485BPOS 1 d504791d485bpos.txt THE EQUITY OPTIONS POST-EFFECTIVE AMENDMENT NO. 22 AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 2018 REGISTRATION NOS. 333-40161 811-06025 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-6 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POST-EFFECTIVE AMENDMENT NO. 22 [X] AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 87 [X]
METROPOLITAN LIFE SEPARATE ACCOUNT UL (Exact Name of Registrant) METROPOLITAN LIFE INSURANCE COMPANY (Name of Depositor) 200 Park Avenue New York, NY 10166 (Address of depositor's principal executive offices) DEPOSITOR'S TELEPHONE NUMBER INCLUDING AREA CODE (212) 578-9500 STEPHEN W. GAUSTER, ESQ. Senior Vice President and Interim General Counsel Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 (Name and address of agent for service) COPY TO: W. THOMAS CONNER Vedder Price P.C. 1633 Broadway, 31st Floor New York, New York 10019 Approximate Date of Proposed Public Offering: on April 30, 2018 or as soon thereafter as practicable It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) [X] on April 30, 2018 pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities Being Registered: Interests in Metropolitan Life Separate Account UL, which funds certain Variable Additional Insurance Options. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTE: This registration statement incorporates by reference the prospectuses and supplements dated May 1, 2017, May 1, 2016, May 1, 2015, April 28, 2014, April 29, 2013, April 30, 2012, May 1, 2011, May 1, 2010, May 1, 2009, and April 28, 2008 for the policies, each as filed in Post-Effective Amendment No. 20 filed on April 14, 2016, Post-Effective Amendment No. 19 filed on April 15, 2015, Post-Effective Amendment No. 18 filed on April 11, 2014, Post-Effective Amendment No. 17 filed on April 11, 2013, Post-Effective Amendment No. 16 filed on April 12, 2012, Post-Effective Amendment No. 15 filed on April 14, 2011, Post-Effective Amendment No. 14 filed on April 16, 2010, Post- Effective Amendment No. 13 filed on April 16, 2009, Post-Effective Amendment No. 12 filed on April 18, 2008, respectively, to the Registration Statement on Form N-6 (File No. 333-40161). METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") THE EQUITY OPTIONS EQUITY ADDITIONS (ALSO KNOWN AS VARIABLE ADDITIONAL INSURANCE DIVIDEND OPTION) EQUITY ENRICHER (ALSO KNOWN AS VARIABLE ADDITIONAL BENEFITS RIDER) SUPPLEMENT DATED APRIL 30, 2018 TO Prospectus Dated April 28, 2008 This supplement updates certain information contained in your last prospectus and subsequent supplements. You should read and retain this supplement with your Policy. We will send you an additional copy of your most recent prospectus (and any previous supplements thereto), without charge, on written request sent to MetLife, P.O. Box 543, Warwick, RI 02887-0543. Equity Options policies and riders ARE NO LONGER AVAILABLE FOR SALE. You allocate net premiums to and may transfer cash value among the available Divisions (Divisions may be referred to as "Investment Divisions" in your Policy and marketing materials) of Metropolitan Life Separate Account UL. Each available Division, in turn, invests in the shares of one of the following Portfolios: BRIGHTHOUSE FUNDS TRUST I (CLASS A) Morgan Stanley Mid Cap Growth Portfolio* BRIGHTHOUSE FUNDS TRUST II (CLASS A) MetLife Stock Index Portfolio -------- * This Portfolio is not available for Equity Additions. The prospectuses for the Portfolios describe in greater detail an investment in the Portfolios listed above. YOU CAN OBTAIN PROSPECTUSES FOR THE PORTFOLIOS BY CALLING 1-800-638-5000. 1 SENDING COMMUNICATIONS AND PAYMENTS TO US You can communicate all of your requests, instructions and notifications to us by contacting us in writing at our Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. These include: changing your beneficiary; taking a Policy loan; taking a partial withdrawal; surrendering your Policy; making transfer requests or changing your premium allocations. As of the date of this prospectus, requests for partial withdrawals and Policy loans must be in writing. However, you should contact us at 1-800-MET-5000 for our current procedures. Below is a list of our Designated Offices for various functions. We may name additional or alternate Designated Offices. If we do, we will notify you in writing. You may also contact us at 1-800-MET-5000 for information on where to direct communication regarding any function not listed below or for any other inquiry.
FUNCTION DESIGNATED OFFICE ADDRESS Premium Payments MetLife, P.O. Box 371487, Pittsburgh, PA 15250-7487 Payment Inquiries MetLife, P.O. Box 354, Warwick, RI 02887-0354 Surrenders, Withdrawals, Loans, Investment MetLife, P.O. Box 543, Warwick, RI 02887-0543 Division Transfers, Premium Reallocation Death Claims MetLife, P.O. Box 353, Warwick, RI 02887-0353 Beneficiary & Ownership MetLife, P.O. Box 313, Warwick, RI 02887-0313 Address Changes MetLife, 500 Schoolhouse Road, Johnstown, PA 15904 Attn: Data Integrity
If you send your premium payments or transaction requests to an address other than the one we have designated for receipt of such premium payments or requests, we may return the premium payment to you, or there may be a delay in applying the premium payment or transaction to your Policy. Our variable life insurance business is largely conducted through digital communications and data storage networks and systems operated by us and our service providers or other business partners (e.g., the Portfolios and the firms involved in the distribution and sale of our variable life insurance policies). For example, many routine operations, such as processing Owners' requests and elections and day-to-day record keeping, are all executed through computer networks and systems. We have established administrative and technical controls and a business continuity plan to protect our operations against cybersecurity breaches. Despite these protocols, a cybersecurity breach could have a material, negative impact on MetLife and the Separate Account, as well as individual Owners and their Policies. Our operations also could be negatively affected by a cybersecurity breach at a third party, such as a governmental or regulatory authority or another participant in the financial markets. Cybersecurity breaches can be intentional or unintentional events, and can occur through unauthorized access to computer systems, networks or devices; infection from computer viruses or other malicious software code; or attacks that shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality. Cybersecurity breaches can interfere with our processing of Policy transactions, including the processing of transfer orders from our website or with the Funds; impact our ability to calculate unit values; cause the release and possible destruction of confidential Owner or business information; or impede order processing or cause other operational issues. Although we continually make efforts to identify and reduce our exposure to cybersecurity risk, there is no guarantee that we will be able to successfully manage this risk at all times. 2 FEE TABLES The following tables describe the fees and expenses that the Portfolios will pay and that therefore a Policy Owner will indirectly pay periodically during the time that he or she owns an Equity Option. The first table shows the lowest and highest fees and expenses charged by the Portfolio(s) offered with Equity Additions and Equity Enricher for the fiscal year ended December 31, 2017. The next table describes the annual operating expenses for each Portfolio for the year ended December 31, 2017, as a percentage of the Portfolio's average daily net assets for the year, before and after any fee waivers and expense reimbursements. More detail concerning each Portfolio's fees and expenses is contained in the table that follows this table and in the prospectuses for the Portfolios. LOWEST AND HIGHEST TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES
LOWEST HIGHEST EQUITY ADDITIONS Total Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets, including management fees and other expenses) .27% .27% EQUITY ENRICHER Total Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets, including management fees and other expenses) .27% .70%
TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES
TOTAL NET TOTAL ANNUAL FEE WAIVER ANNUAL MANAGEMENT OTHER OPERATING AND/OR EXPENSE OPERATING PORTFOLIO FEE EXPENSES EXPENSES REIMBURSEMENT EXPENSES BRIGHTHOUSE FUNDS TRUST I -- CLASS A Morgan Stanley Mid Cap Growth Portfolio1 0.65% 0.05% 0.70% 0.01% 0.69% BRIGHTHOUSE FUNDS TRUST II -- CLASS A MetLife Stock Index Portfolio 0.25% 0.02% 0.27% 0.01% 0.26%
1 This Portfolio is not available for Equity Additions. The information shown in the table above was provided by the Portfolios. Certain Portfolios and their investment adviser have entered into expense reimbursement and/or fee waiver arrangements that will continue from May 1, 2018 through at least April 30, 2019. These arrangements can be terminated with respect to a Portfolio only with the approval of the board of directors or trustees of that Portfolio. Please see the Portfolios' prospectuses for additional information regarding these arrangements. 3 THE PORTFOLIOS MANAGEMENT OF THE PORTFOLIOS Brighthouse Investment Advisers, LLC is the investment adviser who is responsible for overall management of Brighthouse Funds Trust I and Brighthouse Funds Trust II. Brighthouse Investment Advisers, LLC has contracted with sub-advisers to make day-to-day investment decisions for the Portfolios. The sub-advisers and the investment objective of each Portfolio are as follows:
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER BRIGHTHOUSE FUNDS TRUST I -- CLASS A Morgan Stanley Mid Cap Growth Portfolio Seeks capital appreciation. Brighthouse Investment Advisers, LLC Subadviser: Morgan Stanley Investment Management Inc. BRIGHTHOUSE FUNDS TRUST II -- CLASS A MetLife Stock Index Portfolio Seeks to track the performance of Brighthouse Investment the Standard & Poor's 500(R) Advisers, LLC Composite Stock Price Index. Subadviser: MetLife Investment Advisors, LLC
On August 4, 2017, MetLife, Inc. completed the separation of Brighthouse Financial, Inc. and its subsidiaries ("Brighthouse") where MetLife, Inc. retained an ownership interest of 19.2% non-voting common stock outstanding of Brighthouse Financial, Inc. Brighthouse subsidiaries include Brighthouse Investment Advisers, LLC, which serves as the investment adviser for the Brighthouse Funds Trust I and Brighthouse Funds Trust II. We and Our affiliated companies have entered into agreements with Brighthouse Investment Advisers, LLC, Brighthouse Funds Trust I and Brighthouse Funds Trust II whereby We receive payments for certain administrative, marketing and support services described in the previous paragraphs. Currently, the Portfolios in Brighthouse Funds Trust I and Brighthouse Funds Trust II are only available in variable annuity contracts and variable life insurance policies issued by Metropolitan Life Insurance Company and its affiliates, as well as Brighthouse Life Insurance Company and its affiliates. As of December 31, 2017, approximately 85% of Portfolio assets held in Separate Accounts of Metropolitan Life Insurance Company and its affiliates were allocated to Portfolios in Brighthouse Funds Trust I and Brighthouse Funds Trust II. Should We or Brighthouse Investment Advisers, LLC decide to terminate the agreements, we would be required to find alternative Portfolios which could have higher or lower costs to the Contract Owner. In addition, the amount of payments We receive could cease or be substantially reduced which may have a material impact on Our financial statements. FEDERAL TAX MATTERS The following is a brief summary of some tax rules that may apply to your Policy. It does not purport to be complete or cover every situation. The summary does not address state, local or foreign tax issues related to your Policy. Because individual circumstances vary, you should consult with your own tax adviser to find out how taxes can affect your benefits and rights under your Policy, especially before you make unscheduled premium payments, change your specified face amount, change your death benefit option, change coverage provided by riders, take a loan or withdrawal, or assign or surrender the Policy. Under current federal income tax law, the taxable portion of distributions from variable life contracts is taxed at ordinary income tax rates and does not qualify for the reduced tax rate applicable to long-term capital gains and dividends. INSURANCE PROCEEDS o Insurance proceeds are generally excludable from your beneficiary's gross income to the extent provided in Section 101 of the Internal Revenue Code ("Code"). o In the case of employer-owned life insurance as defined in Section 101(j) of the Code, the amount of the death benefit excludable from gross income is limited to premiums paid unless the Policy falls 4 within certain specified exceptions and a notice and consent requirement is satisfied before the Policy is issued. Certain specified exceptions are based on the status of an employee as highly compensated, a director, or recently employed. There are also exceptions for Policy proceeds paid to an employee's heirs. These exceptions only apply if proper notice is given to the insured employee and consent is received from the insured employee before the issuance of the Policy. These rules apply to Policies issued August 18, 2006 and later and also apply to Policies issued before August 18, 2006 after a material increase in the death benefit or other material change. An IRS reporting requirement applies to employer-owned life insurance subject to these rules. Because these rules are complex and will affect the tax treatment of death benefits, it is advisable to consult tax counsel. The death benefit will also be taxable in the case of a transfer-for-value unless certain exceptions apply. o The death proceeds may be subject to federal estate tax: (i) if paid to the insured's estate or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. o If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. o Whether or not any federal estate tax is due is based on a number of factors including the estate size. Please consult your tax adviser for the applicable estate tax rates. o The insurance proceeds payable upon death of the insured will never be less than the minimum amount required for the Policy to be treated as life insurance under Section 7702 of the Code, as in effect on the date the Policy was issued. The rules with respect to Policies issued on a substandard risk basis are not entirely clear. CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) o You are generally not taxed on your cash value (except with respect to the DWI option) until you withdraw it or surrender your Policy or receive a distribution (such as when your Policy terminates on the Final Date). In these cases, you are generally permitted to take withdrawals and receive other distributions up to the amount of premiums paid without any tax consequences. However, withdrawals and other distributions will be treated as gain subject to ordinary income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules apply in the first 15 Policy years. Distributions during the first 15 Policy years accompanied by a reduction in Policy benefits, including distributions which must be made in order to enable the Policy to continue to qualify as a life insurance contract for federal income tax purposes, are subject to different tax rules and may be treated in whole or in part as taxable income. o There may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if you are subject to that tax. o For income tax purposes, if you surrender an Equity Option for its cash value but the base Policy remains in force, you will be considered to have made a partial withdrawal. o Amounts applied to the DWI option are treated as distributions from the Policy and interest credited on amounts applied to the DWI option is currently taxable as ordinary income. SPLIT-DOLLAR INSURANCE PLANS The IRS has issued guidance on split dollar insurance plans. A tax adviser should be consulted with respect to this guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. If your split dollar plan provides deferred compensation, specific tax rules governing deferred compensation arrangements may apply. Failure to adhere to these rules will result in adverse tax consequences. The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on U.S. exchanges, from extending, directly or indirectly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be 5 interpreted to apply to certain split-dollar life insurance arrangements for directors and executive officers of such companies, since at least some such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. Any affected business contemplating the payment of a premium on an existing Policy or the purchase of a new Policy in connection with a split-dollar life insurance arrangement should consult legal counsel. LOANS o Loan amounts you receive will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. Loans from or secured by a Policy that is not classified as a modified endowment contract should not generally be treated as a taxable distribution so long as the Policy stays in force. o Interest on loans is generally not deductible. For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. o If your Policy terminates (upon surrender, cancellation lapse or, in most cases, exchange) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. In the case of an outstanding loan at the time of an exchange, the cancelled loan will generally be taxed to the extent of any policy gain. Since amounts borrowed reduce the cash value that will be distributed to you if the Policy is surrendered, cancelled or lapses, any cash value distributed to you in these circumstances may be insufficient to pay the income tax on any gain. o The tax consequences of loans outstanding after the 15th Policy year are uncertain. o A loan that is taken from, or secured by, a Policy may have tax consequences. A loan from or secured by a Policy that is not classified as a modified endowment contract should generally not be treated as a taxable distribution so long as the Policy stays in force. Nevertheless, the tax consequences associated with loans outstanding after the tenth Policy year are uncertain. A tax adviser should be consulted when considering a loan. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance policies where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the Policy, exceeds tax law limits referred to as the "7-pay test." Material changes in the Policy include changes in the level of benefits, receipt of an unnecessary premium and certain other changes to your Policy after the issue date. Unnecessary premiums are premiums paid into the Policy which are not needed in order to provide a death benefit equal to the lowest death benefit that was payable in the most recent 7-pay testing period. Reductions in benefits during a 7-pay testing period also may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts that may provide relief in limited circumstances. Due to the flexibility of the Policies as to premiums and benefits, the individual circumstances of each Policy will determine whether it is classified as a modified endowment contract. If your Policy is considered a modified endowment contract the following applies: o The death benefit will still generally be income tax free to your beneficiary, to the extent discussed above. o Amounts withdrawn or distributed before the insured's death, including (without limitation) loans taken from or secured by the Policy, assignments and pledges, are (to the extent of any gain in your 6 Policy) treated as income first and subject to income tax. All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. o An additional 10% income tax generally applies to the taxable portion of the amounts you receive before age 59 1/2 except if you are disabled or if the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your beneficiary. The foregoing exceptions to the 10% additional tax generally do not apply to a Policy Owner that is a non-natural person, such as a corporation. o If a Policy becomes a modified endowment contract, distributions that occur during the Policy year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract will be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Policy. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy Owners of gains under their Policy. If Portfolio shares are sold directly to tax-qualified retirement plans that later lose their tax-qualified status, or to non-qualified plans, there could be adverse consequences under the diversification rules. INVESTOR CONTROL In some circumstances, Owners of variable policies who retain excessive control over the investment of the underlying Separate Account assets may be treated as the Owners of those assets and may be subject to tax on income produced by those assets.The Equity Options are supported by assets held in our Separate Account. Although published guidance in this area does not address certain aspects of the Policies, we believe that the Owner of a Policy should not be treated as an owner of the assets in our Separate Account. We reserve the right to modify the Policies to bring them into conformity with applicable standards should such modification be necessary to prevent Owners of the Policies from being treated as the owners of the underlying Separate Account assets. ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES The transfer of the Policy or the designation of a Beneficiary may have Federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. When the insured dies, the death proceeds will generally be includable in the Policy Owner's estate for purposes of the Federal estate tax if the Policy Owner was the insured, if the insured possessed incidents of ownership in the Policy at the time of death, or the insured made a gift transfer of the policy within three years of death. If the Policy Owner was not the insured, the fair market value of the Policy would be included in the Policy Owner's estate upon the Policy Owner's death. Moreover, under certain circumstances, the Code may impose a "generation-skipping transfer tax" when all or part of a life insurance policy is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Policy Owner. Regulations issued under the Code may require us to deduct the tax from your Policy, or from any applicable payment, and pay it directly to the IRS. Qualified tax advisers should be consulted concerning the estate and gift tax consequences of Policy ownership and distributions under Federal, state and local law. The individual situation of each Policy Owner or beneficiary will determine the extent, if any, to which Federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of Federal, state and local estate, inheritance, generation-skipping transfer and other taxes. 7 In general, current rules for a $10 million federal estate, gift and generation-skipping transfer tax exemption (as indexed for inflation) and a top tax rate of 40 percent through the year 2025. The complexity of the tax law, along with uncertainty as to how it might be modified in coming years, underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios. WITHHOLDING To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient's Federal income tax liability. Recipients can generally elect however, not to have tax withheld from distributions. LIFE INSURANCE PURCHASES BY RESIDENTS OF PUERTO RICO In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the IRS announced that income received by residents of Puerto Rico under life insurance contracts issued by a Puerto Rico branch of a United States life insurance company is U.S. source income that is generally subject to United States Federal income tax. LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers that are not U.S. citizens or residents are advised to consult with a qualified tax adviser regarding U.S. and foreign taxation with respect to a Policy purchase. BUSINESS USES OF POLICY Businesses can use the policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. As noted, in the case of a business owned Policy, the provisions of Section 101(j) of the Code may limit the amount of the death benefit excludable from gross income unless a specified exception applies and a notice and consent requirement is satisfied, as discussed above. If you are contemplating a change to an existing Policy or purchasing a Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax adviser. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax laws, rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: o Possible taxation of cash value transfers ; o Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets; o Possible changes in the tax treatment of Policy benefits and rights. 8 TAX CREDITS AND DEDUCTIONS MetLife may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividend received deductions, are not passed back to the Separate Account or to Policy Owners since MetLife is the owner of the assets from which the tax benefits are derived. THE COMPANY'S INCOME TAXES Under current federal income tax law we are not taxed on the Separate Account's operations. Thus, currently we do not deduct a charge from the Separate Account for company federal income taxes. (We do deduct a charge for federal taxes from premiums.) We reserve the right to charge the Separate Account for any future federal income taxes we may incur. Under current laws we may incur state and local taxes (in addition to premium taxes). These taxes are not now significant and we are not currently charging for them. If they increase, we may deduct charges for such taxes. OTHER INFORMATION The Financial Industry Regulatory Authority ("FINRA") provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org. An investor brochure that includes information describing FINRA BrokerCheck is available through the Hotline or on-line. FINANCIAL STATEMENTS You can find the financial statements of the Separate Account and the financial statements of Metropolitan Life Insurance Company in the Statement of Additional Information. You may obtain a copy of the Statement of Additional Information, without charge, by e-mailing us at rcg@metlife.com or by calling 800-MET-5000. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 9 EQUITY OPTIONS EQUITY ADDITIONS (VARIABLE ADDITIONAL INSURANCE DIVIDEND OPTION) EQUITY ENRICHER (VARIABLE ADDITIONAL BENEFITS RIDER) METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION (PART B) APRIL 30, 2018 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the prospectus dated April 28, 2008, as supplemented, and should be read in conjunction therewith. A copy of the prospectus for Equity Options may be obtained by writing to MetLife, P.O. Box 543, Warwick, RI 02887-0543. YOU MAY OBTAIN PROSPECTUSES FOR THE PORTFOLIOS BY CALLING 1-800-638-5000. 1 TABLE OF CONTENTS
PAGE ----- THE COMPANY AND THE SEPARATE ACCOUNT................................ 3 DISTRIBUTION OF THE POLICIES THAT INCLUDE THE EQUITY OPTIONS........ 3 COMMISSIONS......................................................... 3 INCOME PLANS........................................................ 3 POTENTIAL CONFLICTS OF INTEREST..................................... 4 LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY................... 4 MISSTATEMENT OF AGE OR SEX.......................................... 4 REPORTS............................................................. 4 PERFORMANCE DATA.................................................... 5 PERSONALIZED ILLUSTRATIONS.......................................... 5 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................... 6 FINANCIAL STATEMENTS................................................ 6
2 THE COMPANY AND THE SEPARATE ACCOUNT Metropolitan Life Insurance Company is a provider of insurance, annuities, employee benefits and asset management. We are also one of the largest institutional investors in the United States with a $270.2 billion general account portfolio invested primarily in investment grade corporate bonds, structured finance securities, mortgage loans and U.S. Treasury and agency securities, as well as real estate and corporate equity, at December 31, 2017. The Company was incorporated under the laws of New York in 1868. The Company's office is located at 200 Park Avenue, New York, New York 10166-0188. The Company is a wholly-owned subsidiary of MetLife, Inc. We established the Separate Account under New York law on December 13, 1988. The Separate Account receives premium payments from the Equity Options described in the Prospectus and other variable life insurance policies that we issue. We have registered the Separate Account as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). For more information about MetLife, please visit our website at www.metlife.com DISTRIBUTION OF THE POLICIES THAT INCLUDE THE EQUITY OPTIONS MetLife Investors Distribution Company ("MLIDC"), 200 Park Avenue, New York, New York 10166, is the principal underwriter and distributor of the Equity Options. MLIDC, which is our affiliate, is registered under the Securities Exchange Act of 1934 (the "34 Act") as a broker-dealer and is a member of the Financial Industry Regulatory Authority ("FINRA"). Beginning January 1, 2009, new Equity Options are no longer sold. COMMISSIONS We do not pay commissions for the sale of the Equity Additions. MLIDC received sales compensation with respect to the sale of Equity Enricher in the following amounts:
AGGREGATE AMOUNT OF AGGREGATE AMOUNT OF COMMISSIONS RETAINED COMMISSIONS PAID TO BY DISTRIBUTOR AFTER FISCAL YEAR DISTRIBUTOR PAYMENTS TO SELLING FIRMS --------------- --------------------- -------------------------- 2017.........$19,616 $0 2016.........$20,296 $0 2015.........$27,708 $0
INCOME PLANS Generally, you can receive the Policy's insurance proceeds or amounts paid upon surrender of your Policy or your Equity Option under an income plan instead of in a lump sum. Before you choose an income plan you should consider: o The tax consequences associated with the Policy proceeds, which can vary considerably, depending on whether a plan is chosen. You or your beneficiary should consult with a qualified tax adviser about tax consequences. 3 o That your Policy or your Equity Option will terminate at the time you commence an income plan and you will receive a new contract, which describes the terms of the income plan. You should carefully review the terms of the new contract, because it contains important information about the terms and conditions of the income plan. o The rates of return that we credit under these plans are not based on the performance of any of the Portfolios. Generally, we currently make the following income plans available: o Interest Income o Installment Income for a Stated Amount o Joint and Survivor Life Income o Installment Income for a Stated Period o Single Life Income-Guaranteed Payment Period o Single Life Income-Guaranteed Return POTENTIAL CONFLICTS OF INTEREST The Portfolio's Boards of Trustees monitor events to identify conflicts that may arise from the sale of Portfolio shares to variable life and variable annuity separate accounts of affiliated and, if applicable, unaffiliated insurance companies and qualified plans. Conflicts could result from changes in state insurance law or Federal income tax law, changes in investment management of a Portfolio, or differences in voting instructions given by variable life and variable annuity contract owners and qualified plans, if applicable. If there is a material conflict, the Board of Trustees will determine what action should be taken, including the removal of the affected Division from the Portfolio(s), if necessary. If we believe any Portfolio action is insufficient, we will consider taking other action to protect Policy Owners. There could, however, be unavoidable delays or interruptions of operations of the Separate Account that we may be unable to remedy. LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY We will not contest your Policy after two Policy years from the base Policy's issue or reinstatement (excluding riders added later). We will not contest an increase in a death benefit after it has been in effect for two years. MISSTATEMENT OF AGE OR SEX We will adjust benefits to reflect the correct age and sex of the insured, if this information is not correct in the Policy application. REPORTS Generally, you will promptly receive statements confirming your significant transactions such as: o Transactions between an Equity Option and another part of the Policy. o Transfers between Divisions. 4 o Partial withdrawals. o Loan amounts you request. o Premium payments. If your premium payments are made through preauthorized checking arrangement or another systematic payment method, we will not send you any confirmation in addition to the one you receive from your bank or employer. We will also send you an annual statement within 30 days after a Policy year. The statement will summarize the year's transactions and include information on: o Deductions and charges. o Status of the death benefit. o Cash values. o Amounts in the Divisions you are using. o Status of Policy loans. o Automatic loans to pay interest. o Information on your modified endowment contract status (if applicable). We will also send you a Fund's annual and semi-annual reports to shareholders. PERFORMANCE DATA We may provide information concerning the historical investment experience of the Divisions, including average annual net rates of return for periods of one, three, five, and ten years, as well as average annual net rates of return and total net rates of return since inception of the Portfolios. These net rates of return represent past performance and are not an indication of future performance. Cost of insurance, sales, premium tax, and mortality and expense risk charges, which can significantly reduce the return to the Equity Options Owner, are not reflected in these rates. The rates of return reflect only the fees and expenses of the underlying Portfolios. The net rates of return show performance from the inception of the Portfolios, which in some instances, may precede the inception date of the corresponding Division. PERSONALIZED ILLUSTRATIONS We may provide personalized illustrations showing how the Equity Options work based on assumptions about investment returns and the Policy Owner's and/or insured's characteristics. The illustrations are intended to show how the death benefit and cash value for the Equity Options could vary over an extended period of time assuming hypothetical gross rates of return (i.e., investment income and capital gains and losses, realized or unrealized) for the Separate Account equal to specified constant after-tax rates of return. One of the gross rates of return will be 0%. Gross rates of return do not reflect the deduction of any charges and expenses. The illustrations will be based on specified 5 assumptions, such as face amount, premium payments, insured, underwriting class, and death benefit option. Illustrations will disclose the specific assumptions upon which they are based. Values will be given based on guaranteed mortality and expense risk and other charges and may also be based on current mortality and expense risk and other charges. The illustrated death benefit, Cash Surrender Value, and Cash Value for a hypothetical Policy would be different, either higher or lower, from the amounts shown in the illustration if the actual gross rates of return averaged the gross rates of return upon which the illustration is based, but varied above and below the average during the period, or if premiums were paid in other amounts or at other than annual intervals. For example, as a result of variations in actual returns, additional Premium payments beyond those shown or to realize the Policy values shown in particular illustrations even if the average rate of return is realized. Illustrations may also show the internal rate of return on the Cash Surrender Value and the death benefit. The internal rate of return on the Cash Surrender Value is equivalent to an interest rate (after taxes) at which an amount equal to the illustrated premiums could have been invested outside the Policy to arrive at the death benefit of the Policy. Illustrations may also show values based on the historical performance of the Divisions. We reserve the right to impose a $25 fee for each illustration that you request in excess of one per year. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements and financial highlights comprising each of the Divisions of Metropolitan Life Separate Account UL included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements and related financial statement schedules of Metropolitan Life Insurance Company and subsidiaries included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial statement schedules are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is 30 Rockefeller Plaza, New York, New York 10112-0015. FINANCIAL STATEMENTS The financial statements of the Separate Account and the financial statements of Metropolitan Life Insurance Company are attached. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policy Owners of Metropolitan Life Separate Account UL and Board of Directors of Metropolitan Life Insurance Company OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS We have audited the accompanying statements of assets and liabilities of Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company (the "Company") comprising each of the individual Divisions listed in Note 2.A as of December 31, 2017, the related statements of operations and changes in net assets for the respective stated periods in the three years then ended, the financial highlights in Note 8 for the respective stated periods in the five years then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Divisions constituting the Separate Account of the Company as of December 31, 2017, the results of their operations and changes in net assets for the respective stated periods in the three years then ended, and the financial highlights for the respective stated periods in the five years then ended, in conformity with accounting principles generally accepted in the United States of America. BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on the Separate Account's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2017, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 23, 2018 We have served as the Separate Account's auditor since 1990. This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2017
