to other
comprehensive income (loss)
|
| | | | ||||||||||||
Other net investment gains (losses)
|
9 | 26 | 17 | 39 | ||||||||||||
Total net investment gains (losses)
|
3 | 8 | 10 | 21 | ||||||||||||
Net derivative gains (losses)
|
4 | 15 | (14 | ) | 14 | |||||||||||
Total revenues
|
1,156 | 1,191 | 2,244 | 2,361 | ||||||||||||
Expenses
|
||||||||||||||||
Policyholder benefits and claims
|
746 | 771 | 1,435 | 1,504 | ||||||||||||
Policyholder dividends
|
296 | 324 | 593 | 645 | ||||||||||||
Other expenses
|
49 | 51 | 98 | 101 | ||||||||||||
Total expenses
|
1,091 | 1,146 | 2,126 | 2,250 | ||||||||||||
Revenues, net of expenses before provision for income tax
expense (benefit)
|
65 | 45 | 118 | 111 | ||||||||||||
Provision for income tax expense (benefit)
|
21 | 15 | 38 | 37 | ||||||||||||
Revenues, net of expenses and provision for income tax expense
(benefit)
|
$ | 44 | $ | 30 | $ | 80 | $ | 74 | ||||||||
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Balance, end of period
|
$ | 4,361 | $ | 4,513 | $ | 4,361 | $ | 4,513 | ||||||||
Balance, beginning of period
|
4,405 | 4,543 | 4,441 | 4,587 | ||||||||||||
Change during period
|
$ | (44 | ) | $ | (30 | ) | $ | (80 | ) | $ | (74 | ) | ||||
104
7. | Long-term and Short-term Debt |
8. | Contingencies, Commitments and Guarantees |
105
106
107
108
109
110
111
112
9. | Employee Benefit Plans |
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||||||
Three Months |
Six Months |
Three Months |
Six Months |
|||||||||||||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Service costs
|
$ | 63 | $ | 44 | $ | 126 | $ | 88 | $ | 4 | $ | 5 | $ | 9 | $ | 9 | ||||||||||||||||
Interest costs
|
105 | 100 | 210 | 199 | 27 | 28 | 54 | 56 | ||||||||||||||||||||||||
Expected return on plan assets
|
(113 | ) | (112 | ) | (227 | ) | (224 | ) | (19 | ) | (21 | ) | (39 | ) | (40 | ) | ||||||||||||||||
Settlement and curtailment costs
|
| 7 | | 7 | | | | | ||||||||||||||||||||||||
Amortization of net actuarial (gains) losses
|
48 | 49 | 97 | 98 | 10 | 10 | 21 | 19 | ||||||||||||||||||||||||
Amortization of prior service costs (credit)
|
1 | 1 | 2 | 3 | (27 | ) | (20 | ) | (54 | ) | (41 | ) | ||||||||||||||||||||
Net periodic benefit costs
|
$ | 104 | $ | 89 | $ | 208 | $ | 171 | $ | (5 | ) | $ | 2 | $ | (9 | ) | $ | 3 | ||||||||||||||
113
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||||||
Three Months |
Six Months |
Three Months |
Six Months |
|||||||||||||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Amortization of net actuarial (gains) losses
|
$ | 48 | $ | 49 | $ | 97 | $ | 98 | $ | 10 | $ | 10 | $ | 21 | $ | 19 | ||||||||||||||||
Amortization of prior service costs (credit)
|
1 | 1 | 2 | 3 | (27 | ) | (20 | ) | (54 | ) | (41 | ) | ||||||||||||||||||||
Subtotal
|
49 | 50 | 99 | 101 | (17 | ) | (10 | ) | (33 | ) | (22 | ) | ||||||||||||||||||||
Deferred income tax expense (benefit)
|
(15 | ) | (18 | ) | (34 | ) | (36 | ) | 7 | 28 | 11 | 26 | ||||||||||||||||||||
Components of net periodic benefit costs amortized from
accumulated other comprehensive income (loss), net of income tax
|
$ | 34 | $ | 32 | $ | 65 | $ | 65 | $ | (10 | ) | $ | 18 | $ | (22 | ) | $ | 4 | ||||||||||||||
10. | Equity |
114
11. | Other Expenses |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Compensation
|
$ | 1,329 | $ | 878 | $ | 2,656 | $ | 1,722 | ||||||||
Pension, postretirement & postemployment benefit costs
|
95 | 96 | 190 | 187 | ||||||||||||
Commissions
|
1,587 | 835 | 3,003 | 1,639 | ||||||||||||
Volume-related costs
|
91 | 100 | 174 | 193 | ||||||||||||
Interest credited to bank deposits
|
23 | 36 | 46 | 75 | ||||||||||||
Capitalization of DAC
|
(1,698 | ) | (756 | ) | (3,267 | ) | (1,489 | ) | ||||||||
Amortization of DAC and VOBA
|
1,381 | 1,014 | 2,437 | 1,611 | ||||||||||||
Amortization of negative VOBA
|
(183 | ) | | (366 | ) | | ||||||||||
Interest expense on debt and debt issue costs
|
420 | 369 | 835 | 739 | ||||||||||||
Premium taxes, licenses & fees
|
142 | 133 | 277 | 250 | ||||||||||||
Professional services
|
400 | 229 | 683 | 429 | ||||||||||||
Rent, net of sublease income
|
113 | 71 | 220 | 146 | ||||||||||||
Other
|
795 | 404 | 1,509 | 839 | ||||||||||||
Total other expenses
|
$ | 4,495 | $ | 3,409 | $ | 8,397 | $ | 6,341 | ||||||||
115
12. | Earnings Per Common Share |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions, except share and per share data) | ||||||||||||||||
Weighted Average Shares:
|
||||||||||||||||
Weighted average common stock outstanding for basic earnings per
common share
|
1,059,751,486 | 822,905,671 | 1,058,795,981 | 822,407,969 | ||||||||||||
Incremental common shares from assumed:
|
||||||||||||||||
Stock purchase contracts underlying common equity units (1)
|
4,015,640 | | 3,282,889 | | ||||||||||||
Exercise or issuance of stock-based awards
|
7,208,779 | 7,567,202 | 7,832,099 | 6,766,823 | ||||||||||||
Weighted average common stock outstanding for diluted earnings
per common share
|
1,070,975,905 | 830,472,873 | 1,069,910,969 | 829,174,792 | ||||||||||||
Income (Loss) from Continuing Operations:
|
||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 1,201 | $ | 1,536 | $ | 2,255 | $ | 2,364 | ||||||||
Less: Income (loss) from continuing operations, net of income
tax, attributable to noncontrolling interests
|
(7 | ) | (10 | ) | | (11 | ) | |||||||||
Less: Preferred stock dividends
|
31 | 31 | 61 | 61 | ||||||||||||
Preferred stock redemption premium
|
| | 146 | | ||||||||||||
Income (loss) from continuing operations, net of income tax,
available to MetLife, Inc.s common shareholders
|
$ | 1,177 | $ | 1,515 | $ | 2,048 | $ | 2,314 | ||||||||
Basic
|
$ | 1.11 | $ | 1.84 | $ | 1.93 | $ | 2.81 | ||||||||
Diluted
|
$ | 1.10 | $ | 1.83 | $ | 1.91 | $ | 2.79 | ||||||||
Income (Loss) from Discontinued Operations:
|
||||||||||||||||
Income (loss) from discontinued operations, net of income tax
|
$ | 29 | $ | 11 | $ | (12 | ) | $ | 17 | |||||||
Less: Income (loss) from discontinued operations, net of income
tax, attributable to noncontrolling interests
|
| | | | ||||||||||||
Income (loss) from discontinued operations, net of income tax,
available to MetLife, Inc.s common shareholders
|
$ | 29 | $ | 11 | $ | (12 | ) | $ | 17 | |||||||
Basic
|
$ | 0.03 | $ | 0.01 | $ | (0.01 | ) | $ | 0.02 | |||||||
Diluted
|
$ | 0.03 | $ | 0.01 | $ | (0.01 | ) | $ | 0.02 | |||||||
Net Income (Loss):
|
||||||||||||||||
Net income (loss)
|
$ | 1,230 | $ | 1,547 | $ | 2,243 | $ | 2,381 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
(7 | ) | (10 | ) | | (11 | ) | |||||||||
Less: Preferred stock dividends
|
31 | 31 | 61 | 61 | ||||||||||||
Preferred stock redemption premium
|
| | 146 | | ||||||||||||
Net income (loss) available to MetLife, Inc.s common
shareholders
|
$ | 1,206 | $ | 1,526 | $ | 2,036 | $ | 2,331 | ||||||||
Basic
|
$ | 1.14 | $ | 1.85 | $ | 1.92 | $ | 2.83 | ||||||||
Diluted
|
$ | 1.13 | $ | 1.84 | $ | 1.90 | $ | 2.81 | ||||||||
(1) | See Note 14 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the Companys common equity units. |
116
13. | Business Segment Information |
117
| Universal life and investment-type product policy fees exclude the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (GMIB Fees); | |
| Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and | |
| Other revenues are adjusted for settlements of foreign currency earnings hedges. |
| Policyholder benefits and claims and policyholder dividends exclude: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs (GMIB Costs), and (iv) market value adjustments associated with surrenders or terminations of contracts (Market Value Adjustments); | |
| Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and amounts related to net investment income earned on contractholder-directed unit-linked investments; | |
| Amortization of DAC and value of business acquired (VOBA) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments; | |
| Amortization of negative VOBA excludes amounts related to Market Value Adjustments; | |
| Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and | |
| Other expenses exclude costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) business combinations. |
118
119
Operating Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Business | International | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate |
Auto |
Other |
Banking, |
|||||||||||||||||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
& |
International |
Corporate |
Total |
||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2011 | Products | Products | Funding | Home | Total | Japan | Regions | Total | & Other | Total | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
$ | 4,268 | $ | 240 | $ | 781 | $ | 748 | $ | 6,037 | $ | 1,602 | $ | 1,653 | $ | 3,255 | $ | 2 | $ | 9,294 | $ | | $ | 9,294 | ||||||||||||||||||||||||
Universal life and investment-type product policy fees
|
565 | 622 | 58 | | 1,245 | 195 | 470 | 665 | | 1,910 | 59 | 1,969 | ||||||||||||||||||||||||||||||||||||
Net investment income
|
1,572 | 792 | 1,325 | 51 | 3,740 | 517 | 539 | 1,056 | 297 | 5,093 | 5 | 5,098 | ||||||||||||||||||||||||||||||||||||
Other revenues
|
204 | 75 | 61 | 7 | 347 | 4 | 35 | 39 | 202 | 588 | 4 | 592 | ||||||||||||||||||||||||||||||||||||
Net investment gains (losses)
|
| | | | | | | | | | (155 | ) | (155 | ) | ||||||||||||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | | 352 | 352 | ||||||||||||||||||||||||||||||||||||
Total revenues
|
6,609 | 1,729 | 2,225 | 806 | 11,369 | 2,318 | 2,697 | 5,015 | 501 | 16,885 | 265 | 17,150 | ||||||||||||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
4,634 | 402 | 1,292 | 719 | 7,047 | 1,019 | 1,218 | 2,237 | 1 | 9,285 | 208 | 9,493 | ||||||||||||||||||||||||||||||||||||
Interest credited to policyholder account balances
|
246 | 395 | 330 | | 971 | 388 | 152 | 540 | | 1,511 | (69 | ) | 1,442 | |||||||||||||||||||||||||||||||||||
Interest credited to bank deposits
|
| | | | | | | | 23 | 23 | | 23 | ||||||||||||||||||||||||||||||||||||
Capitalization of DAC
|
(214 | ) | (400 | ) | (6 | ) | (117 | ) | (737 | ) | (519 | ) | (442 | ) | (961 | ) | | (1,698 | ) | | (1,698 | ) | ||||||||||||||||||||||||||
Amortization of DAC and VOBA
|
214 | 238 | 5 | 113 | 570 | 371 | 312 | 683 | | 1,253 | 128 | 1,381 | ||||||||||||||||||||||||||||||||||||
Amortization of negative VOBA
|
| | | | | (141 | ) | (23 | ) | (164 | ) | | (164 | ) | (19 | ) | (183 | ) | ||||||||||||||||||||||||||||||
Interest expense on debt
|
| 1 | 2 | | 3 | | | | 325 | 328 | 92 | 420 | ||||||||||||||||||||||||||||||||||||
Other expenses
|
1,038 | 784 | 118 | 198 | 2,138 | 823 | 1,109 | 1,932 | 337 | 4,407 | 145 | 4,552 | ||||||||||||||||||||||||||||||||||||
Total expenses
|
5,918 | 1,420 | 1,741 | 913 | 9,992 | 1,941 | 2,326 | 4,267 | 686 | 14,945 | 485 | 15,430 | ||||||||||||||||||||||||||||||||||||
Provision for income tax expense (benefit)
|
242 | 108 | 170 | (51 | ) | 469 | 132 | 109 | 241 | (130 | ) | 580 | (61 | ) | 519 | |||||||||||||||||||||||||||||||||
Operating earnings
|
$ | 449 | $ | 201 | $ | 314 | $ | (56 | ) | $ | 908 | $ | 245 | $ | 262 | $ | 507 | $ | (55 | ) | 1,360 | |||||||||||||||||||||||||||
Adjustments to:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues
|
265 | |||||||||||||||||||||||||||||||||||||||||||||||
Total expenses
|
(485 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit
|
61 | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income
tax
|
$ | 1,201 | $ | 1,201 | ||||||||||||||||||||||||||||||||||||||||||||
120
Operating Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Business | International | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate |
Auto |
Other |
Banking, |
|||||||||||||||||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
& |
International |
Corporate |
Total |
||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2010 | Products | Products | Funding | Home | Total | Japan | Regions | Total | & Other | Total | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
$ | 4,317 | $ | 250 | $ | 474 | $ | 723 | $ | 5,764 | $ | | $ | 817 | $ | 817 | $ | 3 | $ | 6,584 | $ | | $ | 6,584 | ||||||||||||||||||||||||
Universal life and investment-type product policy fees
|
546 | 509 | 56 | | 1,111 | | 312 | 312 | | 1,423 | 59 | 1,482 | ||||||||||||||||||||||||||||||||||||
Net investment income
|
1,495 | 842 | 1,234 | 52 | 3,623 | | 274 | 274 | 223 | 4,120 | (59 | ) | 4,061 | |||||||||||||||||||||||||||||||||||
Other revenues
|
188 | 54 | 59 | 8 | 309 | | 4 | 4 | 231 | 544 | | 544 | ||||||||||||||||||||||||||||||||||||
Net investment gains (losses)
|
| | | | | | | | | | (14 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | | 1,481 | 1,481 | ||||||||||||||||||||||||||||||||||||
Total revenues
|
6,546 | 1,655 | 1,823 | 783 | 10,807 | | 1,407 | 1,407 | 457 | 12,671 | 1,467 | 14,138 | ||||||||||||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
4,721 | 422 | 979 | 506 | 6,628 | | 751 | 751 | (2 | ) | 7,377 | (59 | ) | 7,318 | ||||||||||||||||||||||||||||||||||
Interest credited to policyholder account balances
|
237 | 405 | 364 | | 1,006 | | 41 | 41 | | 1,047 | 1 | 1,048 | ||||||||||||||||||||||||||||||||||||
Interest credited to bank deposits
|
| | | | | | | | 36 | 36 | | 36 | ||||||||||||||||||||||||||||||||||||
Capitalization of DAC
|
(217 | ) | (262 | ) | (3 | ) | (117 | ) | (599 | ) | | (157 | ) | (157 | ) | | (756 | ) | | (756 | ) | |||||||||||||||||||||||||||
Amortization of DAC and VOBA
|
206 | 272 | 4 | 111 | 593 | | 109 | 109 | | 702 | 312 | 1,014 | ||||||||||||||||||||||||||||||||||||
Amortization of negative VOBA
|
| | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||
Interest expense on debt
|
| 1 | 1 | | 2 | | 2 | 2 | 262 | 266 | 103 | 369 | ||||||||||||||||||||||||||||||||||||
Other expenses
|
1,031 | 607 | 117 | 193 | 1,948 | | 477 | 477 | 273 | 2,698 | 48 | 2,746 | ||||||||||||||||||||||||||||||||||||
Total expenses
|
5,978 | 1,445 | 1,462 | 693 | 9,578 | | 1,223 | 1,223 | 569 | 11,370 | 405 | 11,775 | ||||||||||||||||||||||||||||||||||||
Provision for income tax expense (benefit)
|
199 | 74 | 126 | 17 | 416 | | 42 | 42 | (102 | ) | 356 | 471 | 827 | |||||||||||||||||||||||||||||||||||
Operating earnings
|
$ | 369 | $ | 136 | $ | 235 | $ | 73 | $ | 813 | $ | | $ | 142 | $ | 142 | $ | (10 | ) | 945 | ||||||||||||||||||||||||||||
Adjustments to:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues
|
1,467 | |||||||||||||||||||||||||||||||||||||||||||||||
Total expenses
|
(405 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit
|
(471 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income
tax
|
$ | 1,536 | $ | 1,536 | ||||||||||||||||||||||||||||||||||||||||||||
121
Operating Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Business | International | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate |
Auto |
Other |
Banking, |
|||||||||||||||||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
& |
International |
Corporate |
Total |
||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2011 | Products | Products | Funding | Home | Total | Japan | Regions | Total | & Other | Total | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
$ | 8,460 | $ | 446 | $ | 1,072 | $ | 1,483 | $ | 11,461 | $ | 3,119 | $ | 3,264 | $ | 6,383 | $ | 4 | $ | 17,848 | $ | | $ | 17,848 | ||||||||||||||||||||||||
Universal life and investment-type product policy fees
|
1,129 | 1,208 | 112 | | 2,449 | 389 | 906 | 1,295 | | 3,744 | 114 | 3,858 | ||||||||||||||||||||||||||||||||||||
Net investment income
|
3,101 | 1,578 | 2,636 | 104 | 7,419 | 956 | 960 | 1,916 | 627 | 9,962 | 452 | 10,414 | ||||||||||||||||||||||||||||||||||||
Other revenues
|
404 | 150 | 121 | 15 | 690 | 13 | 68 | 81 | 384 | 1,155 | 3 | 1,158 | ||||||||||||||||||||||||||||||||||||
Net investment gains (losses)
|
| | | | | | | | | | (254 | ) | (254 | ) | ||||||||||||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | | 37 | 37 | ||||||||||||||||||||||||||||||||||||
Total revenues
|
13,094 | 3,382 | 3,941 | 1,602 | 22,019 | 4,477 | 5,198 | 9,675 | 1,015 | 32,709 | 352 | 33,061 | ||||||||||||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
9,299 | 777 | 2,113 | 1,251 | 13,440 | 1,968 | 2,320 | 4,288 | 3 | 17,731 | 365 | 18,096 | ||||||||||||||||||||||||||||||||||||
Interest credited to policyholder account balances
|
487 | 788 | 665 | | 1,940 | 757 | 295 | 1,052 | | 2,992 | 374 | 3,366 | ||||||||||||||||||||||||||||||||||||
Interest credited to bank deposits
|
| | | | | | | | 46 | 46 | | 46 | ||||||||||||||||||||||||||||||||||||
Capitalization of DAC
|
(430 | ) | (717 | ) | (18 | ) | (222 | ) | (1,387 | ) | (1,041 | ) | (839 | ) | (1,880 | ) | | (3,267 | ) | | (3,267 | ) | ||||||||||||||||||||||||||
Amortization of DAC and VOBA
|
445 | 436 | 10 | 222 | 1,113 | 663 | 600 | 1,263 | | 2,376 | 61 | 2,437 | ||||||||||||||||||||||||||||||||||||
Amortization of negative VOBA
|
| | | | | (287 | ) | (41 | ) | (328 | ) | | (328 | ) | (38 | ) | (366 | ) | ||||||||||||||||||||||||||||||
Interest expense on debt
|
| 1 | 4 | | 5 | | 2 | 2 | 644 | 651 | 184 | 835 | ||||||||||||||||||||||||||||||||||||
Other expenses
|
2,063 | 1,462 | 237 | 391 | 4,153 | 1,593 | 2,111 | 3,704 | 648 | 8,505 | 207 | 8,712 | ||||||||||||||||||||||||||||||||||||
Total expenses
|
11,864 | 2,747 | 3,011 | 1,642 | 19,264 | 3,653 | 4,448 | 8,101 | 1,341 | 28,706 | 1,153 | 29,859 | ||||||||||||||||||||||||||||||||||||
Provision for income tax expense (benefit)
|
431 | 222 | 327 | (41 | ) | 939 | 289 | 211 | 500 | (244 | ) | 1,195 | (248 | ) | 947 | |||||||||||||||||||||||||||||||||
Operating earnings
|
$ | 799 | $ | 413 | $ | 603 | $ | 1 | $ | 1,816 | $ | 535 | $ | 539 | $ | 1,074 | $ | (82 | ) | 2,808 | ||||||||||||||||||||||||||||
Adjustments to:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues
|
352 | |||||||||||||||||||||||||||||||||||||||||||||||
Total expenses
|
(1,153 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit
|
248 | |||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income
tax
|
$ | 2,255 | $ | 2,255 | ||||||||||||||||||||||||||||||||||||||||||||
122
Operating Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Business | International | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate |
Auto |
Other |
Banking, |
|||||||||||||||||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
& |
International |
Corporate |
Total |
||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2010 | Products | Products | Funding | Home | Total | Japan | Regions | Total | & Other | Total | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
$ | 8,640 | $ | 503 | $ | 1,145 | $ | 1,437 | $ | 11,725 | $ | | $ | 1,644 | $ | 1,644 | $ | 3 | $ | 13,372 | $ | | $ | 13,372 | ||||||||||||||||||||||||
Universal life and investment-type product policy fees
|
1,095 | 974 | 111 | | 2,180 | | 601 | 601 | | 2,781 | 106 | 2,887 | ||||||||||||||||||||||||||||||||||||
Net investment income
|
2,999 | 1,694 | 2,425 | 105 | 7,223 | | 702 | 702 | 466 | 8,391 | (10 | ) | 8,381 | |||||||||||||||||||||||||||||||||||
Other revenues
|
377 | 103 | 122 | 6 | 608 | | 5 | 5 | 444 | 1,057 | | 1,057 | ||||||||||||||||||||||||||||||||||||
Net investment gains (losses)
|
| | | | | | | | | | 18 | 18 | ||||||||||||||||||||||||||||||||||||
Net derivative gains (losses)
|
| | | | | | | | | | 1,522 | 1,522 | ||||||||||||||||||||||||||||||||||||
Total revenues
|
13,111 | 3,274 | 3,803 | 1,548 | 21,736 | | 2,952 | 2,952 | 913 | 25,601 | 1,636 | 27,237 | ||||||||||||||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
9,568 | 829 | 2,152 | 1,000 | 13,549 | | 1,516 | 1,516 | (7 | ) | 15,058 | 101 | 15,159 | |||||||||||||||||||||||||||||||||||
Interest credited to policyholder account balances
|
471 | 811 | 719 | | 2,001 | | 191 | 191 | | 2,192 | (2 | ) | 2,190 | |||||||||||||||||||||||||||||||||||
Interest credited to bank deposits
|
| | | | | | | | 75 | 75 | | 75 | ||||||||||||||||||||||||||||||||||||
Capitalization of DAC
|
(423 | ) | (496 | ) | (11 | ) | (221 | ) | (1,151 | ) | | (338 | ) | (338 | ) | | (1,489 | ) | | (1,489 | ) | |||||||||||||||||||||||||||
Amortization of DAC and VOBA
|
445 | 441 | 8 | 218 | 1,112 | | 209 | 209 | | 1,321 | 290 | 1,611 | ||||||||||||||||||||||||||||||||||||
Amortization of negative VOBA
|
| | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||
Interest expense on debt
|
| 2 | 2 | | 4 | | 3 | 3 | 523 | 530 | 209 | 739 | ||||||||||||||||||||||||||||||||||||
Other expenses
|
2,023 | 1,169 | 233 | 372 | 3,797 | | 983 | 983 | 547 | 5,327 | 78 | 5,405 | ||||||||||||||||||||||||||||||||||||
Total expenses
|
12,084 | 2,756 | 3,103 | 1,369 | 19,312 | | 2,564 | 2,564 | 1,138 | 23,014 | 676 | 23,690 | ||||||||||||||||||||||||||||||||||||
Provision for income tax expense (benefit)
|
360 | 181 | 245 | 34 | 820 | | 99 | 99 | (171 | ) | 748 | 435 | 1,183 | |||||||||||||||||||||||||||||||||||
Operating earnings
|
$ | 667 | $ | 337 | $ | 455 | $ | 145 | $ | 1,604 | $ | | $ | 289 | $ | 289 | $ | (54 | ) | 1,839 | ||||||||||||||||||||||||||||
Adjustments to:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues
|
1,636 | |||||||||||||||||||||||||||||||||||||||||||||||
Total expenses
|
(676 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for income tax (expense) benefit
|
(435 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income
tax
|
$ | 2,364 | $ | 2,364 | ||||||||||||||||||||||||||||||||||||||||||||
123
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
U.S. Business:
|
||||||||
Insurance Products
|
$ | 143,626 | $ | 141,366 | ||||
Retirement Products
|
189,411 | 177,045 | ||||||
Corporate Benefit Funding
|
187,041 | 172,929 | ||||||
Auto & Home
|
5,865 | 5,541 | ||||||
Total
|
525,943 | 496,881 | ||||||
International:
|
||||||||
Japan
|
98,803 | 87,416 | ||||||
Other International Regions
|
69,946 | 77,579 | ||||||
Total
|
168,749 | 164,995 | ||||||
Banking, Corporate & Other
|
76,791 | 69,030 | ||||||
Total
|
$ | 771,483 | $ | 730,906 | ||||
14. | Discontinued Operations |
124
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Total revenues
|
$ | 129 | $ | 105 | $ | 236 | $ | 194 | ||||||||
Total expenses
|
116 | 100 | 214 | 184 | ||||||||||||
Income before provision for income tax
|
13 | 5 | 22 | 10 | ||||||||||||
Provision for income tax expense
|
5 | 1 | 8 | 3 | ||||||||||||
Income from operations of discontinued operations, net of income
tax
|
8 | 4 | 14 | 7 | ||||||||||||
Net investment gain (loss), net of income tax
|
(7 | ) | | (74 | ) | | ||||||||||
Income (loss) from discontinued operations, net of income tax
|
$ | 1 | $ | 4 | $ | (60 | ) | $ | 7 | |||||||
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Total assets
held-for-sale
|
$ | 3,369 | $ | 3,331 | ||||
Total liabilities
held-for-sale
|
$ | 3,163 | $ | 3,043 | ||||
Major classes of assets and liabilities included above:
|
||||||||
Total investments
|
$ | 2,987 | $ | 2,726 | ||||
Total future policy benefits
|
$ | 2,616 | $ | 2,461 |
125
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
| Universal life and investment-type product policy fees exclude the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (GMIB) fees (GMIB Fees); | |
| Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are variable interest entities (VIEs) consolidated under GAAP; and | |
| Other revenues are adjusted for settlements of foreign currency earnings hedges. |
| Policyholder benefits and claims and policyholder dividends exclude: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced |
126
pool of assets, (iii) benefits and hedging costs related to GMIBs (GMIB Costs), and (iv) market value adjustments associated with surrenders or terminations of contracts (Market Value Adjustments); |
| Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and amounts related to net investment income earned on contractholder-directed unit-linked investments; | |
| Amortization of deferred policy acquisition costs (DAC) and value of business acquired (VOBA) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments; | |
| Amortization of negative VOBA excludes amounts related to Market Value Adjustments; | |
| Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and | |
| Other expenses exclude costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) business combinations. |
127
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 1,201 | $ | 1,536 | $ | 2,255 | $ | 2,364 | ||||||||
Less: Net investment gains (losses)
|
(155 | ) | (14 | ) | (254 | ) | 18 | |||||||||
Less: Net derivative gains (losses)
|
352 | 1,481 | 37 | 1,522 | ||||||||||||
Less: Other adjustments to continuing operations (1)
|
(417 | ) | (405 | ) | (584 | ) | (580 | ) | ||||||||
Less: Provision for income tax (expense) benefit
|
61 | (471 | ) | 248 | (435 | ) | ||||||||||
Operating earnings
|
1,360 | 945 | 2,808 | 1,839 | ||||||||||||
Less: Preferred stock dividends
|
31 | 31 | 61 | 61 | ||||||||||||
Operating earnings available to common shareholders
|
$ | 1,329 | $ | 914 | $ | 2,747 | $ | 1,778 | ||||||||
(1) | See definitions of operating revenues and operating expenses for the components of such adjustments. |
128
| Premiums, fees and other revenues growth in 2011 of 31%, which is mainly attributable to the Acquisition. The remaining increase is expected to be driven by: |
| Increases in our International businesses from continuing organic growth throughout our various geographic regions; | |
| Higher fees earned on separate accounts, as the equity markets continue to improve, thereby increasing the value of those separate accounts. In addition, net flows of variable annuities are expected to remain strong in the remainder of 2011, which also increases the account values upon which these fees are earned; and | |
| Growth within our pension closeouts business. |
| Focus on disciplined underwriting. We see no significant changes to the underlying trends that drive underwriting results and continue to anticipate solid results in 2011. |
129
| Focus on expense management. We continue to focus on expense control throughout the Company, specifically managing the costs associated with the integration of ALICO. We also continue to expect to begin realizing cost synergies later in 2011. | |
| Performance of the investment portfolio. Although the market environment remains challenging, we expect the performance on our investment portfolio in 2011 with respect to both income and realized gains and losses will generally be higher than the results achieved in 2010. |
130
131
(i) | the estimated fair value of investments in the absence of quoted market values; | |
(ii) | investment impairments; | |
(iii) | the recognition of income on certain investment entities and the application of the consolidation rules to certain investments; |
132
(iv) | the estimated fair value of and accounting for freestanding derivatives and the existence and estimated fair value of embedded derivatives requiring bifurcation; | |
(v) | the capitalization and amortization of DAC and the establishment and amortization of VOBA; | |
(vi) | the measurement of goodwill and related impairment, if any; | |
(vii) | the liability for future policyholder benefits and the accounting for reinsurance contracts; | |
(viii) | accounting for income taxes and the valuation of deferred tax assets; | |
(ix) | accounting for employee benefit plans; and | |
(x) | the liability for litigation and regulatory matters. |
133
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
Revenues
|
||||||||||||||||
Premiums
|
$ | 9,294 | $ | 6,584 | $ | 2,710 | 41.2 | % | ||||||||
Universal life and investment-type product policy fees
|
1,969 | 1,482 | 487 | 32.9 | % | |||||||||||
Net investment income
|
5,098 | 4,061 | 1,037 | 25.5 | % | |||||||||||
Other revenues
|
592 | 544 | 48 | 8.8 | % | |||||||||||
Net investment gains (losses)
|
(155 | ) | (14 | ) | (141 | ) | (1,007.1 | )% | ||||||||
Net derivative gains (losses)
|
352 | 1,481 | (1,129 | ) | (76.2 | )% | ||||||||||
Total revenues
|
17,150 | 14,138 | 3,012 | 21.3 | % | |||||||||||
Expenses
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
9,493 | 7,318 | 2,175 | 29.7 | % | |||||||||||
Interest credited to policyholder account balances
|
1,442 | 1,048 | 394 | 37.6 | % | |||||||||||
Interest credited to bank deposits
|
23 | 36 | (13 | ) | (36.1 | )% | ||||||||||
Capitalization of DAC
|
(1,698 | ) | (756 | ) | (942 | ) | (124.6 | )% | ||||||||
Amortization of DAC and VOBA
|
1,381 | 1,014 | 367 | 36.2 | % | |||||||||||
Amortization of negative VOBA
|
(183 | ) | | (183 | ) | |||||||||||
Interest expense on debt
|
420 | 369 | 51 | 13.8 | % | |||||||||||
Other expenses
|
4,552 | 2,746 | 1,806 | 65.8 | % | |||||||||||
Total expenses
|
15,430 | 11,775 | 3,655 | 31.0 | % | |||||||||||
Income (loss) from continuing operations before provision for
income tax
|
1,720 | 2,363 | (643 | ) | (27.2 | )% | ||||||||||
Provision for income tax expense (benefit)
|
519 | 827 | (308 | ) | (37.2 | )% | ||||||||||
Income (loss) from continuing operations, net of income tax
|
1,201 | 1,536 | (335 | ) | (21.8 | )% | ||||||||||
Income (loss) from discontinued operations, net of income tax
|
29 | 11 | 18 | 163.6 | % | |||||||||||
Net income (loss)
|
1,230 | 1,547 | (317 | ) | (20.5 | )% | ||||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
(7 | ) | (10 | ) | 3 | 30.0 | % | |||||||||
Net income (loss) attributable to MetLife, Inc.
|
1,237 | 1,557 | (320 | ) | (20.6 | )% | ||||||||||
Less: Preferred stock dividends
|
31 | 31 | | | % | |||||||||||
Preferred stock redemption premium
|
| | | |||||||||||||
Net income (loss) available to MetLife, Inc.s common
shareholders
|
$ | 1,206 | $ | 1,526 | $ | (320 | ) | (21.0 | )% | |||||||
134
135
136
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 582 | $ | 332 | $ | 284 | $ | (62 | ) | $ | 331 | $ | (84 | ) | $ | (182 | ) | $ | 1,201 | |||||||||||||
Less: Net investment gains (losses)
|
3 | 42 | (12 | ) | (6 | ) | (47 | ) | (33 | ) | (102 | ) | (155 | ) | ||||||||||||||||||
Less: Net derivative gains (losses)
|
261 | 271 | (52 | ) | (3 | ) | 135 | (261 | ) | 1 | 352 | |||||||||||||||||||||
Less: Other adjustments to continuing operations (1)
|
(58 | ) | (111 | ) | 17 | | 46 | (218 | ) | (93 | ) | (417 | ) | |||||||||||||||||||
Less: Provision for income tax (expense) benefit
|
(73 | ) | (71 | ) | 17 | 3 | (48 | ) | 166 | 67 | 61 | |||||||||||||||||||||
Operating earnings
|
$ | 449 | $ | 201 | $ | 314 | $ | (56 | ) | $ | 245 | $ | 262 | (55 | ) | 1,360 | ||||||||||||||||
Less: Preferred stock dividends
|
31 | 31 | ||||||||||||||||||||||||||||||
Operating earnings available to common shareholders
|
$ | (86 | ) | $ | 1,329 | |||||||||||||||||||||||||||
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 714 | $ | 401 | $ | 330 | $ | 72 | $ | | $ | 68 | $ | (49 | ) | $ | 1,536 | |||||||||||||||
Less: Net investment gains (losses)
|
(4 | ) | 70 | 16 | 1 | | 5 | (102 | ) | (14 | ) | |||||||||||||||||||||
Less: Net derivative gains (losses)
|
605 | 418 | 129 | (3 | ) | | 260 | 72 | 1,481 | |||||||||||||||||||||||
Less: Other adjustments to continuing operations (1)
|
(69 | ) | (78 | ) | 8 | | | (233 | ) | (33 | ) | (405 | ) | |||||||||||||||||||
Less: Provision for income tax (expense) benefit
|
(187 | ) | (145 | ) | (58 | ) | 1 | | (106 | ) | 24 | (471 | ) | |||||||||||||||||||
Operating earnings
|
$ | 369 | $ | 136 | $ | 235 | $ | 73 | $ | | $ | 142 | (10 | ) | 945 | |||||||||||||||||
Less: Preferred stock dividends
|
31 | 31 | ||||||||||||||||||||||||||||||
Operating earnings available to common shareholders
|
$ | (41 | ) | $ | 914 | |||||||||||||||||||||||||||
(1) | See definitions of operating revenues and operating expenses for the components of such adjustments. |
137
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Total revenues
|
$ | 6,819 | $ | 2,067 | $ | 2,197 | $ | 797 | $ | 2,241 | $ | 2,531 | $ | 498 | $ | 17,150 | ||||||||||||||||
Less: Net investment gains (losses)
|
3 | 42 | (12 | ) | (6 | ) | (47 | ) | (33 | ) | (102 | ) | (155 | ) | ||||||||||||||||||
Less: Net derivative gains (losses)
|
261 | 271 | (52 | ) | (3 | ) | 135 | (261 | ) | 1 | 352 | |||||||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
1 | | | | | | | 1 | ||||||||||||||||||||||||
Less: Other adjustments to revenues (1)
|
(55 | ) | 25 | 36 | | (165 | ) | 128 | 98 | 67 | ||||||||||||||||||||||
Total operating revenues
|
$ | 6,609 | $ | 1,729 | $ | 2,225 | $ | 806 | $ | 2,318 | $ | 2,697 | $ | 501 | $ | 16,885 | ||||||||||||||||
Total expenses
|
$ | 5,922 | $ | 1,556 | $ | 1,760 | $ | 913 | $ | 1,730 | $ | 2,672 | $ | 877 | $ | 15,430 | ||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
4 | 120 | | | | | | 124 | ||||||||||||||||||||||||
Less: Other adjustments to expenses (1)
|
| 16 | 19 | | (211 | ) | 346 | 191 | 361 | |||||||||||||||||||||||
Total operating expenses
|
$ | 5,918 | $ | 1,420 | $ | 1,741 | $ | 913 | $ | 1,941 | $ | 2,326 | $ | 686 | $ | 14,945 | ||||||||||||||||
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Total revenues
|
$ | 7,117 | $ | 2,128 | $ | 2,013 | $ | 781 | $ | | $ | 1,561 | $ | 538 | $ | 14,138 | ||||||||||||||||
Less: Net investment gains (losses)
|
(4 | ) | 70 | 16 | 1 | | 5 | (102 | ) | (14 | ) | |||||||||||||||||||||
Less: Net derivative gains (losses)
|
605 | 418 | 129 | (3 | ) | | 260 | 72 | 1,481 | |||||||||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
7 | | | | | | | 7 | ||||||||||||||||||||||||
Less: Other adjustments to revenues (1)
|
(37 | ) | (15 | ) | 45 | | | (111 | ) | 111 | (7 | ) | ||||||||||||||||||||
Total operating revenues
|
$ | 6,546 | $ | 1,655 | $ | 1,823 | $ | 783 | $ | | $ | 1,407 | $ | 457 | $ | 12,671 | ||||||||||||||||
Total expenses
|
$ | 6,017 | $ | 1,508 | $ | 1,499 | $ | 693 | $ | | $ | 1,345 | $ | 713 | $ | 11,775 | ||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
40 | 172 | | | | | | 212 | ||||||||||||||||||||||||
Less: Other adjustments to expenses (1)
|
(1 | ) | (109 | ) | 37 | | | 122 | 144 | 193 | ||||||||||||||||||||||
Total operating expenses
|
$ | 5,978 | $ | 1,445 | $ | 1,462 | $ | 693 | $ | | $ | 1,223 | $ | 569 | $ | 11,370 | ||||||||||||||||
(1) | See definitions of operating revenues and operating expenses for the components of such adjustments. |
138
139
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 4,268 | $ | 4,317 | $ | (49 | ) | (1.1 | )% | |||||||
Universal life and investment-type product policy fees
|
565 | 546 | 19 | 3.5 | % | |||||||||||
Net investment income
|
1,572 | 1,495 | 77 | 5.2 | % | |||||||||||
Other revenues
|
204 | 188 | 16 | 8.5 | % | |||||||||||
Total operating revenues
|
6,609 | 6,546 | 63 | 1.0 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
4,634 | 4,721 | (87 | ) | (1.8 | )% | ||||||||||
Interest credited to policyholder account balances
|
246 | 237 | 9 | 3.8 | % | |||||||||||
Capitalization of DAC
|
(214 | ) | (217 | ) | 3 | 1.4 | % | |||||||||
Amortization of DAC and VOBA
|
214 | 206 | 8 | 3.9 | % | |||||||||||
Other expenses
|
1,038 | 1,031 | 7 | 0.7 | % | |||||||||||
Total operating expenses
|
5,918 | 5,978 | (60 | ) | (1.0 | )% | ||||||||||
Provision for income tax expense (benefit)
|
242 | 199 | 43 | 21.6 | % | |||||||||||
Operating earnings
|
$ | 449 | $ | 369 | $ | 80 | 21.7 | % | ||||||||
140
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 240 | $ | 250 | $ | (10 | ) | (4.0 | )% | |||||||
Universal life and investment-type product policy fees
|
622 | 509 | 113 | 22.2 | % | |||||||||||
Net investment income
|
792 | 842 | (50 | ) | (5.9 | )% | ||||||||||
Other revenues
|
75 | 54 | 21 | 38.9 | % | |||||||||||
Total operating revenues
|
1,729 | 1,655 | 74 | 4.5 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
402 | 422 | (20 | ) | (4.7 | )% | ||||||||||
Interest credited to policyholder account balances
|
395 | 405 | (10 | ) | (2.5 | )% | ||||||||||
Capitalization of DAC
|
(400 | ) | (262 | ) | (138 | ) | (52.7 | )% | ||||||||
Amortization of DAC and VOBA
|
238 | 272 | (34 | ) | (12.5 | )% | ||||||||||
Interest expense on debt
|
1 | 1 | | | % | |||||||||||
Other expenses
|
784 | 607 | 177 | 29.2 | % | |||||||||||
Total operating expenses
|
1,420 | 1,445 | (25 | ) | (1.7 | )% | ||||||||||
Provision for income tax expense (benefit)
|
108 | 74 | 34 | 45.9 | % | |||||||||||
Operating earnings
|
$ | 201 | $ | 136 | $ | 65 | 47.8 | % | ||||||||
141
142
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 781 | $ | 474 | $ | 307 | 64.8 | % | ||||||||
Universal life and investment-type product policy fees
|
58 | 56 | 2 | 3.6 | % | |||||||||||
Net investment income
|
1,325 | 1,234 | 91 | 7.4 | % | |||||||||||
Other revenues
|
61 | 59 | 2 | 3.4 | % | |||||||||||
Total operating revenues
|
2,225 | 1,823 | 402 | 22.1 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1,292 | 979 | 313 | 32.0 | % | |||||||||||
Interest credited to policyholder account balances
|
330 | 364 | (34 | ) | (9.3 | )% | ||||||||||
Capitalization of DAC
|
(6 | ) | (3 | ) | (3 | ) | (100.0 | )% | ||||||||
Amortization of DAC and VOBA
|
5 | 4 | 1 | 25.0 | % | |||||||||||
Interest expense on debt
|
2 | 1 | 1 | 100.0 | % | |||||||||||
Other expenses
|
118 | 117 | 1 | 0.9 | % | |||||||||||
Total operating expenses
|
1,741 | 1,462 | 279 | 19.1 | % | |||||||||||
Provision for income tax expense (benefit)
|
170 | 126 | 44 | 34.9 | % | |||||||||||
Operating earnings
|
$ | 314 | $ | 235 | $ | 79 | 33.6 | % | ||||||||
143
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 748 | $ | 723 | $ | 25 | 3.5 | % | ||||||||
Net investment income
|
51 | 52 | (1 | ) | (1.9 | )% | ||||||||||
Other revenues
|
7 | 8 | (1 | ) | (12.5 | )% | ||||||||||
Total operating revenues
|
806 | 783 | 23 | 2.9 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
719 | 506 | 213 | 42.1 | % | |||||||||||
Capitalization of DAC
|
(117 | ) | (117 | ) | | | % | |||||||||
Amortization of DAC and VOBA
|
113 | 111 | 2 | 1.8 | % | |||||||||||
Other expenses
|
198 | 193 | 5 | 2.6 | % | |||||||||||
Total operating expenses
|
913 | 693 | 220 | 31.7 | % | |||||||||||
Provision for income tax expense (benefit)
|
(51 | ) | 17 | (68 | ) | (400.0 | )% | |||||||||
Operating earnings
|
$ | (56 | ) | $ | 73 | $ | (129 | ) | (176.7 | )% | ||||||
144
Three Months |
||||||||||||
Ended |
||||||||||||
June 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(In millions) | ||||||||||||
OPERATING REVENUES
|
||||||||||||
Premiums
|
$ | 1,602 | $ | | $ | 1,602 | ||||||
Universal life and investment-type product policy fees
|
195 | | 195 | |||||||||
Net investment income
|
517 | | 517 | |||||||||
Other revenues
|
4 | | 4 | |||||||||
Total operating revenues
|
2,318 | | 2,318 | |||||||||
OPERATING EXPENSES
|
||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1,019 | | 1,019 | |||||||||
Interest credited to policyholder account balances
|
388 | | 388 | |||||||||
Capitalization of DAC
|
(519 | ) | | (519 | ) | |||||||
Amortization of DAC and VOBA
|
371 | | 371 | |||||||||
Amortization of negative VOBA
|
(141 | ) | | (141 | ) | |||||||
Other expenses
|
823 | | 823 | |||||||||
Total operating expenses
|
1,941 | | 1,941 | |||||||||
Provision for income tax expense (benefit)
|
132 | | 132 | |||||||||
Operating earnings
|
$ | 245 | $ | | $ | 245 | ||||||
145
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 1,653 | $ | 817 | $ | 836 | 102.3 | % | ||||||||
Universal life and investment-type product policy fees
|
470 | 312 | 158 | 50.6 | % | |||||||||||
Net investment income
|
539 | 274 | 265 | 96.7 | % | |||||||||||
Other revenues
|
35 | 4 | 31 | 775.0 | % | |||||||||||
Total operating revenues
|
2,697 | 1,407 | 1,290 | 91.7 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1,218 | 751 | 467 | 62.2 | % | |||||||||||
Interest credited to policyholder account balances
|
152 | 41 | 111 | 270.7 | % | |||||||||||
Capitalization of DAC
|
(442 | ) | (157 | ) | (285 | ) | (181.5 | )% | ||||||||
Amortization of DAC and VOBA
|
312 | 109 | 203 | 186.2 | % | |||||||||||
Amortization of negative VOBA
|
(23 | ) | | (23 | ) | |||||||||||
Interest expense on debt
|
| 2 | (2 | ) | (100.0 | )% | ||||||||||
Other expenses
|
1,109 | 477 | 632 | 132.5 | % | |||||||||||
Total operating expenses
|
2,326 | 1,223 | 1,103 | 90.2 | % | |||||||||||
Provision for income tax expense (benefit)
|
109 | 42 | 67 | 159.5 | % | |||||||||||
Operating earnings
|
$ | 262 | $ | 142 | $ | 120 | 84.5 | % | ||||||||
146
Three Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 2 | $ | 3 | $ | (1 | ) | (33.3 | )% | |||||||
Net investment income
|
297 | 223 | 74 | 33.2 | % | |||||||||||
Other revenues
|
202 | 231 | (29 | ) | (12.6 | )% | ||||||||||
Total operating revenues
|
501 | 457 | 44 | 9.6 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1 | (2 | ) | 3 | 150.0 | % | ||||||||||
Interest credited to bank deposits
|
23 | 36 | (13 | ) | (36.1 | )% | ||||||||||
Interest expense on debt
|
325 | 262 | 63 | 24.0 | % | |||||||||||
Other expenses
|
337 | 273 | 64 | 23.4 | % | |||||||||||
Total operating expenses
|
686 | 569 | 117 | 20.6 | % | |||||||||||
Provision for income tax expense (benefit)
|
(130 | ) | (102 | ) | (28 | ) | (27.5 | )% | ||||||||
Operating earnings
|
(55 | ) | (10 | ) | (45 | ) | (450.0 | )% | ||||||||
Less: Preferred stock dividends
|
31 | 31 | | | % | |||||||||||
Operating earnings available to common shareholders
|
$ | (86 | ) | $ | (41 | ) | $ | (45 | ) | (109.8 | )% | |||||
147
148
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
Revenues
|
||||||||||||||||
Premiums
|
$ | 17,848 | $ | 13,372 | $ | 4,476 | 33.5 | % | ||||||||
Universal life and investment-type product policy fees
|
3,858 | 2,887 | 971 | 33.6 | % | |||||||||||
Net investment income
|
10,414 | 8,381 | 2,033 | 24.3 | % | |||||||||||
Other revenues
|
1,158 | 1,057 | 101 | 9.6 | % | |||||||||||
Net investment gains (losses)
|
(254 | ) | 18 | (272 | ) | (1,511.1 | )% | |||||||||
Net derivative gains (losses)
|
37 | 1,522 | (1,485 | ) | (97.6 | )% | ||||||||||
Total revenues
|
33,061 | 27,237 | 5,824 | 21.4 | % | |||||||||||
Expenses
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
18,096 | 15,159 | 2,937 | 19.4 | % | |||||||||||
Interest credited to policyholder account balances
|
3,366 | 2,190 | 1,176 | 53.7 | % | |||||||||||
Interest credited to bank deposits
|
46 | 75 | (29 | ) | (38.7 | )% | ||||||||||
Capitalization of DAC
|
(3,267 | ) | (1,489 | ) | (1,778 | ) | (119.4 | )% | ||||||||
Amortization of DAC and VOBA
|
2,437 | 1,611 | 826 | 51.3 | % | |||||||||||
Amortization of negative VOBA
|
(366 | ) | | (366 | ) | |||||||||||
Interest expense on debt
|
835 | 739 | 96 | 13.0 | % | |||||||||||
Other expenses
|
8,712 | 5,405 | 3,307 | 61.2 | % | |||||||||||
Total expenses
|
29,859 | 23,690 | 6,169 | 26.0 | % | |||||||||||
Income (loss) from continuing operations before provision for
income tax
|
3,202 | 3,547 | (345 | ) | (9.7 | )% | ||||||||||
Provision for income tax expense (benefit)
|
947 | 1,183 | (236 | ) | (19.9 | )% | ||||||||||
Income (loss) from continuing operations, net of income tax
|
2,255 | 2,364 | (109 | ) | (4.6 | )% | ||||||||||
Income (loss) from discontinued operations, net of income tax
|
(12 | ) | 17 | (29 | ) | (170.6 | )% | |||||||||
Net income (loss)
|
2,243 | 2,381 | (138 | ) | (5.8 | )% | ||||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
| (11 | ) | 11 | 100.0 | % | ||||||||||
Net income (loss) attributable to MetLife, Inc.
|
2,243 | 2,392 | (149 | ) | (6.2 | )% | ||||||||||
Less: Preferred stock dividends
|
61 | 61 | | | % | |||||||||||
Preferred stock redemption premium
|
146 | | 146 | |||||||||||||
Net income (loss) available to MetLife, Inc.s common
shareholders
|
$ | 2,036 | $ | 2,331 | $ | (295 | ) | (12.7 | )% | |||||||
149
150
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 813 | $ | 506 | $ | 527 | $ | (5 | ) | $ | 593 | $ | 121 | $ | (300 | ) | $ | 2,255 | ||||||||||||||
Less: Net investment gains (losses)
|
40 | 51 | | (6 | ) | (94 | ) | (145 | ) | (100 | ) | (254 | ) | |||||||||||||||||||
Less: Net derivative gains (losses)
|
92 | 264 | (179 | ) | (3 | ) | 127 | (185 | ) | (79 | ) | 37 | ||||||||||||||||||||
Less: Other adjustments to continuing operations (1)
|
(110 | ) | (171 | ) | 61 | | 57 | (271 | ) | (150 | ) | (584 | ) | |||||||||||||||||||
Less: Provision for income tax (expense) benefit
|
(8 | ) | (51 | ) | 42 | 3 | (32 | ) | 183 | 111 | 248 | |||||||||||||||||||||
Operating earnings
|
$ | 799 | $ | 413 | $ | 603 | $ | 1 | $ | 535 | $ | 539 | (82 | ) | 2,808 | |||||||||||||||||
Less: Preferred stock dividends
|
61 | 61 | ||||||||||||||||||||||||||||||
Operating earnings available to common shareholders
|
$ | (143 | ) | $ | 2,747 | |||||||||||||||||||||||||||
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of income tax
|
$ | 1,002 | $ | 597 | $ | 569 | $ | 143 | $ | | $ | 176 | $ | (123 | ) | $ | 2,364 | |||||||||||||||
Less: Net investment gains (losses)
|
9 | 91 | 57 | | | (29 | ) | (110 | ) | 18 | ||||||||||||||||||||||
Less: Net derivative gains (losses)
|
625 | 511 | 70 | (3 | ) | | 266 | 53 | 1,522 | |||||||||||||||||||||||
Less: Other adjustments to continuing operations (1)
|
(117 | ) | (201 | ) | 59 | | | (268 | ) | (53 | ) | (580 | ) | |||||||||||||||||||
Less: Provision for income tax (expense) benefit
|
(182 | ) | (141 | ) | (72 | ) | 1 | | (82 | ) | 41 | (435 | ) | |||||||||||||||||||
Operating earnings
|
$ | 667 | $ | 337 | $ | 455 | $ | 145 | $ | | $ | 289 | (54 | ) | 1,839 | |||||||||||||||||
Less: Preferred stock dividends
|
61 | 61 | ||||||||||||||||||||||||||||||
Operating earnings available to common shareholders
|
$ | (115 | ) | $ | 1,778 | |||||||||||||||||||||||||||
151
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Total revenues
|
$ | 13,120 | $ | 3,742 | $ | 3,842 | $ | 1,593 | $ | 4,604 | $ | 5,128 | $ | 1,032 | $ | 33,061 | ||||||||||||||||
Less: Net investment gains (losses)
|
40 | 51 | | (6 | ) | (94 | ) | (145 | ) | (100 | ) | (254 | ) | |||||||||||||||||||
Less: Net derivative gains (losses)
|
92 | 264 | (179 | ) | (3 | ) | 127 | (185 | ) | (79 | ) | 37 | ||||||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
(2 | ) | | | | | | | (2 | ) | ||||||||||||||||||||||
Less: Other adjustments to revenues (1)
|
(104 | ) | 45 | 80 | | 94 | 260 | 196 | 571 | |||||||||||||||||||||||
Total operating revenues
|
$ | 13,094 | $ | 3,382 | $ | 3,941 | $ | 1,602 | $ | 4,477 | $ | 5,198 | $ | 1,015 | $ | 32,709 | ||||||||||||||||
Total expenses
|
$ | 11,868 | $ | 2,963 | $ | 3,030 | $ | 1,642 | $ | 3,690 | $ | 4,979 | $ | 1,687 | $ | 29,859 | ||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
4 | 90 | | | | | | 94 | ||||||||||||||||||||||||
Less: Other adjustments to expenses (1)
|
| 126 | 19 | | 37 | 531 | 346 | 1,059 | ||||||||||||||||||||||||
Total operating expenses
|
$ | 11,864 | $ | 2,747 | $ | 3,011 | $ | 1,642 | $ | 3,653 | $ | 4,448 | $ | 1,341 | $ | 28,706 | ||||||||||||||||
Corporate |
Other |
Banking, |
||||||||||||||||||||||||||||||
Insurance |
Retirement |
Benefit |
Auto & |
International |
Corporate |
|||||||||||||||||||||||||||
Products | Products | Funding | Home | Japan | Regions | & Other | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Total revenues
|
$ | 13,678 | $ | 3,842 | $ | 4,026 | $ | 1,545 | $ | | $ | 3,065 | $ | 1,081 | $ | 27,237 | ||||||||||||||||
Less: Net investment gains (losses)
|
9 | 91 | 57 | | | (29 | ) | (110 | ) | 18 | ||||||||||||||||||||||
Less: Net derivative gains (losses)
|
625 | 511 | 70 | (3 | ) | | 266 | 53 | 1,522 | |||||||||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
6 | | | | | | | 6 | ||||||||||||||||||||||||
Less: Other adjustments to revenues (1)
|
(73 | ) | (34 | ) | 96 | | | (124 | ) | 225 | 90 | |||||||||||||||||||||
Total operating revenues
|
$ | 13,111 | $ | 3,274 | $ | 3,803 | $ | 1,548 | $ | | $ | 2,952 | $ | 913 | $ | 25,601 | ||||||||||||||||
Total expenses
|
$ | 12,134 | $ | 2,923 | $ | 3,140 | $ | 1,369 | $ | | $ | 2,708 | $ | 1,416 | $ | 23,690 | ||||||||||||||||
Less: Adjustments related to net investment gains (losses) and
net derivative gains (losses)
|
50 | 176 | | | | | | 226 | ||||||||||||||||||||||||
Less: Other adjustments to expenses (1)
|
| (9 | ) | 37 | | | 144 | 278 | 450 | |||||||||||||||||||||||
Total operating expenses
|
$ | 12,084 | $ | 2,756 | $ | 3,103 | $ | 1,369 | $ | | $ | 2,564 | $ | 1,138 | $ | 23,014 | ||||||||||||||||
152
153
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 8,460 | $ | 8,640 | $ | (180 | ) | (2.1 | )% | |||||||
Universal life and investment-type product policy fees
|
1,129 | 1,095 | 34 | 3.1 | % | |||||||||||
Net investment income
|
3,101 | 2,999 | 102 | 3.4 | % | |||||||||||
Other revenues
|
404 | 377 | 27 | 7.2 | % | |||||||||||
Total operating revenues
|
13,094 | 13,111 | (17 | ) | (0.1 | )% | ||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
9,299 | 9,568 | (269 | ) | (2.8 | )% | ||||||||||
Interest credited to policyholder account balances
|
487 | 471 | 16 | 3.4 | % | |||||||||||
Capitalization of DAC
|
(430 | ) | (423 | ) | (7 | ) | (1.7 | )% | ||||||||
Amortization of DAC and VOBA
|
445 | 445 | | | % | |||||||||||
Other expenses
|
2,063 | 2,023 | 40 | 2.0 | % | |||||||||||
Total operating expenses
|
11,864 | 12,084 | (220 | ) | (1.8 | )% | ||||||||||
Provision for income tax expense (benefit)
|
431 | 360 | 71 | 19.7 | % | |||||||||||
Operating earnings
|
$ | 799 | $ | 667 | $ | 132 | 19.8 | % | ||||||||
154
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 446 | $ | 503 | $ | (57 | ) | (11.3 | )% | |||||||
Universal life and investment-type product policy fees
|
1,208 | 974 | 234 | 24.0 | % | |||||||||||
Net investment income
|
1,578 | 1,694 | (116 | ) | (6.8 | )% | ||||||||||
Other revenues
|
150 | 103 | 47 | 45.6 | % | |||||||||||
Total operating revenues
|
3,382 | 3,274 | 108 | 3.3 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
777 | 829 | (52 | ) | (6.3 | )% | ||||||||||
Interest credited to policyholder account balances
|
788 | 811 | (23 | ) | (2.8 | )% | ||||||||||
Capitalization of DAC
|
(717 | ) | (496 | ) | (221 | ) | (44.6 | )% | ||||||||
Amortization of DAC and VOBA
|
436 | 441 | (5 | ) | (1.1 | )% | ||||||||||
Interest expense on debt
|
1 | 2 | (1 | ) | (50.0 | )% | ||||||||||
Other expenses
|
1,462 | 1,169 | 293 | 25.1 | % | |||||||||||
Total operating expenses
|
2,747 | 2,756 | (9 | ) | (0.3 | )% | ||||||||||
Provision for income tax expense (benefit)
|
222 | 181 | 41 | 22.7 | % | |||||||||||
Operating earnings
|
$ | 413 | $ | 337 | $ | 76 | 22.6 | % | ||||||||
155
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 1,072 | $ | 1,145 | $ | (73 | ) | (6.4 | )% | |||||||
Universal life and investment-type product policy fees
|
112 | 111 | 1 | 0.9 | % | |||||||||||
Net investment income
|
2,636 | 2,425 | 211 | 8.7 | % | |||||||||||
Other revenues
|
121 | 122 | (1 | ) | (0.8 | )% | ||||||||||
Total operating revenues
|
3,941 | 3,803 | 138 | 3.6 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
2,113 | 2,152 | (39 | ) | (1.8 | )% | ||||||||||
Interest credited to policyholder account balances
|
665 | 719 | (54 | ) | (7.5 | )% | ||||||||||
Capitalization of DAC
|
(18 | ) | (11 | ) | (7 | ) | (63.6 | )% | ||||||||
Amortization of DAC and VOBA
|
10 | 8 | 2 | 25.0 | % | |||||||||||
Interest expense on debt
|
4 | 2 | 2 | 100.0 | % | |||||||||||
Other expenses
|
237 | 233 | 4 | 1.7 | % | |||||||||||
Total operating expenses
|
3,011 | 3,103 | (92 | ) | (3.0 | )% | ||||||||||
Provision for income tax expense (benefit)
|
327 | 245 | 82 | 33.5 | % | |||||||||||
Operating earnings
|
$ | 603 | $ | 455 | $ | 148 | 32.5 | % | ||||||||
156
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 1,483 | $ | 1,437 | $ | 46 | 3.2 | % | ||||||||
Net investment income
|
104 | 105 | (1 | ) | (1.0 | )% | ||||||||||
Other revenues
|
15 | 6 | 9 | 150.0 | % | |||||||||||
Total operating revenues
|
1,602 | 1,548 | 54 | 3.5 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1,251 | 1,000 | 251 | 25.1 | % | |||||||||||
Capitalization of DAC
|
(222 | ) | (221 | ) | (1 | ) | (0.5 | )% | ||||||||
Amortization of DAC and VOBA
|
222 | 218 | 4 | 1.8 | % | |||||||||||
Other expenses
|
391 | 372 | 19 | 5.1 | % | |||||||||||
Total operating expenses
|
1,642 | 1,369 | 273 | 19.9 | % | |||||||||||
Provision for income tax expense (benefit)
|
(41 | ) | 34 | (75 | ) | (220.6 | )% | |||||||||
Operating earnings
|
$ | 1 | $ | 145 | $ | (144 | ) | (99.3 | )% | |||||||
157
Six Months |
||||||||||||
Ended |
||||||||||||
June 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(In millions) | ||||||||||||
OPERATING REVENUES
|
||||||||||||
Premiums
|
$ | 3,119 | $ | | $ | 3,119 | ||||||
Universal life and investment-type product policy fees
|
389 | | 389 | |||||||||
Net investment income
|
956 | | 956 | |||||||||
Other revenues
|
13 | | 13 | |||||||||
Total operating revenues
|
4,477 | | 4,477 | |||||||||
OPERATING EXPENSES
|
||||||||||||
Policyholder benefits and claims and policyholder dividends
|
1,968 | | 1,968 | |||||||||
Interest credited to policyholder account balances
|
757 | | 757 | |||||||||
Capitalization of DAC
|
(1,041 | ) | | (1,041 | ) | |||||||
Amortization of DAC and VOBA
|
663 | | 663 | |||||||||
Amortization of negative VOBA
|
(287 | ) | | (287 | ) | |||||||
Other expenses
|
1,593 | | 1,593 | |||||||||
Total operating expenses
|
3,653 | | 3,653 | |||||||||
Provision for income tax expense (benefit)
|
289 | | 289 | |||||||||
Operating earnings
|
$ | 535 | $ | | $ | 535 | ||||||
158
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 3,264 | $ | 1,644 | $ | 1,620 | 98.5 | % | ||||||||
Universal life and investment-type product policy fees
|
906 | 601 | 305 | 50.7 | % | |||||||||||
Net investment income
|
960 | 702 | 258 | 36.8 | % | |||||||||||
Other revenues
|
68 | 5 | 63 | 1,260.0 | % | |||||||||||
Total operating revenues
|
5,198 | 2,952 | 2,246 | 76.1 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
2,320 | 1,516 | 804 | 53.0 | % | |||||||||||
Interest credited to policyholder account balances
|
295 | 191 | 104 | 54.5 | % | |||||||||||
Capitalization of DAC
|
(839 | ) | (338 | ) | (501 | ) | (148.2 | )% | ||||||||
Amortization of DAC and VOBA
|
600 | 209 | 391 | 187.1 | % | |||||||||||
Amortization of negative VOBA
|
(41 | ) | | (41 | ) | |||||||||||
Interest expense on debt
|
2 | 3 | (1 | ) | (33.3 | )% | ||||||||||
Other expenses
|
2,111 | 983 | 1,128 | 114.8 | % | |||||||||||
Total operating expenses
|
4,448 | 2,564 | 1,884 | 73.5 | % | |||||||||||
Provision for income tax expense (benefit)
|
211 | 99 | 112 | 113.1 | % | |||||||||||
Operating earnings
|
$ | 539 | $ | 289 | $ | 250 | 86.5 | % | ||||||||
159
Six Months |
||||||||||||||||
Ended |
||||||||||||||||
June 30, | ||||||||||||||||
2011 | 2010 | Change | % Change | |||||||||||||
(In millions) | ||||||||||||||||
OPERATING REVENUES
|
||||||||||||||||
Premiums
|
$ | 4 | $ | 3 | $ | 1 | 33.3 | % | ||||||||
Net investment income
|
627 | 466 | 161 | 34.5 | % | |||||||||||
Other revenues
|
384 | 444 | (60 | ) | (13.5 | )% | ||||||||||
Total operating revenues
|
1,015 | 913 | 102 | 11.2 | % | |||||||||||
OPERATING EXPENSES
|
||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
3 | (7 | ) | 10 | 142.9 | % | ||||||||||
Interest credited to bank deposits
|
46 | 75 | (29 | ) | (38.7 | )% | ||||||||||
Interest expense on debt
|
644 | 523 | 121 | 23.1 | % | |||||||||||
Other expenses
|
648 | 547 | 101 | 18.5 | % | |||||||||||
Total operating expenses
|
1,341 | 1,138 | 203 | 17.8 | % | |||||||||||
Provision for income tax expense (benefit)
|
(244 | ) | (171 | ) | (73 | ) | (42.7 | )% | ||||||||
Operating earnings
|
(82 | ) | (54 | ) | (28 | ) | (51.9 | )% | ||||||||
Less: Preferred stock dividends
|
61 | 61 | | | % | |||||||||||
Operating earnings available to common shareholders
|
$ | (143 | ) | $ | (115 | ) | $ | (28 | ) | (24.3 | )% | |||||
160
| credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest; | |
| interest rate risk, relating to the market price and cash flow variability associated with changes in market interest rates; | |
| liquidity risk, relating to the diminished ability to sell certain investments in times of strained market conditions; and | |
| market valuation risk, relating to the variability in the estimated fair value of investments associated with changes in market factors such as credit spreads. |
161
162
At or For the |
At or For the |
|||||||||||||||
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||
Yield (1)
|
4.94 | % | 5.34 | % | 4.93 | % | 5.54 | % | ||||||||
Investment income (2),(3)
|
$ | 3,794 | $ | 2,939 | $ | 7,487 | $ | 6,053 | ||||||||
Investment gains (losses) (3)
|
$ | (105 | ) | $ | (127 | ) | $ | (268 | ) | $ | (193 | ) | ||||
Ending carrying value (2),(3)
|
$ | 342,607 | $ | 247,098 | $ | 342,607 | $ | 247,098 | ||||||||
Mortgage Loans:
|
||||||||||||||||
Yield (1)
|
5.50 | % | 5.55 | % | 5.52 | % | 5.48 | % | ||||||||
Investment income (3),(4)
|
$ | 765 | $ | 694 | $ | 1,524 | $ | 1,366 | ||||||||
Investment gains (losses) (3)
|
$ | 68 | $ | 11 | $ | 115 | $ | (17 | ) | |||||||
Ending carrying value (3)
|
$ | 56,927 | $ | 51,070 | $ | 56,927 | $ | 51,070 | ||||||||
Real Estate and Real Estate Joint Ventures:
|
||||||||||||||||
Yield (1)
|
4.85 | % | 3.15 | % | 3.85 | % | 0.52 | % | ||||||||
Investment income
|
$ | 99 | $ | 54 | $ | 156 | $ | 18 | ||||||||
Investment gains (losses)
|
$ | 47 | $ | (17 | ) | $ | 76 | $ | (39 | ) | ||||||