AMERICAN FUNDS AB GLOBAL AB AMERICAN GLOBAL SMALL THEMATIC GROWTH INTERMEDIATE BOND FUNDS BOND CAPITALIZATION DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value........... $ 34,675 $ 76,308 $ 6,687,935 $ 75,338,619 Due from Metropolitan Life Insurance Company................. -- -- -- 24 --------------------- -------------------- -------------------- -------------------- Total Assets................... 34,675 76,308 6,687,935 75,338,643 --------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................. -- -- 1 -- --------------------- -------------------- -------------------- -------------------- Total Liabilities.............. -- -- 1 -- --------------------- -------------------- -------------------- -------------------- NET ASSETS............................. $ 34,675 $ 76,308 $ 6,687,934 $ 75,338,643 ===================== ==================== ==================== ====================
The accompanying notes are an integral part of these financial statements. 1 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS GROWTH GROWTH-INCOME HIGH-INCOME BOND INTERNATIONAL DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 200,354,597 $ 120,442,660 $ 8,652 $ 653,285 Due from Metropolitan Life Insurance Company........ 17 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 200,354,614 120,442,660 8,652 653,285 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 200,354,614 $ 120,442,660 $ 8,652 $ 653,285 ==================== ==================== ==================== ==================== BHFTI ALLIANZ AMERICAN FUNDS U.S. GLOBAL INVESTORS BHFTI AMERICAN GOVERNMENT/AAA- BHFTI AB GLOBAL DYNAMIC FUNDS BALANCED RATED SECURITIES DYNAMIC ALLOCATION MULTI-ASSET PLUS ALLOCATION DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 54,697 $ 79,701 $ 6,566 $ 1,216,312 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 54,697 79,701 6,566 1,216,312 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 54,697 $ 79,701 $ 6,566 $ 1,216,312 ==================== ==================== ==================== ==================== BHFTI AMERICAN BHFTI AMERICAN FUNDS GROWTH FUNDS MODERATE ALLOCATION ALLOCATION DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 2,284,932 $ 1,445,306 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 2,284,932 1,445,306 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 2,284,932 $ 1,445,306 ==================== ====================
The accompanying notes are an integral part of these financial statements. 2 The accompanying notes are an integral part of these financial statements. 3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTI BHFTI AQR GLOBAL BLACKROCK GLOBAL BHFTI BRIGHTHOUSE BHFTI BRIGHTHOUSE RISK BALANCED TACTICAL STRATEGIES ASSET ALLOCATION 100 BALANCED PLUS DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 161,171 $ 423,672 $ 25,375,457 $ 397,746 Due from Metropolitan Life Insurance Company........ -- -- 1 -- --------------------- -------------------- -------------------- -------------------- Total Assets.......... 161,171 423,672 25,375,458 397,746 --------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- --------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 161,171 $ 423,672 $ 25,375,458 $ 397,746 ===================== ==================== ==================== ==================== BHFTI BRIGHTHOUSE/ BHFTI BRIGHTHOUSE/ BHFTI BRIGHTHOUSE/ BHFTI BRIGHTHOUSE ABERDEEN EMERGING TEMPLETON WELLINGTON SMALL CAP VALUE MARKETS EQUITY INTERNATIONAL BOND LARGE CAP RESEARCH DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 786,268 $ 878,183 $ 251,705 $ 459,536,049 Due from Metropolitan Life Insurance Company........ -- -- -- 12 -------------------- -------------------- --------------------- -------------------- Total Assets.......... 786,268 878,183 251,705 459,536,061 -------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 786,268 $ 878,183 $ 251,705 $ 459,536,061 ==================== ==================== ===================== ==================== BHFTI CLARION BHFTI CLEARBRIDGE GLOBAL REAL ESTATE AGGRESSIVE GROWTH DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 30,031,022 $ 44,501,185 Due from Metropolitan Life Insurance Company........ 1 -- -------------------- -------------------- Total Assets.......... 30,031,023 44,501,185 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -------------------- -------------------- Total Liabilities..... -- 1 -------------------- -------------------- NET ASSETS.................... $ 30,031,023 $ 44,501,184 ==================== ====================
The accompanying notes are an integral part of these financial statements. 4 The accompanying notes are an integral part of these financial statements. 5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTI HARRIS BHFTI INVESCO BHFTI JPMORGAN OAKMARK BALANCED-RISK BHFTI INVESCO GLOBAL INTERNATIONAL ALLOCATION SMALL CAP GROWTH ACTIVE ALLOCATION DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 48,278,391 $ 64,239 $ 7,838,418 $ 250,960 Due from Metropolitan Life Insurance Company........ 1 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 48,278,392 64,239 7,838,418 250,960 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 48,278,392 $ 64,239 $ 7,838,418 $ 250,960 ==================== ==================== ==================== ==================== BHFTI BHFTI BHFTI BHFTI JPMORGAN LOOMIS SAYLES METLIFE MULTI-INDEX MFS RESEARCH SMALL CAP VALUE GLOBAL MARKETS TARGETED RISK INTERNATIONAL DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 443,605 $ 449,303 $ 176,748 $ 20,729,355 Due from Metropolitan Life Insurance Company........ -- -- -- 1 -------------------- -------------------- -------------------- -------------------- Total Assets.......... 443,605 449,303 176,748 20,729,356 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 443,605 $ 449,303 $ 176,748 $ 20,729,356 ==================== ==================== ==================== ==================== BHFTI MORGAN STANLEY BHFTI OPPENHEIMER MID CAP GROWTH GLOBAL EQUITY DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 247,719,328 $ 61,029,650 Due from Metropolitan Life Insurance Company........ 84 28 -------------------- -------------------- Total Assets.......... 247,719,412 61,029,678 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 247,719,412 $ 61,029,678 ==================== ====================
The accompanying notes are an integral part of these financial statements. 6 The accompanying notes are an integral part of these financial statements. 7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTI BHFTI PANAGORA GLOBAL PIMCO INFLATION BHFTI BHFTI SCHRODERS DIVERSIFIED RISK PROTECTED BOND PIMCO TOTAL RETURN GLOBAL MULTI-ASSET DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 328 $ 10,294,920 $ 43,336,899 $ 72,213 Due from Metropolitan Life Insurance Company........ -- -- 1 -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 328 10,294,920 43,336,900 72,213 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 328 $ 10,294,920 $ 43,336,900 $ 72,213 ==================== ==================== ==================== ==================== BHFTI BHFTI SCHRODERS SSGA GROWTH AND BHFTI BHFTI T. ROWE PRICE GLOBAL MULTI-ASSET II INCOME ETF SSGA GROWTH ETF LARGE CAP VALUE DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 14,281 $ 8,867,092 $ 8,014,231 $ 2,745,970 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- -------------------- Total Assets.......... 14,281 8,867,092 8,014,231 2,745,970 --------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- --------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 14,281 $ 8,867,092 $ 8,014,231 $ 2,745,970 ===================== ==================== ==================== ==================== BHFTI BHFTI T. ROWE PRICE VICTORY SYCAMORE MID CAP GROWTH MID CAP VALUE DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 41,886,462 $ 91,702,539 Due from Metropolitan Life Insurance Company........ -- 43 -------------------- -------------------- Total Assets.......... 41,886,462 91,702,582 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 41,886,462 $ 91,702,582 ==================== ====================
The accompanying notes are an integral part of these financial statements. 8 The accompanying notes are an integral part of these financial statements. 9 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTII BHFTII BLACKROCK BAILLIE GIFFORD BHFTII BLACKROCK BHFTII BLACKROCK ULTRA-SHORT INTERNATIONAL STOCK BOND INCOME CAPITAL APPRECIATION TERM BOND DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 49,983,594 $ 77,942,299 $ 12,042,675 $ 27,545,528 Due from Metropolitan Life Insurance Company........ 4 3 -- -- --------------------- -------------------- -------------------- --------------------- Total Assets.......... 49,983,598 77,942,302 12,042,675 27,545,528 --------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- --------------------- Total Liabilities..... -- -- -- -- --------------------- -------------------- -------------------- --------------------- NET ASSETS.................... $ 49,983,598 $ 77,942,302 $ 12,042,675 $ 27,545,528 ===================== ==================== ==================== ===================== BHFTII BRIGHTHOUSE BHFTII BRIGHTHOUSE BHFTII BRIGHTHOUSE BHFTII BRIGHTHOUSE ASSET ALLOCATION 20 ASSET ALLOCATION 40 ASSET ALLOCATION 60 ASSET ALLOCATION 80 DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- --------------------- --------------------- ASSETS: Investments at fair value.. $ 4,439,761 $ 11,333,587 $ 56,043,906 $ 108,508,808 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- --------------------- --------------------- Total Assets.......... 4,439,761 11,333,587 56,043,906 108,508,808 -------------------- --------------------- --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 1 1 -------------------- --------------------- --------------------- --------------------- Total Liabilities..... -- 1 1 1 -------------------- --------------------- --------------------- --------------------- NET ASSETS.................... $ 4,439,761 $ 11,333,586 $ 56,043,905 $ 108,508,807 ==================== ===================== ===================== ===================== BHFTII BRIGHTHOUSE/ARTISAN BHFTII BRIGHTHOUSE/ MID CAP VALUE WELLINGTON BALANCED DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 65,688,626 $ 324,356,062 Due from Metropolitan Life Insurance Company........ -- 2 -------------------- -------------------- Total Assets.......... 65,688,626 324,356,064 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 10 -- -------------------- -------------------- Total Liabilities..... 10 -- -------------------- -------------------- NET ASSETS.................... $ 65,688,616 $ 324,356,064 ==================== ====================
The accompanying notes are an integral part of these financial statements. 10 The accompanying notes are an integral part of these financial statements. 11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTII BRIGHTHOUSE/ BHFTII WELLINGTON CORE BHFTII FRONTIER BHFTII LOOMIS SAYLES EQUITY OPPORTUNITIES MID CAP GROWTH JENNISON GROWTH SMALL CAP CORE DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 80,734,815 $ 257,694,582 $ 36,062,693 $ 27,323,851 Due from Metropolitan Life Insurance Company........ -- -- -- 41 -------------------- -------------------- -------------------- -------------------- Total Assets.......... 80,734,815 257,694,582 36,062,693 27,323,892 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 1 1 1 -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... 1 1 1 -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 80,734,814 $ 257,694,581 $ 36,062,692 $ 27,323,892 ==================== ==================== ==================== ==================== BHFTII BHFTII LOOMIS SAYLES METLIFE AGGREGATE BHFTII METLIFE BHFTII METLIFE SMALL CAP GROWTH BOND INDEX MID CAP STOCK INDEX MSCI EAFE INDEX DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 13,090,723 $ 135,065,115 $ 108,841,778 $ 92,302,765 Due from Metropolitan Life Insurance Company........ -- -- 11 -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 13,090,723 135,065,115 108,841,789 92,302,765 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- 5 -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 1 -- 5 -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 13,090,723 $ 135,065,114 $ 108,841,789 $ 92,302,760 ==================== ==================== ==================== ==================== BHFTII METLIFE BHFTII RUSSELL 2000 INDEX METLIFE STOCK INDEX DIVISION DIVISION ------------------- -------------------- ASSETS: Investments at fair value.. $ 84,250,319 $ 1,133,720,316 Due from Metropolitan Life Insurance Company........ 24 -- ------------------- -------------------- Total Assets.......... 84,250,343 1,133,720,316 ------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 6 ------------------- -------------------- Total Liabilities..... -- 6 ------------------- -------------------- NET ASSETS.................... $ 84,250,343 $ 1,133,720,310 =================== ====================
The accompanying notes are an integral part of these financial statements. 12 The accompanying notes are an integral part of these financial statements. 13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
BHFTII BHFTII BHFTII NEUBERGER MFS TOTAL RETURN BHFTII MFS VALUE MFS VALUE II BERMAN GENESIS DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 32,868,276 $ 106,238,351 $ 21,738,289 $ 121,560,476 Due from Metropolitan Life Insurance Company........ 1 21 2 32 -------------------- -------------------- -------------------- -------------------- Total Assets.......... 32,868,277 106,238,372 21,738,291 121,560,508 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 32,868,277 $ 106,238,372 $ 21,738,291 $ 121,560,508 ==================== ==================== ==================== ==================== BHFTII WESTERN BHFTII BHFTII BHFTII ASSET MANAGEMENT T. ROWE PRICE T. ROWE PRICE VANECK GLOBAL STRATEGIC LARGE CAP GROWTH SMALL CAP GROWTH NATURAL RESOURCES BOND OPPORTUNITIES DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 105,928,694 $ 131,687,035 $ 310,832 $ 54,412,032 Due from Metropolitan Life Insurance Company........ -- -- -- 5 -------------------- -------------------- -------------------- -------------------- Total Assets.......... 105,928,694 131,687,035 310,832 54,412,037 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 4 -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 4 -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 105,928,694 $ 131,687,031 $ 310,832 $ 54,412,037 ==================== ==================== ==================== ==================== BHFTII WESTERN ASSET MANAGEMENT DREYFUS VIF U.S. GOVERNMENT INTERNATIONAL VALUE DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 15,840,871 $ 245,233 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 15,840,871 245,233 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 15,840,871 $ 245,233 ==================== ====================
The accompanying notes are an integral part of these financial statements. 14 The accompanying notes are an integral part of these financial statements. 15 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
FIDELITY VIP ASSET FIDELITY VIP FIDELITY VIP FIDELITY VIP MANAGER: GROWTH CONTRAFUND EQUITY-INCOME FREEDOM 2010 DIVISION DIVISION DIVISION DIVISION --------------------- --------------------- --------------------- --------------------- ASSETS: Investments at fair value.. $ 2,166,028 $ 3,034,301 $ 1,660 $ 145,861 Due from Metropolitan Life Insurance Company....... -- -- -- -- --------------------- --------------------- --------------------- --------------------- Total Assets.......... 2,166,028 3,034,301 1,660 145,861 --------------------- --------------------- --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... -- -- -- -- --------------------- --------------------- --------------------- --------------------- Total Liabilities..... -- -- -- -- --------------------- --------------------- --------------------- --------------------- NET ASSETS.................... $ 2,166,028 $ 3,034,301 $ 1,660 $ 145,861 ===================== ===================== ===================== ===================== FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP FREEDOM 2020 FREEDOM 2025 FREEDOM 2030 FREEDOM 2040 DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- --------------------- --------------------- ASSETS: Investments at fair value.. $ 568,714 $ 516,236 $ 279,269 $ 237,064 Due from Metropolitan Life Insurance Company....... -- -- -- -- -------------------- --------------------- --------------------- --------------------- Total Assets.......... 568,714 516,236 279,269 237,064 -------------------- --------------------- --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... -- -- -- -- -------------------- --------------------- --------------------- --------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- --------------------- --------------------- NET ASSETS.................... $ 568,714 $ 516,236 $ 279,269 $ 237,064 ==================== ===================== ===================== ===================== FIDELITY VIP FIDELITY VIP GOVERNMENT FREEDOM 2050 MONEY MARKET DIVISION DIVISION --------------------- --------------------- ASSETS: Investments at fair value.. $ 191,082 $ 4,356,720 Due from Metropolitan Life Insurance Company....... -- -- --------------------- --------------------- Total Assets.......... 191,082 4,356,720 --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... 13 1 --------------------- --------------------- Total Liabilities..... 13 1 --------------------- --------------------- NET ASSETS.................... $ 191,069 $ 4,356,719 ===================== =====================
The accompanying notes are an integral part of these financial statements. 16 The accompanying notes are an integral part of these financial statements. 17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
FIDELITY VIP FIDELITY VIP INVESTMENT FTVIPT HIGH INCOME GRADE BOND FIDELITY VIP MID CAP FRANKLIN INCOME VIP DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 475,673 $ 1,202,686 $ 277,353 $ 344,847 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- --------------------- -------------------- Total Assets.......... 475,673 1,202,686 277,353 344,847 --------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 288,802 --------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- 288,802 --------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 475,673 $ 1,202,686 $ 277,353 $ 56,045 ===================== ==================== ===================== ==================== FTVIPT FRANKLIN MUTUAL FTVIPT FRANKLIN FTVIPT TEMPLETON FTVIPT TEMPLETON GLOBAL DISCOVERY VIP MUTUAL SHARES VIP FOREIGN VIP GLOBAL BOND VIP DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 604,329 $ 111,384 $ 10,011,812 $ 755,203 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- --------------------- -------------------- Total Assets.......... 604,329 111,384 10,011,812 755,203 -------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 604,329 $ 111,384 $ 10,011,812 $ 755,203 ==================== ==================== ===================== ==================== GOLDMAN SACHS GOLDMAN SMALL CAP EQUITY SACHS MID-CAP VALUE INSIGHTS DIVISION DIVISION --------------------- -------------------- ASSETS: Investments at fair value.. $ 86,945 $ 7,764 Due from Metropolitan Life Insurance Company........ -- -- --------------------- -------------------- Total Assets.......... 86,945 7,764 --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- --------------------- -------------------- Total Liabilities..... -- -- --------------------- -------------------- NET ASSETS.................... $ 86,945 $ 7,764 ===================== ====================
The accompanying notes are an integral part of these financial statements. 18 The accompanying notes are an integral part of these financial statements. 19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2017
INVESCO V.I. JANUS JANUS HENDERSON INVESCO V.I. COMSTOCK INTERNATIONAL GROWTH HENDERSON BALANCED ENTERPRISE DIVISION DIVISION DIVISION DIVISION --------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 681,172 $ 364,454 $ 1,219,411 $ 350,154 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- --------------------- -------------------- -------------------- Total Assets.......... 681,172 364,454 1,219,411 350,154 --------------------- --------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- 1 -- --------------------- --------------------- -------------------- -------------------- Total Liabilities..... -- -- 1 -- --------------------- --------------------- -------------------- -------------------- NET ASSETS.................... $ 681,172 $ 364,454 $ 1,219,410 $ 350,154 ===================== ===================== ==================== ==================== JANUS JANUS JANUS MFS VIT HENDERSON FORTY HENDERSON OVERSEAS HENDERSON RESEARCH GLOBAL EQUITY DIVISION DIVISION DIVISION DIVISION --------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 330,857 $ 27,304 $ 343,490 $ 338,550 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- --------------------- -------------------- -------------------- Total Assets.......... 330,857 27,304 343,490 338,550 --------------------- --------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- --------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- --------------------- --------------------- -------------------- -------------------- NET ASSETS.................... $ 330,857 $ 27,304 $ 343,490 $ 338,550 ===================== ===================== ==================== ==================== MFS VIT NEW DISCOVERY MFS VIT VALUE DIVISION DIVISION -------------------- --------------------- ASSETS: Investments at fair value.. $ 20,796 $ 20,375 Due from Metropolitan Life Insurance Company........ -- -- -------------------- --------------------- Total Assets.......... 20,796 20,375 -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- --------------------- Total Liabilities..... -- -- -------------------- --------------------- NET ASSETS.................... $ 20,796 $ 20,375 ==================== =====================
The accompanying notes are an integral part of these financial statements. 20 The accompanying notes are an integral part of these financial statements. 21 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2017
MORGAN STANLEY MORGAN STANLEY MFS VIT II VIF EMERGING VIF EMERGING PIMCO VIT HIGH YIELD MARKETS DEBT MARKETS EQUITY ALL ASSET DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 157,998 $ 1,733,616 $ 3,179,608 $ 146,396 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 157,998 1,733,616 3,179,608 146,396 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 157,998 $ 1,733,616 $ 3,179,608 $ 146,396 ==================== ==================== ==================== ==================== PIMCO VIT COMMODITYREALRETURN PIMCO VIT PUTNAM VT STRATEGY LOW DURATION INTERNATIONAL VALUE ROYCE MICRO-CAP DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 5,028 $ 921,977 $ 5,527 $ 11,026 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 5,028 921,977 5,527 11,026 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 1 -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 5,028 $ 921,976 $ 5,527 $ 11,026 ==================== ==================== ==================== ==================== ROYCE SMALL-CAP DIVISION -------------------- ASSETS: Investments at fair value.. $ 14,989 Due from Metropolitan Life Insurance Company........ -- -------------------- Total Assets.......... 14,989 -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -------------------- Total Liabilities..... -- -------------------- NET ASSETS.................... $ 14,989 ====================
The accompanying notes are an integral part of these financial statements. 22 The accompanying notes are an integral part of these financial statements. 23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AB GLOBAL THEMATIC GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 88 $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 88 -- -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 2,867 877 4,879 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,867 877 4,879 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 8,219 (1,193) (2,756) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 11,086 (316) 2,123 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 11,174 $ (316) $ 2,123 ==================== ==================== ==================== AB INTERMEDIATE BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 3,922 $ 2,736 $ 2,061 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 3,922 2,736 2,061 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,238 1,264 1,833 Realized gains (losses) on sale of investments....... (3,842) (186) (171) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (2,604) 1,078 1,662 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,197 49 (3,852) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (407) 1,127 (2,190) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,515 $ 3,863 $ (129) ==================== ==================== ==================== AMERICAN FUNDS BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 128,797 $ 110,564 $ 104,107 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,943 9,571 8,549 -------------------- -------------------- -------------------- Net investment income (loss).................... 118,854 100,993 95,558 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 98,810 23,172 116,557 Realized gains (losses) on sale of investments....... (4,363) 1,509 (3,532) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 94,447 24,681 113,025 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 12,429 45,632 (201,734) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 106,876 70,313 (88,709) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 225,730 $ 171,306 $ 6,849 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 24 The accompanying notes are an integral part of these financial statements. 25 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 302,899 $ 159,045 $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 83,802 77,911 91,602 -------------------- -------------------- -------------------- Net investment income (loss).................... 219,097 81,134 (91,602) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 11,923,223 5,579,846 Realized gains (losses) on sale of investments....... 493,132 (19,783) 1,343,378 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 493,132 11,903,440 6,923,224 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 15,300,486 (10,777,574) (6,348,033) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 15,793,618 1,125,866 575,191 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 16,012,715 $ 1,207,000 $ 483,589 ==================== ==================== ==================== AMERICAN FUNDS GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 940,051 $ 1,259,429 $ 1,004,590 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 168,990 147,194 155,259 -------------------- -------------------- -------------------- Net investment income (loss).................... 771,061 1,112,235 849,331 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 17,857,311 14,591,335 34,618,471 Realized gains (losses) on sale of investments....... 3,386,491 1,564,440 3,175,509 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 21,243,802 16,155,775 37,793,980 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 23,936,579 (2,560,394) (27,669,113) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 45,180,381 13,595,381 10,124,867 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 45,951,442 $ 14,707,616 $ 10,974,198 ==================== ==================== ==================== AMERICAN FUNDS GROWTH-INCOME DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,583,807 $ 1,500,084 $ 1,369,670 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 110,967 100,558 103,704 -------------------- --------------------- -------------------- Net investment income (loss).................... 1,472,840 1,399,526 1,265,966 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,249,514 11,252,001 15,356,438 Realized gains (losses) on sale of investments....... 1,686,109 993,174 1,779,863 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 8,935,623 12,245,175 17,136,301 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 12,349,992 (2,551,087) (16,929,014) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 21,285,615 9,694,088 207,287 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 22,758,455 $ 11,093,614 $ 1,473,253 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 26 The accompanying notes are an integral part of these financial statements. 27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AMERICAN FUNDS HIGH-INCOME BOND DIVISION -------------------- 2017 (a) -------------------- INVESTMENT INCOME: Dividends............................................ $ 468 -------------------- EXPENSES: Mortality and expense risk charges................... -- -------------------- Net investment income (loss).................... 468 -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- Realized gains (losses) on sale of investments....... -- -------------------- Net realized gains (losses)..................... -- -------------------- Change in unrealized gains (losses) on investments... (375) -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (375) -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 93 ==================== AMERICAN FUNDS INTERNATIONAL DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 7,618 $ 4,799 $ 7,125 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 7,618 4,799 7,125 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,927 28,955 32,754 Realized gains (losses) on sale of investments....... 7,074 (7,617) 20,582 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 14,001 21,338 53,336 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 132,723 (18,823) (72,634) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 146,724 2,515 (19,298) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 154,342 $ 7,314 $ (12,173) ==================== ==================== ==================== AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 724 $ 737 $ 712 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 724 737 712 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 1,010 404 Realized gains (losses) on sale of investments....... (41) (42) (3) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (41) 968 401 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 178 (1,163) (350) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 137 (195) 51 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 861 $ 542 $ 763 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 28 The accompanying notes are an integral part of these financial statements. 29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI AB GLOBAL DYNAMIC ALLOCATION DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,050 $ 977 $ 2,180 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 1,050 977 2,180 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 630 2,323 Realized gains (losses) on sale of investments....... 227 (200) (101) --------------------- -------------------- -------------------- Net realized gains (losses)..................... 227 430 2,222 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 7,735 769 (4,443) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,962 1,199 (2,221) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 9,012 $ 2,176 $ (41) ===================== ==================== ==================== BHFTI ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 94 $ 2 $ 21 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 94 2 21 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 19 Realized gains (losses) on sale of investments....... 101 (12) (278) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 101 (12) (259) -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 685 80 (72) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 786 68 (331) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 880 $ 70 $ (310) ==================== ==================== ===================== BHFTI AMERICAN FUNDS BALANCED ALLOCATION DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 19,259 $ 18,208 $ 15,506 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 19,259 18,208 15,506 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 53,965 77,498 46,196 Realized gains (losses) on sale of investments....... 1,827 (552) 3,497 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 55,792 76,946 49,693 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 98,370 (22,963) (69,036) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 154,162 53,983 (19,343) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 173,421 $ 72,191 $ (3,837) ==================== ==================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 30 The accompanying notes are an integral part of these financial statements. 31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI AMERICAN FUNDS GROWTH ALLOCATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 29,710 $ 26,959 $ 24,524 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 29,710 26,959 24,524 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 125,095 165,604 95,418 Realized gains (losses) on sale of investments....... 2,793 (5,416) 15,416 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 127,888 160,188 110,834 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 236,441 (37,021) (141,365) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 364,329 123,167 (30,531) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 394,039 $ 150,126 $ (6,007) ==================== ==================== ==================== BHFTI AMERICAN FUNDS MODERATE ALLOCATION DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 27,088 $ 23,999 $ 17,019 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 27,088 23,999 17,019 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 56,192 68,764 40,376 Realized gains (losses) on sale of investments....... (553) (1,035) 12,509 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 55,639 67,729 52,885 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 80,012 (16,232) (73,320) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 135,651 51,497 (20,435) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 162,739 $ 75,496 $ (3,416) ==================== ==================== =================== BHFTI AQR GLOBAL RISK BALANCED DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,366 $ -- $ 7,434 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 2,366 -- 7,434 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,628 -- 13,315 Realized gains (losses) on sale of investments....... (1,940) (7,843) (2,519) ------------------- ------------------- -------------------- Net realized gains (losses)..................... 4,688 (7,843) 10,796 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 6,767 18,548 (30,868) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 11,455 10,705 (20,072) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 13,821 $ 10,705 $ (12,638) =================== =================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 32 The accompanying notes are an integral part of these financial statements. 33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BLACKROCK GLOBAL TACTICAL STRATEGIES DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,651 $ 4,216 $ 3,577 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 2,651 4,216 3,577 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,771 23,769 9,296 Realized gains (losses) on sale of investments....... (105) (756) 49 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 4,666 23,013 9,345 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 40,461 (13,208) (14,933) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 45,127 9,805 (5,588) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 47,778 $ 14,021 $ (2,011) ===================== ===================== ===================== BHFTI BRIGHTHOUSE ASSET ALLOCATION 100 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 349,648 $ 523,833 $ 322,952 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 15,750 14,780 16,490 --------------------- --------------------- --------------------- Net investment income (loss).................... 333,898 509,053 306,462 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,313,399 2,664,123 1,572,075 Realized gains (losses) on sale of investments....... 313,827 102,098 325,688 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 1,627,226 2,766,221 1,897,763 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 2,972,083 (1,391,486) (2,617,113) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,599,309 1,374,735 (719,350) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,933,207 $ 1,883,788 $ (412,888) ===================== ===================== ===================== BHFTI BRIGHTHOUSE BALANCED PLUS DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 5,462 $ 7,951 $ 4,773 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 5,462 7,951 4,773 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 17,375 3,078 13,434 Realized gains (losses) on sale of investments....... 860 (955) (2,885) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 18,235 2,123 10,549 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 35,046 12,397 (26,058) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 53,281 14,520 (15,509) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 58,743 $ 22,471 $ (10,736) ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 34 The accompanying notes are an integral part of these financial statements. 35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BRIGHTHOUSE SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,610 $ 8,421 $ 800 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,610 8,421 800 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 26,213 21,554 310,745 Realized gains (losses) on sale of investments....... 9,255 (31,090) 1,317 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 35,468 (9,536) 312,062 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 41,355 191,373 (358,930) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 76,823 181,837 (46,868) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 83,433 $ 190,258 $ (46,068) ==================== ==================== ==================== BHFTI BRIGHTHOUSE/ABERDEEN EMERGING MARKETS EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 9,611 $ 6,049 $ 10,228 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 9,611 6,049 10,228 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 7,574 (30,698) (4,559) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 7,574 (30,698) (4,559) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 170,725 89,323 (82,085) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 178,299 58,625 (86,644) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 187,910 $ 64,674 $ (76,416) ==================== ==================== ==================== BHFTI BRIGHTHOUSE/TEMPLETON INTERNATIONAL BOND DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 16,491 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- -- 16,491 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 100 486 355 Realized gains (losses) on sale of investments....... (1,448) (2,171) (5,538) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (1,348) (1,685) (5,183) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,100 4,976 (19,099) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 752 3,291 (24,282) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 752 $ 3,291 $ (7,791) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 36 The accompanying notes are an integral part of these financial statements. 37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BRIGHTHOUSE/WELLINGTON LARGE CAP RESEARCH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 4,789,366 $ 9,605,133 $ 3,933,627 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 2,236,275 2,007,407 2,110,795 -------------------- --------------------- -------------------- Net investment income (loss).................... 2,553,091 7,597,726 1,822,832 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 16,060,148 26,127,082 29,529,907 Realized gains (losses) on sale of investments....... 9,245,393 4,953,703 6,791,139 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 25,305,541 31,080,785 36,321,046 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 57,041,217 (8,253,818) (21,509,605) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 82,346,758 22,826,967 14,811,441 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 84,899,849 $ 30,424,693 $ 16,634,273 ==================== ===================== ==================== BHFTI CLARION GLOBAL REAL ESTATE DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,053,750 $ 679,349 $ 1,234,670 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 27,604 29,090 31,928 -------------------- --------------------- -------------------- Net investment income (loss).................... 1,026,146 650,259 1,202,742 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 11,186 31,945 48,531 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 11,186 31,945 48,531 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 1,949,598 (362,033) (1,654,271) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,960,784 (330,088) (1,605,740) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,986,930 $ 320,171 $ (402,998) ==================== ===================== ==================== BHFTI CLEARBRIDGE AGGRESSIVE GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 411,128 $ 270,534 $ 198,717 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 38,033 36,607 45,621 --------------------- -------------------- -------------------- Net investment income (loss).................... 373,095 233,927 153,096 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 1,758,844 970,623 1,820,551 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,758,844 970,623 1,820,551 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 5,283,206 (103,509) (3,670,688) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,042,050 867,114 (1,850,137) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,415,145 $ 1,101,041 $ (1,697,041) ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 38 The accompanying notes are an integral part of these financial statements. 39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI HARRIS OAKMARK INTERNATIONAL DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 809,196 $ 861,973 $ 1,358,813 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 57,884 49,021 57,999 -------------------- -------------------- -------------------- Net investment income (loss).................... 751,312 812,952 1,300,814 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 2,415,203 3,880,482 Realized gains (losses) on sale of investments....... 298,648 (640,681) 49,542 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 298,648 1,774,522 3,930,024 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 10,649,156 446,527 (6,964,997) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 10,947,804 2,221,049 (3,034,973) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 11,699,116 $ 3,034,001 $ (1,734,159) ==================== ==================== ==================== BHFTI INVESCO BALANCED-RISK ALLOCATION DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,933 $ 63 $ 1,200 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 1,933 63 1,200 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,679 -- 3,078 Realized gains (losses) on sale of investments....... 1 (528) (1,351) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 2,680 (528) 1,727 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 724 4,887 (4,753) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 3,404 4,359 (3,026) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 5,337 $ 4,422 $ (1,826) ==================== ==================== ===================== BHFTI INVESCO SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 9,561 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 8,930 8,076 9,074 -------------------- -------------------- -------------------- Net investment income (loss).................... (8,930) (8,076) 487 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 722,548 1,137,318 1,773,695 Realized gains (losses) on sale of investments....... (32,646) (110,635) 1,804 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 689,902 1,026,683 1,775,499 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 961,544 (318,719) (1,866,286) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,651,446 707,964 (90,787) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,642,516 $ 699,888 $ (90,300) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 40 The accompanying notes are an integral part of these financial statements. 41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI JPMORGAN GLOBAL ACTIVE ALLOCATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 5,628 $ 3,855 $ 5,107 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 5,628 3,855 5,107 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 3,091 8,853 Realized gains (losses) on sale of investments....... 761 (510) (120) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 761 2,581 8,733 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 28,770 (1,187) (12,813) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 29,531 1,394 (4,080) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 35,159 $ 5,249 $ 1,027 ==================== ==================== ==================== BHFTI JPMORGAN SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 7,780 $ 6,286 $ 4,196 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 7,780 6,286 4,196 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 27,983 22,605 26,694 Realized gains (losses) on sale of investments....... 12,875 2,029 (765) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 40,858 24,634 25,929 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (24,944) 79,671 (52,802) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 15,914 104,305 (26,873) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 23,694 $ 110,591 $ (22,677) ==================== ==================== ==================== BHFTI LOOMIS SAYLES GLOBAL MARKETS DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,635 $ 6,758 $ 7,875 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,635 6,758 7,875 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,769 11,125 -- Realized gains (losses) on sale of investments....... 6,743 1,573 18,423 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 8,512 12,698 18,423 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 71,276 (1,350) (13,993) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 79,788 11,348 4,430 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 86,423 $ 18,106 $ 12,305 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 42 The accompanying notes are an integral part of these financial statements. 43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI METLIFE MULTI-INDEX TARGETED RISK DIVISION ------------------------------------------------------------------ 2017 2016 2015 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,477 $ 1,944 $ 1,398 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 2,477 1,944 1,398 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,511 -- 3,097 Realized gains (losses) on sale of investments....... 1,795 (37) 1,073 ------------------- ------------------- -------------------- Net realized gains (losses)..................... 6,306 (37) 4,170 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 15,712 4,590 (7,672) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 22,018 4,553 (3,502) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 24,495 $ 6,497 $ (2,104) =================== =================== ==================== BHFTI MFS RESEARCH INTERNATIONAL DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 365,364 $ 378,662 $ 565,935 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 16,781 15,460 17,693 -------------------- -------------------- -------------------- Net investment income (loss).................... 348,583 363,202 548,242 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 120,626 (113,918) 34,366 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 120,626 (113,918) 34,366 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,288,325 (396,420) (864,226) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 4,408,951 (510,338) (829,860) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 4,757,534 $ (147,136) $ (281,618) ==================== ==================== ==================== BHFTI MORGAN STANLEY MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 795,262 $ -- $ -- -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 672,898 581,093 686,901 -------------------- -------------------- ------------------- Net investment income (loss).................... 122,364 (581,093) (686,901) -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 6,098,517 3,185,085 4,836,759 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 6,098,517 3,185,085 4,836,759 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 66,869,811 (20,525,720) (15,427,415) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 72,968,328 (17,340,635) (10,590,656) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 73,090,692 $ (17,921,728) $ (11,277,557) ==================== ==================== ===================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 44 The accompanying notes are an integral part of these financial statements. 45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI OPPENHEIMER GLOBAL EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 631,796 $ 540,111 $ 609,199 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 143,449 112,319 104,779 -------------------- -------------------- -------------------- Net investment income (loss).................... 488,347 427,792 504,420 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 2,248,912 1,119,227 Realized gains (losses) on sale of investments....... 2,246,334 1,062,963 1,459,506 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,246,334 3,311,875 2,578,733 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 14,255,607 (3,785,262) (1,183,054) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 16,501,941 (473,387) 1,395,679 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 16,990,288 $ (45,595) $ 1,900,099 ==================== ==================== ==================== BHFTI PANAGORA GLOBAL DIVERSIFIED RISK DIVISION ------------------------------------------------------------------ 2017 2016 2015 (b) ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 50 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- -------------------- -------------------- Net investment income (loss).................... -- -- 50 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 65 Realized gains (losses) on sale of investments....... 81 1 (360) ------------------- -------------------- -------------------- Net realized gains (losses)..................... 81 1 (295) ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 16 (1) 1 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 97 -- (294) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 97 $ -- $ (244) =================== ==================== ==================== BHFTI PIMCO INFLATION PROTECTED BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 184,363 $ -- $ 559,967 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 17,161 17,989 19,912 -------------------- -------------------- -------------------- Net investment income (loss).................... 167,202 (17,989) 540,055 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (123,809) (134,822) (211,211) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (123,809) (134,822) (211,211) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 327,314 652,775 (655,945) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 203,505 517,953 (867,156) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 370,707 $ 499,964 $ (327,101) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 46 The accompanying notes are an integral part of these financial statements. 47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI PIMCO TOTAL RETURN DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 849,953 $ 1,232,049 $ 2,501,824 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 52,719 55,405 58,540 -------------------- -------------------- --------------------- Net investment income (loss).................... 797,234 1,176,644 2,443,284 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 211,560 -- 545,027 Realized gains (losses) on sale of investments....... (75,048) (107,899) (40,218) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 136,512 (107,899) 504,809 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 1,034,223 134,407 (2,854,535) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,170,735 26,508 (2,349,726) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,967,969 $ 1,203,152 $ 93,558 ==================== ==================== ===================== BHFTI SCHRODERS GLOBAL MULTI-ASSET DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 508 $ 675 $ 467 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 508 675 467 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,219 658 1,401 Realized gains (losses) on sale of investments....... 255 (11) 35 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,474 647 1,436 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 6,574 1,558 (2,611) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 8,048 2,205 (1,175) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 8,556 $ 2,880 $ (708) ===================== ==================== ==================== BHFTI SCHRODERS GLOBAL MULTI-ASSET II DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 116 $ 47 $ 86 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 116 47 86 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1 16 433 Realized gains (losses) on sale of investments....... 43 (9) 545 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 44 7 978 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,539 239 (255) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,583 246 723 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,699 $ 293 $ 809 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 48 The accompanying notes are an integral part of these financial statements. 49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI SSGA GROWTH AND INCOME ETF DIVISION ---------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 220,103 $ 201,907 $ 200,671 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 8,503 8,489 9,183 ------------------- ------------------- ------------------- Net investment income (loss)..................... 211,600 193,418 191,488 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 25,075 439,798 439,240 Realized gains (losses) on sale of investments....... 31,915 (17,565) 68,038 ------------------- ------------------- ------------------- Net realized gains (losses)...................... 56,990 422,233 507,278 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 993,368 (166,860) (845,948) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,050,358 255,373 (338,670) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,261,958 $ 448,791 $ (147,182) =================== =================== =================== BHFTI SSGA GROWTH ETF DIVISION ---------------------------------------------------------------- 2017 2016 2015 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 183,120 $ 159,959 $ 152,270 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 7,493 7,001 7,372 -------------------- ------------------- ------------------- Net investment income (loss)..................... 175,627 152,958 144,898 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 82,762 424,639 369,187 Realized gains (losses) on sale of investments....... 70,763 (36,140) 30,189 -------------------- ------------------- ------------------- Net realized gains (losses)...................... 153,525 388,499 399,376 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 1,057,422 (116,079) (699,498) -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,210,947 272,420 (300,122) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,386,574 $ 425,378 $ (155,224) ==================== =================== =================== BHFTI T. ROWE PRICE LARGE CAP VALUE DIVISION ---------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 56,019 $ 63,487 $ 36,741 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss)..................... 56,019 63,487 36,741 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 211,170 241,959 4,421 Realized gains (losses) on sale of investments....... 7,745 22,893 86,882 ------------------- ------------------- -------------------- Net realized gains (losses)...................... 218,915 264,852 91,303 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 129,307 1,148 (197,956) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 348,222 266,000 (106,653) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 404,241 $ 329,487 $ (69,912) =================== =================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 50 The accompanying notes are an integral part of these financial statements. 51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI T. ROWE PRICE MID CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 53,030 45,975 45,309 -------------------- --------------------- -------------------- Net investment income (loss).................... (53,030) (45,975) (45,309) -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,182,369 4,929,907 5,111,107 Realized gains (losses) on sale of investments....... 414,597 274,363 671,843 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 3,596,966 5,204,270 5,782,950 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 4,985,555 (3,017,999) (3,612,484) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 8,582,521 2,186,271 2,170,466 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 8,529,491 $ 2,140,296 $ 2,125,157 ==================== ===================== ==================== BHFTI VICTORY SYCAMORE MID CAP VALUE DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,006,939 $ 727,789 $ 652,691 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 82,275 77,755 88,957 --------------------- -------------------- --------------------- Net investment income (loss).................... 924,664 650,034 563,734 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 3,889,123 4,446,457 Realized gains (losses) on sale of investments....... 763,180 11,246 732,310 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 763,180 3,900,369 5,178,767 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 6,544,581 7,673,646 (13,696,346) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,307,761 11,574,015 (8,517,579) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 8,232,425 $ 12,224,049 $ (7,953,845) ===================== ==================== ===================== BHFTII BAILLIE GIFFORD INTERNATIONAL STOCK DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 553,050 $ 627,145 $ 713,415 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 209,721 179,611 193,538 --------------------- -------------------- -------------------- Net investment income (loss).................... 343,329 447,534 519,877 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 322,047 (310,525) (206,507) --------------------- -------------------- -------------------- Net realized gains (losses)..................... 322,047 (310,525) (206,507) --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 12,519,996 1,728,920 (1,227,962) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 12,842,043 1,418,395 (1,434,469) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 13,185,372 $ 1,865,929 $ (914,592) ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 52 The accompanying notes are an integral part of these financial statements. 53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BLACKROCK BOND INCOME DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,411,937 $ 2,531,954 $ 3,137,039 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 272,659 278,834 287,424 -------------------- -------------------- -------------------- Net investment income (loss).................... 2,139,278 2,253,120 2,849,615 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 918,699 Realized gains (losses) on sale of investments....... (33,084) 30,488 (4,703) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (33,084) 30,488 913,996 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 749,028 (97,803) (3,544,439) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 715,944 (67,315) (2,630,443) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 2,855,222 $ 2,185,805 $ 219,172 ==================== ==================== ==================== BHFTII BLACKROCK CAPITAL APPRECIATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 11,274 $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 11,518 9,977 10,693 -------------------- -------------------- -------------------- Net investment income (loss).................... (244) (9,977) (10,693) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 248,842 852,431 1,744,269 Realized gains (losses) on sale of investments....... 337,629 195,339 278,466 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 586,471 1,047,770 2,022,735 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,528,190 (1,066,351) (1,407,738) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 3,114,661 (18,581) 614,997 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,114,417 $ (28,558) $ 604,304 ==================== ==================== ==================== BHFTII BLACKROCK ULTRA-SHORT TERM BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 91,995 $ 16,356 $ 813 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 31,108 34,740 35,827 -------------------- -------------------- -------------------- Net investment income (loss).................... 60,887 (18,384) (35,014) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 532 487 -- Realized gains (losses) on sale of investments....... 25,191 3,225 -- -------------------- -------------------- -------------------- Net realized gains (losses)..................... 25,723 3,712 -- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 119,513 60,725 -- -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 145,236 64,437 -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 206,123 $ 46,053 $ (35,014) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 54 The accompanying notes are an integral part of these financial statements. 55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE ASSET ALLOCATION 20 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 126,677 $ 185,658 $ 124,733 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 7,207 7,760 8,287 --------------------- --------------------- --------------------- Net investment income (loss).................... 119,470 177,898 116,446 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 87,901 179,520 168,162 Realized gains (losses) on sale of investments....... (47,017) (57,458) 6,832 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 40,884 122,062 174,994 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 193,850 (54,551) (309,762) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 234,734 67,511 (134,768) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 354,204 $ 245,409 $ (18,322) ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 40 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 243,164 $ 380,608 $ 46,938 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 15,988 15,456 17,505 --------------------- --------------------- --------------------- Net investment income (loss).................... 227,176 365,152 29,433 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 340,561 653,875 559,298 Realized gains (losses) on sale of investments....... 8,343 (4,511) 140,214 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 348,904 649,364 699,512 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 555,970 (402,883) (854,363) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 904,874 246,481 (154,851) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,132,050 $ 611,633 $ (125,418) ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 60 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,067,522 $ 1,741,228 $ 390,972 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 79,507 80,187 85,255 --------------------- --------------------- --------------------- Net investment income (loss).................... 988,015 1,661,041 305,717 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,146,384 4,622,045 3,409,671 Realized gains (losses) on sale of investments....... 456,295 180,894 662,426 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 2,602,679 4,802,939 4,072,097 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 3,901,633 (2,834,262) (4,965,532) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 6,504,312 1,968,677 (893,435) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,492,327 $ 3,629,718 $ (587,718) ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 56 The accompanying notes are an integral part of these financial statements. 57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE ASSET ALLOCATION 80 DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,815,853 $ 3,023,030 $ 512,933 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 89,663 80,568 85,082 -------------------- --------------------- --------------------- Net investment income (loss).................... 1,726,190 2,942,462 427,851 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,578,827 11,163,996 4,372,751 Realized gains (losses) on sale of investments....... 1,298,195 857,817 1,805,013 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 6,877,022 12,021,813 6,177,764 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 9,496,898 (7,365,543) (8,037,823) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 16,373,920 4,656,270 (1,860,059) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 18,100,110 $ 7,598,732 $ (1,432,208) ==================== ===================== ===================== BHFTII BRIGHTHOUSE/ARTISAN MID CAP VALUE DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 441,768 $ 623,203 $ 704,333 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 54,893 49,909 52,726 --------------------- --------------------- -------------------- Net investment income (loss).................... 