Ending carrying value
|
$ | 8,234 | $ | 6,841 | $ | 8,234 | $ | 6,841 | ||||||||
Policy Loans:
|
||||||||||||||||
Yield (1)
|
5.41 | % | 6.26 | % | 5.41 | % | 6.66 | % | ||||||||
Investment income
|
$ | 160 | $ | 157 | $ | 320 | $ | 333 | ||||||||
Ending carrying value
|
$ | 11,858 | $ | 10,047 | $ | 11,858 | $ | 10,047 | ||||||||
Equity Securities:
|
||||||||||||||||
Yield (1)
|
6.04 | % | 5.37 | % | 4.70 | % | 4.36 | % | ||||||||
Investment income
|
$ | 48 | $ | 39 | $ | 78 | $ | 64 | ||||||||
Investment gains (losses)
|
$ | (70 | ) | $ | 74 | $ | (34 | ) | $ | 101 | ||||||
Ending carrying value
|
$ | 3,238 | $ | 2,738 | $ | 3,238 | $ | 2,738 | ||||||||
Other Limited Partnership Interests:
|
||||||||||||||||
Yield (1)
|
9.90 | % | 11.13 | % | 12.52 | % | 14.93 | % | ||||||||
Investment income
|
$ | 159 | $ | 161 | $ | 402 | $ | 426 | ||||||||
Investment gains (losses)
|
$ | 5 | $ | (10 | ) | $ | 8 | $ | (11 | ) | ||||||
Ending carrying value
|
$ | 6,453 | $ | 5,856 | $ | 6,453 | $ | 5,856 | ||||||||
Cash and Short-Term Investments:
|
||||||||||||||||
Yield (1)
|
0.92 | % | 0.36 | % | 0.93 | % | 0.37 | % | ||||||||
Investment income
|
$ | 41 | $ | 15 | $ | 84 | $ | 28 | ||||||||
Investment gains (losses)
|
$ | 1 | $ | | $ | 1 | $ | 1 | ||||||||
Ending carrying value (3)
|
$ | 22,026 | $ | 20,341 | $ | 22,026 | $ | 20,341 | ||||||||
Other Invested Assets: (5)
|
||||||||||||||||
Investment income
|
$ | 165 | $ | 166 | $ | 177 | $ | 320 | ||||||||
Investment gains (losses)
|
$ | (7 | ) | $ | 17 | $ | (3 | ) | $ | 75 | ||||||
Ending carrying value
|
$ | 14,900 | $ | 15,571 | $ | 14,900 | $ | 15,571 | ||||||||
Total Investments:
|
||||||||||||||||
Investment income yield (1)
|
4.96 | % | 5.24 | % | 4.89 | % | 5.39 | % | ||||||||
Investment fees and expenses yield
|
(0.13 | ) | (0.13 | ) | (0.13 | ) | (0.14 | ) | ||||||||
Net Investment Income Yield (3)
|
4.83 | % | 5.11 | % | 4.76 | % | 5.25 | % | ||||||||
Investment income
|
$ | 5,231 | $ | 4,225 | $ | 10,228 | $ | 8,608 | ||||||||
Investment fees and expenses
|
(138 | ) | (105 | ) | (266 | ) | (217 | ) | ||||||||
Net Investment Income (3),(6)
|
$ | 5,093 | $ | 4,120 | $ | 9,962 | $ | 8,391 | ||||||||
Ending Carrying Value (3)
|
$ | 466,243 | $ | 359,562 | $ | 466,243 | $ | 359,562 | ||||||||
Gross investment gains (3)
|
$ | 348 | $ | 413 | $ | 638 | $ | 687 | ||||||||
Gross investment losses (3)
|
(290 | ) | (293 | ) | (533 | ) | (449 | ) | ||||||||
Writedowns
|
(119 | ) | (172 | ) | (210 | ) | (321 | ) | ||||||||
Investment Portfolio Gains (Losses) (3),(6)
|
$ | (61 | ) | $ | (52 | ) | $ | (105 | ) | $ | (83 | ) | ||||
Investment portfolio gains (losses) income tax (expense) benefit
|
23 | 11 | 38 | 19 | ||||||||||||
Investment Portfolio Gains (Losses), Net of Income Tax
|
$ | (38 | ) | $ | (41 | ) | $ | (67 | ) | $ | (64 | ) | ||||
Derivative Gains (Losses) (6)
|
$ | 293 | $ | 1,322 | $ | (93 | ) | $ | 1,312 | |||||||
Derivative gains (losses) income tax (expense) benefit
|
(104 | ) | (540 | ) | 28 | (529 | ) | |||||||||
Derivative Gains (Losses), Net of Income Tax
|
$ | 189 | $ | 782 | $ | (65 | ) | $ | 783 | |||||||
As described in the footnotes below, the yield table reflects certain differences from the presentation of invested assets, net investment income, net investment gains (losses) and net derivative gains (losses) as presented in the consolidated balance sheets and consolidated statements of operations, including the exclusion of |
163
contractholder-directed unit-linked investments classified within trading and other securities, as the contractholder, not the Company, directs the investment of the funds; and the exclusion of the effects of consolidating certain VIEs that are consolidated securitization entities (CSEs). This yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe it enhances understanding of our investment portfolio results. |
(1) | Yields are based on average of quarterly average asset carrying values, excluding recognized and unrealized investment gains (losses), collateral received from counterparties associated with our securities lending program, the effects of consolidating certain VIEs that are treated as CSEs and, effective October 1, 2010, contractholder-directed unit-linked investments. Yields also exclude investment income recognized on mortgage loans and securities held by CSEs and, effective October 1, 2010, contractholder-directed unit-linked investments. | |
(2) | Fixed maturity securities include $863 million and $2,901 million at estimated fair value of trading and other securities at June 30, 2011 and 2010, respectively. Fixed maturity securities include $16 million and $44 million of investment income related to trading and other securities for the three months and six months ended June 30, 2011, respectively, and ($56) million and $23 million of investment income (loss) related to trading and other securities for the three months and six months ended June 30, 2010, respectively. | |
(3) | (a) Ending carrying values of fixed maturity securities as presented herein, exclude (i) contractholder-directed unit-linked investments reported within trading and other securities, of $18,690 million at June 30, 2011, and (ii) securities held by CSEs reported within trading and other securities, of $147 million and $257 million at June 30, 2011 and 2010, respectively. Effective October 1, 2010, investment income and net investment income, as presented herein, excludes investment income and net investment income on contractholder-directed unit-linked investments reported within trading and other securities, as shown in footnote (6) to this yield table. | |
(b) Ending carrying values, investment income, net investment income, and investment gains (losses), as presented herein, exclude the effects of consolidating certain VIEs that are treated as CSEs. The adjustments to investment income, net investment income and investment gains (losses) in the aggregate are as shown in footnote (6) to this yield table. The adjustments to ending carrying value, investment income and investment gains (losses) by invested asset class are presented below. Both the invested assets and long-term debt of the CSEs are accounted for under the fair value option (FVO). The adjustment to investment gains (losses) presented below and in footnote (6) to this yield table includes the effects of remeasuring both the invested assets and long-term debt in accordance with the FVO. |
At or For the Three Months Ended June 30, 2011 | At or For the Six Months Ended June 30, 2011 | |||||||||||||||||||||||
Impact of Excluding |
Total - Including all |
Impact of Excluding |
Total - Including all |
|||||||||||||||||||||
As Reported in the |
Trading and Other |
Trading and Other |
As Reported in the |
Trading and Other |
Trading and Other |
|||||||||||||||||||
Yield Table | Securities and CSEs | Securities and CSEs | Yield Table | Securities and CSEs | Securities and CSEs | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Trading and Other Securities:
|
||||||||||||||||||||||||
(included within Fixed Maturity Securities): | ||||||||||||||||||||||||
Ending carrying value | $ | 863 | $ | 18,837 | $ | 19,700 | $ | 863 | $ | 18,837 | $ | 19,700 | ||||||||||||
Investment income | $ | 16 | $ | (32 | ) | $ | (16 | ) | $ | 44 | $ | 388 | $ | 432 | ||||||||||
Investment gains (losses) | $ | | $ | (15 | ) | $ | (15 | ) | $ | | $ | (8 | ) | $ | (8 | ) | ||||||||
Mortgage Loans:
|
||||||||||||||||||||||||
Ending carrying value | $ | 56,927 | $ | 6,697 | $ | 63,624 | $ | 56,927 | $ | 6,697 | $ | 63,624 | ||||||||||||
Investment income | $ | 765 | $ | 96 | $ | 861 | $ | 1,524 | $ | 191 | $ | 1,715 | ||||||||||||
Investment gains (losses) | $ | 68 | $ | (1 | ) | $ | 67 | $ | 115 | $ | 17 | $ | 132 | |||||||||||
Cash and Short-Term Investments:
|
||||||||||||||||||||||||
Ending carrying value | $ | 22,026 | $ | 21 | $ | 22,047 | $ | 22,026 | $ | 21 | $ | 22,047 | ||||||||||||
Total Investments:
|
||||||||||||||||||||||||
Ending carrying value | $ | 466,243 | $ | 25,555 | $ | 491,798 | $ | 466,243 | $ | 25,555 | $ | 491,798 |
(4) | Investment income from fixed maturity securities and mortgage loans includes prepayment fees. |
164
(5) | Other invested assets are principally comprised of freestanding derivatives with positive estimated fair values and leveraged leases. Freestanding derivatives with negative estimated fair values are included within other liabilities. However, the accruals of settlement payments on freestanding derivatives included in other liabilities are included in net investment income as shown in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements. As yield is not considered a meaningful measure of performance for other invested assets, it has been excluded from the yield table. | |
(6) | Net investment income, investment portfolio gains (losses) and derivative gains (losses) presented in this yield table vary from the most directly comparable measures presented in the GAAP interim condensed consolidated statements of operations due to certain reclassifications affecting net investment income, net investment gains (losses), net derivative gains (losses), and interest credited to policyholder account balances (PABs) and excludes the effects of consolidating under GAAP certain VIEs that are treated as CSEs. Such reclassifications are presented in the tables below. |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In millions) | ||||||||||||||||
Net investment income in the above yield table
|
$ | 5,093 | $ | 4,120 | $ | 9,962 | $ | 8,391 | ||||||||
Real estate discontinued operations deduct from net
investment income
|
| (4 | ) | (2 | ) | (7 | ) | |||||||||
Scheduled periodic settlement payments on derivatives not
qualifying for hedge accounting deduct from net
investment income, add to net derivative gains (losses)
|
(55 | ) | (61 | ) | (94 | ) | (110 | ) | ||||||||
Equity method operating joint ventures add to net
investment income, deduct from net derivative gains (losses)
|
| (97 | ) | (23 | ) | (102 | ) | |||||||||
Net investment income on contractholder-directed unit-linked
investments reported within trading and other
securities add to net investment income
|
(32 | ) | | 387 | | |||||||||||
Incremental net investment income from CSEs add to
net investment income
|
92 | 103 | 184 | 209 | ||||||||||||
Net investment income GAAP consolidated statements
of operations
|
$ | 5,098 | $ | 4,061 | $ | 10,414 | $ | 8,381 | ||||||||
Investment portfolio gains (losses) in the above
yield table
|
$ | (61 | ) | $ | (52 | ) | $ | (105 | ) | $ | (83 | ) | ||||
Real estate discontinued operations deduct from net
investment gains (losses)
|
(43 | ) | (10 | ) | (71 | ) | (10 | ) | ||||||||
Investment gains (losses) related to CSEs add to net
investment gains (losses)
|
(16 | ) | (2 | ) | 9 | 8 | ||||||||||
Other gains (losses) add to net investment gains
(losses)
|
(35 | ) | 50 | (87 | ) | 103 | ||||||||||
Net investment gains (losses) GAAP consolidated
statements of operations
|
$ | (155 | ) | $ | (14 | ) | $ | (254 | ) | $ | 18 | |||||
Derivative gains (losses) in the above yield table
|
$ | 293 | $ | 1,322 | $ | (93 | ) | $ | 1,312 | |||||||
Scheduled periodic settlement payments on derivatives not
qualifying for hedge accounting add to net
derivative gains (losses), deduct from net investment income
|
55 | 61 | 94 | 110 | ||||||||||||
Scheduled periodic settlement payments on derivatives not
qualifying for hedge accounting add to net
derivative gains (losses), deduct from interest credited to PABs
|
8 | 1 | 16 | (2 | ) | |||||||||||
Settlement of foreign currency earnings add to net
derivative gains (losses), deduct from other revenues
|
(4 | ) | | (3 | ) | | ||||||||||
Equity method operating joint ventures add to net
investment income, deduct from net derivative gains (losses)
|
| 97 | 23 | 102 | ||||||||||||
Net derivative gains (losses) GAAP consolidated
statements of operations
|
$ | 352 | $ | 1,481 | $ | 37 | $ | 1,522 | ||||||||
165
166
June 30, 2011 | ||||||||||||||||
Fixed Maturity |
Equity |
|||||||||||||||
Securities | Securities | |||||||||||||||
(In millions) | ||||||||||||||||
Level 1:
|
||||||||||||||||
Quoted prices in active markets for identical assets
|
$ | 19,894 | 5.8 | % | $ | 685 | 21.2 | % | ||||||||
Level 2:
|
||||||||||||||||
Independent pricing source
|
267,755 | 78.3 | 603 | 18.6 | ||||||||||||
Internal matrix pricing or discounted cash flow techniques
|
34,436 | 10.1 | 991 | 30.6 | ||||||||||||
Significant other observable inputs
|
302,191 | 88.4 | 1,594 | 49.2 | ||||||||||||
Level 3:
|
||||||||||||||||
Independent pricing source
|
9,266 | 2.7 | 759 | 23.4 | ||||||||||||
Internal matrix pricing or discounted cash flow techniques
|
8,392 | 2.5 | 179 | 5.5 | ||||||||||||
Independent broker quotations
|
2,001 | 0.6 | 21 | 0.7 | ||||||||||||
Significant unobservable inputs
|
19,659 | 5.8 | 959 | 29.6 | ||||||||||||
Total estimated fair value
|
$ | 341,744 | 100.0 | % | $ | 3,238 | 100.0 | % | ||||||||
June 30, 2011 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices |
Significant |
|||||||||||||||
in Active |
Other |
Significant |
||||||||||||||
Markets for |
Observable |
Unobservable |
Total |
|||||||||||||
Identical Assets |
Inputs |
Inputs |
Estimated |
|||||||||||||
(Level 1) | (Level 2) | (Level 3) | Fair Value | |||||||||||||
(In millions) | ||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||
U.S. corporate securities
|
$ | | $ | 89,926 | $ | 6,871 | $ | 96,797 | ||||||||
Foreign corporate securities
|
| 64,694 | 5,844 | 70,538 | ||||||||||||
Foreign government securities
|
82 | 46,003 | 3,161 | 49,246 | ||||||||||||
Residential mortgage-backed securities (RMBS)
|
| 43,116 | 434 | 43,550 | ||||||||||||
U.S. Treasury and agency securities
|
19,812 | 15,727 | 26 | 35,565 | ||||||||||||
Commercial mortgage-backed securities (CMBS)
|
| 18,737 | 781 | 19,518 | ||||||||||||
Asset-backed securities (ABS)
|
| 12,406 | 2,451 | 14,857 | ||||||||||||
State and political subdivision securities
|
| 11,580 | 89 | 11,669 | ||||||||||||
Other fixed maturity securities
|
| 2 | 2 | 4 | ||||||||||||
Total fixed maturity securities
|
$ | 19,894 | $ | 302,191 | $ | 19,659 | $ | 341,744 | ||||||||
Equity Securities:
|
||||||||||||||||
Common stock
|
$ | 685 | $ | 1,100 | $ | 305 | $ | 2,090 | ||||||||
Non-redeemable preferred stock
|
| 494 | 654 | 1,148 | ||||||||||||
Total equity securities
|
$ | 685 | $ | 1,594 | $ | 959 | $ | 3,238 | ||||||||
167
| The majority of the Level 3 fixed maturity and equity securities (89%, as presented above) were concentrated in four sectors: U.S. and foreign corporate securities, foreign government securities and ABS. | |
| Level 3 fixed maturity securities are priced principally through market standard valuation methodologies, independent pricing services and independent non-binding broker quotations using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. Level 3 fixed maturity securities consists of less liquid fixed maturity securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies including alternative residential mortgage loan (Alt-A) RMBS and less liquid prime RMBS, certain below investment grade private placements and less liquid investment grade corporate securities (included in U.S. and foreign corporate securities) and less liquid ABS including securities supported by sub-prime mortgage loans (included in ABS). | |
| During the three months ended June 30, 2011, Level 3 fixed maturity securities decreased by $1,616 million, or 8%. The decrease was driven by transfers out of Level 3, partially offset by net purchases in excess of sales and an increase in estimated fair value recognized in other comprehensive income (loss). See analysis of transfers into and/or out of Level 3 below. Net purchases in excess of sales of fixed maturity securities were concentrated in foreign and U.S. corporate securities. The increase in estimated fair value recognized in accumulated other comprehensive income (loss) for fixed maturity securities was concentrated in U.S. and foreign corporate securities due to improving market conditions including an improvement in liquidity and a decrease in interest rates. | |
| During the six months ended June 30, 2011, Level 3 fixed maturity securities decreased by $3,057 million, or 13%. The decrease was driven by transfers out of Level 3, partially offset by an increase in estimated fair value recognized in other comprehensive income (loss) and net purchases in excess of sales. See analysis of transfers into and/or out of Level 3 below. The increase in estimated fair value recognized in accumulated other comprehensive income (loss) for fixed maturity securities was concentrated in foreign and U.S. corporate securities and ABS, and net purchases in excess of sales of fixed maturity securities were concentrated in foreign and U.S. corporate securities and foreign government securities. |
Three Months |
Six Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
June 30, 2011 | June 30, 2011 | |||||||||||||||
Fixed Maturity |
Equity |
Fixed Maturity |
Equity |
|||||||||||||
Securities | Securities | Securities | Securities | |||||||||||||
(In millions) | ||||||||||||||||
Balance, beginning of period
|
$ | 21,275 | $ | 1,305 | $ | 22,716 | $ | 1,173 | ||||||||
Total realized/unrealized gains (losses) included in:
|
||||||||||||||||
Earnings
|
(15 | ) | (67 | ) | 35 | (65 | ) | |||||||||
Other comprehensive income (loss)
|
134 | 79 | 547 | 88 | ||||||||||||
Purchases
|
2,540 | 29 | 3,517 | 70 | ||||||||||||
Sales
|
(1,821 | ) | (307 | ) | (3,215 | ) | (314 | ) | ||||||||
Transfers into Level 3
|
756 | 2 | 653 | 12 | ||||||||||||
Transfers out of Level 3
|
(3,210 | ) | (82 | ) | (4,594 | ) | (5 | ) | ||||||||
Balance, end of period
|
$ | 19,659 | $ | 959 | $ | 19,659 | $ | 959 | ||||||||
168
| Total gains and losses in earnings and other comprehensive income (loss) are calculated assuming transfers into or out of Level 3 occurred at the beginning of the period. Items transferred into and out for the same period are excluded from the rollforward. | |
| Total gains (losses) for fixed maturity securities included in earnings of less than $1 million and ($1) million, and other comprehensive income (loss) of $10 million and $5 million, were incurred on these securities subsequent to their transfer into Level 3, for the three months and six months ended June 30, 2011, respectively. | |
| Net transfers into and/or out of Level 3 for fixed maturity securities were ($2,454) million and ($3,941) million, and were comprised of transfers into Level 3 of $756 million and $653 million, and transfers out of Level 3 of ($3,210) million and ($4,594) million for the three months and six months ended June 30, 2011, respectively. |
| During the three months and six months ended June 30, 2011, fixed maturity securities transfers into Level 3 of $756 million and $653 million, respectively, resulted primarily from current market conditions characterized by a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade). These current market conditions have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value principally for certain RMBS, foreign government securities and ABS. | |
| During the three months and six months ended June 30, 2011, fixed maturity securities transfers out of Level 3 of ($3,210) million and ($4,594) million, respectively, resulted primarily from increased transparency of both new issuances that, subsequent to issuance and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company was able to obtain pricing from, or corroborate pricing received from independent pricing services with observable inputs, or there were increases in market activity and upgraded credit ratings primarily for certain ABS, RMBS, U.S. and foreign corporate securities. |
169
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||||
Estimated |
Estimated |
|||||||||||||||||||||||||||
NAIC |
Amortized |
Fair |
% of |
Amortized |
Fair |
% of |
||||||||||||||||||||||
Rating | Rating Agency Designation | Cost | Value | Total | Cost | Value | Total | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
1 | Aaa/Aa/A | $ | 232,136 | $ | 239,320 | 70.0 | % | $ | 226,639 | $ | 231,198 | 71.2 | % | |||||||||||||||
2 | Baa | 72,007 | 76,483 | 22.4 | 65,412 | 68,729 | 21.2 | |||||||||||||||||||||
3 | Ba | 15,561 | 15,337 | 4.5 | 15,331 | 15,290 | 4.7 | |||||||||||||||||||||
4 | B | 8,923 | 8,585 | 2.5 | 8,742 | 8,308 | 2.6 | |||||||||||||||||||||
5 | Caa and lower | 1,334 | 1,121 | 0.3 | 1,340 | 1,142 | 0.3 | |||||||||||||||||||||
6 | In or near default | 942 | 898 | 0.3 | 153 | 130 | | |||||||||||||||||||||
Total fixed maturity securities | $ | 330,903 | $ | 341,744 | 100.0 | % | $ | 317,617 | $ | 324,797 | 100.0 | % | ||||||||||||||||
170
Fixed Maturity Securities by Sector & Credit Quality Rating at June 30, 2011 | ||||||||||||||||||||||||||||
NAIC Rating: | 1 | 2 | 3 | 4 | 5 | 6 |
Total |
|||||||||||||||||||||
Caa and |
In or Near |
Estimated |
||||||||||||||||||||||||||
Rating Agency Designation: | Aaa/Aa/A | Baa | Ba | B | Lower | Default | Fair Value | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
U.S. corporate securities
|
$ | 47,015 | $ | 37,166 | $ | 8,236 | $ | 4,009 | $ | 370 | $ | 1 | $ | 96,797 | ||||||||||||||
Foreign corporate securities
|
38,501 | 27,242 | 3,185 | 1,470 | 135 | 5 | 70,538 | |||||||||||||||||||||
Foreign government securities
|
37,843 | 8,638 | 1,259 | 1,497 | 9 | | 49,246 | |||||||||||||||||||||
RMBS (1)
|
37,484 | 1,287 | 2,219 | 1,306 | 389 | 865 | 43,550 | |||||||||||||||||||||
U.S. Treasury and agency securities
|
35,565 | | | | | | 35,565 | |||||||||||||||||||||
CMBS (1)
|
18,365 | 713 | 243 | 168 | 17 | 12 | 19,518 | |||||||||||||||||||||
ABS (1)
|
13,683 | 680 | 158 | 128 | 193 | 15 | 14,857 | |||||||||||||||||||||
State and political subdivision securities
|
10,862 | 757 | 37 | 5 | 8 | | 11,669 | |||||||||||||||||||||
Other fixed maturity securities
|
2 | | | 2 | | | 4 | |||||||||||||||||||||
Total fixed maturity securities
|
$ | 239,320 | $ | 76,483 | $ | 15,337 | $ | 8,585 | $ | 1,121 | $ | 898 | $ | 341,744 | ||||||||||||||
Percentage of total
|
70.0 | % | 22.4 | % | 4.5 | % | 2.5 | % | 0.3 | % | 0.3 | % | 100.0 | % |
Fixed Maturity Securities by Sector & Credit Quality Rating at December 31, 2010 | ||||||||||||||||||||||||||||
NAIC Rating: |
1 | 2 | 3 | 4 | 5 | 6 |
Total |
|||||||||||||||||||||
Caa and |
In or Near |
Estimated |
||||||||||||||||||||||||||
Rating Agency Designation: | Aaa/Aa/A | Baa | Ba | B | Lower | Default | Fair Value | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
U.S. corporate securities
|
$ | 46,035 | $ | 34,259 | $ | 7,633 | $ | 3,452 | $ | 353 | $ | 40 | $ | 91,772 | ||||||||||||||
Foreign corporate securities
|
39,430 | 24,352 | 2,474 | 1,454 | 169 | 9 | 67,888 | |||||||||||||||||||||
Foreign government securities
|
31,559 | 7,184 | 2,179 | 1,080 | | | 42,002 | |||||||||||||||||||||
RMBS (1)
|
38,984 | 1,109 | 2,271 | 1,993 | 331 | 45 | 44,733 | |||||||||||||||||||||
U.S. Treasury and agency securities
|
33,304 | | | | | | 33,304 | |||||||||||||||||||||
CMBS (1)
|
19,385 | 665 | 363 | 205 | 56 | 1 | 20,675 | |||||||||||||||||||||
ABS (1)
|
13,133 | 435 | 338 | 120 | 226 | 35 | 14,287 | |||||||||||||||||||||
State and political subdivision securities
|
9,368 | 722 | 32 | | 7 | | 10,129 | |||||||||||||||||||||
Other fixed maturity securities
|
| 3 | | 4 | | | 7 | |||||||||||||||||||||
Total fixed maturity securities
|
$ | 231,198 | $ | 68,729 | $ | 15,290 | $ | 8,308 | $ | 1,142 | $ | 130 | $ | 324,797 | ||||||||||||||
Percentage of total
|
71.2 | % | 21.2 | % | 4.7 | % | 2.6 | % | 0.3 | % | | % | 100.0 | % |
| Fixed maturity and equity securities on a sector basis and the related cost or amortized cost, gross unrealized gains and losses, including noncredit loss component of OTTI loss, and estimated fair value of such securities at June 30, 2011 and December 31, 2010. | |
| Estimated fair value and unrealized gains (losses) on below investment grade or non-rated, non-income producing, fixed maturity securities at June 30, 2011 and December 31, 2010. | |
| Government and agency securities holdings in excess of 10% of the Companys equity. | |
| U.S. and foreign corporate fixed maturity securities the composition by industry and sector and related concentrations of credit risk at June 30, 2011 and December 31, 2010. |
171
June 30, 2011 | December 31, 2010 | |||||||||||||||
Estimated |
Estimated |
|||||||||||||||
Fair |
% of |
Fair |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
RMBS
|
$ | 43,550 | 55.9 | % | $ | 44,733 | 56.1 | % | ||||||||
CMBS
|
19,518 | 25.0 | 20,675 | 26.0 | ||||||||||||
ABS
|
14,857 | 19.1 | 14,287 | 17.9 | ||||||||||||
Total structured securities
|
$ | 77,925 | 100.0 | % | $ | 79,695 | 100.0 | % | ||||||||
Ratings profile:
|
||||||||||||||||
RMBS rated Aaa/AAA
|
$ | 34,105 | 78.3 | % | $ | 36,085 | 80.7 | % | ||||||||
RMBS rated NAIC 1
|
$ | 37,484 | 86.1 | % | $ | 38,984 | 87.1 | % | ||||||||
CMBS rated Aaa/AAA
|
$ | 16,160 | 82.8 | % | $ | 16,901 | 81.7 | % | ||||||||
CMBS rated NAIC 1
|
$ | 18,365 | 94.1 | % | $ | 19,385 | 93.7 | % | ||||||||
ABS rated Aaa/AAA
|
$ | 9,809 | 66.0 | % | $ | 10,411 | 72.9 | % | ||||||||
ABS rated NAIC 1
|
$ | 13,683 | 92.1 | % | $ | 13,133 | 91.9 | % |
| RMBS holdings by security type and risk profile at June 30, 2011 and December 31, 2010. | |
| Alt-A RMBS holdings by vintage year and selected other information at June 30, 2011 and December 31, 2010. | |
| CMBS holdings by rating agency designation and by vintage year as well as NAIC rating at June 30, 2011 and December 31, 2010. | |
| ABS holdings by collateral type and selected other information at June 30, 2011 and December 31, 2010. |
172
| Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment | |
| Net Unrealized Investment Gains (Losses) | |
| Continuous Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale by Sector | |
| Aging of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale | |
| Concentration of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale | |
| Evaluating Temporarily Impaired Available-for-Sale Securities |
173
| The components of net investment gains (losses) for the three months and six months ended June 30, 2011 and 2010. | |
| Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) for the three months and six months ended June 30, 2011 and 2010. | |
| Fixed maturity security OTTI losses recognized in earnings by sector and by industry within the U.S. and foreign corporate securities sector for the three months and six months ended June 30, 2011 and 2010. | |
| Equity security OTTI losses recognized in earnings by sector and industry for the three months and six months ended June 30, 2011 and 2010. |
174
| Securities on loan, aging of cash collateral liability, security collateral on deposit from counterparties and the estimated fair value of the reinvestment portfolio at June 30, 2011 and December 31, 2010. | |
| Estimated fair value of the securities on loan related to the cash collateral on open at June 30, 2011 and portion consisting of U.S. Treasury and agency securities at June 30, 2011 and composition of the remaining securities on loan and the composition of the reinvestment portfolio at June 30, 2011. |
175
June 30, 2011 | ||||||||||||||||
Trading and Other |
Trading |
|||||||||||||||
Securities | Liabilities | |||||||||||||||
(In millions) | ||||||||||||||||
Quoted prices in active markets for identical assets and
liabilities (Level 1)
|
$ | 7,622 | 39 | % | $ | 54 | 100 | % | ||||||||
Significant other observable inputs (Level 2)
|
11,399 | 58 | | | ||||||||||||
Significant unobservable inputs (Level 3)
|
679 | 3 | | | ||||||||||||
Total estimated fair value
|
$ | 19,700 | 100 | % | $ | 54 | 100 | % | ||||||||
Three Months |
Six Months |
|||||||
Ended |
Ended |
|||||||