386,875 573,294 651,607 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 6,218,111 7,448,048 Realized gains (losses) on sale of investments....... 643,877 158,671 632,699 --------------------- --------------------- -------------------- Net realized gains (losses)..................... 643,877 6,376,782 8,080,747 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 6,536,022 4,919,832 (14,388,947) --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,179,899 11,296,614 (6,308,200) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,566,774 $ 11,869,908 $ (5,656,593) ===================== ===================== ==================== BHFTII BRIGHTHOUSE/WELLINGTON BALANCED DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 6,002,089 $ 8,164,072 $ 6,073,749 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 1,662,608 1,586,955 1,662,109 -------------------- --------------------- --------------------- Net investment income (loss).................... 4,339,481 6,577,117 4,411,640 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,530,180 13,751,650 51,879,369 Realized gains (losses) on sale of investments....... 2,933,892 1,873,457 4,030,610 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 10,464,072 15,625,107 55,909,979 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 27,671,155 (3,743,348) (53,963,621) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 38,135,227 11,881,759 1,946,358 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 42,474,708 $ 18,458,876 $ 6,357,998 ==================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 58 The accompanying notes are an integral part of these financial statements. 59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE/WELLINGTON CORE EQUITY OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,196,624 $ 1,178,342 $ 1,320,806 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 58,748 55,978 57,675 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,137,876 1,122,364 1,263,131 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,824,131 3,218,161 25,408,009 Realized gains (losses) on sale of investments....... 379,451 (89,698) 716,455 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,203,582 3,128,463 26,124,464 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 9,056,499 855,321 (25,717,218) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 12,260,081 3,983,784 407,246 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 13,397,957 $ 5,106,148 $ 1,670,377 ==================== ==================== ==================== BHFTII FRONTIER MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 1,632,964 1,459,027 1,605,819 -------------------- -------------------- -------------------- Net investment income (loss).................... (1,632,964) (1,459,027) (1,605,819) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,792,652 25,696,515 31,059,487 Realized gains (losses) on sale of investments....... 5,416,830 2,622,698 5,229,191 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 11,209,482 28,319,213 36,288,678 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 43,545,366 (16,692,072) (28,947,695) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 54,754,848 11,627,141 7,340,983 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 53,121,884 $ 10,168,114 $ 5,735,164 ==================== ==================== ==================== BHFTII JENNISON GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 84,450 $ 66,617 $ 64,278 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 17,500 14,334 14,588 -------------------- -------------------- -------------------- Net investment income (loss).................... 66,950 52,283 49,690 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,883,231 2,948,170 3,546,254 Realized gains (losses) on sale of investments....... 374,997 177,425 583,747 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,258,228 3,125,595 4,130,001 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 6,383,010 (3,197,364) (1,789,865) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 8,641,238 (71,769) 2,340,136 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 8,708,188 $ (19,486) $ 2,389,826 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 60 The accompanying notes are an integral part of these financial statements. 61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII LOOMIS SAYLES SMALL CAP CORE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 75,600 $ 76,360 $ 38,636 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 26,031 22,984 24,860 -------------------- -------------------- -------------------- Net investment income (loss).................... 49,569 53,376 13,776 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,682,939 2,113,583 3,150,294 Realized gains (losses) on sale of investments....... 473,735 122,418 370,891 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,156,674 2,236,001 3,521,185 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,501,241 1,915,532 (3,857,826) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 3,657,915 4,151,533 (336,641) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,707,484 $ 4,204,909 $ (322,865) ==================== ==================== ==================== BHFTII LOOMIS SAYLES SMALL CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,721 9,163 9,783 -------------------- -------------------- -------------------- Net investment income (loss).................... (9,721) (9,163) (9,783) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 548,702 1,165,890 1,543,783 Realized gains (losses) on sale of investments....... 214,228 56,242 261,026 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 762,930 1,222,132 1,804,809 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,111,346 (582,015) (1,598,061) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 2,874,276 640,117 206,748 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 2,864,555 $ 630,954 $ 196,965 ==================== ==================== ==================== BHFTII METLIFE AGGREGATE BOND INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 3,851,349 $ 3,556,980 $ 3,746,041 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 41,255 40,599 39,974 -------------------- -------------------- -------------------- Net investment income (loss).................... 3,810,094 3,516,381 3,706,067 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (60,039) 157,844 111,155 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (60,039) 157,844 111,155 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 463,003 (713,953) (3,467,125) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 402,964 (556,109) (3,355,970) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 4,213,058 $ 2,960,272 $ 350,097 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 62 The accompanying notes are an integral part of these financial statements. 63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII METLIFE MID CAP STOCK INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,393,301 $ 1,110,219 $ 1,033,473 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 73,593 65,628 68,461 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,319,708 1,044,591 965,012 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,351,214 6,666,040 5,617,501 Realized gains (losses) on sale of investments....... 2,402,793 1,488,577 1,969,456 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 8,754,007 8,154,617 7,586,957 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,956,766 7,196,356 (10,506,888) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 13,710,773 15,350,973 (2,919,931) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 15,030,481 $ 16,395,564 $ (1,954,919) ==================== ==================== ==================== BHFTII METLIFE MSCI EAFE INDEX DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 2,349,651 $ 1,978,825 $ 2,538,836 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 40,550 35,536 38,784 ------------------- ------------------- ------------------- Net investment income (loss).................... 2,309,101 1,943,289 2,500,052 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 1,359,240 101,562 707,350 ------------------- ------------------- ------------------- Net realized gains (losses)..................... 1,359,240 101,562 707,350 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 15,314,940 (990,605) (3,862,935) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 16,674,180 (889,043) (3,155,585) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 18,983,281 $ 1,054,246 $ (655,533) =================== =================== =================== BHFTII METLIFE RUSSELL 2000 INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 973,933 $ 959,940 $ 876,249 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 54,478 46,857 47,773 -------------------- -------------------- -------------------- Net investment income (loss).................... 919,455 913,083 828,476 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,194,653 4,042,248 4,152,346 Realized gains (losses) on sale of investments....... 2,846,816 1,662,177 2,119,087 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,041,469 5,704,425 6,271,433 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,109,388 7,347,406 (10,053,677) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 10,150,857 13,051,831 (3,782,244) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 11,070,312 $ 13,964,914 $ (2,953,768) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 64 The accompanying notes are an integral part of these financial statements. 65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII METLIFE STOCK INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 19,102,288 $ 19,282,251 $ 16,989,974 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 2,334,132 2,114,804 2,188,283 -------------------- -------------------- -------------------- Net investment income (loss).................... 16,768,156 17,167,447 14,801,691 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 30,024,000 42,275,909 40,868,342 Realized gains (losses) on sale of investments....... 34,571,519 15,702,100 17,484,826 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 64,595,519 57,978,009 58,353,168 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 126,477,450 31,292,870 (63,726,527) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 191,072,969 89,270,879 (5,373,359) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 207,841,125 $ 106,438,326 $ 9,428,332 ==================== ==================== ==================== BHFTII MFS TOTAL RETURN DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 265,892 $ 287,267 $ 256,077 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 9,874 9,492 8,955 ------------------- ------------------- ------------------- Net investment income (loss).................... 256,018 277,775 247,122 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 556,179 417,334 -- Realized gains (losses) on sale of investments....... 137,114 162,191 196,619 ------------------- ------------------- ------------------- Net realized gains (losses)..................... 693,293 579,525 196,619 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 1,181,033 3,086 (470,036) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,874,326 582,611 (273,417) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 2,130,344 $ 860,386 $ (26,295) =================== =================== =================== BHFTII MFS VALUE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,881,888 $ 1,901,086 $ 2,325,157 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 74,868 68,482 70,555 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,807,020 1,832,604 2,254,602 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,556,050 7,583,219 13,359,170 Realized gains (losses) on sale of investments....... 820,001 440,263 1,066,697 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,376,051 8,023,482 14,425,867 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 7,634,853 1,456,878 (16,842,516) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 14,010,904 9,480,360 (2,416,649) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 15,817,924 $ 11,312,964 $ (162,047) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 66 The accompanying notes are an integral part of these financial statements. 67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII MFS VALUE II DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 550,421 $ 319,165 $ 358,828 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 24,035 22,545 23,445 -------------------- -------------------- -------------------- Net investment income (loss).................... 526,386 296,620 335,383 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 1,458,734 1,605,704 Realized gains (losses) on sale of investments....... (221,837) (389,249) (183,787) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (221,837) 1,069,485 1,421,917 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,234,077 1,883,740 (2,942,487) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,012,240 2,953,225 (1,520,570) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,538,626 $ 3,249,845 $ (1,185,187) ==================== ==================== ==================== BHFTII NEUBERGER BERMAN GENESIS DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 467,365 $ 488,023 $ 455,355 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 97,289 88,644 93,449 -------------------- -------------------- -------------------- Net investment income (loss).................... 370,076 399,379 361,906 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 9,271,091 -- -- Realized gains (losses) on sale of investments....... 2,786,014 1,826,763 1,512,189 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 12,057,105 1,826,763 1,512,189 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,394,645 15,758,188 (1,230,308) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 16,451,750 17,584,951 281,881 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 16,821,826 $ 17,984,330 $ 643,787 ==================== ==================== ==================== BHFTII T. ROWE PRICE LARGE CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 290,388 $ 49,087 $ 117,835 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 68,479 57,405 60,498 -------------------- -------------------- -------------------- Net investment income (loss).................... 221,909 (8,318) 57,337 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,723,064 10,221,524 15,073,030 Realized gains (losses) on sale of investments....... 2,250,944 1,301,214 2,495,339 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 7,974,008 11,522,738 17,568,369 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 19,425,313 (10,229,673) (8,845,976) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 27,399,321 1,293,065 8,722,393 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 27,621,230 $ 1,284,747 $ 8,779,730 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 68 The accompanying notes are an integral part of these financial statements. 69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII T. ROWE PRICE SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 383,598 $ 278,411 $ 155,566 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 422,353 374,021 404,512 --------------------- -------------------- -------------------- Net investment income (loss).................... (38,755) (95,610) (248,946) --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,083,773 13,259,903 9,768,650 Realized gains (losses) on sale of investments....... 2,988,428 2,246,255 3,150,255 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 10,072,201 15,506,158 12,918,905 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 14,656,850 (3,850,598) (9,935,901) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 24,729,051 11,655,560 2,983,004 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 24,690,296 $ 11,559,950 $ 2,734,058 ===================== ==================== ==================== BHFTII VANECK GLOBAL NATURAL RESOURCES DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 290 $ 1,967 $ 974 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 290 1,967 974 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (3,647) (7,201) (9,795) -------------------- --------------------- -------------------- Net realized gains (losses)..................... (3,647) (7,201) (9,795) -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 5,530 88,581 (64,308) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,883 81,380 (74,103) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,173 $ 83,347 $ (73,129) ==================== ===================== ==================== BHFTII WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,088,016 $ 831,199 $ 1,322,147 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 86,369 69,295 32,560 -------------------- --------------------- -------------------- Net investment income (loss).................... 2,001,647 761,904 1,289,587 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 364,897 119,058 73,628 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 364,897 119,058 73,628 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 1,796,363 2,417,251 (1,827,670) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,161,260 2,536,309 (1,754,042) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,162,907 $ 3,298,213 $ (464,455) ==================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 70 The accompanying notes are an integral part of these financial statements. 71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII WESTERN ASSET MANAGEMENT U.S. GOVERNMENT DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 418,500 $ 416,577 $ 373,766 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 16,252 16,155 16,226 --------------------- -------------------- -------------------- Net investment income (loss).................... 402,248 400,422 357,540 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (35,219) (10,757) (6,880) --------------------- -------------------- -------------------- Net realized gains (losses)..................... (35,219) (10,757) (6,880) --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (80,512) (199,711) (270,748) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (115,731) (210,468) (277,628) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 286,517 $ 189,954 $ 79,912 ===================== ==================== ==================== DREYFUS VIF INTERNATIONAL VALUE DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,916 $ 3,283 $ 4,421 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 2,916 3,283 4,421 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (300) (5,322) (390) --------------------- --------------------- --------------------- Net realized gains (losses)..................... (300) (5,322) (390) --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 51,516 (2,271) (10,460) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 51,216 (7,593) (10,850) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 54,132 $ (4,310) $ (6,429) ===================== ===================== ===================== FIDELITY VIP ASSET MANAGER: GROWTH DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 24,598 $ 23,502 $ 20,958 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 24,598 23,502 20,958 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 254,110 25,657 1,145 Realized gains (losses) on sale of investments....... 39,851 35,213 127,820 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 293,961 60,870 128,965 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 9,749 (48,668) (145,469) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 303,710 12,202 (16,504) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 328,308 $ 35,704 $ 4,454 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 72 The accompanying notes are an integral part of these financial statements. 73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP CONTRAFUND DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 25,600 $ 18,813 $ 25,926 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 25,600 18,813 25,926 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 151,989 215,517 265,481 Realized gains (losses) on sale of investments....... 64,249 49,752 107,564 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 216,238 265,269 373,045 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 321,303 (89,763) (372,526) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 537,541 175,506 519 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 563,141 $ 194,319 $ 26,445 ===================== ===================== ===================== FIDELITY VIP EQUITY-INCOME DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 40 $ 351 $ 426 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 40 351 426 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 208 873 2,231 Realized gains (losses) on sale of investments....... 645 (15) 275 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 853 858 2,506 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (214) 1,277 (3,341) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 639 2,135 (835) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 679 $ 2,486 $ (409) ===================== ===================== ===================== FIDELITY VIP FREEDOM 2010 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,182 $ 439 $ 361 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 2,182 439 361 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,201 455 65 Realized gains (losses) on sale of investments....... 700 (28) 5,610 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 1,901 427 5,675 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 324 369 (5,470) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,225 796 205 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,407 $ 1,235 $ 566 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 74 The accompanying notes are an integral part of these financial statements. 75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP FREEDOM 2020 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 8,288 $ 8,579 $ 10,060 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 8,288 8,579 10,060 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 15,960 16,688 2,356 Realized gains (losses) on sale of investments....... 17,690 2,623 166,915 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 33,650 19,311 169,271 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 50,769 4,403 (177,998) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 84,419 23,714 (8,727) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 92,707 $ 32,293 $ 1,333 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2025 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 7,280 $ 6,677 $ 8,151 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 7,280 6,677 8,151 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 13,035 13,619 2,389 Realized gains (losses) on sale of investments....... 687 (312) 231 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 13,722 13,307 2,620 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 58,295 6,315 (13,249) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 72,017 19,622 (10,629) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 79,297 $ 26,299 $ (2,478) ===================== ===================== ===================== FIDELITY VIP FREEDOM 2030 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,686 $ 2,599 $ 2,154 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 3,686 2,599 2,154 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,522 4,822 611 Realized gains (losses) on sale of investments....... 8,178 (1,669) 1,142 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 15,700 3,153 1,753 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 21,517 4,716 (4,989) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 37,217 7,869 (3,236) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 40,903 $ 10,468 $ (1,082) ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 76 The accompanying notes are an integral part of these financial statements. 77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP FREEDOM 2040 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,654 $ 2,084 $ 1,492 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 2,654 2,084 1,492 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,908 3,682 541 Realized gains (losses) on sale of investments....... 6,961 (877) 263 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 12,869 2,805 804 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 24,961 5,080 (3,345) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 37,830 7,885 (2,541) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 40,484 $ 9,969 $ (1,049) ===================== ===================== ===================== FIDELITY VIP FREEDOM 2050 DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,270 $ 1,500 $ 878 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 2,270 1,500 878 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,679 2,239 308 Realized gains (losses) on sale of investments....... 3,738 (570) 535 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 8,417 1,669 843 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 19,567 2,841 (2,416) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 27,984 4,510 (1,573) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 30,254 $ 6,010 $ (695) ==================== ===================== ===================== FIDELITY VIP GOVERNMENT MONEY MARKET DIVISION --------------------------------------------- 2017 2016 (c) --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 22,875 $ 4,167 --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- --------------------- --------------------- Net investment income (loss).................... 22,875 4,167 --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- Realized gains (losses) on sale of investments....... -- -- --------------------- --------------------- Net realized gains (losses)..................... -- -- --------------------- --------------------- Change in unrealized gains (losses) on investments... -- -- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... -- -- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 22,875 $ 4,167 ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 78 The accompanying notes are an integral part of these financial statements. 79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP HIGH INCOME DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 24,337 $ 18,971 $ 14,336 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 24,337 18,971 14,336 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (18) (443) (455) --------------------- --------------------- --------------------- Net realized gains (losses)..................... (18) (443) (455) --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 2,185 19,200 (20,979) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,167 18,757 (21,434) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 26,504 $ 37,728 $ (7,098) ===================== ===================== ===================== FIDELITY VIP INVESTMENT GRADE BOND DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 28,197 $ 28,927 $ 31,506 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 28,197 28,927 31,506 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,616 587 993 Realized gains (losses) on sale of investments....... (2,296) (2,116) (839) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 3,320 (1,529) 154 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 18,959 27,988 (39,907) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 22,279 26,459 (39,753) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 50,476 $ 55,386 $ (8,247) ===================== ===================== ===================== FIDELITY VIP MID CAP DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,285 $ 766 $ 745 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- -------------------- Net investment income (loss).................... 1,285 766 745 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 12,504 14,495 30,638 Realized gains (losses) on sale of investments....... 3,777 (682) 648 --------------------- --------------------- -------------------- Net realized gains (losses)..................... 16,281 13,813 31,286 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 31,948 9,442 (36,156) --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 48,229 23,255 (4,870) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 49,514 $ 24,021 $ (4,125) ===================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 80 The accompanying notes are an integral part of these financial statements. 81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FTVIPT FRANKLIN INCOME VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,194 $ 2,059 $ 1,086 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 2,194 2,059 1,086 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 186 (110) (154) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 186 (110) (154) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 6,858 3,968 (2,439) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 7,044 3,858 (2,593) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 9,238 $ 5,917 $ (1,507) ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 9,201 $ 8,262 $ 13,670 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 9,201 8,262 13,670 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 29,295 39,176 27,512 Realized gains (losses) on sale of investments....... 1,492 (2,198) 194 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 30,787 36,978 27,706 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 6,135 13,065 (58,851) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 36,922 50,043 (31,145) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 46,123 $ 58,305 $ (17,475) ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL SHARES VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,384 $ 1,664 $ 1,895 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 2,384 1,664 1,895 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,324 6,856 4,180 Realized gains (losses) on sale of investments....... (2) (444) 33 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 4,322 6,412 4,213 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,445 4,437 (9,723) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 5,767 10,849 (5,510) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 8,151 $ 12,513 $ (3,615) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 82 The accompanying notes are an integral part of these financial statements. 83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FTVIPT TEMPLETON FOREIGN VIP DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 225,978 $ 114,022 $ 189,205 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 225,978 114,022 189,205 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 89,391 177,426 Realized gains (losses) on sale of investments....... 5,599 (69,876) 5,027 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 5,599 19,515 182,453 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 996,224 260,337 (703,728) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,001,823 279,852 (521,275) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,227,801 $ 393,874 $ (332,070) ==================== ==================== =================== FTVIPT TEMPLETON GLOBAL BOND VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 83,772 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- -- 83,772 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,934 449 5,274 Realized gains (losses) on sale of investments....... (2,105) (4,156) (97,965) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (171) (3,707) (92,691) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 11,918 24,908 (36,601) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 11,747 21,201 (129,292) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 11,747 $ 21,201 $ (45,520) ==================== ==================== ==================== GOLDMAN SACHS MID-CAP VALUE DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 623 $ 1,071 $ 1,118 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 623 1,071 1,118 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,676 43 20,122 Realized gains (losses) on sale of investments....... 316 (9,872) 671 ------------------- ------------------- -------------------- Net realized gains (losses)..................... 4,992 (9,829) 20,793 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 3,256 25,433 (48,920) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 8,248 15,604 (28,127) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 8,871 $ 16,675 $ (27,009) =================== =================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 84 The accompanying notes are an integral part of these financial statements. 85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 41 $ 413 $ 104 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- --------------------- Net investment income (loss)................... 41 413 104 --------------------- ---------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 836 986 4,391 Realized gains (losses) on sale of investments....... 3,260 (839) 336 --------------------- ---------------------- --------------------- Net realized gains (losses).................... 4,096 147 4,727 --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments... (3,129) 6,057 (5,505) --------------------- ---------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 967 6,204 (778) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,008 $ 6,617 $ (674) ===================== ====================== ===================== INVESCO V.I. COMSTOCK DIVISION ----------------------------------------------------------------------- 2017 2016 2015 ---------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 10,939 $ 4,913 $ 5,695 ---------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ---------------------- --------------------- --------------------- Net investment income (loss)................... 10,939 4,913 5,695 ---------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,965 29,536 941 Realized gains (losses) on sale of investments....... 4,332 2,231 3,469 ---------------------- --------------------- --------------------- Net realized gains (losses).................... 28,297 31,767 4,410 ---------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 52,013 25,839 (32,126) ---------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 80,310 57,606 (27,716) ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 91,249 $ 62,519 $ (22,021) ====================== ===================== ===================== INVESCO V.I. INTERNATIONAL GROWTH DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 4,975 $ 4,874 $ 5,017 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- --------------------- Net investment income (loss)................... 4,975 4,874 5,017 --------------------- ---------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 6,211 630 2,637 --------------------- ---------------------- --------------------- Net realized gains (losses).................... 6,211 630 2,637 --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments... 61,391 (8,246) (13,856) --------------------- ---------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 67,602 (7,616) (11,219) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 72,577 $ (2,742) $ (6,202) ===================== ====================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 86 The accompanying notes are an integral part of these financial statements. 87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
JANUS HENDERSON BALANCED DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 15,832 $ 20,153 $ 15,263 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 15,832 20,153 15,263 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,191 14,217 35,506 Realized gains (losses) on sale of investments....... 11,402 8,012 5,452 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 13,593 22,229 40,958 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 160,350 (19) (51,128) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 173,943 22,210 (10,170) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 189,775 $ 42,363 $ 5,093 ==================== ===================== ===================== JANUS HENDERSON ENTERPRISE DIVISION -------------------------------------------- 2017 2016 (d) -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 710 $ 107 -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -------------------- --------------------- Net investment income (loss).................... 710 107 -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 32,459 38,700 Realized gains (losses) on sale of investments....... 20,860 (534) -------------------- --------------------- Net realized gains (losses)..................... 53,319 38,166 -------------------- --------------------- Change in unrealized gains (losses) on investments... 49,008 289 -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 102,327 38,455 -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 103,037 $ 38,562 ==================== ===================== JANUS HENDERSON FORTY DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... -- -- -- --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 29,535 67,914 121,081 Realized gains (losses) on sale of investments....... 20,272 (8,107) 1,569 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 49,807 59,807 122,650 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 82,066 (58,944) (57,429) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 131,873 863 65,221 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 131,873 $ 863 $ 65,221 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 88 The accompanying notes are an integral part of these financial statements. 89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
JANUS HENDERSON OVERSEAS DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 358 $ 1,672 $ 225 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 358 1,672 225 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 1,129 1,449 Realized gains (losses) on sale of investments....... (10,688) (7,649) (6,243) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (10,688) (6,520) (4,794) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 18,215 1,900 363 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,527 (4,620) (4,431) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,885 $ (2,948) $ (4,206) ==================== ==================== ==================== JANUS HENDERSON RESEARCH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,234 $ 1,500 $ 2,968 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,234 1,500 2,968 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,957 17,243 84,817 Realized gains (losses) on sale of investments....... 2,574 45,098 17,674 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 5,531 62,341 102,491 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 68,064 (66,733) (79,472) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 73,595 (4,392) 23,019 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 74,829 $ (2,892) $ 25,987 ==================== ==================== ==================== MFS VIT GLOBAL EQUITY DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,698 $ 1,326 $ 1,587 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,698 1,326 1,587 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 9,831 9,731 6,506 Realized gains (losses) on sale of investments....... 2,533 695 2,452 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 12,364 10,426 8,958 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 40,361 736 (14,256) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 52,725 11,162 (5,298) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 54,423 $ 12,488 $ (3,711) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 90 The accompanying notes are an integral part of these financial statements. 91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
MFS VIT NEW DISCOVERY DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... -- -- -- --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,695 9,401 6,957 Realized gains (losses) on sale of investments....... 37,307 (174) 374 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 42,002 9,227 7,331 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (961) 7,467 (11,470) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 41,041 16,694 (4,139) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 41,041 $ 16,694 $ (4,139) ===================== ==================== ==================== MFS VIT VALUE DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 345 $ 369 $ 439 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 345 369 439 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 800 1,629 1,237 Realized gains (losses) on sale of investments....... 847 619 659 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,647 2,248 1,896 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,235 (76) (2,518) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,882 2,172 (622) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 3,227 $ 2,541 $ (183) ==================== ==================== ==================== MFS VIT II HIGH YIELD DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 9,827 $ 9,347 $ 9,868 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 9,827 9,347 9,868 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (95) (220) (99) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (95) (220) (99) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (254) 9,158 (16,013) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (349) 8,938 (16,112) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 9,478 $ 18,285 $ (6,244) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 92 The accompanying notes are an integral part of these financial statements. 93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
MORGAN STANLEY VIF EMERGING MARKETS DEBT DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 70,167 $ 59,307 $ 45,047 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 70,167 59,307 45,047 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (7,471) (12,131) (12,799) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (7,471) (12,131) (12,799) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 58,835 45,652 (46,377) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 51,364 33,521 (59,176) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 121,531 $ 92,828 $ (14,129) ==================== ==================== ==================== MORGAN STANLEY VIF EMERGING MARKETS EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 29,128 $ 12,938 $ 18,406 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 29,128 12,938 18,406 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 244,612 (37,991) (24,296) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 244,612 (37,991) (24,296) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 807,706 171,862 (266,747) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,052,318 133,871 (291,043) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,081,446 $ 146,809 $ (272,637) ==================== ==================== ==================== PIMCO VIT ALL ASSET DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,628 $ 3,261 $ 17,942 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,628 3,261 17,942 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (130) (833) (111,468) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (130) (833) (111,468) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 11,089 12,619 38,369 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 10,959 11,786 (73,099) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 17,587 $ 15,047 $ (55,157) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 94 The accompanying notes are an integral part of these financial statements. 95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
PIMCO VIT COMMODITYREALRETURN STRATEGY DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 1,293 $ 111 $ 1,467 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 1,293 111 1,467 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (3,603) (957) (11,415) -------------------- -------------------- ------------------- Net realized gains (losses)..................... (3,603) (957) (11,415) -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 2,335 2,262 3,408 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,268) 1,305 (8,007) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 25 $ 1,416 $ (6,540) ==================== ==================== =================== PIMCO VIT LOW DURATION DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 12,109 $ 13,010 $ 29,643 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 12,109 13,010 29,643 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (327) (325) 12,574 ------------------- ------------------- -------------------- Net realized gains (losses)..................... (327) (325) 12,574 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 386 (271) (33,266) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 59 (596) (20,692) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 12,168 $ 12,414 $ 8,951 =================== =================== ==================== PUTNAM VT INTERNATIONAL VALUE DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 86 $ 122 $ 91 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- -------------------- -------------------- Net investment income (loss).................... 86 122 91 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 45 (165) (22) ------------------- -------------------- -------------------- Net realized gains (losses)..................... 45 (165) (22) ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,055 58 (118) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,100 (107) (140) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,186 $ 15 $ (49) =================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 96 The accompanying notes are an integral part of these financial statements. 97 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
ROYCE MICRO-CAP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 73 $ 61 $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 73 61 -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,139 -- 498 Realized gains (losses) on sale of investments....... 5 71 1 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,144 71 499 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (673) 1,525 (1,557) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 471 1,596 (1,058) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 544 $ 1,657 $ (1,058) ==================== ==================== ==================== ROYCE SMALL-CAP DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 136 $ 1,115 $ 443 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 136 1,115 443 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 11,025 12,749 Realized gains (losses) on sale of investments....... (13,382) (4,843) 64 -------------------- --------------------- -------------------- Net realized gains (losses)..................... (13,382) 6,182 12,813 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 13,095 2,799 (19,154) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (287) 8,981 (6,341) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (151) $ 10,096 $ (5,898) ==================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 98 The accompanying notes are an integral part of these financial statements. 99 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AB GLOBAL THEMATIC GROWTH DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 88 $ -- $ -- Net realized gains (losses)......................... 2,867 877 4,879 Change in unrealized gains (losses) on investments.. 8,219 (1,193) (2,756) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,174 (316) 2,123 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,269 1,269 1,493 Net transfers (including fixed account)............. (9,295) (7,397) (6,753) Policy charges...................................... (859) (883) (1,929) Transfers for Policy benefits and terminations...... -- (90) (30,831) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (8,885) (7,101) (38,020) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,289 (7,417) (35,897) NET ASSETS: Beginning of year................................... 32,386 39,803 75,700 ------------------- -------------------- -------------------- End of year......................................... $ 34,675 $ 32,386 $ 39,803 =================== ==================== ==================== AB INTERMEDIATE BOND DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,922 $ 2,736 $ 2,061 Net realized gains (losses)......................... (2,604) 1,078 1,662 Change in unrealized gains (losses) on investments.. 2,197 49 (3,852) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,515 3,863 (129) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 644 -- 644 Net transfers (including fixed account)............. 32,033 33,741 2,915 Policy charges...................................... (2,761) (3,112) (2,460) Transfers for Policy benefits and terminations...... (52,174) -- -- ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (22,258) 30,629 1,099 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (18,743) 34,492 970 NET ASSETS: Beginning of year................................... 95,051 60,559 59,589 ------------------- -------------------- -------------------- End of year......................................... $ 76,308 $ 95,051 $ 60,559 =================== ==================== ==================== AMERICAN FUNDS BOND DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 118,854 $ 100,993 $ 95,558 Net realized gains (losses)......................... 94,447 24,681 113,025 Change in unrealized gains (losses) on investments.. 12,429 45,632 (201,734) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 225,730 171,306 6,849 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 560,778 594,195 595,751 Net transfers (including fixed account)............. 341,614 266,964 482,848 Policy charges...................................... (355,918) (399,254) (353,117) Transfers for Policy benefits and terminations...... (446,430) (479,171) (500,127) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 100,044 (17,266) 225,355 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 325,774 154,040 232,204 NET ASSETS: Beginning of year................................... 6,362,160 6,208,120 5,975,916 ------------------- -------------------- -------------------- End of year......................................... $ 6,687,934 $ 6,362,160 $ 6,208,120 =================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 100 The accompanying notes are an integral part of these financial statements. 101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 219,097 $ 81,134 $ (91,602) Net realized gains (losses)......................... 493,132 11,903,440 6,923,224 Change in unrealized gains (losses) on investments.. 15,300,486 (10,777,574) (6,348,033) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 16,012,715 1,207,000 483,589 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,572,438 4,934,049 5,361,656 Net transfers (including fixed account)............. (860,452) (1,739,842) (992,517) Policy charges...................................... (3,422,778) (3,505,140) (3,751,216) Transfers for Policy benefits and terminations...... (4,732,036) (4,322,961) (4,463,980) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,442,828) (4,633,894) (3,846,057) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 11,569,887 (3,426,894) (3,362,468) NET ASSETS: Beginning of year................................... 63,768,756 67,195,650 70,558,118 -------------------- -------------------- -------------------- End of year......................................... $ 75,338,643 $ 63,768,756 $ 67,195,650 ==================== ==================== ==================== AMERICAN FUNDS GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 771,061 $ 1,112,235 $ 849,331 Net realized gains (losses)......................... 21,243,802 16,155,775 37,793,980 Change in unrealized gains (losses) on investments.. 23,936,579 (2,560,394) (27,669,113) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 45,951,442 14,707,616 10,974,198 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,971,466 10,568,668 11,128,355 Net transfers (including fixed account)............. (2,105,090) (1,947,160) (2,877,301) Policy charges...................................... (9,064,646) (8,879,484) (8,922,399) Transfers for Policy benefits and terminations...... (13,311,865) (10,245,919) (10,503,688) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (14,510,135) (10,503,895) (11,175,033) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 31,441,307 4,203,721 (200,835) NET ASSETS: Beginning of year................................... 168,913,307 164,709,586 164,910,421 -------------------- -------------------- ------------------- End of year......................................... $ 200,354,614 $ 168,913,307 $ 164,709,586 ==================== ==================== =================== AMERICAN FUNDS GROWTH-INCOME DIVISION ------------------------------------------------------------------ 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,472,840 $ 1,399,526 $ 1,265,966 Net realized gains (losses)......................... 8,935,623 12,245,175 17,136,301 Change in unrealized gains (losses) on investments.. 12,349,992 (2,551,087) (16,929,014) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 22,758,455 11,093,614 1,473,253 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,390,830 6,753,905 7,132,701 Net transfers (including fixed account)............. (931,937) (1,474,231) (706,082) Policy charges...................................... (5,833,783) (5,885,637) (5,898,040) Transfers for Policy benefits and terminations...... (7,681,451) (6,406,059) (6,373,610) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (8,056,341) (7,012,022) (5,845,031) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 14,702,114 4,081,592 (4,371,778) NET ASSETS: Beginning of year................................... 105,740,546 101,658,954 106,030,732 ------------------- -------------------- -------------------- End of year......................................... $ 120,442,660 $ 105,740,546 $ 101,658,954 =================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 102 The accompanying notes are an integral part of these financial statements. 103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
AMERICAN FUNDS HIGH-INCOME BOND DIVISION -------------------- 2017 (a) -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 468 Net realized gains (losses)......................... -- Change in unrealized gains (losses) on investments.. (375) -------------------- Net increase (decrease) in net assets resulting from operations................................ 93 -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- Net transfers (including fixed account)............. 8,614 Policy charges...................................... (55) Transfers for Policy benefits and terminations...... -- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 8,559 -------------------- Net increase (decrease) in net assets............. 8,652 NET ASSETS: Beginning of year................................... -- -------------------- End of year......................................... $ 8,652 ==================== AMERICAN FUNDS INTERNATIONAL DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,618 $ 4,799 $ 7,125 Net realized gains (losses)......................... 14,001 21,338 53,336 Change in unrealized gains (losses) on investments.. 132,723 (18,823) (72,634) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 154,342 7,314 (12,173) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 37,367 2,192 6,030 Net transfers (including fixed account)............. 217,535 -- (251,186) Policy charges...................................... (15,980) (6,055) (9,566) Transfers for Policy benefits and terminations...... (88,369) (70,171) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 150,553 (74,034) (254,722) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 304,895 (66,720) (266,895) NET ASSETS: Beginning of year................................... 348,390 415,110 682,005 -------------------- -------------------- -------------------- End of year......................................... $ 653,285 $ 348,390 $ 415,110 ==================== ==================== ==================== AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 724 $ 737 $ 712 Net realized gains (losses)......................... (41) 968 401 Change in unrealized gains (losses) on investments.. 178 (1,163) (350) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 861 542 763 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,253 5,191 2,595 Net transfers (including fixed account)............. 1 9 1 Policy charges...................................... (1,725) (1,778) (1,568) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (471) 3,422 1,028 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 390 3,964 1,791 NET ASSETS: Beginning of year................................... 54,307 50,343 48,552 -------------------- -------------------- -------------------- End of year......................................... $ 54,697 $ 54,307 $ 50,343 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 104 The accompanying notes are an integral part of these financial statements. 105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI AB GLOBAL DYNAMIC ALLOCATION DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,050 $ 977 $ 2,180 Net realized gains (losses)......................... 227 430 2,222 Change in unrealized gains (losses) on investments.. 7,735 769 (4,443) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 9,012 2,176 (41) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 14,853 15,256 16,182 Net transfers (including fixed account)............. 4,736 (2,468) 8,940 Policy charges...................................... (8,465) (8,319) (9,589) Transfers for Policy benefits and terminations...... (2,345) (5,916) (4,204) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 8,779 (1,447) 11,329 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 17,791 729 11,288 NET ASSETS: Beginning of year................................... 61,910 61,181 49,893 -------------------- -------------------- -------------------- End of year......................................... $ 79,701 $ 61,910 $ 61,181 ==================== ==================== ==================== BHFTI ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 94 $ 2 $ 21 Net realized gains (losses)......................... 101 (12) (259) Change in unrealized gains (losses) on investments.. 685 80 (72) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 880 70 (310) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,038 3,715 1,892 Net transfers (including fixed account)............. 19 274 1,102 Policy charges...................................... (1,306) (1,293) (645) Transfers for Policy benefits and terminations...... (851) -- (95) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 900 2,696 2,254 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,780 2,766 1,944 NET ASSETS: Beginning of year................................... 4,786 2,020 76 -------------------- -------------------- -------------------- End of year......................................... $ 6,566 $ 4,786 $ 2,020 ==================== ==================== ==================== BHFTI AMERICAN FUNDS BALANCED ALLOCATION DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 19,259 $ 18,208 $ 15,506 Net realized gains (losses)......................... 55,792 76,946 49,693 Change in unrealized gains (losses) on investments.. 98,370 (22,963) (69,036) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 173,421 72,191 (3,837) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 143,128 85,094 112,261 Net transfers (including fixed account)............. (1,238) 21,073 (10,152) Policy charges...................................... (81,299) (69,192) (60,959) Transfers for Policy benefits and terminations...... (8,464) (12,455) (19,938) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 52,127 24,520 21,212 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 225,548 96,711 17,375 NET ASSETS: Beginning of year................................... 990,764 894,053 876,678 -------------------- --------------------- -------------------- End of year......................................... $ 1,216,312 $ 990,764 $ 894,053 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 106 The accompanying notes are an integral part of these financial statements. 107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI AMERICAN FUNDS GROWTH ALLOCATION DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 29,710 $ 26,959 $ 24,524 Net realized gains (losses)......................... 127,888 160,188 110,834 Change in unrealized gains (losses) on investments.. 236,441 (37,021) (141,365) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 394,039 150,126 (6,007) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 312,058 271,362 284,585 Net transfers (including fixed account)............. 23,444 26,046 (51,416) Policy charges...................................... (159,833) (153,833) (138,948) Transfers for Policy benefits and terminations...... (46,322) (70,269) (45,437) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 129,347 73,306 48,784 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 523,386 223,432 42,777 NET ASSETS: Beginning of year................................... 1,761,546 1,538,114 1,495,337 ------------------- -------------------- -------------------- End of year......................................... $ 2,284,932 $ 1,761,546 $ 1,538,114 =================== ==================== ==================== BHFTI AMERICAN FUNDS MODERATE ALLOCATION DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 27,088 $ 23,999 $ 17,019 Net realized gains (losses)......................... 55,639 67,729 52,885 Change in unrealized gains (losses) on investments.. 80,012 (16,232) (73,320) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 162,739 75,496 (3,416) -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 283,128 234,792 222,467 Net transfers (including fixed account)............. 6,385 22,400 58,079 Policy charges...................................... (137,260) (128,785) (117,193) Transfers for Policy benefits and terminations...... (28,322) (14,859) (211,042) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 123,931 113,548 (47,689) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 286,670 189,044 (51,105) NET ASSETS: Beginning of year................................... 1,158,636 969,592 1,020,697 -------------------- -------------------- ------------------- End of year......................................... $ 1,445,306 $ 1,158,636 $ 969,592 ==================== ==================== =================== BHFTI AQR GLOBAL RISK BALANCED DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,366 $ -- $ 7,434 Net realized gains (losses)......................... 4,688 (7,843) 10,796 Change in unrealized gains (losses) on investments.. 6,767 18,548 (30,868) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 13,821 10,705 (12,638) -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 32,619 40,240 47,166 Net transfers (including fixed account)............. (4,180) (10,383) (53,166) Policy charges...................................... (14,372) (20,166) (21,458) Transfers for Policy benefits and terminations...... (2,595) (19,162) (5,275) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 11,472 (9,471) (32,733) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 25,293 1,234 (45,371) NET ASSETS: Beginning of year................................... 135,878 134,644 180,015 -------------------- -------------------- ------------------- End of year......................................... $ 161,171 $ 135,878 $ 134,644 ==================== ==================== ===================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 108 The accompanying notes are an integral part of these financial statements. 109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BLACKROCK GLOBAL TACTICAL STRATEGIES DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,651 $ 4,216 $ 3,577 Net realized gains (losses)......................... 4,666 23,013 9,345 Change in unrealized gains (losses) on investments.. 40,461 (13,208) (14,933) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 47,778 14,021 (2,011) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 85,970 84,543 68,269 Net transfers (including fixed account)............. 3,878 26,959 617 Policy charges...................................... (28,027) (25,547) (22,928) Transfers for Policy benefits and terminations...... (3,363) (9,699) (8,345) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 58,458 76,256 37,613 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 106,236 90,277 35,602 NET ASSETS: Beginning of year................................... 317,436 227,159 191,557 --------------------- --------------------- --------------------- End of year......................................... $ 423,672 $ 317,436 $ 227,159 ===================== ===================== ===================== BHFTI BRIGHTHOUSE ASSET ALLOCATION 100 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 333,898 $ 509,053 $ 306,462 Net realized gains (losses)......................... 1,627,226 2,766,221 1,897,763 Change in unrealized gains (losses) on investments.. 2,972,083 (1,391,486) (2,617,113) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 4,933,207 1,883,788 (412,888) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,127,500 2,219,202 2,468,258 Net transfers (including fixed account)............. (38,240) (470,839) (542,629) Policy charges...................................... (1,156,903) (1,181,948) (1,172,423) Transfers for Policy benefits and terminations...... (2,194,731) (1,188,155) (791,081) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,262,374) (621,740) (37,875) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 3,670,833 1,262,048 (450,763) NET ASSETS: Beginning of year................................... 21,704,625 20,442,577 20,893,340 --------------------- --------------------- --------------------- End of year......................................... $ 25,375,458 $ 21,704,625 $ 20,442,577 ===================== ===================== ===================== BHFTI BRIGHTHOUSE BALANCED PLUS DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 5,462 $ 7,951 $ 4,773 Net realized gains (losses)......................... 18,235 2,123 10,549 Change in unrealized gains (losses) on investments.. 35,046 12,397 (26,058) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 58,743 22,471 (10,736) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 76,917 69,223 60,907 Net transfers (including fixed account)............. 18,013 10,477 16,180 Policy charges...................................... (39,341) (34,809) (31,093) Transfers for Policy benefits and terminations...... (33,545) (11,096) (10,066) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 22,044 33,795 35,928 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 80,787 56,266 25,192 NET ASSETS: Beginning of year................................... 316,959 260,693 235,501 --------------------- --------------------- --------------------- End of year......................................... $ 397,746 $ 316,959 $ 260,693 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 110 The accompanying notes are an integral part of these financial statements. 111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BRIGHTHOUSE SMALL CAP VALUE DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,610 $ 8,421 $ 800 Net realized gains (losses)......................... 35,468 (9,536) 312,062 Change in unrealized gains (losses) on investments.. 41,355 191,373 (358,930) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 83,433 190,258 (46,068) ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 13,771 27,558 9,270 Net transfers (including fixed account)............. (68,948) (158,661) (679) Policy charges...................................... (16,210) (18,270) (21,127) Transfers for Policy benefits and terminations...... (173) (68,518) (3,611) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (71,560) (217,891) (16,147) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 11,873 (27,633) (62,215) NET ASSETS: Beginning of year................................... 774,395 802,028 864,243 ------------------- ------------------- ------------------- End of year......................................... $ 786,268 $ 774,395 $ 802,028 =================== =================== =================== BHFTI BRIGHTHOUSE/ABERDEEN EMERGING MARKETS EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 9,611 $ 6,049 $ 10,228 Net realized gains (losses)......................... 7,574 (30,698) (4,559) Change in unrealized gains (losses) on investments.. 170,725 89,323 (82,085) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 187,910 64,674 (76,416) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 102,644 132,505 116,005 Net transfers (including fixed account)............. 21,155 50,504 29,215 Policy charges...................................... (36,046) (33,644) (40,363) Transfers for Policy benefits and terminations...... (49,717) (100,287) (11,079) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 38,036 49,078 93,778 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 225,946 113,752 17,362 NET ASSETS: Beginning of year................................... 652,237 538,485 521,123 -------------------- -------------------- -------------------- End of year......................................... $ 878,183 $ 652,237 $ 538,485 ==================== ==================== ==================== BHFTI BRIGHTHOUSE/TEMPLETON INTERNATIONAL BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ 16,491 Net realized gains (losses)......................... (1,348) (1,685) (5,183) Change in unrealized gains (losses) on investments.. 