June 30, 2011 | June 30, 2011 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | 668 | $ | 822 | ||||
Total realized/unrealized gains (losses) included in earnings
|
26 | 62 | ||||||
Purchases
|
315 | 326 | ||||||
Sales
|
(340 | ) | (490 | ) | ||||
Transfers into Level 3
|
35 | 124 | ||||||
Transfers out of Level 3
|
(25 | ) | (165 | ) | ||||
Balance, end of period
|
$ | 679 | $ | 679 | ||||
176
177
June 30, 2011 | December 31, 2010 | |||||||||||||||
% of |
% of |
|||||||||||||||
Amount | Total | Amount | Total | |||||||||||||
(In millions) | ||||||||||||||||
Region:
|
||||||||||||||||
South Atlantic
|
$ | 8,429 | 21.5 | % | $ | 8,016 | 21.2 | % | ||||||||
Pacific
|
8,078 | 20.7 | 8,974 | 23.7 | ||||||||||||
Middle Atlantic
|
7,278 | 18.6 | 6,484 | 17.1 | ||||||||||||
International
|
4,711 | 12.1 | 4,214 | 11.1 | ||||||||||||
West South Central
|
3,322 | 8.5 | 3,266 | 8.6 | ||||||||||||
East North Central
|
3,189 | 8.2 | 3,066 | 8.1 | ||||||||||||
New England
|
1,758 | 4.5 | 1,531 | 4.1 | ||||||||||||
Mountain
|
911 | 2.3 | 884 | 2.3 | ||||||||||||
West North Central
|
650 | 1.7 | 666 | 1.8 | ||||||||||||
East South Central
|
467 | 1.2 | 461 | 1.2 | ||||||||||||
Other
|
257 | 0.7 | 256 | 0.8 | ||||||||||||
Total recorded investment
|
39,050 | 100.0 | % | 37,818 | 100.0 | % | ||||||||||
Less: valuation allowances
|
469 | 562 | ||||||||||||||
Carrying value, net of valuation allowances
|
$ | 38,581 | $ | 37,256 | ||||||||||||
Property Type:
|
||||||||||||||||
Office
|
$ | 17,951 | 46.0 | % | $ | 16,857 | 44.6 | % | ||||||||
Retail
|
8,901 | 22.8 | 9,215 | 24.3 | ||||||||||||
Apartments
|
3,755 | 9.6 | 3,630 | 9.6 | ||||||||||||
Hotels
|
3,135 | 8.0 | 3,089 | 8.2 | ||||||||||||
Industrial
|
3,046 | 7.8 | 2,910 | 7.7 | ||||||||||||
Other
|
2,262 | 5.8 | 2,117 | 5.6 | ||||||||||||
Total recorded investment
|
39,050 | 100.0 | % | 37,818 | 100.0 | % | ||||||||||
Less: valuation allowances
|
469 | 562 | ||||||||||||||
Carrying value, net of valuation allowances
|
$ | 38,581 | $ | 37,256 | ||||||||||||
178
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||||||||
% of |
% of |
|||||||||||||||||||||||||||||||
Recorded |
% of |
Valuation |
Recorded |
Recorded |
% of |
Valuation |
Recorded |
|||||||||||||||||||||||||
Investment | Total | Allowance | Investment | Investment | Total | Allowance | Investment | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||||||
Performing
|
$ | 38,710 | 99.1 | % | $ | 441 | 1.1 | % | $ | 37,487 | 99.1 | % | $ | 528 | 1.4 | % | ||||||||||||||||
Restructured (1)
|
156 | 0.4 | 8 | 5.1 | % | 93 | 0.2 | 6 | 6.5 | % | ||||||||||||||||||||||
Potentially delinquent
|
23 | 0.1 | 15 | 65.2 | % | 180 | 0.5 | 28 | 15.6 | % | ||||||||||||||||||||||
Delinquent or under foreclosure
|
161 | 0.4 | 5 | 3.1 | % | 58 | 0.2 | | | % | ||||||||||||||||||||||
Total
|
$ | 39,050 | 100.0 | % | $ | 469 | 1.2 | % | $ | 37,818 | 100.0 | % | $ | 562 | 1.5 | % | ||||||||||||||||
Agricultural
(2):
|
||||||||||||||||||||||||||||||||
Performing
|
$ | 12,732 | 98.1 | % | $ | 41 | 0.3 | % | $ | 12,486 | 97.9 | % | $ | 35 | 0.3 | % | ||||||||||||||||
Restructured (3)
|
50 | 0.4 | 9 | 18.0 | % | 33 | 0.3 | 8 | 24.2 | % | ||||||||||||||||||||||
Potentially delinquent
|
37 | 0.3 | | | % | 62 | 0.5 | 11 | 17.7 | % | ||||||||||||||||||||||
Delinquent or under foreclosure(3)
|
162 | 1.2 | 29 | 17.9 | % | 170 | 1.3 | 34 | 20.0 | % | ||||||||||||||||||||||
Total
|
$ | 12,981 | 100.0 | % | $ | 79 | 0.6 | % | $ | 12,751 | 100.0 | % | $ | 88 | 0.7 | % | ||||||||||||||||
Residential
(4):
|
||||||||||||||||||||||||||||||||
Performing
|
$ | 2,615 | 98.4 | % | $ | 17 | 0.7 | % | $ | 2,145 | 96.1 | % | $ | 12 | 0.6 | % | ||||||||||||||||
Restructured (5)
|
3 | 0.1 | | | % | 4 | 0.2 | | | % | ||||||||||||||||||||||
Potentially delinquent
|
4 | 0.2 | | | % | 4 | 0.2 | | | % | ||||||||||||||||||||||
Delinquent or under foreclosure (5)
|
35 | 1.3 | 1 | 2.9 | % | 78 | 3.5 | 2 | 2.6 | % | ||||||||||||||||||||||
Total
|
$ | 2,657 | 100.0 | % | $ | 18 | 0.7 | % | $ | 2,231 | 100.0 | % | $ | 14 | 0.6 | % | ||||||||||||||||
(1) | As of June 30, 2011 and December 31, 2010, restructured commercial mortgage loans were comprised of seven and five restructured loans, respectively, all of which were performing. | |
(2) | Of the $13.0 billion of agricultural mortgage loans outstanding at June 30, 2011, 51% were subject to rate resets prior to maturity. A substantial portion of these mortgage loans have been successfully reset, refinanced or extended at market terms. | |
(3) | As of June 30, 2011 and December 31, 2010, restructured agricultural mortgage loans were comprised of eleven and five restructured loans, respectively, all of which were performing. Additionally, as of December 31, 2010, delinquent or under foreclosure agricultural mortgage loans included two restructured loans with a recorded investment of $29 million, which were not performing. | |
(4) | Residential mortgage loans held-for-investment consist primarily of first lien residential mortgage loans, and to a much lesser extent, second lien residential mortgage loans and home equity lines of credit. | |
(5) | As of June 30, 2011, restructured residential mortgage loans were comprised of eleven restructured loans, all of which were performing. Additionally, as of June 30, 2011, delinquent or under foreclosure residential mortgage loans included two previously restructured loans with a recorded investment of less than $1 million, which were not performing. As of December 31, 2010, restructured residential mortgage loans were comprised of twelve previously restructured loans, all of which were performing. |
179
180
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying |
% of |
Carrying |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
Traditional
|
$ | 5,702 | 69.2 | % | $ | 5,106 | 63.6 | % | ||||||||
Real estate joint ventures and funds
|
2,356 | 28.6 | 2,707 | 33.7 | ||||||||||||
Real estate and real estate joint ventures
|
8,058 | 97.8 | 7,813 | 97.3 | ||||||||||||
Foreclosed (commercial, agricultural and residential)
|
169 | 2.1 | 152 | 1.9 | ||||||||||||
Real estate
held-for-investment
|
8,227 | 99.9 | 7,965 | 99.2 | ||||||||||||
Real estate
held-for-sale
|
7 | 0.1 | 65 | 0.8 | ||||||||||||
Total real estate and real estate joint ventures
|
$ | 8,234 | 100.0 | % | $ | 8,030 | 100.0 | % | ||||||||
181
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying |
% of |
Carrying |
% of |
|||||||||||||
Value | Total | Value | Total | |||||||||||||
(In millions) | ||||||||||||||||
Freestanding derivatives with positive estimated fair values
|
$ | 7,693 | 51.6 | % | $ | 7,777 | 50.4 | % | ||||||||
Leveraged leases, net of non-recourse debt
|
2,219 | 14.9 | 2,191 | 14.2 | ||||||||||||
Tax credit partnerships
|
1,001 | 6.7 | 976 | 6.3 | ||||||||||||
MSRs
|
964 | 6.5 | 950 | 6.2 | ||||||||||||
Funds withheld
|
557 | 3.7 | 551 | 3.6 | ||||||||||||
Joint venture investments
|
208 | 1.4 | 694 | 4.5 | ||||||||||||
Other
|
2,258 | 15.2 | 2,291 | 14.8 | ||||||||||||
Total
|
$ | 14,900 | 100.0 | % | $ | 15,430 | 100.0 | % | ||||||||
| A comprehensive description of the nature of the Companys derivative instruments, including the strategies for which derivatives are used in managing various risks. | |
| Information about the notional amount estimated fair value, and primary underlying risk exposure of the Companys derivative financial instruments, excluding embedded derivatives held at June 30, 2011 and December 31, 2010. |
182
| The notional amount and estimated fair value of derivatives and non-derivative instruments designated as hedging instruments by type of hedge designation at June 30, 2011 and December 31, 2010. | |
| The notional amount and estimated fair value of derivatives that were not designated or do not qualify as hedging instruments by derivative type at June 30, 2011 and December 31, 2010. | |
| The statement of operations effects of derivatives in cash flow, fair value, or non-qualifying hedge relationships for the three months and six months ended June 30, 2011 and 2010. |
June 30, 2011 | ||||||||||||||||
Derivative |
Derivative |
|||||||||||||||
Assets | Liabilities | |||||||||||||||
(In millions) | ||||||||||||||||
Quoted prices in active markets for identical assets and
liabilities (Level 1)
|
$ | 73 | 1 | % | $ | 153 | 4 | % | ||||||||
Significant other observable inputs (Level 2)
|
7,233 | 94 | 3,360 | 88 | ||||||||||||
Significant unobservable inputs (Level 3)
|
387 | 5 | 308 | 8 | ||||||||||||
Total estimated fair value
|
$ | 7,693 | 100 | % | $ | 3,821 | 100 | % | ||||||||
183
Three Months |
Six Months |
|||||||
Ended |
Ended |
|||||||
June 30, 2011 | June 30, 2011 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | (23 | ) | $ | 173 | |||
Total realized/unrealized gains (losses) included in:
|
||||||||
Earnings
|
(15 | ) | (94 | ) | ||||
Other comprehensive income (loss)
|
25 | 9 | ||||||
Purchases, sales, issuances and settlements
|
83 | 99 | ||||||
Transfer into and/or out of Level 3
|
9 | (108 | ) | |||||
Balance, end of period
|
$ | 79 | $ | 79 | ||||
June 30, 2011 | ||||||||||||||||
Net Embedded Derivatives Within | ||||||||||||||||
Asset Host |
||||||||||||||||
Contracts | Liability Host Contracts | |||||||||||||||
(In millions) | ||||||||||||||||
Quoted prices in active markets for identical assets and
liabilities (Level 1)
|
$ | | | % | $ | | | % | ||||||||
Significant other observable inputs (Level 2)
|
2 | 1 | 15 | 1 | ||||||||||||
Significant unobservable inputs (Level 3)
|
196 | 99 | 2,270 | 99 | ||||||||||||
Total estimated fair value
|
$ | 198 | 100 | % | $ | 2,285 | 100 | % | ||||||||
184
Three Months |
Six Months |
|||||||
Ended |
Ended |
|||||||
June 30, 2011 | June 30, 2011 | |||||||
(In millions) | ||||||||
Balance, beginning of period
|
$ | (1,538 | ) | $ | (2,438 | ) | ||
Total realized/unrealized gains (losses) included in:
|
||||||||
Earnings
|
(373 | ) | 584 | |||||
Other comprehensive income (loss)
|
(50 | ) | (2 | ) | ||||
Purchases, sales, issuances and settlements
|
(113 | ) | (218 | ) | ||||
Transfer into and/or out of Level 3
|
| | ||||||
Balance, end of period
|
$ | (2,074 | ) | $ | (2,074 | ) | ||
| Commitments to Fund Partnership Investments | |
| Mortgage Loan Commitments | |
| Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments | |
| Guarantees |
185
186
187
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(In millions) | ||||||||
Sources:
|
||||||||
Net cash provided by operating activities
|
$ | 6,793 | $ | 3,928 | ||||
Net cash provided by changes in policyholder account balances
|
3,829 | 1,823 | ||||||
Net cash provided by changes in payables for collateral under
securities loaned and other transactions
|
2,807 | 5,576 | ||||||
Long-term debt issued, net of issuance costs
|
1,220 | 677 | ||||||
Cash received in connection with collateral financing
arrangements
|
100 | | ||||||
Common stock issued, net of issuance costs
|
2,950 | | ||||||
Stock options exercised
|
73 | 26 | ||||||
Cash provided by the effect of change in foreign currency
exchange rates
|
146 | | ||||||
Total sources
|
17,918 | 12,030 | ||||||
Uses:
|
||||||||
Net cash used in investing activities
|
16,898 | 10,120 | ||||||
Net cash used for changes in bank deposits
|
341 | 497 | ||||||
Net cash used for short-term debt repayments
|
204 | 33 | ||||||
Long-term debt repaid
|
715 | 511 | ||||||
Redemption of convertible preferred stock
|
2,805 | | ||||||
Preferred stock redemption premium
|
146 | | ||||||
Dividends on preferred stock
|
61 | 61 | ||||||
Net cash used in other, net
|
121 | 139 | ||||||
Cash used in the effect of change in foreign currency exchange
rates
|
| 79 | ||||||
Total uses
|
21,291 | 11,440 | ||||||
Net increase (decrease) in cash and cash equivalents
|
$ | (3,373 | ) | $ | 590 | |||
188
| The Holding Company and MetLife Funding, Inc. (MetLife Funding) each have commercial paper programs supported by $4.0 billion in general corporate credit facilities. MetLife Funding, a subsidiary of Metropolitan Life Insurance Company (MLIC), serves as a centralized finance unit for the Company. MetLife Funding raises cash from its commercial paper program and uses the proceeds to extend loans, through MetLife Credit Corp., another subsidiary of MLIC, to the Holding Company, MLIC and other affiliates in order to enhance the financial flexibility and liquidity of these companies. Outstanding balances for the commercial paper program fluctuate in line with changes to affiliates financing arrangements. Pursuant to a support agreement, MLIC has agreed to cause MetLife Funding to have a tangible net worth of at least one dollar. At both June 30, 2011 and December 31, 2010, MetLife Funding had a tangible net worth of $12 million. At both June 30, 2011 and December 31, 2010, MetLife Funding had total outstanding liabilities for its commercial paper program, including accrued interest payable, of $102 million. | |
| MetLife Bank is a depository institution that is approved to use the Federal Reserve Bank of New York Discount Window borrowing privileges. To utilize these privileges, MetLife Bank has pledged qualifying loans and investment securities to the Federal Reserve Bank of New York as collateral. At both June 30, 2011 and December 31, 2010, MetLife Bank had no liability for advances from the Federal Reserve Bank of New York under this facility. | |
| MetLife Bank has a cash need to fund residential mortgage loans that it originates and generally holds for a relatively short period before selling them to one of the government-sponsored enterprises such as FNMA or FHLMC. The outstanding volume of residential mortgage originations varies from month to month and is cyclical within a month. To meet the variable funding requirements from this mortgage activity, as well as to increase overall liquidity from time to time, MetLife Bank takes advantage of short-term collateralized borrowing opportunities with the Federal Home Loan Bank of New York (FHLB of NY). MetLife Bank has entered into advances agreements with the FHLB of NY whereby MetLife Bank has received cash advances and under which the FHLB of NY has been granted a blanket lien on certain of MetLife Banks residential mortgage loans, mortgage loans held-for-sale, commercial mortgage loans and mortgage-backed securities to collateralize MetLife Banks repayment obligations. Upon any event of default by MetLife Bank, the FHLB of NYs recovery is limited to the amount of MetLife Banks liability under the advances agreements. MetLife Bank has received advances from the FHLB of NY on both short-term and long-term bases, with a total liability of $4.5 billion and $3.8 billion at June 30, 2011 and December 31, 2010, respectively. | |
| The Company also had obligations under funding agreements with the FHLB of NY of $12.0 billion and $12.6 billion at June 30, 2011 and December 31, 2010, respectively, for MLIC, and with the Federal Home Loan Bank of Boston (FHLB of Boston) of $400 million and $100 million at June 30, 2011 and December 31, 2010, respectively, for MetLife Insurance Company of Connecticut (MICC). See Note 8 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report. In September 2010, MetLife Investors Insurance Company (MLIIC) and General American Life Insurance Company (GALIC), subsidiaries of MetLife, Inc., each became a member of the Federal Home Loan Bank of Des Moines (FHLB of Des Moines), and each purchased $10 million of FHLB of Des Moines common stock. Membership in the FHLB of Des Moines provides an additional source of contingent liquidity for the Company. The Company had obligations under funding agreements with the FHLB of Des Moines of |
189
$175 million for MLIIC and $425 million for GALIC at June 30, 2011. There were no funding agreements with the FHLB of Des Moines at December 31, 2010. |
| The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain special purpose entities (SPEs) that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. At June 30, 2011 and December 31, 2010, funding agreements outstanding, which are included in policyholder account balances, were $29.0 billion and $27.2 billion, respectively. See Note 8 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report. | |
| MLIC and MICC have each issued funding agreements to certain SPEs that have issued debt securities for which payment of interest and principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and principal by the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. The obligations under these funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of the Companys liability for funding agreements issued to such SPEs was $2.8 billion at both June 30, 2011 and December 31, 2010, which is included in policyholder account balances. The obligations under these funding agreements are collateralized by designated agricultural real estate mortgage loans with carrying values of $3.2 billion at both June 30, 2011 and December 31, 2010. See Note 8 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report. |
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Short-term debt
|
$ | 102 | $ | 306 | ||||
Long-term debt (1)
|
$ | 21,722 | $ | 20,766 | ||||
Collateral financing arrangements
|
$ | 5,297 | $ | 5,297 | ||||
Junior subordinated debt securities
|
$ | 3,192 | $ | 3,191 |
(1) | Excludes $6,547 million and $6,820 million at June 30, 2011 and December 31, 2010, respectively, of long-term debt relating to CSEs. See Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements. |
190
191
Dividend | ||||||||||||||||||||
Series A |
Series A |
Series B |
Series B |
|||||||||||||||||
Declaration Date | Record Date | Payment Date | Per Share | Aggregate | Per Share | Aggregate | ||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
May 16, 2011
|
May 31, 2011 | June 15, 2011 | $ | 0.2555555 | $ | 7 | $ | 0.4062500 | $ | 24 | ||||||||||
March 7, 2011
|
February 28, 2011 | March 15, 2011 | $ | 0.2500000 | 6 | $ | 0.4062500 | 24 | ||||||||||||
$ | 13 | $ | 48 | |||||||||||||||||
192
193
2011 | ||||
Permitted w/o |
||||
Company | Approval (1) | |||
(In millions) | ||||
Metropolitan Life Insurance Company
|
$ | 1,321 | ||
American Life Insurance Company
|
$ | 661 | ||
MetLife Insurance Company of Connecticut
|
$ | 517 | ||
Metropolitan Property and Casualty Insurance Company
|
$ | | ||
Metropolitan Tower Life Insurance Company
|
$ | 80 |
194
(1) | Reflects dividend amounts that may be paid during 2011 without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2011, some or all of such dividends may require regulatory approval. On April 29, 2011, MLIC paid as a dividend $183 million of such available amount to the Holding Company. No other available amounts were paid by the above subsidiaries to the Holding Company during the six months ended June 30, 2011. |
195
June 30, 2011 | December 31, 2010 | |||||||
(In millions) | ||||||||
Long-term debt unaffiliated
|
$ | 16,454 | $ | 16,258 | ||||
Long-term debt affiliated (1)
|
$ | 500 | $ | 665 | ||||
Collateral financing arrangements
|
$ | 2,797 | $ | 2,797 | ||||
Junior subordinated debt securities
|
$ | 1,748 | $ | 1,748 |
(1) | Includes $165 million of affiliated senior notes associated with bonds held by ALICO at December 31, 2010. Such bonds were sold to a third party in the second quarter of 2011. |
Subsidiaries | Interest Rate | Maturity Date | June 30, 2011 | December 31, 2010 | ||||||||
(In millions) | ||||||||||||
Metropolitan Life Insurance Company (1)
|
6-month LIBOR + 1.80% | December 31, 2011 | $ | | $ | 775 | ||||||
Metropolitan Life Insurance Company
|
7.13% | December 15, 2032 | 400 | 400 | ||||||||
Metropolitan Life Insurance Company
|
7.13% | January 15, 2033 | 100 | 100 | ||||||||
Total
|
$ | 500 | $ | 1,275 | ||||||||
(1) | In April 2011, MLIC repaid in cash the $775 million surplus note issued to the Holding Company in December 2009. The early redemption was approved by the New York Superintendent of Insurance. |
196
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
197
| implementing a corporate risk framework, which outlines the Companys approach for managing risk on an enterprise-wide basis; | |
| developing policies and procedures for managing, measuring, monitoring and controlling those risks identified in the corporate risk framework; | |
| establishing appropriate corporate risk tolerance levels; | |
| deploying capital on an economic capital basis; and | |
| reporting on a periodic basis to the Finance and Risk Committee of the Companys Board of Directors; with respect to credit risk, reporting to the Investment Committee of the Companys Board of Directors; and reporting on various aspects of risk to financial and non-financial senior management committees. |
198
199
| The Companys Treasury Department is responsible for managing the exposure to investments in foreign subsidiaries. Limits to exposures are established and monitored by the Treasury Department and managed by the Investment Department. | |
| The Investment Department is responsible for managing the exposure to foreign currency investments. Exposure limits to unhedged foreign currency investments are incorporated into the standing authorizations granted to management by the Board of Directors and are reported to the Board of Directors on a periodic basis. | |
| The lines of business are responsible for establishing limits and managing any foreign exchange rate exposure caused by the sale or issuance of insurance products. |
| Risks Related to Living Guarantee Benefits The Company uses a wide range of derivative contracts to hedge the risk associated with variable annuity living guarantee benefits. These hedges include equity and interest rate futures, interest rate swaps, currency futures/forwards, equity indexed options and interest rate option contracts and equity variance swaps. | |
| Minimum Interest Rate Guarantees For certain Company liability contracts, the Company provides the contractholder a guaranteed minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. The Company purchases interest rate floors to reduce risk associated with these liability guarantees. | |
| Reinvestment Risk in Long Duration Liability Contracts Derivatives are used to hedge interest rate risk related to certain long duration liability contracts, such as deferred annuities. Hedges include zero coupon interest rate swaps and swaptions. | |
| Foreign Currency Risk The Company uses currency swaps and forwards to hedge foreign currency risk. These hedges primarily swap foreign currency denominated bonds, investments in foreign subsidiaries or equity exposures to U.S. dollars. | |
| General ALM Hedging Strategies In the ordinary course of managing the Companys asset/liability risks, the Company uses interest rate futures, interest rate swaps, interest rate caps, interest rate floors and inflation swaps. These hedges are designed to reduce interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash flows. |
200
| the net present values of its interest rate sensitive exposures resulting from a 10% change (increase or decrease) in interest rates; | |
| the U.S. dollar equivalent estimated fair values of the Companys foreign currency exposures due to a 10% change (increase or decrease) in foreign currency exchange rates; and | |
| the estimated fair value of its equity positions due to a 10% change (increase or decrease) in equity market prices. |
| the market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including the impact of prepayment rates on mortgages; | |
| for the derivatives that qualify as hedges, the impact on reported earnings may be materially different from the change in market values; | |
| the analysis excludes other significant real estate holdings and liabilities pursuant to insurance contracts; and | |
| the model assumes that the composition of assets and liabilities remains unchanged throughout the period. |
June 30, 2011 | ||||
(In millions) | ||||
Non-trading:
|
||||
Interest rate risk
|
$ | 5,105 | ||
Foreign currency exchange rate risk
|
$ | 4,485 | ||
Equity market risk
|
$ | 11 | ||
Trading:
|
||||
Interest rate risk
|
$ | 9 | ||
Foreign currency exchange rate risk
|
$ | 449 |
201
June 30, 2011 | ||||||||||||
Assuming a |
||||||||||||
Estimated |
10% Increase |
|||||||||||
Notional |
Fair |
in the Yield |
||||||||||
Amount | Value (3) | Curve | ||||||||||
(In millions) | ||||||||||||
Assets:
|
||||||||||||
Fixed maturity securities
|
$ | 341,744 | $ | (5,900 | ) | |||||||
Equity securities
|
3,238 | | ||||||||||
Trading and other securities
|
19,700 | (11 | ) | |||||||||
Mortgage loans:
|
||||||||||||
Held-for-investment
|
63,338 | (359 | ) | |||||||||
Held-for-sale
|
2,805 | (14 | ) | |||||||||
Mortgage loans, net
|
66,143 | (373 | ) | |||||||||
Policy loans
|
13,381 | (170 | ) | |||||||||
Real estate joint ventures (1)
|
558 | | ||||||||||
Other limited partnership interests (1)
|
1,651 | | ||||||||||
Short-term investments
|
12,419 | (2 | ) | |||||||||
Other invested assets:
|
||||||||||||
Mortgage servicing rights
|
964 | 61 | ||||||||||
Other
|
1,480 | | ||||||||||
Cash and cash equivalents
|
9,628 | (1 | ) | |||||||||
Accrued investment income
|
4,341 | | ||||||||||
Premiums, reinsurance and other receivables
|
3,314 | (204 | ) | |||||||||
Other assets
|
501 | (8 | ) | |||||||||
Net embedded derivatives within asset host contracts (2)
|
198 | (16 | ) | |||||||||
Mortgage loan commitments
|
$ | 4,362 | (20 | ) | (10 | ) | ||||||
Commitments to fund bank credit facilities, bridge loans and
private corporate
|
||||||||||||
bond investments
|
$ | 2,342 | (22 | ) | | |||||||
Total Assets
|
$ | (6,634 | ) | |||||||||
Liabilities:
|
||||||||||||
Policyholder account balances
|
$ | 158,635 | $ | 807 | ||||||||
Payables for collateral under securities loaned and other
transactions
|
30,079 | | ||||||||||
Bank deposits
|
10,078 | | ||||||||||
Short-term debt
|
102 | | ||||||||||
Long-term debt
|
22,962 | 332 | ||||||||||
Collateral financing arrangements
|
4,867 | | ||||||||||
Junior subordinated debt securities
|
3,588 | 167 | ||||||||||
Other liabilities:
|
||||||||||||
Trading liabilities
|
54 | 2 | ||||||||||
Other
|
2,962 | | ||||||||||
Net embedded derivatives within liability host contracts (2)
|
2,285 | 1,597 | ||||||||||
Total Liabilities
|
$ | 2,905 | ||||||||||
Derivative Instruments:
|
||||||||||||
Interest rate swaps
|
$ | 69,893 | $ | 1,763 | $ | (1,129 | ) | |||||
Interest rate floors
|
$ | 23,866 | 545 | (68 | ) | |||||||
Interest rate caps
|
$ | 37,726 | 189 | 60 | ||||||||
Interest rate futures
|
$ | 12,770 | 9 | 4 | ||||||||
Interest rate options
|
$ | 16,635 | 137 | (101 | ) | |||||||
Interest rate forwards
|
$ | 8,637 | (94 | ) | (67 | ) | ||||||
Synthetic GICs
|
$ | 4,392 | | | ||||||||
Foreign currency swaps
|
$ | 17,455 | 13 | 5 | ||||||||
Foreign currency forwards
|
$ | 10,038 | (4 | ) | 24 | |||||||
Currency futures
|
$ | 525 | | | ||||||||
Currency options
|
$ | 2,191 | 15 | | ||||||||
Credit default swaps
|
$ | 12,266 | 65 | | ||||||||
Credit forwards
|
$ | 121 | (1 | ) | | |||||||
Equity futures
|
$ | 6,015 | (84 | ) | | |||||||
Equity options
|
$ | 16,330 | 1,337 | (107 | ) | |||||||
Variance swaps
|
$ | 18,719 | (17 | ) | (6 | ) | ||||||
Total rate of return swaps
|
$ | 1,862 | (1 | ) | | |||||||
Total Derivative Instruments
|
$ | (1,385 | ) | |||||||||
Net Change
|
$ | (5,114 | ) | |||||||||
(1) | Represents only those investments accounted for using the cost method. |
202
(2) | Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract. | |
(3) | Separate account assets and liabilities which are interest rate sensitive are not included herein as any interest rate risk is borne by the holder of the separate account. |
June 30, 2011 | ||||||||||||
Assuming a |
||||||||||||
Estimated |
10% Increase |
|||||||||||
Notional |
Fair |
in the Foreign |
||||||||||
Amount | Value (1) | Exchange Rate | ||||||||||
(In millions) | ||||||||||||
Assets:
|
||||||||||||
Fixed maturity securities
|
$ | 341,744 | $ | (7,670 | ) | |||||||
Equity securities
|
3,238 | (130 | ) | |||||||||
Trading and other securities
|
19,700 | (449 | ) | |||||||||
Mortgage loans:
|
||||||||||||
Held-for-investment
|
63,338 | (463 | ) | |||||||||
Held-for-sale
|
2,805 | | ||||||||||
Mortgage loans, net
|
66,143 | (463 | ) | |||||||||
Policy loans
|
13,381 | (199 | ) | |||||||||
Other limited partnership interests
|
1,651 | (12 | ) | |||||||||
Short-term investments
|
12,419 | (229 | ) | |||||||||
Other invested assets:
|
||||||||||||
Mortgage servicing rights
|
964 | | ||||||||||
Other
|
1,480 | (119 | ) | |||||||||
Cash and cash equivalents
|
9,628 | (152 | ) | |||||||||
Accrued investment income
|
4,341 | (11 | ) | |||||||||
Premiums, reinsurance and other receivables
|
3,314 | (9 | ) | |||||||||
Other assets
|
501 | (19 | ) | |||||||||
Total Assets
|
$ | (9,462 | ) | |||||||||
Liabilities:
|
||||||||||||
Policyholder account balances
|
$ | 158,635 | $ | 3,478 | ||||||||
Bank deposits
|
10,078 | | ||||||||||
Long-term debt
|
22,962 | 118 | ||||||||||
Payable for collateral under securities loaned and other
transactions
|
30,079 | 3 | ||||||||||
Other liabilities
|
2,962 | 28 | ||||||||||
Net embedded derivatives within liability host contracts (2)
|
2,285 | 449 | ||||||||||
Total Liabilities
|
$ | 4,076 | ||||||||||
Derivative Instruments:
|
||||||||||||
Interest rate swaps
|
$ | 69,893 | $ | 1,763 | $ | (11 | ) | |||||
Interest rate floors
|
$ | 23,866 | 545 | | ||||||||
Interest rate caps
|
$ | 37,726 | 189 | | ||||||||
Interest rate futures
|
$ | 12,770 | 9 | (1 | ) | |||||||
Interest rate options
|
$ | 16,635 | 137 | (32 | ) | |||||||
Interest rate forwards
|
$ | 8,637 | (94 | ) | | |||||||
Synthetic GICs
|
$ | 4,392 | | | ||||||||
Foreign currency swaps
|
$ | 17,455 | 13 | 650 | ||||||||
Foreign currency forwards
|
$ | 10,038 | (4 | ) | 8 | |||||||
Currency futures
|
$ | 525 | | (50 | ) | |||||||
Currency options
|
$ | 2,191 | 15 | 20 | ||||||||
Credit default swaps
|
$ | 12,266 | 65 | | ||||||||
Credit forwards
|
$ | 121 | (1 | ) | | |||||||
Equity futures
|
$ | 6,015 | (84 | ) | 4 | |||||||
Equity options
|
$ | 16,330 | 1,337 | (135 | ) | |||||||
Variance swaps
|
$ | 18,719 | (17 | ) | (1 | ) | ||||||
Total rate of return swaps
|
$ | 1,862 | (1 | ) | | |||||||
Total Derivative Instruments
|
$ | 452 | ||||||||||
Net Change
|
$ | (4,934 | ) | |||||||||
203
(1) | Estimated fair value presented in the table above represents the estimated fair value of all financial instruments within this financial statement caption, not necessarily those solely subject to foreign exchange risk. | |
(2) | Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract. |
June 30, 2011 | ||||||||||||
Assuming a |
||||||||||||
Estimated |
10% Decrease |
|||||||||||
Notional |
Fair |
in Equity |
||||||||||
Amount | Value (1) | Prices | ||||||||||
(In millions) | ||||||||||||
Assets:
|
||||||||||||
Equity securities
|
$ | 3,328 | $ | (349 | ) | |||||||
Other invested assets:
|
||||||||||||
Net embedded derivatives within asset host contracts (2)
|
198 | 11 | ||||||||||
Total Assets
|
$ | (338 | ) | |||||||||
Liabilities:
|
||||||||||||
Policyholder account balances
|
$ | 158,635 | $ | | ||||||||
Bank deposits
|
10,078 | | ||||||||||
Other liabilities:
|
||||||||||||
Net embedded derivatives within liability host contracts (2)
|
2,285 | (544 | ) | |||||||||
Total Liabilities
|
$ | (544 | ) | |||||||||
Derivative Instruments:
|
||||||||||||
Interest rate swaps
|
$ | 69,893 | $ | 1,763 | $ | | ||||||
Interest rate floors
|
$ | 23,866 | 545 | | ||||||||
Interest rate caps
|
$ | 37,726 | 189 | | ||||||||
Interest rate futures
|
$ | 12,770 | 9 | | ||||||||
Interest rate options
|
$ | 16,635 | 137 | | ||||||||
Interest rate forwards
|
$ | 8,637 | (94 | ) | | |||||||
Synthetic GICs
|
$ | 4,392 | | | ||||||||
Foreign currency swaps
|
$ | 17,455 | 13 | | ||||||||
Foreign currency forwards
|
$ | 10,038 | (4 | ) | | |||||||
Currency futures
|
$ | 525 | | | ||||||||
Currency options
|
$ | 2,191 | 15 | | ||||||||
Credit default swaps
|
$ | 12,266 | 65 | | ||||||||
Credit forwards
|
$ | 121 | (1 | ) | | |||||||
Equity futures
|
$ | 6,015 | (84 | ) | 391 | |||||||
Equity options
|
$ | 16,330 | 1,337 | 292 | ||||||||
Variance swaps
|
$ | 18,719 | (17 | ) | | |||||||
Total rate of return swaps
|
$ | 1,862 | (1 | ) | 188 | |||||||
Total Derivative Instruments
|
$ | 871 | ||||||||||
Net Change
|
$ | (11 | ) | |||||||||
204
(1) | Estimated fair value presented in the table above represents the estimated fair value of all financial instruments within this financial statement caption not necessarily those solely subject to equity price risk. | |
(2) | Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract. |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
205
206
207
Item 1A. | Risk Factors |
208
| licensing companies and agents to transact business; | |
| calculating the value of assets to determine compliance with statutory requirements; |
209
| mandating certain insurance benefits; | |
| regulating certain premium rates; | |
| reviewing and approving policy forms; | |
| regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements; | |
| regulating advertising; | |
| protecting privacy; | |
| establishing statutory capital and reserve requirements and solvency standards; | |
| fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; | |
| approving changes in control of insurance companies; | |
| restricting the payment of dividends and other transactions between affiliates; and | |
| regulating the types, amounts and valuation of investments. |
| chartering to carry on business as a bank; |
210
| the permissibility of certain activities; | |
| maintaining minimum capital ratios; | |
| capital management in relation to the banks assets; | |
| dividend payments; | |
| safety and soundness standards; | |
| loan loss and other related liabilities; | |
| liquidity; | |
| financial reporting and disclosure standards; | |
| counterparty credit concentration; | |
| restrictions on related party and affiliate transactions; | |
| lending limits (and, in addition, Dodd-Frank includes the credit exposures arising from securities lending by MetLife Bank within lending limits otherwise applicable to loans); | |
| payment of interest; | |
| unfair or deceptive acts or practices; | |
| mortgage servicing practices; | |
| privacy; and | |
| relationships with MetLife, Inc. in its capacity as a bank holding company and potentially with other investors in connection with a change in control of MetLife Bank. |
211
212
213
214
215
216
217
| reducing new sales of insurance products, annuities and other investment products; | |
| adversely affecting our relationships with our sales force and independent sales intermediaries; | |
| materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders; | |
| requiring us to reduce prices for many of our products and services to remain competitive; and | |
| adversely affecting our ability to obtain reinsurance at reasonable prices or at all. |
218
219
220
221
222
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(c) Total Number |
(d) Maximum Number |
|||||||||||||||
of Shares |
(or Approximate |
|||||||||||||||
Purchased as Part |
Dollar Value) of |
|||||||||||||||
(a) Total Number |
of Publicly |
Shares that May Yet |
||||||||||||||
of Shares |
(b) Average Price |
Announced Plans |
Be Purchased Under the |
|||||||||||||
Period | Purchased (1) | Paid per Share | or Programs | Plans or Programs (2) | ||||||||||||
April 1 April 30, 2011
|
2,729 | $ | 46.10 | | $ | 1,260,735,127 | ||||||||||
May 1 May 31, 2011
|
1,188 | $ | 44.63 | | $ | 1,260,735,127 | ||||||||||
June 1 June 30, 2011
|
11,744 | $ | 40.78 | | $ | 1,260,735,127 |
(1) | During the periods April 1 through April 30, 2011, May 1 through May 31, 2011, and June 1 through June 30, 2011, separate account and other affiliates of the Company purchased 2,729 shares, 1,188 shares and 11,744 shares, respectively, of common stock on the open market in nondiscretionary transactions to rebalance index funds. Except as disclosed above, there were no shares of common stock which were repurchased by the Company. | |
(2) | At June 30, 2011, the Company had $1,261 million remaining under its common stock repurchase program authorizations. In April 2008, the Companys Board of Directors authorized an additional $1.0 billion common stock repurchase program, which will begin after the completion of the January 2008 $1.0 billion common stock repurchase program, of which $261 million remained outstanding at June 30, 2011. Under these authorizations, the Company may purchase its common stock from the MetLife Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act) and in privately negotiated transactions. Any future common stock repurchases will be dependent upon several factors, including the Companys capital position, its liquidity, its financial strength and credit ratings, general market conditions and the market price of MetLife, Inc.s common stock compared to managements assessment of the stocks underlying value and applicable regulatory, legal and accounting factors. |
223
Item 6. | Exhibits |
Exhibit |
||||
No. | Description | |||
10 | .1 | Agreement, effective as of May 9, 2011, by and between Kathleen A. Henkel and MetLife, Inc. | ||
31 | .1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31 | .2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32 | .1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32 | .2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101 | .INS | XBRL Instance Document. | ||
101 | .SCH | XBRL Taxonomy Extension Schema Document. | ||
101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | ||
101 | .LAB | XBRL Taxonomy Extension Label Linkbase Document. | ||
101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | ||
101 | .DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
224
By |
/s/ Peter
M. Carlson
|
Title: | Executive Vice President, Finance |
225
Exhibit |
||||
No. | Description | |||
10 | .1 | Agreement, effective as of May 9, 2011, by and between Kathleen A. Henkel and MetLife, Inc. | ||
31 | .1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31 | .2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32 | .1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32 | .2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101 | .INS | XBRL Instance Document. | ||
101 | .SCH | XBRL Taxonomy Extension Schema Document. | ||
101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | ||
101 | .LAB | XBRL Taxonomy Extension Label Linkbase Document. | ||
101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | ||
101 | .DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
E-1
2
/s/ Steven A. Kandarian
|
/s/ Kathleen A. Henkel | |
By: Steven A. Kandarian
|
Kathleen A. Henkel | |
President and Chief Executive Officer |
3
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Steven A. Kandarian | ||||
Steven A. Kandarian | ||||
President and Chief Executive Officer |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ William J. Wheeler | ||||
William J. Wheeler | ||||
Executive Vice President and Chief Financial Officer |
/s/ Steven A. Kandarian | ||||
Steven A. Kandarian | ||||
President and Chief Executive Officer | ||||
/s/ William J. Wheeler | ||||
William J. Wheeler | ||||
Executive Vice President and Chief Financial Officer | ||||
Investments (Details 14) (USD $)
In Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Changes in fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss) | ||
Balance, beginning of period | $ (601) | $ (859) |
Noncredit OTTI losses recognized | (184) | (212) |
Transferred to retained earnings | 0 | 16 |
Securities sold with a previous noncredit OTTI loss | 77 | 137 |
Subsequent increases in estimated fair value | (31) | 317 |
Balance, end of period | $ (739) | $ (601) |
Equity (Details Textuals) (USD $)
In Millions, except Share data |
3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Mar. 31, 2011
Convertible Preferred Stock
|
Dec. 31, 2010
Convertible Preferred Stock
|
Jun. 30, 2011
Convertible Preferred Stock
|
|
Equity - Convertible Preferred Stock (Textuals) [Abstract] | |||||||
Convertible Preferred Stock Issuance Date | November 1, 2010 | ||||||
Preferred stock, shares issued | 6,857,000 | 0 | |||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||
Preferred stock, aggregate liquidation preference | $ 0.01 | ||||||
Fair Value of Stock Issued | $ 2,805 | ||||||
Redemption premium on convertible preferred stock | 0 | 0 | 146 | 0 | 146 | ||
Convertible Preferred Stock repurchase Date | March 8, 2011 | ||||||
Redemption of Convertible Preferred Stock | $ 2,951 |
Acquisitions and Dispositions (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions And Dispositions Tables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs and Other Charges |
|
Document and Entity Information (USD $)
In Billions, except Share data |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
|
Jun. 30, 2010
|
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | METLIFE INC | ||
Entity Central Index Key | 0001099219 | ||
Document Type | 10-Q | ||
Document Period End Date | Jun. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q2 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 31 | ||
Entity Common Stock, Shares Outstanding | 1,057,493,527 |
Fair Value (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recurring Fair Value Measurements |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans held-for-sale carried under the fair value option |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in estimated fair value residential mortgage loans held-for-sale |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans Held by Consolidated Securitization Entities carried under the Fair Value Option |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans and securities classified as trading securities the related long-term debt carried under fair value option |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value of certain investments |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments |
|
Other Expenses (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Other Expenses | ||||
Compensation | $ 1,329 | $ 878 | $ 2,656 | $ 1,722 |
Pension, postretirement & postemployment benefit costs | 95 | 96 | 190 | 187 |
Commissions | 1,587 | 835 | 3,003 | 1,639 |
Volume-related costs | 91 | 100 | 174 | 193 |
Interest credited to bank deposits | 23 | 36 | 46 | 75 |
Capitalization of DAC | (1,698) | (756) | (3,267) | (1,489) |
Amortization of DAC and VOBA | 1,381 | 1,014 | 2,437 | 1,611 |
Amortization of negative VOBA | (183) | 0 | (366) | 0 |
Interest expense on debt and debt issue costs | 420 | 369 | 835 | 739 |
Premium taxes, licenses & fees | 142 | 133 | 277 | 250 |
Professional services | 400 | 229 | 683 | 429 |
Rent, net of sublease income | 113 | 71 | 220 | 146 |
Other | 795 | 404 | 1,509 | 839 |
Total other expenses | $ 4,495 | $ 3,409 | $ 8,397 | $ 6,341 |
Investments (Details 41) (USD $)
In Millions |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Variable Interest Entity Primary Beneficiary | ||
Total Assets | $ 10,965 | $ 11,080 |
Total Liabilities | 6,651 | 6,995 |
Consolidated securitization entities [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 6,899 | 7,114 |
Total Liabilities | 6,606 | 6,892 |
MRSC collateral financing arrangement [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 3,381 | 3,333 |
Total Liabilities | 0 | 0 |
Real estate joint ventures [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 17 | 20 |
Total Liabilities | 18 | 17 |
Other limited partnership interests [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 354 | 319 |
Total Liabilities | 26 | 85 |
Other invested assets [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 102 | 108 |
Total Liabilities | 1 | 1 |
Trading Securities [Member]
|
||
Variable Interest Entity Primary Beneficiary | ||
Total Assets | 212 | 186 |
Total Liabilities | $ 0 | $ 0 |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Fair Value
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value |
Considerable judgment is often required in interpreting market
data to develop estimates of fair value, and the use of
different assumptions or valuation methodologies may have a
material effect on the estimated fair value amounts.
Assets
and Liabilities Measured at Fair Value
Recurring
Fair Value Measurements
The assets and liabilities measured at estimated fair value on a
recurring basis, including those items for which the Company has
elected the FVO, were determined as described below. These
estimated fair values and their corresponding placement in the
fair value hierarchy are summarized as follows:
See “— Variable Interest Entities” in
Note 3 for discussion of CSEs included in the tables above.
The methods and assumptions used to estimate the fair value of
financial instruments are summarized as follows:
Fixed
Maturity Securities, Equity Securities, Trading and Other
Securities and Short-term Investments
When available, the estimated fair value of the Company’s
fixed maturity securities, equity securities, trading and other
securities and short-term investments are based on quoted prices
in active markets that are readily and regularly obtainable.
Generally, these are the most liquid of the Company’s
securities holdings and valuation of these securities does not
involve management’s judgment.
When quoted prices in active markets are not available, the
determination of estimated fair value is based on market
standard valuation methodologies. The market standard valuation
methodologies utilized include: discounted cash flow
methodologies, matrix pricing or other similar techniques. The
inputs in applying these market standard valuation methodologies
include, but are not limited to: interest rates, credit standing
of the issuer or counterparty, industry sector of the issuer,
coupon rate, call provisions, sinking fund requirements,
maturity and management’s assumptions regarding estimated
duration, liquidity and estimated future cash flows.
Accordingly, the estimated fair values are based on available
market information and management’s judgments about
financial instruments.
The significant inputs to the market standard valuation
methodologies for certain types of securities with reasonable
levels of price transparency are inputs that are observable in
the market or can be derived principally from or corroborated by
observable market data. Such observable inputs include
benchmarking prices for similar assets in active markets, quoted
prices in markets that are not active and observable yields and
spreads in the market.
When observable inputs are not available, the market standard
valuation methodologies for determining the estimated fair value
of certain types of securities that trade infrequently, and
therefore have little or no price transparency, rely on inputs
that are significant to the estimated fair value that are not
observable in the market or
cannot be derived principally from or corroborated by observable
market data. These unobservable inputs can be based in large
part on management’s judgment or estimation and cannot be
supported by reference to market activity. Even though
unobservable, these inputs are assumed to be consistent with
what other market participants would use when pricing such
securities and are considered appropriate given the
circumstances.
The estimated fair value of FVO securities held by CSEs is
determined on a basis consistent with the methodologies
described herein for fixed maturity securities and equity
securities. The Company consolidates certain securitization
entities that hold securities that have been accounted for under
the FVO and classified within trading and other securities.
The use of different methodologies, assumptions and inputs may
have a material effect on the estimated fair values of the
Company’s securities holdings.
Mortgage
Loans
Mortgage loans presented in the tables above consist of
commercial mortgage loans held by CSEs and residential mortgage
loans
held-for-sale
for which the Company has elected the FVO and which are carried
at estimated fair value. The Company consolidates certain
securitization entities that hold commercial mortgage loans. See
“— Valuation Techniques and Inputs by
Level Within the Three-Level Fair Value Hierarchy by
Major Classes of Assets and Liabilities” below for a
discussion of the methods and assumptions used to estimate the
fair value of these financial instruments.
Mortgage
Servicing Rights (“MSRs”)
Although MSRs are not financial instruments, the Company has
included them in the preceding table as a result of its election
to carry MSRs at estimated fair value. See
“— Valuation Techniques and Inputs by
Level Within the Three-Level Fair Value Hierarchy by
Major Classes of Assets and Liabilities” below for a
discussion of the methods and assumptions used to estimate the
fair value of these financial instruments.
Other
Investments
Other investments is primarily comprised of investment funds.
The estimated fair value of these investment funds is determined
on a basis consistent with the methodologies described herein
for trading and other securities.
Derivatives
The estimated fair value of derivatives is determined through
the use of quoted market prices for exchange-traded derivatives
and interest rate forwards to sell certain to be announced
securities, or through the use of pricing models for OTC
derivatives. The determination of estimated fair value, when
quoted market values are not available, is based on market
standard valuation methodologies and inputs that are assumed to
be consistent with what other market participants would use when
pricing the instruments. Derivative valuations can be affected
by changes in interest rates, foreign currency exchange rates,
financial indices, credit spreads, default risk (including the
counterparties to the contract), volatility, liquidity and
changes in estimates and assumptions used in the pricing models.
The significant inputs to the pricing models for most OTC
derivatives are inputs that are observable in the market or can
be derived principally from or corroborated by observable market
data. Significant inputs that are observable generally include:
interest rates, foreign currency exchange rates, interest rate
curves, credit curves and volatility. However, certain OTC
derivatives may rely on inputs that are significant to the
estimated fair value that are not observable in the market or
cannot be derived principally from or corroborated by observable
market data. Significant inputs that are unobservable generally
include: independent broker quotes, credit correlation
assumptions, references to emerging market currencies and inputs
that are outside the observable portion of the interest rate
curve, credit curve, volatility or other relevant market
measure. These unobservable inputs may
involve significant management judgment or estimation. Even
though unobservable, these inputs are based on assumptions
deemed appropriate given the circumstances and are assumed to be
consistent with what other market participants would use when
pricing such instruments.
The credit risk of both the counterparty and the Company are
considered in determining the estimated fair value for all OTC
derivatives, and any potential credit adjustment is based on the
net exposure by counterparty after taking into account the
effects of netting agreements and collateral arrangements. The
Company values its derivative positions using the standard swap
curve which includes a spread to the risk free rate. This credit
spread is appropriate for those parties that execute trades at
pricing levels consistent with the standard swap curve. As the
Company and its significant derivative counterparties
consistently execute trades at such pricing levels, additional
credit risk adjustments are not currently required in the
valuation process. The Company’s ability to consistently
execute at such pricing levels is in part due to the netting
agreements and collateral arrangements that are in place with
all of its significant derivative counterparties. The evaluation
of the requirement to make additional credit risk adjustments is
performed by the Company each reporting period.
Most inputs for OTC derivatives are mid market inputs but, in
certain cases, bid level inputs are used when they are deemed
more representative of exit value. Market liquidity, as well as
the use of different methodologies, assumptions and inputs, may
have a material effect on the estimated fair values of the
Company’s derivatives and could materially affect net
income.
Net
Embedded Derivatives Within Asset and Liability Host
Contracts
Embedded derivatives principally include certain direct, assumed
and ceded variable annuity guarantees and equity or bond indexed
crediting rates within certain funding agreements. Embedded
derivatives are recorded at estimated fair value with changes in
estimated fair value reported in net income.
The Company issues and assumes certain variable annuity products
with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs
are embedded derivatives, which are measured at estimated fair
value separately from the host variable annuity contract, with
changes in estimated fair value reported in net derivative gains
(losses). These embedded derivatives are classified within
policyholder account balances in the consolidated balance sheets.
The fair value of these guarantees is estimated using the
present value of future benefits minus the present value of
future fees using actuarial and capital market assumptions
related to the projected cash flows over the expected lives of
the contracts. A risk neutral valuation methodology is used
under which the cash flows from the guarantees are projected
under multiple capital market scenarios using observable risk
free rates, currency exchange rates and observable and estimated
implied volatilities.
The valuation of these guarantee liabilities includes
adjustments for nonperformance risk and for a risk margin
related to non-capital market inputs. Both of these adjustments
are captured as components of the spread which, when combined
with the risk free rate, is used to discount the cash flows of
the liability for purposes of determining its fair value.
The nonperformance adjustment is determined by taking into
consideration publicly available information relating to spreads
in the secondary market for the Holding Company’s debt,
including related credit default swaps. These observable spreads
are then adjusted, as necessary, to reflect the priority of
these liabilities and the claims paying ability of the issuing
insurance subsidiaries compared to the Holding Company.
Risk margins are established to capture the non-capital market
risks of the instrument which represent the additional
compensation a market participant would require to assume the
risks related to the uncertainties of such actuarial assumptions
as annuitization, premium persistency, partial withdrawal and
surrenders. The establishment of risk margins requires the use
of significant management judgment, including assumptions of the
amount and cost of capital needed to cover the guarantees. These
guarantees may be more costly than expected in volatile or
declining equity markets. Market conditions including, but not
limited to, changes in interest rates, equity indices, market
volatility and foreign currency exchange rates; changes in
nonperformance risk; and variations in actuarial assumptions
regarding policyholder behavior, mortality and risk margins
related to non-capital market inputs may result in significant
fluctuations in the estimated fair value of the guarantees that
could materially affect net income.