2,100 4,976 (19,099) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 752 3,291 (7,791) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 55,578 49,471 46,145 Net transfers (including fixed account)............. 3,740 10,118 (9,888) Policy charges...................................... (21,986) (19,999) (17,243) Transfers for Policy benefits and terminations...... (5,055) (7,706) (1,587) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 32,277 31,884 17,427 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 33,029 35,175 9,636 NET ASSETS: Beginning of year................................... 218,676 183,501 173,865 -------------------- -------------------- -------------------- End of year......................................... $ 251,705 $ 218,676 $ 183,501 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 112 The accompanying notes are an integral part of these financial statements. 113 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI BRIGHTHOUSE/WELLINGTON LARGE CAP RESEARCH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,553,091 $ 7,597,726 $ 1,822,832 Net realized gains (losses)......................... 25,305,541 31,080,785 36,321,046 Change in unrealized gains (losses) on investments.. 57,041,217 (8,253,818) (21,509,605) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 84,899,849 30,424,693 16,634,273 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 23,708,302 24,784,013 25,871,596 Net transfers (including fixed account)............. (10,690,456) (2,994,332) (1,616,660) Policy charges...................................... (25,868,642) (26,012,789) (25,907,001) Transfers for Policy benefits and terminations...... (22,138,025) (21,189,207) (22,796,743) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (34,988,821) (25,412,315) (24,448,808) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 49,911,028 5,012,378 (7,814,535) NET ASSETS: Beginning of year................................... 409,625,033 404,612,655 412,427,190 -------------------- --------------------- -------------------- End of year......................................... $ 459,536,061 $ 409,625,033 $ 404,612,655 ==================== ===================== ==================== BHFTI CLARION GLOBAL REAL ESTATE DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,026,146 $ 650,259 $ 1,202,742 Net realized gains (losses)......................... 11,186 31,945 48,531 Change in unrealized gains (losses) on investments.. 1,949,598 (362,033) (1,654,271) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,986,930 320,171 (402,998) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,960,709 2,067,349 2,178,317 Net transfers (including fixed account)............. 293,430 (931,910) (643,155) Policy charges...................................... (1,382,360) (1,519,377) (1,546,835) Transfers for Policy benefits and terminations...... (1,474,396) (1,814,112) (1,529,344) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (602,617) (2,198,050) (1,541,017) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 2,384,313 (1,877,879) (1,944,015) NET ASSETS: Beginning of year................................... 27,646,710 29,524,589 31,468,604 -------------------- --------------------- -------------------- End of year......................................... $ 30,031,023 $ 27,646,710 $ 29,524,589 ==================== ===================== ==================== BHFTI CLEARBRIDGE AGGRESSIVE GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 373,095 $ 233,927 $ 153,096 Net realized gains (losses)......................... 1,758,844 970,623 1,820,551 Change in unrealized gains (losses) on investments.. 5,283,206 (103,509) (3,670,688) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 7,415,145 1,101,041 (1,697,041) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,977,490 3,112,659 3,350,304 Net transfers (including fixed account)............. (1,093,022) (1,658,736) (548,727) Policy charges...................................... (2,255,371) (2,334,139) (2,487,088) Transfers for Policy benefits and terminations...... (3,530,000) (2,140,654) (2,989,221) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,900,903) (3,020,870) (2,674,732) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 3,514,242 (1,919,829) (4,371,773) NET ASSETS: Beginning of year................................... 40,986,942 42,906,771 47,278,544 --------------------- -------------------- -------------------- End of year......................................... $ 44,501,184 $ 40,986,942 $ 42,906,771 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 114 The accompanying notes are an integral part of these financial statements. 115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI HARRIS OAKMARK INTERNATIONAL DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 751,312 $ 812,952 $ 1,300,814 Net realized gains (losses)......................... 298,648 1,774,522 3,930,024 Change in unrealized gains (losses) on investments.. 10,649,156 446,527 (6,964,997) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,699,116 3,034,001 (1,734,159) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,813,108 2,947,689 3,189,787 Net transfers (including fixed account)............. (487,527) (726,193) 74,671 Policy charges...................................... (2,050,005) (1,927,311) (2,084,965) Transfers for Policy benefits and terminations...... (3,161,406) (2,331,900) (2,507,280) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,885,830) (2,037,715) (1,327,787) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 8,813,286 996,286 (3,061,946) NET ASSETS: Beginning of year................................... 39,465,106 38,468,820 41,530,766 -------------------- -------------------- -------------------- End of year......................................... $ 48,278,392 $ 39,465,106 $ 38,468,820 ==================== ==================== ==================== BHFTI INVESCO BALANCED-RISK ALLOCATION DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,933 $ 63 $ 1,200 Net realized gains (losses)......................... 2,680 (528) 1,727 Change in unrealized gains (losses) on investments.. 724 4,887 (4,753) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 5,337 4,422 (1,826) -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 16,796 15,956 16,400 Net transfers (including fixed account)............. 2,860 (1,153) 2,103 Policy charges...................................... (6,613) (5,759) (5,388) Transfers for Policy benefits and terminations...... -- (6,082) (3,815) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 13,043 2,962 9,300 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 18,380 7,384 7,474 NET ASSETS: Beginning of year................................... 45,859 38,475 31,001 -------------------- -------------------- --------------------- End of year......................................... $ 64,239 $ 45,859 $ 38,475 ==================== ==================== ===================== BHFTI INVESCO SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (8,930) $ (8,076) $ 487 Net realized gains (losses)......................... 689,902 1,026,683 1,775,499 Change in unrealized gains (losses) on investments.. 961,544 (318,719) (1,866,286) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,642,516 699,888 (90,300) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 384,742 407,148 432,154 Net transfers (including fixed account)............. (138,396) (213,557) (314,953) Policy charges...................................... (302,479) (295,102) (309,254) Transfers for Policy benefits and terminations...... (470,556) (427,897) (252,225) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (526,689) (529,408) (444,278) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,115,827 170,480 (534,578) NET ASSETS: Beginning of year................................... 6,722,591 6,552,111 7,086,689 -------------------- -------------------- -------------------- End of year......................................... $ 7,838,418 $ 6,722,591 $ 6,552,111 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 116 The accompanying notes are an integral part of these financial statements. 117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI JPMORGAN GLOBAL ACTIVE ALLOCATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 5,628 $ 3,855 $ 5,107 Net realized gains (losses)......................... 761 2,581 8,733 Change in unrealized gains (losses) on investments.. 28,770 (1,187) (12,813) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 35,159 5,249 1,027 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 39,817 41,651 43,757 Net transfers (including fixed account)............. 2,080 2,362 (2,180) Policy charges...................................... (26,387) (25,382) (25,286) Transfers for Policy benefits and terminations...... (3,100) (6,113) (2,835) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 12,410 12,518 13,456 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 47,569 17,767 14,483 NET ASSETS: Beginning of year................................... 203,391 185,624 171,141 -------------------- -------------------- -------------------- End of year......................................... $ 250,960 $ 203,391 $ 185,624 ==================== ==================== ==================== BHFTI JPMORGAN SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,780 $ 6,286 $ 4,196 Net realized gains (losses)......................... 40,858 24,634 25,929 Change in unrealized gains (losses) on investments.. (24,944) 79,671 (52,802) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 23,694 110,591 (22,677) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 51,003 42,502 42,823 Net transfers (including fixed account)............. 9,535 (23,758) 19,637 Policy charges...................................... (31,389) (27,602) (22,975) Transfers for Policy benefits and terminations...... (18,537) (2,886) (1,767) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 10,612 (11,744) 37,718 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 34,306 98,847 15,041 NET ASSETS: Beginning of year................................... 409,299 310,452 295,411 -------------------- -------------------- -------------------- End of year......................................... $ 443,605 $ 409,299 $ 310,452 ==================== ==================== ==================== BHFTI LOOMIS SAYLES GLOBAL MARKETS DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,635 $ 6,758 $ 7,875 Net realized gains (losses)......................... 8,512 12,698 18,423 Change in unrealized gains (losses) on investments.. 71,276 (1,350) (13,993) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 86,423 18,106 12,305 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 55,503 52,697 43,858 Net transfers (including fixed account)............. (831) 16,922 (6,677) Policy charges...................................... (36,611) (36,634) (35,911) Transfers for Policy benefits and terminations...... (26,763) (6,534) (109,930) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (8,702) 26,451 (108,660) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 77,721 44,557 (96,355) NET ASSETS: Beginning of year................................... 371,582 327,025 423,380 -------------------- -------------------- -------------------- End of year......................................... $ 449,303 $ 371,582 $ 327,025 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 118 The accompanying notes are an integral part of these financial statements. 119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI METLIFE MULTI-INDEX TARGETED RISK DIVISION ------------------------------------------------------------------ 2017 2016 2015 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,477 $ 1,944 $ 1,398 Net realized gains (losses)......................... 6,306 (37) 4,170 Change in unrealized gains (losses) on investments.. 15,712 4,590 (7,672) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 24,495 6,497 (2,104) ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 24,213 27,195 18,161 Net transfers (including fixed account)............. (7,266) 14,107 13,332 Policy charges...................................... (15,476) (14,951) (11,516) Transfers for Policy benefits and terminations...... (17,570) (583) (3,193) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (16,099) 25,768 16,784 ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 8,396 32,265 14,680 NET ASSETS: Beginning of year................................... 168,352 136,087 121,407 ------------------- ------------------- -------------------- End of year......................................... $ 176,748 $ 168,352 $ 136,087 =================== =================== ==================== BHFTI MFS RESEARCH INTERNATIONAL DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 348,583 $ 363,202 $ 548,242 Net realized gains (losses)......................... 120,626 (113,918) 34,366 Change in unrealized gains (losses) on investments.. 4,288,325 (396,420) (864,226) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 4,757,534 (147,136) (281,618) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 991,117 1,065,950 1,136,865 Net transfers (including fixed account)............. (330,753) (137,625) (166,293) Policy charges...................................... (838,473) (829,989) (883,299) Transfers for Policy benefits and terminations...... (1,056,169) (900,863) (790,282) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,234,278) (802,527) (703,009) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 3,523,256 (949,663) (984,627) NET ASSETS: Beginning of year................................... 17,206,100 18,155,763 19,140,390 -------------------- -------------------- -------------------- End of year......................................... $ 20,729,356 $ 17,206,100 $ 18,155,763 ==================== ==================== ==================== BHFTI MORGAN STANLEY MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 122,364 $ (581,093) $ (686,901) Net realized gains (losses)......................... 6,098,517 3,185,085 4,836,759 Change in unrealized gains (losses) on investments.. 66,869,811 (20,525,720) (15,427,415) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 73,090,692 (17,921,728) (11,277,557) -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 16,448,838 17,390,742 17,952,987 Net transfers (including fixed account)............. (1,158,342) (2,231,512) (1,160,187) Policy charges...................................... (13,161,117) (12,792,889) (13,674,535) Transfers for Policy benefits and terminations...... (13,535,181) (10,991,989) (13,144,136) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (11,405,802) (8,625,648) (10,025,871) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 61,684,890 (26,547,376) (21,303,428) NET ASSETS: Beginning of year................................... 186,034,522 212,581,898 233,885,326 -------------------- -------------------- ------------------- End of year......................................... $ 247,719,412 $ 186,034,522 $ 212,581,898 ==================== ==================== ===================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 120 The accompanying notes are an integral part of these financial statements. 121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI OPPENHEIMER GLOBAL EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 488,347 $ 427,792 $ 504,420 Net realized gains (losses)......................... 2,246,334 3,311,875 2,578,733 Change in unrealized gains (losses) on investments.. 14,255,607 (3,785,262) (1,183,054) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 16,990,288 (45,595) 1,900,099 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,244,364 2,752,403 2,885,208 Net transfers (including fixed account)............. 678,986 (1,108,515) 1,263,650 Policy charges...................................... (2,364,753) (2,302,561) (2,404,251) Transfers for Policy benefits and terminations...... (3,776,926) (2,511,117) (2,602,123) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,218,329) (3,169,790) (857,516) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 14,771,959 (3,215,385) 1,042,583 NET ASSETS: Beginning of year................................... 46,257,719 49,473,104 48,430,521 -------------------- -------------------- -------------------- End of year......................................... $ 61,029,678 $ 46,257,719 $ 49,473,104 ==================== ==================== ==================== BHFTI PANAGORA GLOBAL DIVERSIFIED RISK DIVISION ------------------------------------------------------------------ 2017 2016 2015 (b) ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ 50 Net realized gains (losses)......................... 81 1 (295) Change in unrealized gains (losses) on investments.. 16 (1) 1 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 97 -- (244) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 313 29 41 Net transfers (including fixed account)............. 59 -- 440 Policy charges...................................... (141) (24) (64) Transfers for Policy benefits and terminations...... (15) -- (163) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 216 5 254 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 313 5 10 NET ASSETS: Beginning of year................................... 15 10 -- ------------------- -------------------- -------------------- End of year......................................... $ 328 $ 15 $ 10 =================== ==================== ==================== BHFTI PIMCO INFLATION PROTECTED BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 167,202 $ (17,989) $ 540,055 Net realized gains (losses)......................... (123,809) (134,822) (211,211) Change in unrealized gains (losses) on investments.. 327,314 652,775 (655,945) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 370,707 499,964 (327,101) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 814,655 856,782 942,996 Net transfers (including fixed account)............. 43,919 (25,570) (578,943) Policy charges...................................... (608,502) (670,606) (670,899) Transfers for Policy benefits and terminations...... (685,248) (448,728) (496,484) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (435,176) (288,122) (803,330) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (64,469) 211,842 (1,130,431) NET ASSETS: Beginning of year................................... 10,359,389 10,147,547 11,277,978 -------------------- -------------------- -------------------- End of year......................................... $ 10,294,920 $ 10,359,389 $ 10,147,547 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 122 The accompanying notes are an integral part of these financial statements. 123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI PIMCO TOTAL RETURN DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 797,234 $ 1,176,644 $ 2,443,284 Net realized gains (losses)......................... 136,512 (107,899) 504,809 Change in unrealized gains (losses) on investments.. 1,034,223 134,407 (2,854,535) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,967,969 1,203,152 93,558 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,438,184 3,607,110 3,809,014 Net transfers (including fixed account)............. 446,327 (511,885) (1,054,727) Policy charges...................................... (2,583,508) (2,866,241) (2,872,640) Transfers for Policy benefits and terminations...... (2,772,964) (2,911,492) (2,635,927) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,471,961) (2,682,508) (2,754,280) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 496,008 (1,479,356) (2,660,722) NET ASSETS: Beginning of year................................... 42,840,892 44,320,248 46,980,970 -------------------- -------------------- --------------------- End of year......................................... $ 43,336,900 $ 42,840,892 $ 44,320,248 ==================== ==================== ===================== BHFTI SCHRODERS GLOBAL MULTI-ASSET DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 508 $ 675 $ 467 Net realized gains (losses)......................... 1,474 647 1,436 Change in unrealized gains (losses) on investments.. 6,574 1,558 (2,611) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 8,556 2,880 (708) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 17,420 20,016 11,927 Net transfers (including fixed account)............. 1,670 3,252 948 Policy charges...................................... (7,406) (7,221) (5,687) Transfers for Policy benefits and terminations...... (343) (4,272) (605) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 11,341 11,775 6,583 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 19,897 14,655 5,875 NET ASSETS: Beginning of year................................... 52,316 37,661 31,786 --------------------- -------------------- -------------------- End of year......................................... $ 72,213 $ 52,316 $ 37,661 ===================== ==================== ==================== BHFTI SCHRODERS GLOBAL MULTI-ASSET II DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 116 $ 47 $ 86 Net realized gains (losses)......................... 44 7 978 Change in unrealized gains (losses) on investments.. 1,539 239 (255) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,699 293 809 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,204 6,148 3,971 Net transfers (including fixed account)............. 104 421 96 Policy charges...................................... (2,164) (1,837) (2,087) Transfers for Policy benefits and terminations...... -- (196) (755) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 4,144 4,536 1,225 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 5,843 4,829 2,034 NET ASSETS: Beginning of year................................... 8,438 3,609 1,575 -------------------- -------------------- -------------------- End of year......................................... $ 14,281 $ 8,438 $ 3,609 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 124 The accompanying notes are an integral part of these financial statements. 125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI SSGA GROWTH AND INCOME ETF DIVISION ---------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 211,600 $ 193,418 $ 191,488 Net realized gains (losses)......................... 56,990 422,233 507,278 Change in unrealized gains (losses) on investments.. 993,368 (166,860) (845,948) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................. 1,261,958 448,791 (147,182) ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 707,289 817,890 902,958 Net transfers (including fixed account)............. (395,331) (55,673) (56,759) Policy charges...................................... (484,758) (475,048) (487,928) Transfers for Policy benefits and terminations...... (344,355) (255,414) (287,368) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ (517,155) 31,755 70,903 ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 744,803 480,546 (76,279) NET ASSETS: Beginning of year................................... 8,122,289 7,641,743 7,718,022 ------------------- ------------------- ------------------- End of year......................................... $ 8,867,092 $ 8,122,289 $ 7,641,743 =================== =================== =================== BHFTI SSGA GROWTH ETF DIVISION ---------------------------------------------------------------- 2017 2016 2015 -------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 175,627 $ 152,958 $ 144,898 Net realized gains (losses)......................... 153,525 388,499 399,376 Change in unrealized gains (losses) on investments.. 1,057,422 (116,079) (699,498) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................. 1,386,574 425,378 (155,224) -------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 760,215 957,099 1,101,174 Net transfers (including fixed account)............. (687,768) (419,927) 27,146 Policy charges...................................... (319,979) (381,379) (371,675) Transfers for Policy benefits and terminations...... (266,828) (150,373) (335,865) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ (514,360) 5,420 420,780 -------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 872,214 430,798 265,556 NET ASSETS: Beginning of year................................... 7,142,017 6,711,219 6,445,663 -------------------- ------------------- ------------------- End of year......................................... $ 8,014,231 $ 7,142,017 $ 6,711,219 ==================== =================== =================== BHFTI T. ROWE PRICE LARGE CAP VALUE DIVISION ---------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 56,019 $ 63,487 $ 36,741 Net realized gains (losses)......................... 218,915 264,852 91,303 Change in unrealized gains (losses) on investments.. 129,307 1,148 (197,956) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................. 404,241 329,487 (69,912) ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,636 4,540 7,472 Net transfers (including fixed account)............. 45,576 57,340 (203,997) Policy charges...................................... (34,475) (30,407) (30,931) Transfers for Policy benefits and terminations...... (8) (63,517) (68,966) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ 14,729 (32,044) (296,422) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 418,970 297,443 (366,334) NET ASSETS: Beginning of year................................... 2,327,000 2,029,557 2,395,891 ------------------- ------------------- -------------------- End of year......................................... $ 2,745,970 $ 2,327,000 $ 2,029,557 =================== =================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 126 The accompanying notes are an integral part of these financial statements. 127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTI T. ROWE PRICE MID CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (53,030) $ (45,975) $ (45,309) Net realized gains (losses)......................... 3,596,966 5,204,270 5,782,950 Change in unrealized gains (losses) on investments.. 4,985,555 (3,017,999) (3,612,484) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 8,529,491 2,140,296 2,125,157 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,065,072 2,103,996 2,017,424 Net transfers (including fixed account)............. 456,210 419,067 2,394,912 Policy charges...................................... (1,760,965) (1,724,543) (1,635,548) Transfers for Policy benefits and terminations...... (2,147,279) (2,214,117) (2,115,852) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,386,962) (1,415,597) 660,936 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 7,142,529 724,699 2,786,093 NET ASSETS: Beginning of year................................... 34,743,933 34,019,234 31,233,141 -------------------- --------------------- -------------------- End of year......................................... $ 41,886,462 $ 34,743,933 $ 34,019,234 ==================== ===================== ==================== BHFTI VICTORY SYCAMORE MID CAP VALUE DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 924,664 $ 650,034 $ 563,734 Net realized gains (losses)......................... 763,180 3,900,369 5,178,767 Change in unrealized gains (losses) on investments.. 6,544,581 7,673,646 (13,696,346) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 8,232,425 12,224,049 (7,953,845) --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,231,778 5,540,189 5,923,611 Net transfers (including fixed account)............. (641,335) (1,504,903) 396,833 Policy charges...................................... (4,566,534) (4,725,378) (5,050,098) Transfers for Policy benefits and terminations...... (5,546,494) (5,462,656) (5,269,245) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,522,585) (6,152,748) (3,998,899) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 2,709,840 6,071,301 (11,952,744) NET ASSETS: Beginning of year................................... 88,992,742 82,921,441 94,874,185 --------------------- -------------------- --------------------- End of year......................................... $ 91,702,582 $ 88,992,742 $ 82,921,441 ===================== ==================== ===================== BHFTII BAILLIE GIFFORD INTERNATIONAL STOCK DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 343,329 $ 447,534 $ 519,877 Net realized gains (losses)......................... 322,047 (310,525) (206,507) Change in unrealized gains (losses) on investments.. 12,519,996 1,728,920 (1,227,962) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 13,185,372 1,865,929 (914,592) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,220,885 3,389,861 3,575,231 Net transfers (including fixed account)............. (148,010) (547,175) (179,571) Policy charges...................................... (2,700,122) (2,612,067) (2,610,457) Transfers for Policy benefits and terminations...... (2,532,657) (2,000,028) (2,221,523) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,159,904) (1,769,409) (1,436,320) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 11,025,468 96,520 (2,350,912) NET ASSETS: Beginning of year................................... 38,958,130 38,861,610 41,212,522 --------------------- -------------------- -------------------- End of year......................................... $ 49,983,598 $ 38,958,130 $ 38,861,610 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 128 The accompanying notes are an integral part of these financial statements. 129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BLACKROCK BOND INCOME DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,139,278 $ 2,253,120 $ 2,849,615 Net realized gains (losses)......................... (33,084) 30,488 913,996 Change in unrealized gains (losses) on investments.. 749,028 (97,803) (3,544,439) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,855,222 2,185,805 219,172 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,963,012 6,132,147 6,361,507 Net transfers (including fixed account)............. 626,685 326,685 (1,236,326) Policy charges...................................... (5,216,503) (5,607,933) (5,484,593) Transfers for Policy benefits and terminations...... (3,563,517) (4,113,027) (4,302,406) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,190,323) (3,262,128) (4,661,818) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 664,899 (1,076,323) (4,442,646) NET ASSETS: Beginning of year................................... 77,277,403 78,353,726 82,796,372 -------------------- -------------------- -------------------- End of year......................................... $ 77,942,302 $ 77,277,403 $ 78,353,726 ==================== ==================== ==================== BHFTII BLACKROCK CAPITAL APPRECIATION DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (244) $ (9,977) $ (10,693) Net realized gains (losses)......................... 586,471 1,047,770 2,022,735 Change in unrealized gains (losses) on investments.. 2,528,190 (1,066,351) (1,407,738) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,114,417 (28,558) 604,304 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 713,936 736,403 793,014 Net transfers (including fixed account)............. 183,165 (3,208) 336,170 Policy charges...................................... (575,499) (570,923) (588,991) Transfers for Policy benefits and terminations...... (896,039) (856,815) (655,032) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (574,437) (694,543) (114,839) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,539,980 (723,101) 489,465 NET ASSETS: Beginning of year................................... 9,502,695 10,225,796 9,736,331 -------------------- -------------------- -------------------- End of year......................................... $ 12,042,675 $ 9,502,695 $ 10,225,796 ==================== ==================== ==================== BHFTII BLACKROCK ULTRA-SHORT TERM BOND DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 60,887 $ (18,384) $ (35,014) Net realized gains (losses)......................... 25,723 3,712 -- Change in unrealized gains (losses) on investments.. 119,513 60,725 -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 206,123 46,053 (35,014) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 493,430 567,291 476,089 Net transfers (including fixed account)............. 5,565,246 (1,366,452) (4,569,788) Policy charges...................................... (892,674) (907,994) (886,480) Transfers for Policy benefits and terminations...... (483,837) (365,895) (333,363) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 4,682,165 (2,073,050) (5,313,542) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 4,888,288 (2,026,997) (5,348,556) NET ASSETS: Beginning of year................................... 22,657,240 24,684,237 30,032,793 -------------------- -------------------- -------------------- End of year......................................... $ 27,545,528 $ 22,657,240 $ 24,684,237 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 130 The accompanying notes are an integral part of these financial statements. 131 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE ASSET ALLOCATION 20 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 119,470 $ 177,898 $ 116,446 Net realized gains (losses)......................... 40,884 122,062 174,994 Change in unrealized gains (losses) on investments.. 193,850 (54,551) (309,762) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 354,204 245,409 (18,322) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 436,850 475,558 514,400 Net transfers (including fixed account)............. 657,738 274,364 93,614 Policy charges...................................... (497,021) (539,657) (522,816) Transfers for Policy benefits and terminations...... (1,579,139) (823,306) (165,837) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (981,572) (613,041) (80,639) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (627,368) (367,632) (98,961) NET ASSETS: Beginning of year................................... 5,067,129 5,434,761 5,533,722 --------------------- --------------------- --------------------- End of year......................................... $ 4,439,761 $ 5,067,129 $ 5,434,761 ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 40 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 227,176 $ 365,152 $ 29,433 Net realized gains (losses)......................... 348,904 649,364 699,512 Change in unrealized gains (losses) on investments.. 555,970 (402,883) (854,363) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,132,050 611,633 (125,418) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 939,941 946,570 952,025 Net transfers (including fixed account)............. 326,039 238,465 315,680 Policy charges...................................... (790,214) (796,923) (829,348) Transfers for Policy benefits and terminations...... (647,227) (274,767) (637,520) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (171,461) 113,345 (199,163) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 960,589 724,978 (324,581) NET ASSETS: Beginning of year................................... 10,372,997 9,648,019 9,972,600 --------------------- --------------------- --------------------- End of year......................................... $ 11,333,586 $ 10,372,997 $ 9,648,019 ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 60 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 988,015 $ 1,661,041 $ 305,717 Net realized gains (losses)......................... 2,602,679 4,802,939 4,072,097 Change in unrealized gains (losses) on investments.. 3,901,633 (2,834,262) (4,965,532) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 7,492,327 3,629,718 (587,718) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,213,884 4,497,839 4,710,179 Net transfers (including fixed account)............. 171,111 27,071 (516,267) Policy charges...................................... (3,453,056) (3,556,897) (3,570,057) Transfers for Policy benefits and terminations...... (4,940,179) (3,005,552) (2,803,258) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,008,240) (2,037,539) (2,179,403) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 3,484,087 1,592,179 (2,767,121) NET ASSETS: Beginning of year................................... 52,559,818 50,967,639 53,734,760 --------------------- --------------------- --------------------- End of year......................................... $ 56,043,905 $ 52,559,818 $ 50,967,639 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 132 The accompanying notes are an integral part of these financial statements. 133 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE ASSET ALLOCATION 80 DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,726,190 $ 2,942,462 $ 427,851 Net realized gains (losses)......................... 6,877,022 12,021,813 6,177,764 Change in unrealized gains (losses) on investments.. 9,496,898 (7,365,543) (8,037,823) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 18,100,110 7,598,732 (1,432,208) -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 7,718,644 8,365,149 9,064,666 Net transfers (including fixed account)............. (246,902) (1,384,318) (479,555) Policy charges...................................... (5,348,857) (5,526,010) (5,646,022) Transfers for Policy benefits and terminations...... (7,915,157) (6,463,563) (5,971,484) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,792,272) (5,008,742) (3,032,395) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 12,307,838 2,589,990 (4,464,603) NET ASSETS: Beginning of year................................... 96,200,969 93,610,979 98,075,582 -------------------- --------------------- --------------------- End of year......................................... $ 108,508,807 $ 96,200,969 $ 93,610,979 ==================== ===================== ===================== BHFTII BRIGHTHOUSE/ARTISAN MID CAP VALUE DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 386,875 $ 573,294 $ 651,607 Net realized gains (losses)......................... 643,877 6,376,782 8,080,747 Change in unrealized gains (losses) on investments.. 6,536,022 4,919,832 (14,388,947) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 7,566,774 11,869,908 (5,656,593) --------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,822,689 3,977,996 4,248,709 Net transfers (including fixed account)............. (582,080) (613,228) (532,025) Policy charges...................................... (3,236,913) (3,245,776) (3,288,323) Transfers for Policy benefits and terminations...... (4,024,252) (3,402,376) (3,481,517) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,020,556) (3,283,384) (3,053,156) --------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 3,546,218 8,586,524 (8,709,749) NET ASSETS: Beginning of year................................... 62,142,398 53,555,874 62,265,623 --------------------- --------------------- -------------------- End of year......................................... $ 65,688,616 $ 62,142,398 $ 53,555,874 ===================== ===================== ==================== BHFTII BRIGHTHOUSE/WELLINGTON BALANCED DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,339,481 $ 6,577,117 $ 4,411,640 Net realized gains (losses)......................... 10,464,072 15,625,107 55,909,979 Change in unrealized gains (losses) on investments.. 27,671,155 (3,743,348) (53,963,621) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 42,474,708 18,458,876 6,357,998 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 20,315,289 21,296,974 22,226,199 Net transfers (including fixed account)............. 324,049 (1,837,317) (1,114,111) Policy charges...................................... (21,609,300) (22,205,884) (22,125,724) Transfers for Policy benefits and terminations...... (16,611,763) (16,090,657) (17,838,451) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (17,581,725) (18,836,884) (18,852,087) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 24,892,983 (378,008) (12,494,089) NET ASSETS: Beginning of year................................... 299,463,081 299,841,089 312,335,178 -------------------- --------------------- --------------------- End of year......................................... $ 324,356,064 $ 299,463,081 $ 299,841,089 ==================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 134 The accompanying notes are an integral part of these financial statements. 135 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII BRIGHTHOUSE/WELLINGTON CORE EQUITY OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,137,876 $ 1,122,364 $ 1,263,131 Net realized gains (losses)......................... 3,203,582 3,128,463 26,124,464 Change in unrealized gains (losses) on investments.. 9,056,499 855,321 (25,717,218) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 13,397,957 5,106,148 1,670,377 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,437,684 4,745,132 5,175,987 Net transfers (including fixed account)............. (902,918) (230,740) (1,253,819) Policy charges...................................... (3,769,635) (3,977,030) (3,976,712) Transfers for Policy benefits and terminations...... (5,948,302) (4,646,198) (4,646,062) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (6,183,171) (4,108,836) (4,700,606) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 7,214,786 997,312 (3,030,229) NET ASSETS: Beginning of year................................... 73,520,028 72,522,716 75,552,945 -------------------- -------------------- -------------------- End of year......................................... $ 80,734,814 $ 73,520,028 $ 72,522,716 ==================== ==================== ==================== BHFTII FRONTIER MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (1,632,964) $ (1,459,027) $ (1,605,819) Net realized gains (losses)......................... 11,209,482 28,319,213 36,288,678 Change in unrealized gains (losses) on investments.. 43,545,366 (16,692,072) (28,947,695) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 53,121,884 10,168,114 5,735,164 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 12,186,623 12,817,058 13,526,076 Net transfers (including fixed account)............. (7,255,002) (1,665,871) (546,174) Policy charges...................................... (12,987,997) (13,012,542) (13,281,761) Transfers for Policy benefits and terminations...... (12,680,835) (10,971,677) (13,018,169) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (20,737,211) (12,833,032) (13,320,028) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 32,384,673 (2,664,918) (7,584,864) NET ASSETS: Beginning of year................................... 225,309,908 227,974,826 235,559,690 -------------------- -------------------- -------------------- End of year......................................... $ 257,694,581 $ 225,309,908 $ 227,974,826 ==================== ==================== ==================== BHFTII JENNISON GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 66,950 $ 52,283 $ 49,690 Net realized gains (losses)......................... 2,258,228 3,125,595 4,130,001 Change in unrealized gains (losses) on investments.. 6,383,010 (3,197,364) (1,789,865) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 8,708,188 (19,486) 2,389,826 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,299,752 1,333,946 1,340,497 Net transfers (including fixed account)............. 5,991,640 2,483 509,083 Policy charges...................................... (1,281,802) (1,218,365) (1,224,290) Transfers for Policy benefits and terminations...... (1,623,326) (1,425,516) (1,580,551) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 4,386,264 (1,307,452) (955,261) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 13,094,452 (1,326,938) 1,434,565 NET ASSETS: Beginning of year................................... 22,968,240 24,295,178 22,860,613 -------------------- -------------------- -------------------- End of year......................................... $ 36,062,692 $ 22,968,240 $ 24,295,178 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 136 The accompanying notes are an integral part of these financial statements. 137 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII LOOMIS SAYLES SMALL CAP CORE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 49,569 $ 53,376 $ 13,776 Net realized gains (losses)......................... 2,156,674 2,236,001 3,521,185 Change in unrealized gains (losses) on investments.. 1,501,241 1,915,532 (3,857,826) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,707,484 4,204,909 (322,865) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,274,560 1,334,562 1,455,376 Net transfers (including fixed account)............. (516,348) (285,957) (362,429) Policy charges...................................... (1,191,127) (1,187,314) (1,217,974) Transfers for Policy benefits and terminations...... (1,805,701) (1,306,062) (1,348,393) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,238,616) (1,444,771) (1,473,420) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,468,868 2,760,138 (1,796,285) NET ASSETS: Beginning of year................................... 25,855,024 23,094,886 24,891,171 -------------------- -------------------- -------------------- End of year......................................... $ 27,323,892 $ 25,855,024 $ 23,094,886 ==================== ==================== ==================== BHFTII LOOMIS SAYLES SMALL CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (9,721) $ (9,163) $ (9,783) Net realized gains (losses)......................... 762,930 1,222,132 1,804,809 Change in unrealized gains (losses) on investments.. 2,111,346 (582,015) (1,598,061) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,864,555 630,954 196,965 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 688,741 747,090 790,736 Net transfers (including fixed account)............. (344,283) (235,047) 38,986 Policy charges...................................... (570,448) (586,052) (610,291) Transfers for Policy benefits and terminations...... (670,562) (620,076) (603,154) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (896,552) (694,085) (383,723) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,968,003 (63,131) (186,758) NET ASSETS: Beginning of year................................... 11,122,720 11,185,851 11,372,609 -------------------- -------------------- -------------------- End of year......................................... $ 13,090,723 $ 11,122,720 $ 11,185,851 ==================== ==================== ==================== BHFTII METLIFE AGGREGATE BOND INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,810,094 $ 3,516,381 $ 3,706,067 Net realized gains (losses)......................... (60,039) 157,844 111,155 Change in unrealized gains (losses) on investments.. 463,003 (713,953) (3,467,125) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 4,213,058 2,960,272 350,097 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 10,119,467 10,321,297 10,650,517 Net transfers (including fixed account)............. 8,297,879 1,939,507 (390,145) Policy charges...................................... (8,103,229) (8,491,979) (8,265,344) Transfers for Policy benefits and terminations...... (6,849,400) (6,293,235) (6,269,190) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 3,464,717 (2,524,410) (4,274,162) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 7,677,775 435,862 (3,924,065) NET ASSETS: Beginning of year................................... 127,387,339 126,951,477 130,875,542 -------------------- -------------------- -------------------- End of year......................................... $ 135,065,114 $ 127,387,339 $ 126,951,477 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 138 The accompanying notes are an integral part of these financial statements. 139 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII METLIFE MID CAP STOCK INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,319,708 $ 1,044,591 $ 965,012 Net realized gains (losses)......................... 8,754,007 8,154,617 7,586,957 Change in unrealized gains (losses) on investments.. 4,956,766 7,196,356 (10,506,888) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 15,030,481 16,395,564 (1,954,919) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,357,530 5,416,314 5,638,229 Net transfers (including fixed account)............. 4,274,293 (936,758) 508,090 Policy charges...................................... (4,778,563) (4,718,498) (4,665,601) Transfers for Policy benefits and terminations...... (6,221,097) (4,649,606) (5,028,583) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,367,837) (4,888,548) (3,547,865) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 13,662,644 11,507,016 (5,502,784) NET ASSETS: Beginning of year................................... 95,179,145 83,672,129 89,174,913 -------------------- -------------------- -------------------- End of year......................................... $ 108,841,789 $ 95,179,145 $ 83,672,129 ==================== ==================== ==================== BHFTII METLIFE MSCI EAFE INDEX DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,309,101 $ 1,943,289 $ 2,500,052 Net realized gains (losses)......................... 1,359,240 101,562 707,350 Change in unrealized gains (losses) on investments.. 15,314,940 (990,605) (3,862,935) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 18,983,281 1,054,246 (655,533) ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,958,371 6,241,891 6,286,345 Net transfers (including fixed account)............. 450,416 813,637 1,565,657 Policy charges...................................... (4,348,604) (4,254,888) (4,329,144) Transfers for Policy benefits and terminations...... (5,191,027) (3,939,562) (4,133,342) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,130,844) (1,138,922) (610,484) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 15,852,437 (84,676) (1,266,017) NET ASSETS: Beginning of year................................... 76,450,323 76,534,999 77,801,016 ------------------- ------------------- ------------------- End of year......................................... $ 92,302,760 $ 76,450,323 $ 76,534,999 =================== =================== =================== BHFTII METLIFE RUSSELL 2000 INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 919,455 $ 913,083 $ 828,476 Net realized gains (losses)......................... 6,041,469 5,704,425 6,271,433 Change in unrealized gains (losses) on investments.. 4,109,388 7,347,406 (10,053,677) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,070,312 13,964,914 (2,953,768) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,793,790 4,810,814 4,964,713 Net transfers (including fixed account)............. (1,452,551) (461,739) 432,389 Policy charges...................................... (3,676,061) (3,605,728) (3,613,698) Transfers for Policy benefits and terminations...... (5,164,111) (4,191,102) (4,335,031) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,498,933) (3,447,755) (2,551,627) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 5,571,379 10,517,159 (5,505,395) NET ASSETS: Beginning of year................................... 78,678,964 68,161,805 73,667,200 -------------------- -------------------- -------------------- End of year......................................... $ 84,250,343 $ 78,678,964 $ 68,161,805 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 140 The accompanying notes are an integral part of these financial statements. 141 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII METLIFE STOCK INDEX DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 16,768,156 $ 17,167,447 $ 14,801,691 Net realized gains (losses)......................... 64,595,519 57,978,009 58,353,168 Change in unrealized gains (losses) on investments.. 126,477,450 31,292,870 (63,726,527) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 207,841,125 106,438,326 9,428,332 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 64,139,582 67,338,784 70,011,175 Net transfers (including fixed account)............. (45,284,438) (2,630,167) 798,237 Policy charges...................................... (47,182,585) (47,351,375) (46,759,361) Transfers for Policy benefits and terminations...... (68,817,043) (60,879,042) (59,435,957) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (97,144,484) (43,521,800) (35,385,906) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 110,696,641 62,916,526 (25,957,574) NET ASSETS: Beginning of year................................... 1,023,023,669 960,107,143 986,064,717 -------------------- -------------------- -------------------- End of year......................................... $ 1,133,720,310 $ 1,023,023,669 $ 960,107,143 ==================== ==================== ==================== BHFTII MFS TOTAL RETURN DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 256,018 $ 277,775 $ 247,122 Net realized gains (losses)......................... 693,293 579,525 196,619 Change in unrealized gains (losses) on investments.. 1,181,033 3,086 (470,036) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 2,130,344 860,386 (26,295) ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 684,608 866,669 968,017 Net transfers (including fixed account)............. 20,897,739 183,218 63,944 Policy charges...................................... (679,171) (622,365) (604,132) Transfers for Policy benefits and terminations...... (574,164) (685,850) (558,787) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 20,329,012 (258,328) (130,958) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 22,459,356 602,058 (157,253) NET ASSETS: Beginning of year................................... 10,408,921 9,806,863 9,964,116 ------------------- ------------------- ------------------- End of year......................................... $ 32,868,277 $ 10,408,921 $ 9,806,863 =================== =================== =================== BHFTII MFS VALUE DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,807,020 $ 1,832,604 $ 2,254,602 Net realized gains (losses)......................... 6,376,051 8,023,482 14,425,867 Change in unrealized gains (losses) on investments.. 7,634,853 1,456,878 (16,842,516) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 15,817,924 11,312,964 (162,047) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,176,715 5,385,806 5,724,364 Net transfers (including fixed account)............. 7,193,791 (616,694) (394,287) Policy charges...................................... (4,697,059) (4,746,152) (4,715,726) Transfers for Policy benefits and terminations...... (5,665,116) (5,299,972) (5,310,681) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,008,331 (5,277,012) (4,696,330) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 17,826,255 6,035,952 (4,858,377) NET ASSETS: Beginning of year................................... 88,412,117 82,376,165 87,234,542 -------------------- -------------------- -------------------- End of year......................................... $ 106,238,372 $ 88,412,117 $ 82,376,165 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 142 The accompanying notes are an integral part of these financial statements. 143 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII MFS VALUE II DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 526,386 $ 296,620 $ 335,383 Net realized gains (losses)......................... (221,837) 1,069,485 1,421,917 Change in unrealized gains (losses) on investments.. 1,234,077 1,883,740 (2,942,487) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,538,626 3,249,845 (1,185,187) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,479,679 1,545,784 1,614,117 Net transfers (including fixed account)............. 421,641 (30,878) 139,650 Policy charges...................................... (1,081,681) (1,098,505) (1,098,817) Transfers for Policy benefits and terminations...... (1,629,097) (1,075,384) (1,132,285) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (809,458) (658,983) (477,335) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 729,168 2,590,862 (1,662,522) NET ASSETS: Beginning of year................................... 21,009,123 18,418,261 20,080,783 -------------------- -------------------- -------------------- End of year......................................... $ 21,738,291 $ 21,009,123 $ 18,418,261 ==================== ==================== ==================== BHFTII NEUBERGER BERMAN GENESIS DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 370,076 $ 399,379 $ 361,906 Net realized gains (losses)......................... 12,057,105 1,826,763 1,512,189 Change in unrealized gains (losses) on investments.. 4,394,645 15,758,188 (1,230,308) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 16,821,826 17,984,330 643,787 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,489,836 6,799,075 7,267,381 Net transfers (including fixed account)............. (977,458) (1,167,465) (927,026) Policy charges...................................... (5,884,389) (5,931,913) (5,942,383) Transfers for Policy benefits and terminations...... (7,393,489) (6,477,508) (6,568,694) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (7,765,500) (6,777,811) (6,170,722) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 9,056,326 11,206,519 (5,526,935) NET ASSETS: Beginning of year................................... 112,504,182 101,297,663 106,824,598 -------------------- -------------------- -------------------- End of year......................................... $ 121,560,508 $ 112,504,182 $ 101,297,663 ==================== ==================== ==================== BHFTII T. ROWE PRICE LARGE CAP GROWTH DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 221,909 $ (8,318) $ 57,337 Net realized gains (losses)......................... 7,974,008 11,522,738 17,568,369 Change in unrealized gains (losses) on investments.. 19,425,313 (10,229,673) (8,845,976) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 27,621,230 1,284,747 8,779,730 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,795,916 4,913,132 5,084,380 Net transfers (including fixed account)............. 477,359 143,272 (3,825) Policy charges...................................... (4,722,995) (4,630,873) (4,639,514) Transfers for Policy benefits and terminations...... (6,543,490) (5,259,756) (4,665,654) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,993,210) (4,834,225) (4,224,613) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 21,628,020 (3,549,478) 4,555,117 NET ASSETS: Beginning of year................................... 84,300,674 87,850,152 83,295,035 -------------------- -------------------- -------------------- End of year......................................... $ 105,928,694 $ 84,300,674 $ 87,850,152 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 144 The accompanying notes are an integral part of these financial statements. 145 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII T. ROWE PRICE SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (38,755) $ (95,610) $ (248,946) Net realized gains (losses)......................... 10,072,201 15,506,158 12,918,905 Change in unrealized gains (losses) on investments.. 14,656,850 (3,850,598) (9,935,901) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 24,690,296 11,559,950 2,734,058 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,652,241 6,771,118 6,600,673 Net transfers (including fixed account)............. 1,786,581 (896,281) 926,025 Policy charges...................................... (5,234,546) (5,218,226) (5,239,072) Transfers for Policy benefits and terminations...... (8,669,274) (7,068,348) (7,416,481) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,464,998) (6,411,737) (5,128,855) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 19,225,298 5,148,213 (2,394,797) NET ASSETS: Beginning of year................................... 112,461,733 107,313,520 109,708,317 -------------------- -------------------- -------------------- End of year......................................... $ 131,687,031 $ 112,461,733 $ 107,313,520 ==================== ==================== ==================== BHFTII VANECK GLOBAL NATURAL RESOURCES DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 290 $ 1,967 $ 974 Net realized gains (losses)......................... (3,647) (7,201) (9,795) Change in unrealized gains (losses) on investments.. 5,530 88,581 (64,308) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,173 83,347 (73,129) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 58,187 56,552 58,025 Net transfers (including fixed account)............. 28,003 (24,534) 33,612 Policy charges...................................... (21,430) (19,533) (16,064) Transfers for Policy benefits and terminations...... (15,365) (10,218) (4,972) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 49,395 2,267 70,601 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 51,568 85,614 (2,528) NET ASSETS: Beginning of year................................... 259,264 173,650 176,178 -------------------- -------------------- -------------------- End of year......................................... $ 310,832 $ 259,264 $ 173,650 ==================== ==================== ==================== BHFTII WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,001,647 $ 761,904 $ 1,289,587 Net realized gains (losses)......................... 364,897 119,058 73,628 Change in unrealized gains (losses) on investments.. 1,796,363 2,417,251 (1,827,670) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 4,162,907 3,298,213 (464,455) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,662,710 3,165,030 2,048,302 Net transfers (including fixed account)............. (114,949) 26,947,040 416,380 Policy charges...................................... (2,872,301) (2,541,922) (1,498,601) Transfers for Policy benefits and terminations...... (3,348,106) (2,942,766) (1,520,683) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,672,646) 24,627,382 (554,602) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,490,261 27,925,595 (1,019,057) NET ASSETS: Beginning of year................................... 52,921,776 24,996,181 26,015,238 --------------------- -------------------- -------------------- End of year......................................... $ 54,412,037 $ 52,921,776 $ 24,996,181 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 146 The accompanying notes are an integral part of these financial statements. 147 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
BHFTII WESTERN ASSET MANAGEMENT U.S. GOVERNMENT DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 402,248 $ 400,422 $ 357,540 Net realized gains (losses)......................... (35,219) (10,757) (6,880) Change in unrealized gains (losses) on investments.. (80,512) (199,711) (270,748) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 286,517 189,954 79,912 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,666,603 1,678,562 1,737,457 Net transfers (including fixed account)............. 455,559 141,399 3,538 Policy charges...................................... (1,243,499) (1,306,280) (1,277,275) Transfers for Policy benefits and terminations...... (980,456) (908,115) (1,069,051) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (101,793) (394,434) (605,331) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 184,724 (204,480) (525,419) NET ASSETS: Beginning of year................................... 15,656,147 15,860,627 16,386,046 --------------------- -------------------- -------------------- End of year......................................... $ 15,840,871 $ 15,656,147 $ 15,860,627 ===================== ==================== ==================== DREYFUS VIF INTERNATIONAL VALUE DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,916 $ 3,283 $ 4,421 Net realized gains (losses)......................... (300) (5,322) (390) Change in unrealized gains (losses) on investments.. 51,516 (2,271) (10,460) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 54,132 (4,310) (6,429) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- (12,134) -- Policy charges...................................... (2,197) (2,110) (2,287) Transfers for Policy benefits and terminations...... -- -- (1) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,197) (14,244) (2,288) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 51,935 (18,554) (8,717) NET ASSETS: Beginning of year................................... 193,298 211,852 220,569 --------------------- --------------------- --------------------- End of year......................................... $ 245,233 $ 193,298 $ 211,852 ===================== ===================== ===================== FIDELITY VIP ASSET MANAGER: GROWTH DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 24,598 $ 23,502 $ 20,958 Net realized gains (losses)......................... 293,961 60,870 128,965 Change in unrealized gains (losses) on investments.. 9,749 (48,668) (145,469) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 328,308 35,704 4,454 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 53,311 69,385 154,105 Net transfers (including fixed account)............. 162,659 6,528 (120,734) Policy charges...................................... (65,514) (69,707) (80,789) Transfers for Policy benefits and terminations...... (111,829) (113,789) (173,241) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 38,627 (107,583) (220,659) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 366,935 (71,879) (216,205) NET ASSETS: Beginning of year................................... 1,799,093 1,870,972 2,087,177 -------------------- -------------------- -------------------- End of year......................................... $ 2,166,028 $ 1,799,093 $ 1,870,972 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 148 The accompanying notes are an integral part of these financial statements. 149 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP CONTRAFUND DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 25,600 $ 18,813 $ 25,926 Net realized gains (losses)......................... 216,238 265,269 373,045 Change in unrealized gains (losses) on investments.. 321,303 (89,763) (372,526) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 563,141 194,319 26,445 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 66,230 82,242 177,261 Net transfers (including fixed account)............. (24,949) (6,803) (158,700) Policy charges...................................... (93,243) (91,600) (94,010) Transfers for Policy benefits and terminations...... (152,087) (278,347) (89,062) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (204,049) (294,508) (164,511) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 359,092 (100,189) (138,066) NET ASSETS: Beginning of year................................... 2,675,209 2,775,398 2,913,464 --------------------- --------------------- --------------------- End of year......................................... $ 3,034,301 $ 2,675,209 $ 2,775,398 ===================== ===================== ===================== FIDELITY VIP EQUITY-INCOME DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 40 $ 351 $ 426 Net realized gains (losses)......................... 853 858 2,506 Change in unrealized gains (losses) on investments.. (214) 1,277 (3,341) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 679 2,486 (409) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 143 1,787 2,405 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (39) (227) (278) Transfers for Policy benefits and terminations...... (16,006) (1) (14,085) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (15,902) 1,559 (11,958) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (15,223) 4,045 (12,367) NET ASSETS: Beginning of year................................... 16,883 12,838 25,205 --------------------- --------------------- --------------------- End of year......................................... $ 1,660 $ 16,883 $ 12,838 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2010 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,182 $ 439 $ 361 Net realized gains (losses)......................... 1,901 427 5,675 Change in unrealized gains (losses) on investments.. 324 369 (5,470) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 4,407 1,235 566 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 63,343 54,823 49,696 Net transfers (including fixed account)............. 103,209 -- (481) Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (54,488) (45,887) (78,676) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 112,064 8,936 (29,461) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 116,471 10,171 (28,895) NET ASSETS: Beginning of year................................... 29,390 19,219 48,114 --------------------- --------------------- --------------------- End of year......................................... $ 145,861 $ 29,390 $ 19,219 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 150 The accompanying notes are an integral part of these financial statements. 151 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP FREEDOM 2020 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,288 $ 8,579 $ 10,060 Net realized gains (losses)......................... 33,650 19,311 169,271 Change in unrealized gains (losses) on investments.. 50,769 4,403 (177,998) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 92,707 32,293 1,333 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 178,672 159,769 132,204 Net transfers (including fixed account)............. (78,756) (46) (413,184) Policy charges...................................... (6,488) (6,174) (7,305) Transfers for Policy benefits and terminations...... (184,941) (146,943) (168,987) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (91,513) 6,606 (457,272) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 1,194 38,899 (455,939) NET ASSETS: Beginning of year................................... 567,520 528,621 984,560 --------------------- --------------------- --------------------- End of year......................................... $ 568,714 $ 567,520 $ 528,621 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2025 DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,280 $ 6,677 $ 8,151 Net realized gains (losses)......................... 13,722 13,307 2,620 Change in unrealized gains (losses) on investments.. 