The Company ceded the risk associated with certain of the GMIBs
and GMABs previously described. These reinsurance contracts
contain embedded derivatives which are included within premiums,
reinsurance and other receivables in the consolidated balance
sheets with changes in estimated fair value reported in net
derivative gains (losses) or policyholder benefits and claims
depending on the statement of operations classification of the
direct risk. The value of the embedded derivatives on the ceded
risk is determined using a methodology consistent with that
described previously for the guarantees directly written by the
Company.
As part of its regular review of critical accounting estimates,
the Company periodically assesses inputs for estimating
nonperformance risk (commonly referred to as “own
credit”) in fair value measurements. During the second
quarter of 2010, the Company completed a study that aggregated
and evaluated data, including historical recovery rates of
insurance companies, as well as policyholder behavior observed
over the prior two years as the recent financial crisis evolved.
As a result, at the end of the second quarter of 2010, the
Company refined the way in which its insurance subsidiaries
incorporate expected recovery rates into the nonperformance risk
adjustment for purposes of estimating the fair value of
investment-type contracts and embedded derivatives within
insurance contracts. For the three months ended June 30,
2010, the Company recognized income of $305 million, net of
DAC and income tax, relating to the change in fair value
associated with nonperformance risk for embedded derivatives
within insurance contracts. The impact included a loss of
$577 million, net of DAC and income tax, relating to
implementing the refinement at June 30, 2010. The
refinement reduced basic and diluted net income available to
MetLife, Inc.’s common shareholders per common share by
$0.70 and $0.69, respectively, for the three months ended
June 30, 2010. The refinement reduced both basic and
diluted net income available to MetLife, Inc.’s common
shareholders per common share by $0.70 for the six months ended
June 30, 2010.
The estimated fair value of the embedded derivatives within
funds withheld related to certain ceded reinsurance is
determined based on the change in estimated fair value of the
underlying assets held by the Company in a reference portfolio
backing the funds withheld liability. The estimated fair value
of the underlying assets is determined as previously described
in “— Fixed Maturity Securities, Equity
Securities, Trading and Other Securities and Short-term
Investments.” The estimated fair value of these embedded
derivatives is included, along with their funds withheld hosts,
in other liabilities in the consolidated balance sheets with
changes in estimated fair value recorded in net derivative gains
(losses). Changes in the credit spreads on the underlying
assets, interest rates and market volatility may result in
significant fluctuations in the estimated fair value of these
embedded derivatives that could materially affect net income.
The estimated fair value of the embedded equity and bond indexed
derivatives contained in certain funding agreements is
determined using market standard swap valuation models and
observable market inputs, including an adjustment for
nonperformance risk. The estimated fair value of these embedded
derivatives are included, along with their funding agreements
host, within policyholder account balances with changes in
estimated fair value recorded in net derivative gains (losses).
Changes in equity and bond indices, interest rates and the
Company’s credit standing may result in significant
fluctuations in the estimated fair value of these embedded
derivatives that could materially affect net income.
Separate
Account Assets
Separate account assets are carried at estimated fair value and
reported as a summarized total on the consolidated balance
sheets. The estimated fair value of separate account assets is
based on the estimated fair value of the underlying assets owned
by the separate account. Assets within the Company’s
separate accounts include: mutual funds, fixed maturity
securities, equity securities, mortgage loans, derivatives,
hedge funds, other limited partnership interests, short-term
investments and cash and cash equivalents. See
“— Valuation Techniques and
Inputs by Level Within the Three-Level Fair Value
Hierarchy by Major Classes of Assets and Liabilities” below
for a discussion of the methods and assumptions used to estimate
the fair value of these financial instruments.
Long-term
Debt of CSEs
The Company has elected the FVO for the long-term debt of CSEs,
which are carried at estimated fair value. See
“— Valuation Techniques and Inputs by
Level Within the Three-Level Fair Value Hierarchy by
Major Classes of Assets and Liabilities” below for a
discussion of the methods and assumptions used to estimate the
fair value of these financial instruments.
Trading
Liabilities
Trading liabilities are recorded at estimated fair value with
subsequent changes in estimated fair value recognized in net
investment income. The estimated fair value of trading
liabilities is determined on a basis consistent with the
methodologies described in “— Fixed Maturity
Securities, Equity Securities, Trading and Other Securities and
Short-term Investments.”
Valuation Techniques and Inputs by Level Within the
Three-Level Fair Value Hierarchy by Major Classes of Assets
and Liabilities
A description of the significant valuation techniques and inputs
to the determination of estimated fair value for the more
significant asset and liability classes measured at fair value
on a recurring basis is as follows:
The Company determines the estimated fair value of its
investments using primarily the market approach and the income
approach. The use of quoted prices for identical assets and
matrix pricing or other similar techniques are examples of
market approaches, while the use of discounted cash flow
methodologies is an example of the income approach. The Company
attempts to maximize the use of observable inputs and minimize
the use of unobservable inputs in selecting whether the market
or income approach is used.
While certain investments have been classified as Level 1
from the use of unadjusted quoted prices for identical
investments supported by high volumes of trading activity and
narrow bid/ask spreads, most investments have been classified as
Level 2 because the significant inputs used to measure the
fair value on a recurring basis of the same or similar
investment are market observable or can be corroborated using
market observable information for the full term of the
investment. Level 3 investments include those where
estimated fair values are based on significant unobservable
inputs that are supported by little or no market activity and
may reflect our own assumptions about what factors market
participants would use in pricing these investments.
Level 1
Measurements:
Fixed
Maturity Securities, Equity Securities, Trading and Other
Securities and Short-term Investments
These securities are comprised of U.S. Treasury and agency
securities, foreign government securities, RMBS principally
to-be-announced securities, exchange traded common stock,
exchange traded registered mutual fund interests included in
trading and other securities and short-term money market
securities, including U.S. Treasury bills. Valuation of
these securities is based on unadjusted quoted prices in active
markets that are readily and regularly available.
Contractholder-directed unit-linked investments reported within
trading and other securities include certain registered mutual
fund interests priced using daily net asset value
(“NAV”) provided by the fund managers.
Derivative
Assets and Derivative Liabilities
These assets and liabilities are comprised of exchange-traded
derivatives, as well as interest rate forwards to sell certain
to-be-announced securities. Valuation of these assets and
liabilities is based on unadjusted quoted prices in active
markets that are readily and regularly available.
Separate
Account Assets
These assets are comprised of (i) securities that are
similar in nature to the fixed maturity securities, equity
securities and short-term investments referred to above; and
(ii) certain exchange-traded derivatives, including
financial futures and owned options. Valuation of these assets
is based on unadjusted quoted prices in active markets that are
readily and regularly available.
Level 2
Measurements:
Fixed
Maturity Securities, Equity Securities, Trading and Other
Securities and Short-term Investments
This level includes fixed maturity securities and equity
securities priced principally by independent pricing services
using observable inputs. Trading and other securities and
short-term investments within this level are of a similar nature
and class to the Level 2 securities described below.
Contractholder-directed unit-linked investments reported within
trading and other securities include certain mutual fund
interests without readily determinable fair values given prices
are not published publicly. Valuation of these mutual funds is
based upon quoted prices or reported NAV provided by the fund
managers, which were based on observable inputs.
U.S. corporate and foreign corporate
securities. These securities are principally
valued using the market and income approaches. Valuation is
based primarily on quoted prices in markets that are not active,
or using matrix pricing or other similar techniques that use
standard market observable inputs such as benchmark yields,
spreads off benchmark yields, new issuances, issuer rating,
duration, and trades of identical or comparable securities.
Investment grade privately placed securities are valued using
discounted cash flow methodologies using standard market
observable inputs, and inputs derived from, or corroborated by,
market observable data including market yield curve, duration,
call provisions, observable prices and spreads for similar
publicly traded or privately traded issues that incorporate the
credit quality and industry sector of the issuer. This level
also includes certain below investment grade privately placed
fixed maturity securities priced by independent pricing services
that use observable inputs.
Structured securities comprised of RMBS, CMBS and
ABS. These securities are principally valued
using the market approach. Valuation is based primarily on
matrix pricing or other similar techniques using standard market
inputs including spreads for actively traded securities, spreads
off benchmark yields, expected prepayment speeds and volumes,
current and forecasted loss severity, rating, weighted average
coupon, weighted average maturity, average delinquency rates,
geographic region, debt-service coverage ratios and
issuance-specific information including, but not limited to:
collateral type, payment terms of the underlying assets, payment
priority within the tranche, structure of the security, deal
performance and vintage of loans.
U.S. Treasury and agency
securities. These securities are principally
valued using the market approach. Valuation is based primarily
on quoted prices in markets that are not active, or using matrix
pricing or other similar techniques using standard market
observable inputs such as benchmark U.S. Treasury yield
curve, the spread off the U.S. Treasury curve for the
identical security and comparable securities that are actively
traded.
Foreign government and state and political subdivision
securities. These securities are principally
valued using the market approach. Valuation is based primarily
on matrix pricing or other similar techniques using standard
market observable inputs including benchmark U.S. Treasury
or other yields, issuer ratings, broker-dealer quotes, issuer
spreads and reported trades of similar securities, including
those within the same
sub-sector
or with a similar maturity or credit rating.
Common and non-redeemable preferred
stock. These securities are principally valued
using the market approach where market quotes are available but
are not considered actively traded. Valuation is based
principally on observable inputs including quoted prices in
markets that are not considered active.
Mortgage
Loans Held by CSEs
These commercial mortgage loans are principally valued using the
market approach. The principal market for these commercial loan
portfolios is the securitization market. The Company uses the
quoted securitization market price of the obligations of the
CSEs to determine the estimated fair value of these commercial
loan portfolios. These market prices are determined principally
by independent pricing services using observable inputs.
Mortgage
Loans
Held-For-Sale
Residential mortgage loans
held-for-sale
are principally valued using the market approach. Valuation is
based primarily on readily available observable pricing for
similar loans or securities backed by similar loans. The
unobservable adjustments to such prices are insignificant.
Derivative
Assets and Derivative Liabilities
This level includes all types of derivative instruments utilized
by the Company with the exception of exchange-traded derivatives
and interest rate forwards to sell certain to-be-announced
securities included within Level 1 and those derivative
instruments with unobservable inputs as described in
Level 3. These derivatives are principally valued using an
income approach.
Interest
rate contracts.
Non-option-based — Valuations are based on
present value techniques, which utilize significant inputs that
may include the swap yield curve, LIBOR basis curves and
repurchase rates.
Option-based — Valuations are based on option pricing
models, which utilize significant inputs that may include the
swap yield curve, LIBOR basis curves and interest rate
volatility.
Foreign
currency contracts.
Non-option-based — Valuations are based on present
value techniques, which utilize significant inputs that may
include the swap yield curve, LIBOR basis curves, currency spot
rates and cross currency basis curves.
Option-based — Valuations are based on option pricing
models, which utilize significant inputs that may include the
swap yield curve, LIBOR basis curves, currency spot rates, cross
currency basis curves and currency volatility.
Credit
contracts.
Non-option-based — Valuations are based on present
value techniques, which utilize significant inputs that may
include the swap yield curve, credit curves and recovery rates.
Equity
market contracts.
Non-option-based — Valuations are based on present
value techniques, which utilize significant inputs that may
include the swap yield curve, spot equity index levels and
dividend yield curves.
Option-based — Valuations are based on option pricing
models, which utilize significant inputs that may include the
swap yield curve, spot equity index levels, dividend yield
curves and equity volatility.
Embedded
Derivatives Contained in Certain Funding Agreements
These derivatives are principally valued using an income
approach. Valuations are based on present value techniques,
which utilize significant inputs that may include the swap yield
curve and the spot equity and bond index level.
Separate
Account Assets
These assets are comprised of investments that are similar in
nature to the fixed maturity securities, equity securities,
short-term investments and derivative assets referred to above.
Also included are certain mutual funds and hedge funds without
readily determinable fair values given prices are not published
publicly. Valuation of the mutual funds and hedge funds is based
upon quoted prices or reported NAV provided by the fund managers.
Long-term
Debt of CSEs
The estimated fair value of the long-term debt of the
Company’s CSEs is based on quoted prices when traded as
assets in active markets or, if not available, based on market
standard valuation methodologies, consistent with the
Company’s methods and assumptions used to estimate the fair
value of comparable fixed maturity securities.
Level 3
Measurements:
In general, investments classified within Level 3 use many
of the same valuation techniques and inputs as described in
Level 2 Measurements. However, if key inputs are
unobservable, or if the investments are less liquid and there is
very limited trading activity, the investments are generally
classified as Level 3. The use of independent non-binding
broker quotations to value investments generally indicates there
is a lack of liquidity or a lack of transparency in the process
to develop the valuation estimates generally causing these
investments to be classified in Level 3.
Fixed
Maturity Securities, Equity Securities, Trading and Other
Securities and Short-term Investments
This level includes fixed maturity securities and equity
securities priced principally by independent broker quotations
or market standard valuation methodologies using inputs that are
not market observable or cannot be derived principally from or
corroborated by observable market data. Trading and other
securities and short-term investments within this level are of a
similar nature and class to the Level 3 securities
described below; accordingly, the valuation techniques and
significant market standard observable inputs used in their
valuation are also similar to those described below.
U.S. corporate and foreign corporate
securities. These securities, including financial
services industry hybrid securities classified within fixed
maturity securities, are principally valued using the market and
income approaches. Valuations are based primarily on matrix
pricing or other similar techniques that utilize unobservable
inputs or cannot be derived principally from, or corroborated
by, observable market data, including illiquidity premiums and
spread adjustments to reflect industry trends or specific
credit-related issues. Valuations may be based on independent
non-binding broker quotations. Generally, below investment grade
privately placed or distressed securities included in this level
are valued using discounted cash flow methodologies which rely
upon significant, unobservable inputs and inputs that cannot be
derived principally from, or corroborated by, observable market
data.
Structured securities comprised of RMBS, CMBS and
ABS. These securities are principally valued
using the market approach. Valuation is based primarily on
matrix pricing or other similar techniques that utilize inputs
that are unobservable or cannot be derived principally from, or
corroborated by, observable market data, or are based on
independent non-binding broker quotations. Below investment
grade securities and ABS supported by
sub-prime
mortgage loans included in this level are valued based on inputs
including quoted prices for identical or similar securities that
are less liquid and based on lower levels of trading activity
than securities classified in Level 2, and certain of these
securities are valued based on independent non-binding broker
quotations.
Foreign government and state and political subdivision
securities. These securities are principally
valued using the market approach. Valuation is based primarily
on matrix pricing or other similar techniques, however these
securities are less liquid and certain of the inputs are based
on very limited trading activity.
Common and non-redeemable preferred
stock. These securities, including privately held
securities and financial services industry hybrid securities
classified within equity securities, are principally valued
using the market and income approaches. Valuations are based
primarily on matrix pricing or other similar techniques using
inputs such as comparable credit rating and issuance structure.
Equity securities valuations determined with discounted cash
flow methodologies use inputs such as earnings multiples based
on comparable public companies, and industry-specific
non-earnings based multiples. Certain of these securities are
valued based on independent non-binding broker quotations.
Mortgage
Loans
Mortgage loans include residential mortgage loans
held-for-sale
for which pricing for similar loans or securities backed by
similar loans is not observable and the estimated fair value is
determined using unobservable independent broker quotations or
valuation models.
MSRs
MSRs, which are valued using an income approach, are carried at
estimated fair value and have multiple significant unobservable
inputs including assumptions regarding estimates of discount
rates, loan prepayments and servicing costs. Sales of MSRs tend
to occur in private transactions where the precise terms and
conditions of the sales are typically not readily available and
observable market valuations are limited. As such, the Company
relies primarily on a discounted cash flow model to estimate the
fair value of the MSRs. The model requires inputs such as type
of loan (fixed vs. variable and agency vs. other), age of loan,
loan interest rates and current market interest rates that are
generally observable. The model also requires the use of
unobservable inputs including assumptions regarding estimates of
discount rates, loan prepayments and servicing costs.
Derivative
Assets and Derivative Liabilities
These derivatives are principally valued using an income
approach. Valuations of non-option-based derivatives utilize
present value techniques, whereas valuations of option-based
derivatives utilize option pricing models. These valuation
methodologies generally use the same inputs as described in the
corresponding sections above for Level 2 measurements of
derivatives. However, these derivatives result in Level 3
classification because one or more of the significant inputs are
not observable in the market or cannot be derived principally
from, or corroborated by, observable market data.
Interest
rate contracts.
Non-option-based — Significant unobservable
inputs may include pull through rates on interest rate lock
commitments and the extrapolation beyond observable limits of
the swap yield curve and LIBOR basis curves.
Option-based — Significant unobservable inputs may
include the extrapolation beyond observable limits of the swap
yield curve, LIBOR basis curves and interest rate volatility.
Foreign
currency contracts.
Non-option-based — Significant unobservable inputs may
include the extrapolation beyond observable limits of the swap
yield curve, LIBOR basis curves and cross currency basis curves.
Certain of these derivatives are valued based on independent
non-binding broker quotations.
Option-based — Significant unobservable inputs may
include currency correlation and the extrapolation beyond
observable limits of the swap yield curve, LIBOR basis curves,
cross currency basis curves and currency volatility.
Credit
contracts.
Non-option-based — Significant unobservable inputs may
include credit correlation, repurchase rates, and the
extrapolation beyond observable limits of the swap yield curve
and credit curves. Certain of these derivatives are valued based
on independent non-binding broker quotations.
Equity
market contracts.
Non-option-based — Significant unobservable inputs may
include the extrapolation beyond observable limits of dividend
yield curves.
Option-based — Significant unobservable inputs may
include the extrapolation beyond observable limits of dividend
yield curves and equity volatility. Certain of these derivatives
are valued based on independent non-binding broker quotations.
Direct
and Assumed Guaranteed Minimum Benefits
These embedded derivatives are principally valued using an
income approach. Valuations are based on option pricing
techniques, which utilize significant inputs that may include
swap yield curve, currency exchange rates and implied
volatilities. These embedded derivatives result in Level 3
classification because one or more of the significant inputs are
not observable in the market or cannot be derived principally
from, or corroborated by, observable market data. Significant
unobservable inputs generally include: the extrapolation beyond
observable limits of the swap yield curve and implied
volatilities, actuarial assumptions for policyholder behavior
and mortality and the potential variability in policyholder
behavior and mortality, nonperformance risk and cost of capital
for purposes of calculating the risk margin.
Reinsurance
Ceded on Certain Guaranteed Minimum Benefits
These embedded derivatives are principally valued using an
income approach. The valuation techniques and significant market
standard unobservable inputs used in their valuation are similar
to those previously described for Direct and Assumed Guaranteed
Minimum Benefits and also include counterparty credit spreads.
Embedded
Derivatives Within Funds Withheld Related to Certain Ceded
Reinsurance
These embedded derivatives are principally valued using an
income approach. Valuations are based on present value
techniques, which utilize significant inputs that may include
the swap yield curve and the fair value of assets within the
reference portfolio. These embedded derivatives result in
Level 3 classification because one or more of the
significant inputs are not observable in the market or cannot be
derived principally from, or corroborated by, observable market
data. Significant unobservable inputs generally include: the
fair value of certain assets within the reference portfolio
which are not observable in the market and cannot be derived
principally from, or corroborated by, observable market data.
Separate
Account Assets
These assets are comprised of investments that are similar in
nature to the fixed maturity securities, equity securities and
derivative assets referred to above. Separate account assets
within this level also include mortgage loans and other limited
partnership interests. The estimated fair value of mortgage
loans is determined by discounting expected future cash flows,
using current interest rates for similar loans with similar
credit risk. Other limited partnership interests are valued
giving consideration to the value of the underlying holdings of
the partnerships and by applying a premium or discount, if
appropriate, for factors such as liquidity, bid/ask spreads, the
performance record of the fund manager or other relevant
variables which may impact the exit value of the particular
partnership interest.
Long-term
Debt of CSEs
The estimated fair value of the long-term debt of the
Company’s CSEs are priced principally through independent
broker quotations or market standard valuation methodologies
using inputs that are not market observable or cannot be derived
from or corroborated by observable market data.
Transfers
between Levels 1 and 2:
During the three months and six months ended June 30, 2011
and 2010, transfers between Levels 1 and 2 were not
significant.
Transfers
into or out of Level 3:
Overall, transfers into
and/or out
of Level 3 are attributable to a change in the
observability of inputs. Assets and liabilities are transferred
into Level 3 when a significant input cannot be
corroborated with market observable data. This occurs when
market activity decreases significantly and underlying inputs
cannot be observed, current prices are not available,
and/or when
there are significant variances in quoted prices, thereby
affecting transparency. Assets and liabilities are transferred
out of Level 3 when circumstances change such that a
significant input can be corroborated with market observable
data. This may be due to a significant increase in market
activity, a specific event, or one or more significant input(s)
becoming observable. Transfers into
and/or out
of any level are assumed to occur at the beginning of the
period. Significant transfers into
and/or out
of Level 3 assets and liabilities for the three months and
six months ended June 30, 2011 and 2010 are summarized
below.
Transfers into Level 3 resulted primarily from current
market conditions characterized by a lack of trading activity,
decreased liquidity and credit ratings downgrades (e.g., from
investment grade to below investment grade) which have resulted
in decreased transparency of valuations and an increased use of
broker quotations and unobservable inputs to determine estimated
fair value.
During the three months and six months ended June 30, 2011,
transfers into Level 3 for fixed maturity securities of
$756 million and $653 million, respectively, and
transfers into Level 3 for separate account assets of
$1 million and $9 million, respectively, were
principally comprised of certain RMBS, foreign government
securities and ABS. During the three months and six months ended
June 30, 2010, transfers into Level 3 for fixed
maturity securities of $1,088 million and
$1,214 million, respectively, and transfers into
Level 3 for separate account assets of $12 million and
$49 million, respectively, were principally comprised of
certain CMBS, ABS and U.S. and foreign corporate securities.
Transfers out of Level 3 resulted primarily from increased
transparency of both new issuances that subsequent to issuance
and establishment of trading activity, became priced by
independent pricing services and existing issuances that, over
time, the Company was able to obtain pricing from, or
corroborate pricing received from, independent pricing services
with observable inputs or increases in market activity and
upgraded credit ratings. With respect to derivatives, transfers
out of Level 3 resulted primarily from increased
transparency related to the observable portion of the swap yield
curve or the observable portion of the equity volatility surface.
During the three months and six months ended June 30, 2011,
transfers out of Level 3 for fixed maturity securities of
$3,210 million and $4,594 million, respectively, and
transfers out of Level 3 for separate account assets of
$122 million and $196 million, respectively, were
principally comprised of certain ABS, RMBS and U.S. and
foreign corporate securities. During the six months ended
June 30, 2011, transfers out of Level 3 for
derivatives of $108 million were principally comprised of
interest rate swaps, foreign currency forwards, and equity
options. There were no transfers out of Level 3 for
derivatives for the three months ended June 30, 2011.
During the three months and six months ended June 30, 2010,
transfers out of Level 3 for fixed maturity securities of
$1,063 million and $1,336 million, respectively, and
transfers out of Level 3 for separate account assets of
$182 million and $222 million, respectively, were
principally comprised of certain U.S. and foreign corporate
securities, ABS and RMBS.
The following tables summarize the change of all assets and
(liabilities) measured at estimated fair value on a recurring
basis using significant unobservable inputs (Level 3),
including realized and unrealized gains (losses) of all assets
and (liabilities) and realized and unrealized gains (losses) of
all assets and (liabilities) still held at the end of the
respective time periods:
FVO —
Mortgage Loans
Held-For-Sale
The following table presents residential mortgage loans
held-for-sale
carried under the FVO at:
Residential mortgage loans
held-for-sale
accounted for under the FVO are initially measured at estimated
fair value. Interest income on residential mortgage loans
held-for-sale
is recorded based on the stated rate of the loan and is recorded
in net investment income. Gains and losses from initial
measurement, subsequent changes in estimated fair value and
gains or losses on sales are recognized in other revenues. Such
changes in estimated fair value for these loans were due to the
following:
FVO —
Consolidated Securitization Entities
The Company has elected the FVO for the following assets and
liabilities held by CSEs: commercial mortgage loans, securities
and long-term debt. Information on the estimated fair value of
the securities classified as trading and other securities is
presented in Note 3. The following table presents these
commercial mortgage loans carried under the FVO at:
The following table presents the long-term debt carried under
the FVO related to both the commercial mortgage loans and
securities classified as trading and other securities at:
Interest income on both commercial mortgage loans and securities
classified as trading and other securities held by CSEs is
recorded in net investment income. Interest expense on long-term
debt of CSEs is recorded in other expenses. Gains and losses
from initial measurement, subsequent changes in estimated fair
value and gains or losses on sales of both the commercial
mortgage loans and long-term debt are recognized in net
investment gains (losses), which is summarized in Note 3.
Non-Recurring
Fair Value Measurements
Certain investments are measured at estimated fair value on a
non-recurring basis and are not included in the tables presented
above. The amounts below relate to certain investments measured
at estimated fair value during the period and still held at the
reporting dates.
Fair
Value of Financial Instruments
Amounts related to the Company’s financial instruments that
were not measured at fair value on a recurring basis were as
follows:
The methods and assumptions used to estimate the fair value of
financial instruments are summarized as follows:
The assets and liabilities measured at estimated fair value on a
recurring basis include: fixed maturity securities, equity
securities, trading and other securities, certain short-term
investments, mortgage loans held by CSEs, mortgage loans
held-for-sale
accounted for under the FVO, MSRs, derivative assets and
liabilities, net embedded derivatives within asset and liability
host contracts, separate account assets, long-term debt of CSEs
and trading liabilities. These assets and liabilities are
described in the section “— Recurring Fair Value
Measurements” and, therefore, are excluded from the table
above. The estimated fair value for these financial instruments
approximates carrying value.
Mortgage
Loans
These mortgage loans are principally comprised of commercial and
agricultural mortgage loans, which are originated for investment
purposes and are primarily carried at amortized cost.
Residential mortgage and consumer loans are generally purchased
from third parties for investment purposes and are principally
carried at amortized cost, while those originated for sale and
not carried under the FVO are carried at the lower of cost or
estimated fair value. The estimated fair values of these
mortgage loans are determined as follows:
Mortgage loans
held-for-investment. —
For commercial and agricultural mortgage loans
held-for-investment
and carried at amortized cost, estimated fair value was
primarily determined by estimating expected future cash flows
and discounting them using current interest rates for similar
mortgage loans with similar credit risk. For residential
mortgage loans
held-for-investment
and carried at amortized cost, estimated fair value is primarily
determined from observable pricing for similar loans.
Mortgage loans
held-for-sale. —
Certain mortgage loans previously classified as
held-for-investment
have been designated as
held-for-sale.
For these mortgage loans, estimated fair value is determined
using independent broker quotations or, when the mortgage loan
is in foreclosure or otherwise determined to be collateral
dependent, the fair value of the underlying collateral is
estimated using internal models. For residential mortgage loans
originated for sale, the estimated fair value is determined
principally from observable market pricing or from internal
models.
Policy
Loans
For policy loans with fixed interest rates, estimated fair
values are determined using a discounted cash flow model applied
to groups of similar policy loans determined by the nature of
the underlying insurance liabilities. Cash flow estimates are
developed applying a weighted-average interest rate to the
outstanding principal balance of the respective group of policy
loans and an estimated average maturity determined through
experience studies of the past performance of policyholder
repayment behavior for similar loans. These cash flows are
discounted using current risk-free interest rates with no
adjustment for borrower credit risk as these loans are fully
collateralized by the cash surrender value of the underlying
insurance policy. The estimated fair value for policy loans with
variable interest rates approximates carrying value due to the
absence of borrower credit risk and the short time period
between interest rate resets, which presents minimal risk of a
material change in estimated fair value due to changes in market
interest rates.
Real
Estate Joint Ventures and Other Limited Partnership
Interests
Real estate joint ventures and other limited partnership
interests included in the preceding table consist of those
investments accounted for using the cost method. The remaining
carrying value recognized in the consolidated balance sheets
represents investments in real estate carried at cost less
accumulated depreciation, or real estate joint ventures and
other limited partnership interests accounted for using the
equity method, which do not meet the definition of financial
instruments for which fair value is required to be disclosed.
The estimated fair values for real estate joint ventures and
other limited partnership interests accounted for under the cost
method are generally based on the Company’s share of the
NAV as provided in the financial statements of the investees. In
certain circumstances, management may adjust the NAV by a
premium or discount when it has sufficient evidence to support
applying such adjustments.
Short-term
Investments
Certain short-term investments do not qualify as securities and
are recognized at amortized cost in the consolidated balance
sheets. For these instruments, the Company believes that there
is minimal risk of material changes in interest rates or credit
of the issuer such that estimated fair value approximates
carrying value. In light of recent market conditions, short-term
investments have been monitored to ensure there is sufficient
demand and maintenance of issuer credit quality and the Company
has determined additional adjustment is not required.
Other
Invested Assets
Other invested assets within the preceding table are principally
comprised of funds withheld, various interest-bearing assets
held in foreign subsidiaries and certain amounts due under
contractual indemnifications.
For funds withheld and the various interest-bearing assets held
in foreign subsidiaries, the Company evaluates the specific
facts and circumstances of each instrument to determine the
appropriate estimated fair values. These estimated fair values
were not materially different from the recognized carrying
values.
Cash and
Cash Equivalents
Due to the short-term maturities of cash and cash equivalents,
the Company believes there is minimal risk of material changes
in interest rates or credit of the issuer such that estimated
fair value generally approximates carrying value. In light of
recent market conditions, cash and cash equivalent instruments
have been monitored to ensure there is sufficient demand and
maintenance of issuer credit quality, or sufficient solvency in
the case of depository institutions, and the Company has
determined additional adjustment is not required.
Accrued
Investment Income
Due to the short term until settlement of accrued investment
income, the Company believes there is minimal risk of material
changes in interest rates or credit of the issuer such that
estimated fair value approximates carrying value. In light of
recent market conditions, the Company has monitored the credit
quality of the issuers and has determined additional adjustment
is not required.
Premiums,
Reinsurance and Other Receivables
Premiums, reinsurance and other receivables in the preceding
table are principally comprised of certain amounts recoverable
under reinsurance contracts, amounts on deposit with financial
institutions to facilitate daily settlements related to certain
derivative positions and amounts receivable for securities sold
but not yet settled.
Premiums receivable and those amounts recoverable under
reinsurance treaties determined to transfer sufficient risk are
not financial instruments subject to disclosure and thus have
been excluded from the amounts presented in the preceding table.
Amounts recoverable under ceded reinsurance contracts, which the
Company has determined do not transfer sufficient risk such that
they are accounted for using the deposit method of accounting,
have been included in the preceding table. The estimated fair
value is determined as the present value of expected future cash
flows under the related contracts, which were discounted using
an interest rate determined to reflect the appropriate credit
standing of the assuming counterparty.
The amounts on deposit for derivative settlements essentially
represent the equivalent of demand deposit balances and amounts
due for securities sold are generally received over short
periods such that the estimated fair value approximates carrying
value. In light of recent market conditions, the Company has
monitored the solvency position of the financial institutions
and has determined additional adjustments are not required.
Other
Assets
Other assets in the preceding table are composed of a receivable
for cash paid to an unaffiliated financial institution under the
MetLife Reinsurance Company of Charleston (“MRC”)
collateral financing arrangement as described in Note 12 of
the Notes to the Consolidated Financial Statements included in
the 2010 Annual Report. The estimated fair value of the
receivable for the cash paid to the unaffiliated financial
institution under the MRC collateral financing arrangement is
determined by discounting the expected future cash flows using a
discount rate that reflects the credit rating of the
unaffiliated financial institution. The amounts excluded from
the preceding table are not considered financial instruments
subject to disclosure.
Policyholder
Account Balances
Policyholder account balances in the table above include
investment contracts. Embedded derivatives on investment
contracts and certain variable annuity guarantees accounted for
as embedded derivatives are included in this caption in the
consolidated financial statements but excluded from this caption
in the table above as they are separately presented in
“— Recurring Fair Value Measurements.” The
remaining difference between the amounts reflected as
policyholder account balances in the preceding table and those
recognized in the consolidated balance sheets represents those
amounts due under contracts that satisfy the definition of
insurance contracts and are not considered financial instruments.
The investment contracts primarily include certain funding
agreements, fixed deferred annuities, modified guaranteed
annuities, fixed term payout annuities and total control
accounts. The fair values for these investment contracts are
estimated by discounting best estimate future cash flows using
current market risk-free interest rates and adding a spread to
reflect the nonperformance risk in the liability.
Payables
for Collateral Under Securities Loaned and Other
Transactions
The estimated fair value for payables for collateral under
securities loaned and other transactions approximates carrying
value. The related agreements to loan securities are short-term
in nature such that the Company believes there is limited risk
of a material change in market interest rates. Additionally,
because borrowers are cross-collateralized by the borrowed
securities, the Company believes no additional consideration for
changes in nonperformance risk are necessary.
Bank
Deposits
Due to the frequency of interest rate resets on customer bank
deposits held in money market accounts, the Company believes
that there is minimal risk of a material change in interest
rates such that the estimated fair value approximates carrying
value. For time deposits, estimated fair values are estimated by
discounting the expected cash flows to maturity using a discount
rate based on an average market rate for certificates of deposit
being offered by a representative group of large financial
institutions at the date of the valuation.
Short-term
and Long-term Debt, Collateral Financing Arrangements and Junior
Subordinated Debt Securities
The estimated fair value for short-term debt approximates
carrying value due to the short-term nature of these
obligations. The estimated fair values of long-term debt,
collateral financing arrangements and junior subordinated debt
securities are generally determined by discounting expected
future cash flows using market rates currently available for
debt with similar remaining maturities and reflecting the credit
risk of the Company, including inputs when available, from
actively traded debt of the Company or other companies with
similar types of borrowing arrangements. Risk-adjusted discount
rates applied to the expected future cash flows can vary
significantly based upon the specific terms of each individual
arrangement, including, but not limited to: subordinated rights;
contractual interest rates in relation to current market rates;
the structuring of the arrangement; and the nature and
observability of the applicable valuation inputs. Use of
different risk-adjusted discount rates could result in different
estimated fair values.
The carrying value of long-term debt presented in the table
above differs from the amounts presented in the consolidated
balance sheets as it does not include capital leases which are
not required to be disclosed at estimated fair value.
Other
Liabilities
Other liabilities included in the table above reflect those
other liabilities that satisfy the definition of financial
instruments subject to disclosure. These items consist primarily
of interest and dividends payable; amounts due for securities
purchased but not yet settled; funds withheld amounts payable
which were contractually withheld by the Company in accordance
with the terms of the reinsurance agreements and amounts payable
under certain assumed reinsurance treaties accounted for as
deposit type treaties. The Company evaluates the specific terms,
facts and circumstances of each instrument to determine the
appropriate estimated fair values, which were not materially
different from the carrying values, with the exception of
certain deposit type reinsurance payables. For these reinsurance
payables, the estimated fair value is determined as the present
value of expected future cash flows under the related contracts,
which are discounted using an interest rate determined to
reflect the appropriate credit standing of the assuming
counterparty.
Separate
Account Liabilities
Separate account liabilities included in the preceding table
represents those balances due to policyholders under contracts
that are classified as investment contracts. The remaining
amounts presented in the consolidated balance sheets represent
those contracts classified as insurance contracts, which do not
satisfy the definition of financial instruments.
Separate account liabilities classified as investment contracts
primarily represent variable annuities with no significant
mortality risk to the Company such that the death benefit is
equal to the account balance; funding agreements related to
group life contracts; and certain contracts that provide for
benefit funding.
Separate account liabilities are recognized in the consolidated
balance sheets at an equivalent value of the related separate
account assets. Separate account assets, which equal net
deposits, net investment income and realized and unrealized
investment gains and losses, are fully offset by corresponding
amounts credited to the contractholders’ liability which is
reflected in separate account liabilities. Since separate
account liabilities are fully funded by cash flows from the
separate account assets which are recognized at estimated fair
value as described in the section “— Recurring
Fair Value Measurements,” the Company believes the value of
those assets approximates the estimated fair value of the
related separate account liabilities.
Mortgage
Loan Commitments and Commitments to Fund Bank Credit
Facilities, Bridge Loans and Private Corporate Bond
Investments
The estimated fair values for mortgage loan commitments that
will be held for investment and commitments to fund bank credit
facilities, bridge loans and private corporate bonds that will
be held for investment reflected in the above table represents
the difference between the discounted expected future cash flows
using interest rates that incorporate current credit risk for
similar instruments on the reporting date and the principal
amounts of the commitments.
Assets
and Liabilities of Subsidiaries
Held-For-Sale
The carrying values of the assets and liabilities of
subsidiaries
held-for-sale
reflect those assets and liabilities which were previously
determined to be financial instruments and which were reflected
in other financial statement captions in the comparable table
above in previous periods but have been reclassified to these
captions to reflect the discontinued nature of the operations.
The estimated fair value of the assets and liabilities of
subsidiaries
held-for-sale
have been determined on a basis consistent with the assets and
liabilities as described herein.
|
Closed Block (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed Block (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information regarding the closed block liabilities and assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed block policyholder dividend obligation |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information regarding the closed block revenues and expenses |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in the maximum future earnings of the closed block |
|
Equity (Details Textuals 1) (USD $)
In Millions, except Share data |
3 Months Ended |
---|---|
Mar. 31, 2011
|
|
Equity - Common Stock (Textuals) [Abstract] | |
Shares of common stock, issuance date | March 8, 2011 |
Common stock, shares issued | 68,570,000 |
Price per share of common stock issued | $ 43.25 |
Proceeds from issuance of common stock | $ 2,966 |
Issuance costs | $ 16 |
Derivative Financial Instruments (Details 12) (USD $)
In Millions |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Estimated Fair Value of Embedded Derivatives | ||
Ceded guaranteed minimum benefits | $ 194 | $ 185 |
Options embedded in debt or equity securities | (68) | (57) |
Other | 4 | 0 |
Net embedded derivatives within asset host contracts | 130 | 128 |
Direct guaranteed minimum benefits | (49) | 370 |
Assumed guaranteed minimum benefits | 2,244 | 2,186 |
Other | 90 | 78 |
Net embedded derivatives within liability host contracts | $ 2,285 | $ 2,634 |
Derivative Financial Instruments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional amounts and estimated fair values of derivatives designated and not designated as hedging instruments by primary underlying risk exposure |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not designated or not qualifying as hedging instruments |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Derivatives Gains (Losses) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement Payments By Hedge Classification And Income Statement Location |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net derivatives gains (losses) recognized on fair value derivatives and the related hedged items |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Before Income Tax, Related To Cash Flow Hedges |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Non-Derivative Hedging Instruments in Net Investment Hedging Relationships |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount and location of gains (losses) recognized in income for derivatives that are not designated or qualifying as hedging instruments |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Risk |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value of Embedded Derivatives |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in estimated fair value related to embedded derivatives |
|
Equity
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Equity [Abstract] | |||||
Equity |
Convertible
Preferred Stock
In connection with the financing of the Acquisition in November
2010, MetLife, Inc. issued to AM Holdings 6,857,000 shares
of convertible preferred stock with a $0.01 par value per
share, a liquidation preference of $0.01 per share and a fair
value of $2,805 million. On March 8, 2011, MetLife,
Inc. repurchased and canceled all of the convertible preferred
stock for $2,951 million in cash, which resulted in a
preferred stock redemption premium of $146 million. See
Note 2.
Common
Stock
On March 8, 2011, MetLife, Inc. issued 68,570,000 new
shares of its common stock at a price of $43.25 per share for
gross proceeds of $3.0 billion. In connection with the
offering of common stock, MetLife, Inc. incurred
$16 million of issuance costs which have been recorded as a
reduction of additional paid-in capital. The proceeds were used
to repurchase the convertible preferred stock issued to AM
Holdings in November 2010. See Note 2.
Stock-Based
Compensation Plans
Payout of
2008 — 2010 Performance Shares
Performance Shares are units that, if they vest, are multiplied
by a performance factor to produce a number of final Performance
Shares which are payable in shares of MetLife, Inc. common
stock. Performance Shares are accounted for as equity awards,
but are not credited with dividend-equivalents for actual
dividends paid on MetLife, Inc. common stock during the
performance period. Accordingly, the estimated fair value of
Performance Shares is
based upon the closing price of MetLife, Inc. common stock on
the date of grant, reduced by the present value of estimated
dividends to be paid on that stock during the performance period.
Performance Share awards normally vest in their entirety at the
end of the three-year performance period. Vesting is subject to
continued service, except for employees who are retirement
eligible and in certain other limited circumstances. Vested
Performance Shares are multiplied by a performance factor of 0.0
to 2.0 based largely on MetLife, Inc.’s performance in
change in annual net operating earnings and total shareholder
return over the applicable three-year performance period
compared to the performance of its competitors.
The performance factor was 0.90 for the January 1,
2008 — December 31, 2010 performance period. This
factor has been applied to the 824,825 Performance Shares
associated with that performance period that vested on
December 31, 2010, and as a result 742,343 shares of
MetLife, Inc.’s common stock (less withholding for taxes
and other items, as applicable) were issued (aside from shares
that payees earlier chose to defer) during the second quarter of
2011.
|
Business, Basis of Presentation and Summary of Significant Accounting Policies
|
6 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||
Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||
Business, Basis of Presentation and Summary of Significant Accounting Policies |
Business
“MetLife” or the “Company” refers to
MetLife, Inc., a Delaware corporation incorporated in 1999 (the
“Holding Company”), its subsidiaries and affiliates.
MetLife is a leading global provider of insurance, annuities and
employee benefit programs throughout the United States
(“U.S.”), Japan, Latin America, Asia Pacific, Europe
and the Middle East. Through its subsidiaries and affiliates,
MetLife offers life insurance, annuities, auto and homeowners
insurance, mortgage and deposit products and other financial
services to individuals, as well as group insurance and
retirement & savings products and services to
corporations and other institutions.
MetLife is organized into six segments: Insurance Products,
Retirement Products, Corporate Benefit Funding and
Auto & Home (collectively,
“U.S. Business”), and Japan and Other
International Regions (collectively, “International”).
See Note 13 for further business segment information.
Basis
of Presentation
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America (“GAAP”) requires management to adopt
accounting policies and make estimates and assumptions that
affect amounts reported in the interim condensed consolidated
financial statements.
On November 1, 2010 (the “Acquisition Date”),
MetLife, Inc. completed the acquisition of American Life
Insurance Company (“American Life”) from AM Holdings
LLC (formerly known as ALICO Holdings LLC) (“AM
Holdings”), a subsidiary of American International Group,
Inc. (“AIG”), and Delaware American Life Insurance
Company (“DelAm”) from AIG (American Life, together
with DelAm, collectively, “ALICO”) (the
“Acquisition”). The Acquisition was accounted for
using the acquisition method of accounting. ALICO’s fiscal
year-end is November 30. Accordingly, the Company’s
interim condensed consolidated financial statements reflect the
assets and liabilities of ALICO as of May 31, 2011 and the
operating results of ALICO for the three months and six months
ended May 31, 2011. The accounting policies of ALICO were
conformed to those of MetLife upon the Acquisition. See
Note 2.
In applying the Company’s accounting policies, management
makes subjective and complex judgments that frequently require
estimates about matters that are inherently uncertain. Many of
these policies, estimates and related judgments are common in
the insurance and financial services industries; others are
specific to the Company’s businesses and operations. Actual
results could differ from these estimates.
The accompanying interim condensed consolidated financial
statements include the accounts of the Holding Company and its
subsidiaries, as well as partnerships and joint ventures in
which the Company has control, and variable interest entities
(“VIEs”) for which the Company is the primary
beneficiary. Closed block assets, liabilities, revenues and
expenses are combined on a
line-by-line
basis with the assets, liabilities, revenues and expenses
outside the closed block based on the nature of the particular
item. See Note 6. Intercompany accounts and transactions
have been eliminated.
The Company uses the equity method of accounting for investments
in equity securities in which it has a significant influence or
more than a 20% interest and for real estate joint ventures and
other limited partnership interests in which it has more than a
minor equity interest or more than a minor influence over the
joint venture’s or partnership’s operations, but does
not have a controlling interest and is not the primary
beneficiary. The Company uses the cost method of accounting for
investments in real estate joint ventures and other limited
partnership interests in which it has a minor equity investment
and virtually no influence over the joint venture’s or the
partnership’s operations.
Certain amounts in the prior year periods’ interim
condensed consolidated financial statements have been
reclassified to conform with the 2011 presentation. Such
reclassifications include:
The accompanying interim condensed consolidated financial
statements reflect all adjustments (including normal recurring
adjustments) necessary to present fairly the consolidated
financial position of the Company at June 30, 2011, its
consolidated results of operations for the three months and six
months ended June 30, 2011 and 2010, its consolidated
statements of equity for the six months ended June 30, 2011
and 2010, and its consolidated statements of cash flows for the
six months ended June 30, 2011 and 2010, in conformity with
GAAP. Interim results are not necessarily indicative of full
year performance. The December 31, 2010 consolidated
balance sheet data was derived from audited consolidated
financial statements included in MetLife, Inc.’s Annual
Report on
Form 10-K
for the year ended December 31, 2010, as amended by
MetLife, Inc.’s
Form 10-K/A
dated March 1, 2011 (as amended, the “2010 Annual
Report”), filed with the U.S. Securities and Exchange
Commission (“SEC”), which include all disclosures
required by GAAP. Therefore, these interim condensed
consolidated financial statements should be read in conjunction
with the consolidated financial statements of the Company
included in the 2010 Annual Report.
Adoption
of New Accounting Pronouncements
Effective January 1, 2011, the Company adopted new guidance
that addresses when a business combination should be assumed to
have occurred for the purpose of providing pro forma disclosure.
Under the new guidance, if an entity presents comparative
financial statements, the entity should disclose revenue and
earnings of the combined entity as though the business
combination that occurred during the current year had occurred
as of the beginning of the comparable prior annual reporting
period. The guidance also expands the supplemental pro forma
disclosures to include additional narratives. The adoption did
not have an impact on the Company’s consolidated financial
statements.
Effective January 1, 2011, the Company adopted new guidance
regarding goodwill impairment testing. This guidance modifies
Step 1 of the goodwill impairment test for reporting units with
zero or negative carrying amounts. For those reporting units, an
entity would be required to perform Step 2 of the test if
qualitative factors indicate that it is more likely than not
that goodwill impairment exists. The adoption did not have an
impact on the Company’s consolidated financial statements.
Effective January 1, 2011, the Company adopted new guidance
regarding accounting for investment funds determined to be VIEs.
Under this guidance, an insurance entity would not be required
to consolidate a voting-interest investment fund when it holds
the majority of the voting interests of the fund through its
separate accounts. In addition, an insurance entity would not
consider the interests held through separate accounts for the
benefit of policyholders in the insurer’s evaluation of its
economics in a VIE, unless the separate account contractholder
is a related party. The adoption did not have a material impact
on the Company’s consolidated financial statements.
Future
Adoption of New Accounting Pronouncements
In July 2011, the Financial Accounting Standards Board
(“FASB”) issued new guidance on other expenses
(Accounting Standards Update (“ASU”)
2011-06,
Other Expenses (Topic 720): Fees Paid to the Federal
Government by Health Insurers), effective for calendar years
beginning after December 31, 2013. The objective of this
standard is to address how health insurers should recognize and
classify in their income statements fees mandated by the Patient
Protection and Affordable Care Act as amended by the Health Care
and Education Reconciliation Act. The amendments in this
standard specify that the liability for the fee should be
estimated and recorded in full once the entity provides
qualifying health insurance in the applicable calendar year in
which the fee is payable with a corresponding deferred cost that
is amortized to expense using the straight-line method of
allocation unless another method better allocates the fee over
the calendar year that it is payable. The Company is currently
evaluating the impact of this guidance on its consolidated
financial statements.
In June 2011, the FASB issued new guidance regarding
comprehensive income (ASU
2011-05,
Comprehensive Income (Topic 220): Presentation of
Comprehensive Income), effective for fiscal years, and
interim periods within those years, beginning after
December 15, 2011. The guidance should be applied
retrospectively and early adoption is permitted. The new
guidance provides companies with the option to present the total
of comprehensive income, components of net income, and the
components of other comprehensive income either in a single
continuous statement of comprehensive income or in two separate
but consecutive statements. The objective of the standard is to
increase the prominence of items reported in other comprehensive
income and to facilitate convergence of GAAP and International
Financial Reporting Standards (“IFRS”). The standard
eliminates the option to present components of other
comprehensive income as part of the statement of changes in
stockholders’ equity. The Company is currently evaluating
the impact of this guidance on its consolidated financial
statements.
In May 2011, the FASB issued new guidance regarding fair value
measurement (ASU
2011-04,
Fair Value Measurements (Topic 820): Amendments to Achieve
Common Fair Value Measurement and Disclosure Requirements in
U.S. GAAP and IFRSs), effective for the first interim
or annual period beginning after December 15, 2011. The
guidance should be applied prospectively. The amendments in this
ASU are intended to establish common requirements for measuring
fair value and for disclosing information about fair value
measurements in accordance with GAAP and IFRS. Some of the
amendments clarify the FASB’s intent on the application of
existing fair value measurement requirements. Other amendments
change a particular principle or requirement for measuring fair
value or for disclosing information about fair value
measurements. The Company is currently evaluating the impact of
this guidance on its consolidated financial statements.
In April 2011, the FASB issued new guidance regarding effective
control in repurchase agreements (ASU
2011-03,
Transfers and Servicing (Topic 860): Reconsideration of
Effective Control for Repurchase Agreements), effective for
the first interim or annual period beginning on or after
December 15, 2011. The guidance should be applied
prospectively to transactions or modifications of existing
transactions that occur on or after the effective date. The
amendments in this ASU remove from the assessment of effective
control the criterion requiring the transferor to have the
ability to repurchase or redeem the financial assets. The
Company is currently evaluating the impact of this guidance on
its consolidated financial statements.
In April 2011, the FASB issued new guidance regarding accounting
for troubled debt restructuring (ASU
2011-02,
Receivables (Topic 310): A Creditor’s Determination of
Whether a Restructuring Is a Troubled Debt Restructuring),
effective for the first interim or annual period beginning on or
after June 15, 2011 and which should be applied
retrospectively to the beginning of the annual period of
adoption. This guidance clarifies whether a creditor has granted
a concession and whether a debtor is experiencing financial
difficulties for the purpose of determining when a restructuring
constitutes a troubled debt restructuring. The Company does not
expect the adoption of this guidance to have a material impact
on its consolidated financial statements and related disclosures.
In October 2010, the FASB issued new guidance regarding
accounting for deferred acquisition costs (ASU
2010-26,
Financial Services — Insurance (Topic 944):
Accounting for Costs Associated with Acquiring or
Renewing Insurance Contracts) effective for fiscal years,
and interim periods within those fiscal years, beginning after
December 15, 2011. The guidance should be applied
prospectively upon adoption. Retrospective application to all
prior periods presented upon the date of adoption also is
permitted, but not required. This guidance clarifies the costs
that should be deferred by insurance entities when issuing and
renewing insurance contracts. The guidance also specifies that
only costs related directly to successful acquisition of new or
renewal contracts can be capitalized. All other
acquisition-related costs should be expensed as incurred. The
Company is currently evaluating the impact of this guidance on
its consolidated financial statements and related disclosures.
|
Long-term and Short-term Debt
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Long-term and Short-term Debt [Abstract] | |||||
Long-term and Short-term Debt |
The following represents significant changes in debt from the
amounts reported in Note 11 of the Notes to the
Consolidated Financial Statements included in the 2010 Annual
Report. See Note 3 for discussion of long-term debt of CSEs.
Advances
from the Federal Home Loan Bank of New York
MetLife Bank, National Association (“MetLife Bank”) is
a member of the FHLB of New York (“FHLB of NY”) and
held $221 million and $187 million of common stock of
the FHLB of NY at June 30, 2011 and December 31, 2010,
respectively, which is included in equity securities. MetLife
Bank has also entered into advances agreements with the FHLB of
NY whereby MetLife Bank has received cash advances and under
which the FHLB of NY has been granted a blanket lien on certain
of MetLife Bank’s residential mortgage loans, mortgage
loans
held-for-sale,
commercial mortgage loans and mortgage-backed securities to
collateralize MetLife Bank’s repayment obligations. Upon
any event of default by MetLife Bank, the FHLB of NY’s
recovery is limited to the amount of MetLife Bank’s
liability under the advances agreements. The amount of MetLife
Bank’s liability for advances from the FHLB of NY was
$4.5 billion and $3.8 billion at June 30, 2011
and December 31, 2010, respectively, which is included in
long-term debt and short-term debt depending upon the original
tenor of the advance. During the six months ended June 30,
2011 and 2010, MetLife Bank received advances related to
long-term borrowings totaling $1,205 million and
$678 million, respectively, from the FHLB of NY. MetLife
Bank made repayments to the FHLB of NY of $340 million and
$169 million related to long-term borrowings for the six
months ended June 30, 2011 and 2010, respectively. The
advances related to both long-term and short-term debt were
collateralized by residential mortgage loans, mortgage loans
held-for-sale,
commercial mortgage loans and mortgage-backed securities with
estimated fair values of $7.1 billion and $7.8 billion
at June 30, 2011 and December 31, 2010, respectively.
Credit
and Committed Facilities
The Company maintains unsecured credit facilities and committed
facilities, which aggregated $4.0 billion and
$12.8 billion, respectively, at June 30, 2011. When
drawn upon, these facilities bear interest at varying rates in
accordance with the respective agreements.
The unsecured credit facilities are used for general corporate
purposes, to support the borrowers’ commercial paper
programs and for the issuance of letters of credit. At
June 30, 2011, the Company had outstanding
$1.5 billion in letters of credit and no drawdowns against
these facilities. Remaining unused commitments were
$2.5 billion at June 30, 2011.
The committed facilities are used for collateral for certain of
the Company’s affiliated reinsurance liabilities. At
June 30, 2011, the Company had outstanding
$6.1 billion in letters of credit and $2.8 billion in
aggregate drawdowns against these facilities. Remaining unused
commitments were $3.9 billion at June 30, 2011. In
February 2011, the Holding Company entered into a one-year
$350 million committed facility with a third-party bank to
provide letters of credit for the benefit of Missouri
Reinsurance (Barbados) Inc., a captive reinsurance subsidiary.
Under this facility, one letter of credit of $305 million
was outstanding at June 30, 2011. Both this letter of
credit and the facility were canceled on July 1, 2011.
|
Earnings Per Common Share
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share |
The following table presents the weighted average shares used in
calculating basic earnings per common share and those used in
calculating diluted earnings per common share for each income
category presented below:
|
Contingencies, Commitments and Guarantees
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Contingencies, Commitments and Guarantees [Abstract] | |||||
Contingencies, Commitments and Guarantees |
Contingencies
Litigation
The Company is a defendant in a large number of litigation
matters. In some of the matters, very large
and/or
indeterminate amounts, including punitive and treble damages,
are sought. Modern pleading practice in the
U.S. permits considerable variation in the assertion of
monetary damages or other relief. Jurisdictions may permit
claimants not to specify the monetary damages sought or may
permit claimants to state only that the amount sought is
sufficient to invoke the jurisdiction of the trial court. In
addition, jurisdictions may permit plaintiffs to allege monetary
damages in amounts well exceeding reasonably possible verdicts
in the jurisdiction for similar matters. This variability in
pleadings, together with the actual experience of the Company in
litigating or resolving through settlement numerous claims over
an extended period of time, demonstrates to management that the
monetary relief which may be specified in a lawsuit or claim
bears little relevance to its merits or disposition value.
Due to the vagaries of litigation, the outcome of a litigation
matter and the amount or range of potential loss at particular
points in time may normally be difficult to ascertain.
Uncertainties can include how fact finders will evaluate
documentary evidence and the credibility and effectiveness of
witness testimony, and how trial and appellate courts will apply
the law in the context of the pleadings or evidence presented,
whether by motion practice, or at trial or on appeal.
Disposition valuations are also subject to the uncertainty of
how opposing parties and their counsel will themselves view the
relevant evidence and applicable law.
The Company establishes liabilities for litigation and
regulatory loss contingencies when it is probable that a loss
has been incurred and the amount of the loss can be reasonably
estimated. Liabilities have been established for a number of the
matters noted below. It is possible that some of the matters
could require the Company to pay damages or make other
expenditures or establish accruals in amounts that could not be
estimated at June 30, 2011. While the potential future
charges could be material in the particular quarterly or annual
periods in which they are recorded, based on information
currently known by management, management does not believe any
such charges are likely to have a material adverse effect on the
Company’s financial position.
Matters
as to Which an Estimate Can Be Made
For some of the matters disclosed below, the Company is able to
estimate a reasonably possible range of loss. For such matters
where a loss is believed to be reasonably possible, but not
probable, no accrual has been made. As of June 30, 2011,
the Company estimates the aggregate range of reasonably possible
losses in excess of amounts accrued for these matters to be
approximately $0 to $355 million.
Matters
as to Which an Estimate Cannot Be Made
For other matters disclosed below, the Company is not currently
able to estimate the reasonably possible loss or range of loss.
The Company is often unable to estimate the possible loss or
range of loss until developments in such matters have provided
sufficient information to support an assessment of the range of
possible loss, such as quantification of a damage demand from
plaintiffs, discovery from other parties and investigation of
factual allegations, rulings by the court on motions or appeals,
analysis by experts, and the progress of settlement
negotiations. On a quarterly and annual basis, the Company
reviews relevant information with respect to litigation
contingencies and updates its accruals, disclosures and
estimates of reasonably possible losses or ranges of loss based
on such reviews.
Asbestos-Related
Claims
MLIC is and has been a defendant in a large number of
asbestos-related suits filed primarily in state courts. These
suits principally allege that the plaintiff or plaintiffs
suffered personal injury resulting from exposure to asbestos and
seek both actual and punitive damages. MLIC has never engaged in
the business of manufacturing, producing, distributing or
selling asbestos or asbestos-containing products nor has MLIC
issued liability or workers’ compensation insurance to
companies in the business of manufacturing, producing,
distributing or selling asbestos or asbestos-containing
products. The lawsuits principally have focused on allegations
with respect to certain research, publication and other
activities of one or more of MLIC’s employees during the
period from the 1920’s through approximately the
1950’s and allege that MLIC learned or should have learned
of certain health risks posed by asbestos and, among other
things, improperly publicized or failed to disclose those health
risks.
MLIC believes that it should not have legal liability in these
cases. The outcome of most asbestos litigation matters, however,
is uncertain and can be impacted by numerous variables,
including differences in legal rulings in various jurisdictions,
the nature of the alleged injury and factors unrelated to the
ultimate legal merit of the claims asserted against MLIC. MLIC
employs a number of resolution strategies to manage its asbestos
loss exposure, including seeking resolution of pending
litigation by judicial rulings and settling individual or groups
of claims or lawsuits under appropriate circumstances.
Claims asserted against MLIC have included negligence,
intentional tort and conspiracy concerning the health risks
associated with asbestos. MLIC’s defenses (beyond denial of
certain factual allegations) include that: (i) MLIC owed no
duty to the plaintiffs — it had no special
relationship with the plaintiffs and did not manufacture,
produce, distribute or sell the asbestos products that allegedly
injured plaintiffs; (ii) plaintiffs did not rely on any
actions of MLIC; (iii) MLIC’s conduct was not the
cause of the plaintiffs’ injuries;
(iv) plaintiffs’ exposure occurred after the dangers
of asbestos were known; and (v) the applicable time with
respect to filing suit has expired. During the course of the
litigation, certain trial courts have granted motions dismissing
claims against MLIC, while other trial courts have denied
MLIC’s motions to dismiss. There can be no assurance that
MLIC will receive favorable decisions on motions in the future.
While most cases brought to date have settled, MLIC intends to
continue to defend aggressively against claims based on asbestos
exposure, including defending claims at trials.
As reported in the 2010 Annual Report, MLIC received
approximately 5,670 asbestos-related claims in 2010. During the
six months ended June 30, 2011 and 2010, MLIC received
approximately 2,306 and 2,076 new asbestos-related claims,
respectively. See Note 16 of the Notes to the Consolidated
Financial Statements included in the 2010 Annual Report for
historical information concerning asbestos claims and
MLIC’s increase in its recorded liability at
December 31, 2002. The number of asbestos cases that may be
brought, the aggregate amount of any liability that MLIC may
incur, and the total amount paid in settlements in any given
year are uncertain and may vary significantly from year to year.
The ability of MLIC to estimate its ultimate asbestos exposure
is subject to considerable uncertainty, and the conditions
impacting its liability can be dynamic and subject to change.
The availability of reliable data is limited and it is difficult
to predict the numerous variables that can affect liability
estimates, including the number of future claims, the cost to
resolve claims, the disease mix and severity of disease in
pending and future claims, the impact of the number of new
claims filed in a particular jurisdiction and variations in the
law in the jurisdictions in which claims are filed, the possible
impact of tort reform efforts, the willingness of courts to
allow plaintiffs to pursue claims against MLIC when exposure to
asbestos took place after the dangers of asbestos exposure were
well known, and the impact of any possible future adverse
verdicts and their amounts.
The ability to make estimates regarding ultimate asbestos
exposure declines significantly as the estimates relate to years
further in the future. In the Company’s judgment, there is
a future point after which losses cease to be probable and
reasonably estimable. It is reasonably possible that the
Company’s total exposure to asbestos claims may be
materially greater than the asbestos liability currently accrued
and that future charges to income may be necessary. To the
extent the Company can estimate reasonably possible losses in
excess of amounts accrued, it has been included in the aggregate
estimate of reasonably possible loss provided above. While the
potential future charges could be material in the particular
quarterly or annual periods in which they are recorded, based on
information currently known by management, management does not
believe any such charges are likely to have a material adverse
effect on the Company’s financial position.
The Company believes adequate provision has been made in its
consolidated financial statements for all probable and
reasonably estimable losses for asbestos-related claims.
MLIC’s recorded asbestos liability is based on its
estimation of the following elements, as informed by the facts
presently known to it, its understanding of current law and its
past experiences: (i) the probable and reasonably estimable
liability for asbestos claims already asserted against MLIC,
including claims settled but not yet paid; (ii) the
probable and reasonably estimable liability for asbestos claims
not yet asserted against MLIC, but which MLIC believes are
reasonably probable of assertion; and (iii) the legal
defense costs associated with the foregoing claims. Significant
assumptions underlying MLIC’s
analysis of the adequacy of its recorded liability with respect
to asbestos litigation include: (i) the number of future
claims; (ii) the cost to resolve claims; and (iii) the
cost to defend claims.
MLIC reevaluates on a quarterly and annual basis its exposure
from asbestos litigation, including studying its claims
experience, reviewing external literature regarding asbestos
claims experience in the U.S., assessing relevant trends
impacting asbestos liability and considering numerous variables
that can affect its asbestos liability exposure on an overall or
per claim basis. These variables include bankruptcies of other
companies involved in asbestos litigation, legislative and
judicial developments, the number of pending claims involving
serious disease, the number of new claims filed against it and
other defendants and the jurisdictions in which claims are
pending. Based upon its regular reevaluation of its exposure
from asbestos litigation, MLIC has updated its liability
analysis for asbestos-related claims through June 30, 2011.
Regulatory
Matters
The Company receives and responds to subpoenas or other
inquiries from state regulators, including state insurance
commissioners; state attorneys general or other state
governmental authorities; federal regulators, including the SEC;
federal governmental authorities, including congressional
committees; and the Financial Industry Regulatory Authority
(“FINRA”) seeking a broad range of information. The
issues involved in information requests and regulatory matters
vary widely. The Company cooperates in these inquiries.
MetLife Bank Mortgage Servicing Regulatory and Law
Enforcement Authorities’ Inquiries. Since
2008, MetLife, through its affiliate, MetLife Bank, has
significantly increased its mortgage servicing activities by
acquiring servicing portfolios. Currently, MetLife Bank services
approximately 1% of the aggregate principal amount of the
mortgage loans serviced in the U.S. State and federal
regulatory and law enforcement authorities have initiated
various inquiries, investigations or examinations of alleged
irregularities in the foreclosure practices of the residential
mortgage servicing industry. Mortgage servicing practices have
also been the subject of Congressional attention. Authorities
have publicly stated that the scope of the investigations
extends beyond foreclosure documentation practices to include
mortgage loan modification and loss mitigation practices.
MetLife Bank’s mortgage servicing has been the subject of
recent inquiries and requests by such authorities. MetLife Bank
is cooperating with the authorities’ review of this
business. On April 13, 2011, the Office of the Comptroller
of the Currency (“OCC”) entered into consent decrees
with several banks, including MetLife Bank. The consent decrees
require an independent review of foreclosure practices and set
forth new residential mortgage servicing standards, including a
requirement for a designated point of contact for a borrower
during the loss mitigation process. In addition, the Board of
Governors of the Federal Reserve System (“Federal
Reserve”) entered into consent decrees with the affiliated
bank holding companies of these banks, including MetLife, Inc.,
to enhance the supervision of the mortgage servicing activities
of their banking subsidiaries. Neither of the consent decrees
includes monetary penalties. In a press release, the Federal
Reserve stated that it plans to announce monetary penalties with
respect to the consent orders. The OCC stated in its press
release that the actions do not preclude assessment of civil
money penalties, which the OCC is holding in abeyance. MetLife
Bank has also had an initial meeting with the Department of
Justice regarding mortgage servicing and foreclosure practices.
These consent decrees as well as the inquiries or investigations
referred to above could adversely affect MetLife’s
reputation or result in material fines, penalties, equitable
remedies or other enforcement actions, and result in significant
legal costs in responding to governmental investigations or
other litigation. In addition, the changes to the mortgage
servicing business required by the consent decrees and the
resolution of any other inquiries or investigations may affect
the profitability of such business. The Company is unable to
estimate the reasonably possible loss or range of loss arising
from the MetLife Bank regulatory matters. Management believes
that the Company’s consolidated financial statements as a
whole will not be materially affected by the MetLife Bank
regulatory matters.
United States of America v. EME Homer City Generation,
L.P., et al. (W.D. Pa., filed January 4,
2011). On January 4, 2011, the
U.S. commenced a civil action in United States District
Court for the Western District of Pennsylvania against EME Homer
City Generation L.P. (“EME Homer City”), Homer City
OL6 LLC, and other defendants regarding the operations of the
Homer City Generating Station, an electricity generating
facility. Homer City OL6 LLC, an entity owned by MLIC, is a
passive investor with a noncontrolling interest in the
electricity generating facility, which is solely operated by the
lessee, EME Homer City. The complaint seeks injunctive relief
and assessment of civil penalties for alleged violations of the
federal Clean Air Act and Pennsylvania’s State
Implementation Plan. The alleged violations were the subject of
Notices of Violations (“NOVs”) that the Environmental
Protection Agency (“EPA”) issued to EME Homer City,
Homer City OL6 LLC, and others in June 2008 and May 2010. On
January 7, 2011, the United States District Court for the
Western District of Pennsylvania granted the motion by the
Pennsylvania Department of Environmental Protection and the
State of New York to intervene in the lawsuit as additional
plaintiffs. On February 16, 2011, the State of New Jersey
filed an Intervenor’s Complaint in the lawsuit. On
January 7, 2011, two plaintiffs filed a putative class
action titled Scott Jackson and Maria Jackson v. EME Homer
City Generation L.P., et al. in the United States District Court
for the Western District of Pennsylvania on behalf of a putative
class of persons who have allegedly incurred damage to their
persons
and/or
property because of the violations alleged in the action brought
by the U.S. Homer City OL6 LLC is a defendant in this
action. EME Homer City has acknowledged its obligation to
indemnify Homer City OL6 LLC for any claims relating to the
NOVs. Due to the acknowledged indemnification obligation, this
matter is not included in the aggregate estimate of range of
reasonably possible loss.
In the Matter of Chemform, Inc. Site, Pompano Beach, Broward
County, Florida. In July 2010, the EPA advised
MLIC that it believed payments were due under two settlement
agreements, known as “Administrative Orders on
Consent,” that New England Mutual Life Insurance Company
(“New England Mutual”) signed in 1989 and 1992 with
respect to the cleanup of a Superfund site in Florida (the
“Chemform Site”). The EPA originally contacted MLIC
(as successor to New England Mutual) and a third party in 2001,
and advised that they owed additional
clean-up
costs for the Chemform Site. The matter was not resolved at that
time. The EPA is requesting payment of an amount under
$1 million from MLIC and a third party for past costs and
an additional amount for future environmental testing costs at
the Chemform Site. The Company estimates that the aggregate cost
to resolve this matter will not exceed $1 million.
Unclaimed Property Inquiries. More than 30
U.S. jurisdictions are auditing MetLife, Inc. and certain
of its affiliates for compliance with unclaimed property laws.
Additionally, MLIC and certain of its affiliates have received
subpoenas and other regulatory inquiries from certain regulators
and other officials relating to claims-payment practices and
compliance with unclaimed property laws. On July 5, 2011,
the New York Insurance Department issued a letter requiring life
insurers doing business in New York to use data available on the
U.S. Social Security Administration’s Death Master
File or a similar database to identify instances where death
benefits under life insurance policies, annuities, and retained
asset accounts are payable, to locate and pay beneficiaries
under such contracts, and to report the results of the use of
the data. It is possible that other jurisdictions may pursue
similar investigations or inquiries, or issue directives similar
to the New York Insurance Department’s letter. It is
possible that the audits and related activity may result in
additional payments to beneficiaries, additional escheatment of
funds deemed abandoned under state laws, administrative penalties, and changes to the
Company’s procedures for the identification and escheatment
of abandoned property. The Company is not currently able to
estimate the reasonably possible amount of any such additional
payments or the reasonably possible cost of any such changes in
procedures, but it is possible that such costs may be substantial.
Sales Practices Regulatory Matters. Regulatory
authorities in a small number of states and FINRA, and
occasionally the SEC, have had investigations or inquiries
relating to sales of individual life insurance policies or
annuities or other products by MLIC, MetLife Insurance Company
of Connecticut, New England Life Insurance Company and General
American Life Insurance Company, and four Company
broker-dealers, which are MetLife Securities, Inc.
(“MSI”), New England Securities Corporation, Walnut
Street Securities, Inc. and Tower Square Securities, Inc. These
investigations often focus on the conduct of particular
financial services representatives and
the sale of unregistered or unsuitable products or the misuse of
client assets. Over the past several years, these and a number
of investigations by other regulatory authorities were resolved
for monetary payments and certain other relief, including
restitution payments. The Company may continue to resolve
investigations in a similar manner. The Company believes
adequate provision has been made in its consolidated financial
statements for all probable and reasonably estimable losses for
these sales practices-related investigations or inquiries.
Total
Control Accounts Litigation
MLIC is a defendant in lawsuits related to its use of retained
asset accounts, known as Total Control Accounts
(“TCA”), as a settlement option for death benefits.
The lawsuits include claims of breach of contract, breach of a
common law fiduciary duty or a quasi-fiduciary duty such as a
confidential or special relationship, or breach of a fiduciary
duty under the Employee Retirement Income Security Act of 1974
(“ERISA”).
Clark, et al. v. Metropolitan Life Insurance Company (D.
Nev., filed March 28, 2008). This putative
class action lawsuit alleges breach of contract and breach of a
common law fiduciary
and/or
quasi-fiduciary duty arising from use of the TCA to pay life
insurance policy death benefits. As damages, plaintiffs seek
disgorgement of the difference between the interest paid to the
account holders and the investment earnings on the assets
backing the accounts. In March 2009, the court granted in part
and denied in part MLIC’s motion to dismiss,
dismissing the fiduciary duty and unjust enrichment claims but
allowing a breach of contract claim and a special or
confidential relationship claim to go forward. On
September 9, 2010, the court granted MLIC’s motion for
summary judgment. On September 20, 2010, plaintiff filed a
Notice of Appeal to the United States Court of Appeals for the
Ninth Circuit.
Faber, et al. v. Metropolitan Life Insurance Company
(S.D.N.Y., filed December 4, 2008). This
putative class action lawsuit alleges that MLIC’s use of
the TCA as the settlement option under group life insurance
policies violates MLIC’s fiduciary duties under ERISA. As
damages, plaintiffs seek disgorgement of the difference between
the interest paid to the account holders and the investment
earnings on the assets backing the accounts. On October 23,
2009, the court granted MLIC’s motion to dismiss with
prejudice. On November 24, 2009, plaintiffs filed a Notice
of Appeal to the United States Court of Appeals for the Second
Circuit.
Keife, et al. v. Metropolitan Life Insurance Company (D.
Nev., filed in state court on July 30, 2010 and removed to
federal court on September 7, 2010). This
putative class action lawsuit raises a breach of contract claim
arising from MLIC’s use of the TCA to pay life insurance
benefits under the Federal Employees’ Group Life Insurance
program. As damages, plaintiffs seek disgorgement of the
difference between the interest paid to the account holders and
the investment earnings on the assets backing the accounts. In
September 2010, plaintiffs filed a motion for class
certification of the breach of contract claim, which the court
has stayed. On April 28, 2011, the court denied MLIC’s
motion to dismiss.
The Company is unable to estimate the reasonably possible loss
or range of loss arising from the TCA matters.
Other
U.S. Litigation
Roberts, et al. v. Tishman Speyer Properties, et al. (Sup.
Ct., N.Y. County, filed January 22,
2007). This lawsuit was filed by a putative class
of market rate tenants at Stuyvesant Town and Peter Cooper
Village against parties including Metropolitan Tower Life
Insurance Company (“MTL”) and Metropolitan Insurance
and Annuity Company. Metropolitan Insurance and Annuity Company
has merged into MTL and no longer exists as a separate entity.
These tenants claim that MTL, as former owner, and the current
owner improperly deregulated apartments while receiving J-51 tax
abatements. The lawsuit seeks declaratory relief and damages for
rent overcharges. Although the tenants allege over
$200 million in damages in the complaint, MTL strongly
disputes the tenants’ damages amounts. In October 2009, the
New York State Court of Appeals issued an opinion denying
MTL’s motion to dismiss the complaint. The lawsuit has
returned to the trial court where MTL continues to vigorously
defend against the claims. The Company believes adequate
provision has been made in its consolidated financial
statements for all probable and reasonably estimable losses for
this lawsuit. It is reasonably possible that the Company’s
total exposure may be greater than the liability currently
accrued and that future charges to income may be necessary.
Management believes that the Company’s consolidated
financial statements as a whole will not be materially affected
by any such future charges.
Merrill Haviland, et al. v. Metropolitan Life Insurance
Company (Mich. Cir. Ct., Wayne County, filed June 22,
2011). This lawsuit was filed by 45 retired
General Motors (“GM”) employees against MLIC and
includes claims for conversion, unjust enrichment, breach of
contract, fraud, intentional infliction of emotional distress,
fraudulent insurance acts, and unfair trade practices, based
upon GM’s 2009 reduction of the employees’ life
insurance coverage under GM’s ERISA-governed plan. The
complaint includes a count seeking class action status. MLIC is
the insurer of GM’s group life insurance plan and
administers claims under the plan. According to the complaint,
MLIC had previously provided plaintiffs with a “written
guarantee” that their life insurance benefits under the GM
plan would not be reduced for the rest of their lives. The
Company has removed the case to federal court based upon
complete ERISA preemption of the state law claims and intends to
vigorously defend this action.
Sales Practices Claims. Over the past several
years, the Company has faced numerous claims, including class
action lawsuits, alleging improper marketing or sales of
individual life insurance policies, annuities, mutual funds or
other products. Some of the current cases seek substantial
damages, including punitive and treble damages and
attorneys’ fees. The Company continues to vigorously defend
against the claims in these matters. The Company believes
adequate provision has been made in its consolidated financial
statements for all probable and reasonably estimable losses for
sales practices matters.
International
Litigation
Sun Life Assurance Company of Canada v. Metropolitan
Life Ins. Co. (Super. Ct., Ontario, October
2006). In 2006, Sun Life Assurance Company of
Canada (“Sun Life”), as successor to the purchaser of
MLIC’s Canadian operations, filed this lawsuit in Toronto,
seeking a declaration that MLIC remains liable for “market
conduct claims” related to certain individual life
insurance policies sold by MLIC and that have been transferred
to Sun Life. Sun Life had asked that the court require MLIC to
indemnify Sun Life for these claims pursuant to indemnity
provisions in the sale agreement for the sale of MLIC’s
Canadian operations entered into in June of 1998. In January
2010, the court found that Sun Life had given timely notice of
its claim for indemnification but, because it found that Sun
Life had not yet incurred an indemnifiable loss, granted
MLIC’s motion for summary judgment. Both parties appealed.
In September 2010, Sun Life notified MLIC that a purported class
action lawsuit was filed against Sun Life in Toronto,
Kang v. Sun Life Assurance Co. (Super. Ct., Ontario,
September 2010), alleging sales practices claims regarding the
same individual policies sold by MLIC and transferred to Sun
Life. An amended class action complaint was served on Sun Life,
again without naming MLIC as a party. Sun Life contends that
MLIC is obligated to indemnify Sun Life for some or all of the
claims in this lawsuit. The Company is unable to estimate the
reasonably possible loss or range of loss arising from this
litigation.
Italy Fund Redemption Suspension Complaints and
Litigation. As a result of suspension of
withdrawals and diminution in value in certain funds offered
within certain unit-linked policies sold by the Italian branch
of Alico Life International, Ltd. (“ALIL”), a number
of policyholders invested in those funds have either commenced
or threatened litigation against ALIL, alleging
misrepresentation, inadequate disclosures and other related
claims. These policyholders contacted ALIL beginning in July
2009 alleging that the funds operated at variance to the
published prospectus and that prospectus risk disclosures were
allegedly wrong, unclear, and misleading. The limited number of
lawsuits that have been filed to date have either been resolved
or are proceeding through litigation. In March 2011, ALIL began
implementing a plan to resolve policyholder claims. Under the
plan, ALIL will provide liquidity to the suspended funds so that
policyholders may withdraw investments in these funds, and ALIL
will offer policyholders amounts in addition to the liquidation
value of the suspended funds based on the performance of other
relevant financial products. The settlement program achieved a
96% acceptance rate. Those policyholders who did not accept the
settlement may still pursue other remedies or commence
individual litigation.
The formal investigation opened by the Milan public prosecutor,
into the actions of ALIL employees as well as of employees of
ALIL’s major distributor, has been dismissed by the court.
Under the terms of the stock purchase agreement dated as of
March 7, 2010, as amended, by and among MetLife, Inc., AIG
and AM Holdings, AIG has agreed to indemnify MetLife, Inc. and
its affiliates for third party claims and regulatory fines
associated with ALIL’s suspended funds. Due to the acknowledged indemnification obligation, this matter is not included in the aggregate estimate of range of reasonably possible loss.
Summary
Putative or certified class action litigation and other
litigation and claims and assessments against the Company, in
addition to those discussed previously and those otherwise
provided for in the Company’s consolidated financial
statements, have arisen in the course of the Company’s
business, including, but not limited to, in connection with its
activities as an insurer, mortgage lending bank, employer,
investor, investment advisor and taxpayer. Further, state
insurance regulatory authorities and other federal and state
authorities regularly make inquiries and conduct investigations
concerning the Company’s compliance with applicable
insurance and other laws and regulations.
It is not possible to predict the ultimate outcome of all
pending investigations and legal proceedings. In some of the
matters referred to previously, very large
and/or
indeterminate amounts, including punitive and treble damages,
are sought. Although in light of these considerations it is
possible that an adverse outcome in certain cases could have a
material adverse effect upon the Company’s financial
position, based on information currently known by the
Company’s management, in its opinion, the outcomes of such
pending investigations and legal proceedings are not likely to
have such an effect. However, given the large
and/or
indeterminate amounts sought in certain of these matters and the
inherent unpredictability of litigation, it is possible that an
adverse outcome in certain matters could, from time to time,
have a material adverse effect on the Company’s
consolidated net income or cash flows in particular quarterly or
annual periods.
Commitments
Commitments
to Fund Partnership Investments
The Company makes commitments to fund partnership investments in
the normal course of business. The amounts of these unfunded
commitments were $4.0 billion and $3.8 billion at
June 30, 2011 and December 31, 2010, respectively. The
Company anticipates that these amounts will be invested in
partnerships over the next five years.
Mortgage
Loan Commitments
The Company has issued interest rate lock commitments on certain
residential mortgage loan applications totaling
$2.9 billion and $2.5 billion at June 30, 2011
and December 31, 2010, respectively. The Company intends to
sell the majority of these originated residential mortgage
loans. Interest rate lock commitments to fund mortgage loans
that will be
held-for-sale
are considered derivatives and their estimated fair value and
notional amounts are included within interest rate forwards in
Note 4.
The Company also commits to lend funds under certain other
mortgage loan commitments that will be
held-for-investment.
The amounts of these mortgage loan commitments were
$4.4 billion and $3.8 billion at June 30, 2011
and December 31, 2010, respectively.
Commitments
to Fund Bank Credit Facilities, Bridge Loans and Private
Corporate Bond Investments
The Company commits to lend funds under bank credit facilities,
bridge loans and private corporate bond investments. The amounts
of these unfunded commitments were $2.3 billion and
$2.4 billion at June 30, 2011 and December 31,
2010, respectively.
Guarantees
During the six months ended June 30, 2011, the Company did
not record any additional liabilities for indemnities,
guarantees and commitments. The Company’s recorded
liabilities were $5 million at both June 30, 2011 and
December 31, 2010 for indemnities, guarantees and
commitments.
|
Equity (Details Textuals 2) (Performance Shares [Member])
|
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Performance Shares [Member]
|
||
Equity - Stock-Based Compensation (Textuals) [Abstract] | ||
Vesting period | 3 years | |
Performance Shares, performance factor lower range | 0.0 | |
Performance Shares, performance factor upper range | 2.0 | |
Performance Shares Factor Percentage | 90.00% | |
Outstanding Performance Shares to which the final performance factor will be applied | 824,825 | |
Common stock shares issued for performance share awards | 742,343 |
Fair Value (Details 3) (Residential mortgage loans held for sale [Member], USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Residential mortgage loans held for sale [Member]
|
||||
Changes in estimated fair value residential mortgage loans held-for-sale | ||||
Instrument-specific credit risk based on changes in credit spreads for non-agency loans and adjustments in individual loan quality | $ (2) | $ (1) | $ (3) | $ 0 |
Other changes in estimated fair value | 115 | 134 | 179 | 261 |
Total gains (losses) recognized in other revenues | $ 113 | $ 133 | $ 176 | $ 261 |
Derivative Financial Instruments (Details 6) (Cash Flow Hedges, USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Cash Flow Hedges
|
||||
Other Comprehensive Income Loss Before Income Tax Related To Cash Flow Hedges | ||||
Other comprehensive income (loss), balance at beginning of period | $ (237) | $ 44 | $ (59) | $ (76) |
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges | 82 | 566 | (103) | 617 |
Amounts reclassified to net derivatives gains (losses) | (12) | (17) | (8) | 51 |
Amounts reclassified to net investment income | 0 | 1 | 1 | 2 |
Amounts reclassified to other expenses | 2 | (1) | 4 | (1) |
Other comprehensive income (loss), balance at end of period | $ (165) | $ 593 | $ (165) | $ 593 |
Derivative Financial Instruments (Details 3) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Components of Net Derivatives Gains (Losses) | ||||
Derivatives and hedging gains (losses) | $ 746 | $ 3,680 | $ (512) | $ 3,199 |
Embedded derivatives | (394) | (2,199) | 549 | (1,677) |
Net derivative gains (losses) | $ 352 | $ 1,481 | $ 37 | $ 1,522 |
Discontinued Operations (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations in Consolidated Statements of Operations and Consolidated Balance Sheets |
|
Closed Block
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed Block |
On April 7, 2000 (the “Demutualization Date”),
Metropolitan Life Insurance Company (“MLIC”) converted
from a mutual life insurance company to a stock life insurance
company and became a wholly-owned subsidiary of MetLife, Inc.
The conversion was pursuant to an order by the New York
Superintendent of Insurance approving MLIC’s plan of
reorganization, as amended (the “Plan”). On the
Demutualization Date, MLIC established a closed block for the
benefit of holders of certain individual life insurance policies
of MLIC.
Experience within the closed block, in particular mortality and
investment yields, as well as realized and unrealized gains and
losses, directly impact the policyholder dividend obligation.
Amortization of the closed block DAC, which resides outside of
the closed block, is based upon cumulative actual and expected
earnings within the closed block. Accordingly, the
Company’s net income continues to be sensitive to the
actual performance of the closed block.
Information regarding the closed block liabilities and assets
designated to the closed block was as follows:
Information regarding the closed block policyholder dividend
obligation was as follows:
Information regarding the closed block revenues and expenses was
as follows:
The change in the maximum future earnings of the closed block
was as follows:
MLIC charges the closed block with federal income taxes, state
and local premium taxes and other additive state or local taxes,
as well as investment management expenses relating to the closed
block as provided in the Plan. MLIC also charges the closed
block for expenses of maintaining the policies included in the
closed block.
|
Consolidated Statements of Equity (Unaudited) (Parenthetical) (USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Consolidated Statements of Stockholders Equity [Abstract] | |
Amount of net income (loss) attributable to noncontrolling interests excluded from noncontrolling interests equity | $ 4 |
@E4)5CG>E"+/56^.FNYU*82S'^Q_$V$J,
MI4;T3E()JV,N8/#32I`0B+"D9!Q.[L65,<665=&I;L(Z@(U\J.ERC0
MU*@(QPH-[I5_[U: WW76DKC4=X'OJ[TW>#_9OE,?[+[:RB$7&%15X-Y9!VC="/35QRVEDW*X
MW5K6:@;;6AD+2@*WTJ;"099NO8P%)0W=*IL+A]BY=3(75#1S*VPN'*9S8V.C
M!L!54N5N;>2H!]U#+-TZ`5=%.[?"L#W(4*C5`4U)4P$/:&CEJFHL5-C./<18
MJ)5G045K`?T*:.6J:"S4PLI%Z"G,QCIID"I+8[W.C 7G.@_3)]W*&`A.PQE*_RPAR&POKH&L"N#8AJR
M@72;V'_B#`RZJ4>X5*V*BD*V::[B%/-RE4^L4AA>NI-%YZL*H;*U=+[B\;_0
M-`,\_F=QA/IBT]588Y="NO]$K.# UG$C^CM>[-*;/ON.215)$(\,:(`<<
M.K/$V9B1U;M0YE`HA+%0.$H?#/QIT"VZ#)/T
MO^M3DH[2*]N!3=4CU<$F7S,L>9FUT7(1G"J"LT?!V4-\JH5/RK2>H@C==6.O
M!#YKMK8Z8&3$1X6;(&R-7DHV8HPM!&\QI[)M@'L)"/5L
M9RO0!ORK%6;OO`D@U_A%;9YON@=K52@G32'$YJ)N00P8!QD#0_Y5';,_^H_]
M)X?Q>-ZGM.E_ME^(8\$*$*]2XS4<],=CR#_Z:,R]2L&UM6@6""A%NT#:&ZZ`
M6S&S*FP%M$6-RLZ@+M.G][9)%SO034BM&AHO!A"W[BC-P\F6CV[EG*0/1GP4
MV:@F@K?V#/2_.2X\99J0/TTA_,FPZ'B4[?V>X^C6F"AD)\A[-M_]D/:G[ABP
M@%O*:H=.X`9(GK!D@7,QXR*^"6Q3$[O;&@CH-RC$/D"_P3:8W=9H17V[)3P.
MLRA1W^X2/[[!1/BJ.V-*D?[-KQG30_TGN_](5VY2!>VZ?E3'3':XWEHO=!GP
M<\#CXEU1SKM[]"*JX@V*:<=XT3WCA16/T>D!T)X6?U)-YP_*2?)Y3R@QN.$
M$.^S8_LS;A8.3)N:C02NKGM3V[<\(6(A)M426"[G(I621`III.;>@?BH##YR
MT1_?[2#0CI.C#R3L,QKV8W+5@OTA)?@7T5CQK]14`,A@>1BQ92TW$GS;S)HURB:,+M+NJ77Y3.GR,PB.6H@G2OWA
MS?=K[;[W^4;[Z_;ZZ4M:=!)\>_EPT_M'6GS2FL"GQ""7-Y]OOZ]YD2(!.=%?
M647EQ)]D&_6TU3Z"E-Y2G&ZHL&\$/[\U.:_C%G_%CY.1`SKP.].]@"HZ\`]I
M//C:%91;=%H0W1E;.WQB>TPXW@U,:FU"?#ESB`3>D=@498Z=F7`W0VU#?S!)
M&V$0W`,'AY(/A5IZF43,'1#8UMTVL*V]=03%;-)0\;4_
M"I6``RUYT>U2+1F?-I/KN6)3#YNXAMDUK,XJ$R"J52.U%Z$A4,B4=$QO"J69
M><"4*ZA*;9WG.7&KMM;SG/Q=K@[HI'7(:L_&:O%!5+&),RO<=(HI<#R./%Q,
MX#&D[XF*V;*;9Z@2%JH1%D0N>@8B)S>O9@9Z*`P@7*V@PSIDB^G@\8HC##_/
M%Z/YC#!W`:1CJ1N%$[(\_E48(^>F!<0'54_)8I%WVZ*$Y7.,-9M#:
ZY%)\XU1$RZ+_@A-&J5%=1O0!6UE1MI=5=U
MGIR;Z"X5'&!XF%K`C\"0B?E+^2-N7&Q[8M$X+H_FA5\#L^:4
[U,7EVB/Y3NR14V2U%HR[J,O@AA)_>]S[?:'_=7C]]28M$A6\O
M'VYZ_UC\