58,295 6,315 (13,249) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 79,297 26,299 (2,478) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. 1 -- 407,484 Policy charges...................................... (11,328) (10,760) (9,867) Transfers for Policy benefits and terminations...... -- -- -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (11,327) (10,760) 397,617 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 67,970 15,539 395,139 NET ASSETS: Beginning of year................................... 448,266 432,727 37,588 --------------------- --------------------- --------------------- End of year......................................... $ 516,236 $ 448,266 $ 432,727 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2030 DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,686 $ 2,599 $ 2,154 Net realized gains (losses)......................... 15,700 3,153 1,753 Change in unrealized gains (losses) on investments.. 21,517 4,716 (4,989) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 40,903 10,468 (1,082) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 399,414 337,954 248,938 Net transfers (including fixed account)............. (17,095) (74) 1,585 Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (325,781) (286,393) (211,226) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 56,538 51,487 39,297 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 97,441 61,955 38,215 NET ASSETS: Beginning of year................................... 181,828 119,873 81,658 --------------------- --------------------- --------------------- End of year......................................... $ 279,269 $ 181,828 $ 119,873 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 152 The accompanying notes are an integral part of these financial statements. 153 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP FREEDOM 2040 DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,654 $ 2,084 $ 1,492 Net realized gains (losses)......................... 12,869 2,805 804 Change in unrealized gains (losses) on investments.. 24,961 5,080 (3,345) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 40,484 9,969 (1,049) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 308,883 263,618 178,750 Net transfers (including fixed account)............. -- (142) -- Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (271,312) (203,651) (141,983) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 37,571 59,825 36,767 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 78,055 69,794 35,718 NET ASSETS: Beginning of year................................... 159,009 89,215 53,497 -------------------- -------------------- -------------------- End of year......................................... $ 237,064 $ 159,009 $ 89,215 ==================== ==================== ==================== FIDELITY VIP FREEDOM 2050 DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,270 $ 1,500 $ 878 Net realized gains (losses)......................... 8,417 1,669 843 Change in unrealized gains (losses) on investments.. 19,567 2,841 (2,416) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 30,254 6,010 (695) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 199,787 171,698 115,247 Net transfers (including fixed account)............. -- -- (1,460) Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (146,021) (122,043) (88,414) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 53,766 49,655 25,373 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 84,020 55,665 24,678 NET ASSETS: Beginning of year................................... 107,049 51,384 26,706 --------------------- -------------------- -------------------- End of year......................................... $ 191,069 $ 107,049 $ 51,384 ===================== ==================== ==================== FIDELITY VIP GOVERNMENT MONEY MARKET DIVISION --------------------------------------------- 2017 2016 (c) --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 22,875 $ 4,167 Net realized gains (losses)......................... -- -- Change in unrealized gains (losses) on investments.. -- -- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 22,875 4,167 --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 133,488 256,858 Net transfers (including fixed account)............. 623,595 3,598,871 Policy charges...................................... (65,496) (34,257) Transfers for Policy benefits and terminations...... (183,382) -- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 508,205 3,821,472 --------------------- --------------------- Net increase (decrease) in net assets............. 531,080 3,825,639 NET ASSETS: Beginning of year................................... 3,825,639 -- --------------------- --------------------- End of year......................................... $ 4,356,719 $ 3,825,639 ===================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 154 The accompanying notes are an integral part of these financial statements. 155 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FIDELITY VIP HIGH INCOME DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 24,337 $ 18,971 $ 14,336 Net realized gains (losses)......................... (18) (443) (455) Change in unrealized gains (losses) on investments.. 2,185 19,200 (20,979) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 26,504 37,728 (7,098) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 88,023 35,555 12,069 Net transfers (including fixed account)............. -- 96,126 35,979 Policy charges...................................... (7,437) (6,565) (5,315) Transfers for Policy benefits and terminations...... (1) -- (2,074) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 80,585 125,116 40,659 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 107,089 162,844 33,561 NET ASSETS: Beginning of year................................... 368,584 205,740 172,179 --------------------- --------------------- --------------------- End of year......................................... $ 475,673 $ 368,584 $ 205,740 ===================== ===================== ===================== FIDELITY VIP INVESTMENT GRADE BOND DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,197 $ 28,927 $ 31,506 Net realized gains (losses)......................... 3,320 (1,529) 154 Change in unrealized gains (losses) on investments.. 18,959 27,988 (39,907) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 50,476 55,386 (8,247) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,122 293 829 Net transfers (including fixed account)............. 97,158 (24,137) (11,610) Policy charges...................................... (14,491) (14,328) (14,132) Transfers for Policy benefits and terminations...... (173,140) -- -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (89,351) (38,172) (24,913) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (38,875) 17,214 (33,160) NET ASSETS: Beginning of year................................... 1,241,561 1,224,347 1,257,507 --------------------- --------------------- --------------------- End of year......................................... $ 1,202,686 $ 1,241,561 $ 1,224,347 ===================== ===================== ===================== FIDELITY VIP MID CAP DIVISION --------------------------------------------------------------------- 2017 2016 2015 --------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,285 $ 766 $ 745 Net realized gains (losses)......................... 16,281 13,813 31,286 Change in unrealized gains (losses) on investments.. 31,948 9,442 (36,156) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 49,514 24,021 (4,125) --------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,110 1,018 1,486 Net transfers (including fixed account)............. (9,016) 261 32,283 Policy charges...................................... (5,116) (4,768) (4,213) Transfers for Policy benefits and terminations...... (15,522) (43,917) -- --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (28,544) (47,406) 29,556 --------------------- --------------------- -------------------- Net increase (decrease) in net assets............ 20,970 (23,385) 25,431 NET ASSETS: Beginning of year................................... 256,383 279,768 254,337 --------------------- --------------------- -------------------- End of year......................................... $ 277,353 $ 256,383 $ 279,768 ===================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 156 The accompanying notes are an integral part of these financial statements. 157 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FTVIPT FRANKLIN INCOME VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,194 $ 2,059 $ 1,086 Net realized gains (losses)......................... 186 (110) (154) Change in unrealized gains (losses) on investments.. 6,858 3,968 (2,439) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 9,238 5,917 (1,507) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 7,835 4,179 5,340 Net transfers (including fixed account)............. (9,352) 10,302 12,510 Policy charges...................................... (3,310) (3,200) (2,666) Transfers for Policy benefits and terminations...... (4,397) -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (9,224) 11,281 15,184 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 14 17,198 13,677 NET ASSETS: Beginning of year................................... 56,031 38,833 25,156 -------------------- -------------------- -------------------- End of year......................................... $ 56,045 $ 56,031 $ 38,833 ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 9,201 $ 8,262 $ 13,670 Net realized gains (losses)......................... 30,787 36,978 27,706 Change in unrealized gains (losses) on investments.. 6,135 13,065 (58,851) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 46,123 58,305 (17,475) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 96,318 55,906 24,639 Net transfers (including fixed account)............. (33,115) (15,004) 13,951 Policy charges...................................... (10,889) (11,796) (15,139) Transfers for Policy benefits and terminations...... (53,287) (7,814) (14,827) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (973) 21,292 8,624 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 45,150 79,597 (8,851) NET ASSETS: Beginning of year................................... 559,179 479,582 488,433 -------------------- -------------------- -------------------- End of year......................................... $ 604,329 $ 559,179 $ 479,582 ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL SHARES VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,384 $ 1,664 $ 1,895 Net realized gains (losses)......................... 4,322 6,412 4,213 Change in unrealized gains (losses) on investments.. 1,445 4,437 (9,723) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 8,151 12,513 (3,615) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 18,402 14,420 10,729 Net transfers (including fixed account)............. 1,080 9,226 27,697 Policy charges...................................... (9,419) (7,976) (5,813) Transfers for Policy benefits and terminations...... (3,131) (3,186) (72) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 6,932 12,484 32,541 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 15,083 24,997 28,926 NET ASSETS: Beginning of year................................... 96,301 71,304 42,378 -------------------- -------------------- -------------------- End of year......................................... $ 111,384 $ 96,301 $ 71,304 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 158 The accompanying notes are an integral part of these financial statements. 159 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
FTVIPT TEMPLETON FOREIGN VIP DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 225,978 $ 114,022 $ 189,205 Net realized gains (losses)......................... 5,599 19,515 182,453 Change in unrealized gains (losses) on investments.. 996,224 260,337 (703,728) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 1,227,801 393,874 (332,070) -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 375,066 450,424 522,167 Net transfers (including fixed account)............. 2,927,494 (43,239) 131,629 Policy charges...................................... (222,574) (193,490) (204,300) Transfers for Policy benefits and terminations...... (58,419) (189,973) (119,949) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 3,021,567 23,722 329,547 -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 4,249,368 417,596 (2,523) NET ASSETS: Beginning of year................................... 5,762,444 5,344,848 5,347,371 -------------------- -------------------- ------------------- End of year......................................... $ 10,011,812 $ 5,762,444 $ 5,344,848 ==================== ==================== =================== FTVIPT TEMPLETON GLOBAL BOND VIP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ 83,772 Net realized gains (losses)......................... (171) (3,707) (92,691) Change in unrealized gains (losses) on investments.. 11,918 24,908 (36,601) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,747 21,201 (45,520) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 142,166 66,454 35,603 Net transfers (including fixed account)............. 35,287 5,683 (632,092) Policy charges...................................... (25,311) (25,780) (35,622) Transfers for Policy benefits and terminations...... (33,359) (2,149) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 118,783 44,208 (632,111) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 130,530 65,409 (677,631) NET ASSETS: Beginning of year................................... 624,673 559,264 1,236,895 -------------------- -------------------- -------------------- End of year......................................... $ 755,203 $ 624,673 $ 559,264 ==================== ==================== ==================== GOLDMAN SACHS MID-CAP VALUE DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 623 $ 1,071 $ 1,118 Net realized gains (losses)......................... 4,992 (9,829) 20,793 Change in unrealized gains (losses) on investments.. 3,256 25,433 (48,920) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 8,871 16,675 (27,009) ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- (183,580) -- Policy charges...................................... (4,651) (4,736) (7,778) Transfers for Policy benefits and terminations...... -- (1) (12,103) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,651) (188,317) (19,881) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 4,220 (171,642) (46,890) NET ASSETS: Beginning of year................................... 82,725 254,367 301,257 ------------------- ------------------- -------------------- End of year......................................... $ 86,945 $ 82,725 $ 254,367 =================== =================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 160 The accompanying notes are an integral part of these financial statements. 161 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- ---------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 41 $ 413 $ 104 Net realized gains (losses)......................... 4,096 147 4,727 Change in unrealized gains (losses) on investments.. (3,129) 6,057 (5,505) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,008 6,617 (674) --------------------- ---------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,029 10,556 1,112 Net transfers (including fixed account)............. (37,089) -- -- Policy charges...................................... (1,675) (3,587) (3,707) Transfers for Policy benefits and terminations...... (62) (7,826) (1) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (32,797) (857) (2,596) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets............ (31,789) 5,760 (3,270) NET ASSETS: Beginning of year................................... 39,553 33,793 37,063 --------------------- ---------------------- --------------------- End of year......................................... $ 7,764 $ 39,553 $ 33,793 ===================== ====================== ===================== INVESCO V.I. COMSTOCK DIVISION ----------------------------------------------------------------------- 2017 2016 2015 ---------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 10,939 $ 4,913 $ 5,695 Net realized gains (losses)......................... 28,297 31,767 4,410 Change in unrealized gains (losses) on investments.. 52,013 25,839 (32,126) ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 91,249 62,519 (22,021) ---------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 157,051 59,070 21,481 Net transfers (including fixed account)............. (7,282) 257 (1,856) Policy charges...................................... (9,718) (8,620) (8,488) Transfers for Policy benefits and terminations...... (14) -- (34) ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 140,037 50,707 11,103 ---------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 231,286 113,226 (10,918) NET ASSETS: Beginning of year................................... 449,886 336,660 347,578 ---------------------- --------------------- --------------------- End of year......................................... $ 681,172 $ 449,886 $ 336,660 ====================== ===================== ===================== INVESCO V.I. INTERNATIONAL GROWTH DIVISION ---------------------------------------------------------------------- 2017 2016 2015 --------------------- ---------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,975 $ 4,874 $ 5,017 Net realized gains (losses)......................... 6,211 630 2,637 Change in unrealized gains (losses) on investments.. 61,391 (8,246) (13,856) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 72,577 (2,742) (6,202) --------------------- ---------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 7,874 16,357 -- Net transfers (including fixed account)............. (59,675) 40,410 2,025 Policy charges...................................... (15,059) (16,023) (16,496) Transfers for Policy benefits and terminations...... (65) (9,023) (1) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (66,925) 31,721 (14,472) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets............ 5,652 28,979 (20,674) NET ASSETS: Beginning of year................................... 358,802 329,823 350,497 --------------------- ---------------------- --------------------- End of year......................................... $ 364,454 $ 358,802 $ 329,823 ===================== ====================== =====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 162 The accompanying notes are an integral part of these financial statements. 163 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
JANUS HENDERSON BALANCED DIVISION -------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 15,832 $ 20,153 $ 15,263 Net realized gains (losses)......................... 13,593 22,229 40,958 Change in unrealized gains (losses) on investments.. 160,350 (19) (51,128) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 189,775 42,363 5,093 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 40,337 55,816 36,006 Net transfers (including fixed account)............. (46,193) (14,696) 28,037 Policy charges...................................... (30,609) (32,106) (33,574) Transfers for Policy benefits and terminations...... (7,289) (79,063) (17,338) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (43,754) (70,049) 13,131 -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 146,021 (27,686) 18,224 NET ASSETS: Beginning of year................................... 1,073,389 1,101,075 1,082,851 -------------------- --------------------- --------------------- End of year......................................... $ 1,219,410 $ 1,073,389 $ 1,101,075 ==================== ===================== ===================== JANUS HENDERSON ENTERPRISE DIVISION -------------------------------------------- 2017 2016 (d) -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 710 $ 107 Net realized gains (losses)......................... 53,319 38,166 Change in unrealized gains (losses) on investments.. 49,008 289 -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 103,037 38,562 -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- Net transfers (including fixed account)............. (139,404) 417,833 Policy charges...................................... (4,932) (3,776) Transfers for Policy benefits and terminations...... (61,166) -- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (205,502) 414,057 -------------------- --------------------- Net increase (decrease) in net assets............. (102,465) 452,619 NET ASSETS: Beginning of year................................... 452,619 -- -------------------- --------------------- End of year......................................... $ 350,154 $ 452,619 ==================== ===================== JANUS HENDERSON FORTY DIVISION -------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 49,807 59,807 122,650 Change in unrealized gains (losses) on investments.. 82,066 (58,944) (57,429) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 131,873 863 65,221 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,767 21,593 8,927 Net transfers (including fixed account)............. (53,562) -- 262 Policy charges...................................... (12,150) (15,394) (19,291) Transfers for Policy benefits and terminations...... (250,103) (106,582) (964) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (306,048) (100,383) (11,066) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (174,175) (99,520) 54,155 NET ASSETS: Beginning of year................................... 505,032 604,552 550,397 --------------------- -------------------- -------------------- End of year......................................... $ 330,857 $ 505,032 $ 604,552 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 164 The accompanying notes are an integral part of these financial statements. 165 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
JANUS HENDERSON OVERSEAS DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 358 $ 1,672 $ 225 Net realized gains (losses)......................... (10,688) (6,520) (4,794) Change in unrealized gains (losses) on investments.. 18,215 1,900 363 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 7,885 (2,948) (4,206) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 18,271 21,555 5,534 Net transfers (including fixed account)............. (37,562) -- -- Policy charges...................................... (4,253) (6,610) (7,590) Transfers for Policy benefits and terminations...... (87) (4,970) (5,157) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (23,631) 9,975 (7,213) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (15,746) 7,027 (11,419) NET ASSETS: Beginning of year................................... 43,050 36,023 47,442 -------------------- -------------------- -------------------- End of year......................................... $ 27,304 $ 43,050 $ 36,023 ==================== ==================== ==================== JANUS HENDERSON RESEARCH DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,234 $ 1,500 $ 2,968 Net realized gains (losses)......................... 5,531 62,341 102,491 Change in unrealized gains (losses) on investments.. 68,064 (66,733) (79,472) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 74,829 (2,892) 25,987 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 8,642 3,252 6,990 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (11,111) (11,346) (16,553) Transfers for Policy benefits and terminations...... (69) (187,482) (26,764) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,538) (195,576) (36,327) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 72,291 (198,468) (10,340) NET ASSETS: Beginning of year................................... 271,199 469,667 480,007 -------------------- -------------------- -------------------- End of year......................................... $ 343,490 $ 271,199 $ 469,667 ==================== ==================== ==================== MFS VIT GLOBAL EQUITY DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,698 $ 1,326 $ 1,587 Net realized gains (losses)......................... 12,364 10,426 8,958 Change in unrealized gains (losses) on investments.. 40,361 736 (14,256) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 54,423 12,488 (3,711) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 70,644 27,743 10,152 Net transfers (including fixed account)............. 7,066 (176) (8,832) Policy charges...................................... (4,554) (4,103) (4,102) Transfers for Policy benefits and terminations...... (7,604) -- (175) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 65,552 23,464 (2,957) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 119,975 35,952 (6,668) NET ASSETS: Beginning of year................................... 218,575 182,623 189,291 -------------------- -------------------- -------------------- End of year......................................... $ 338,550 $ 218,575 $ 182,623 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 166 The accompanying notes are an integral part of these financial statements. 167 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
MFS VIT NEW DISCOVERY DIVISION ------------------------------------------------------------------- 2017 2016 2015 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 42,002 9,227 7,331 Change in unrealized gains (losses) on investments.. (961) 7,467 (11,470) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 41,041 16,694 (4,139) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (6,131) (6,581) (6,330) Transfers for Policy benefits and terminations...... (220,519) (38) (52) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (226,650) (6,619) (6,382) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (185,609) 10,075 (10,521) NET ASSETS: Beginning of year................................... 206,405 196,330 206,851 --------------------- -------------------- -------------------- End of year......................................... $ 20,796 $ 206,405 $ 196,330 ===================== ==================== ==================== MFS VIT VALUE DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 345 $ 369 $ 439 Net realized gains (losses)......................... 1,647 2,248 1,896 Change in unrealized gains (losses) on investments.. 1,235 (76) (2,518) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,227 2,541 (183) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. 1 -- -- Policy charges...................................... (2,898) (2,348) (2,032) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,897) (2,348) (2,032) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 330 193 (2,215) NET ASSETS: Beginning of year................................... 20,045 19,852 22,067 -------------------- -------------------- -------------------- End of year......................................... $ 20,375 $ 20,045 $ 19,852 ==================== ==================== ==================== MFS VIT II HIGH YIELD DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 9,827 $ 9,347 $ 9,868 Net realized gains (losses)......................... (95) (220) (99) Change in unrealized gains (losses) on investments.. (254) 9,158 (16,013) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 9,478 18,285 (6,244) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- 1 (33) Policy charges...................................... (2,591) (2,483) (2,300) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,591) (2,482) (2,333) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 6,887 15,803 (8,577) NET ASSETS: Beginning of year................................... 151,111 135,308 143,885 -------------------- -------------------- -------------------- End of year......................................... $ 157,998 $ 151,111 $ 135,308 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 168 The accompanying notes are an integral part of these financial statements. 169 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
MORGAN STANLEY VIF EMERGING MARKETS DEBT DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 70,167 $ 59,307 $ 45,047 Net realized gains (losses)......................... (7,471) (12,131) (12,799) Change in unrealized gains (losses) on investments.. 58,835 45,652 (46,377) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 121,531 92,828 (14,129) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,113 3,052 3,052 Net transfers (including fixed account)............. 377,231 264,923 149,611 Policy charges...................................... (24,084) (19,895) (14,377) Transfers for Policy benefits and terminations...... -- (18) (781) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 355,260 248,062 137,505 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 476,791 340,890 123,376 NET ASSETS: Beginning of year................................... 1,256,825 915,935 792,559 -------------------- -------------------- -------------------- End of year......................................... $ 1,733,616 $ 1,256,825 $ 915,935 ==================== ==================== ==================== MORGAN STANLEY VIF EMERGING MARKETS EQUITY DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 29,128 $ 12,938 $ 18,406 Net realized gains (losses)......................... 244,612 (37,991) (24,296) Change in unrealized gains (losses) on investments.. 807,706 171,862 (266,747) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,081,446 146,809 (272,637) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,120 4,305 4,305 Net transfers (including fixed account)............. (995,326) 831,692 408,440 Policy charges...................................... (61,562) (47,189) (36,287) Transfers for Policy benefits and terminations...... (14,962) (296) (301) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,062,730) 788,512 376,157 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 18,716 935,321 103,520 NET ASSETS: Beginning of year................................... 3,160,892 2,225,571 2,122,051 -------------------- -------------------- -------------------- End of year......................................... $ 3,179,608 $ 3,160,892 $ 2,225,571 ==================== ==================== ==================== PIMCO VIT ALL ASSET DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,628 $ 3,261 $ 17,942 Net realized gains (losses)......................... (130) (833) (111,468) Change in unrealized gains (losses) on investments.. 11,089 12,619 38,369 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 17,587 15,047 (55,157) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,625 8,337 4,611 Net transfers (including fixed account)............. -- 76 (723,721) Policy charges...................................... (7,019) (7,013) (18,374) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,606 1,400 (737,484) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 20,193 16,447 (792,641) NET ASSETS: Beginning of year................................... 126,203 109,756 902,397 -------------------- -------------------- -------------------- End of year......................................... $ 146,396 $ 126,203 $ 109,756 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 170 The accompanying notes are an integral part of these financial statements. 171 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
PIMCO VIT COMMODITYREALRETURN STRATEGY DIVISION ----------------------------------------------------------------- 2017 2016 2015 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,293 $ 111 $ 1,467 Net realized gains (losses)......................... (3,603) (957) (11,415) Change in unrealized gains (losses) on investments.. 2,335 2,262 3,408 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 25 1,416 (6,540) -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,720 -- 2,720 Net transfers (including fixed account)............. (6,206) -- (19,227) Policy charges...................................... (1,439) (1,699) (1,972) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,925) (1,699) (18,479) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. (4,900) (283) (25,019) NET ASSETS: Beginning of year................................... 9,928 10,211 35,230 -------------------- -------------------- ------------------- End of year......................................... $ 5,028 $ 9,928 $ 10,211 ==================== ==================== =================== PIMCO VIT LOW DURATION DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 12,109 $ 13,010 $ 29,643 Net realized gains (losses)......................... (327) (325) 12,574 Change in unrealized gains (losses) on investments.. 386 (271) (33,266) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 12,168 12,414 8,951 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,335 3,335 1,329 Net transfers (including fixed account)............. 49,928 48,327 (723,808) Policy charges...................................... (16,019) (16,404) (16,831) Transfers for Policy benefits and terminations...... (18) (14) (4) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 37,226 35,244 (739,314) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 49,394 47,658 (730,363) NET ASSETS: Beginning of year................................... 872,582 824,924 1,555,287 ------------------- ------------------- -------------------- End of year......................................... $ 921,976 $ 872,582 $ 824,924 =================== =================== ==================== PUTNAM VT INTERNATIONAL VALUE DIVISION ----------------------------------------------------------------- 2017 2016 2015 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 86 $ 122 $ 91 Net realized gains (losses)......................... 45 (165) (22) Change in unrealized gains (losses) on investments.. 1,055 58 (118) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,186 15 (49) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,288 -- 1,288 Net transfers (including fixed account)............. -- 1 -- Policy charges...................................... (1,208) (1,450) (1,363) Transfers for Policy benefits and terminations...... -- -- (1) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 80 (1,449) (76) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,266 (1,434) (125) NET ASSETS: Beginning of year................................... 4,261 5,695 5,820 ------------------- -------------------- -------------------- End of year......................................... $ 5,527 $ 4,261 $ 5,695 =================== ==================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 172 The accompanying notes are an integral part of these financial statements. 173 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
ROYCE MICRO-CAP DIVISION ------------------------------------------------------------------ 2017 2016 2015 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 73 $ 61 $ -- Net realized gains (losses)......................... 1,144 71 499 Change in unrealized gains (losses) on investments.. (673) 1,525 (1,557) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 544 1,657 (1,058) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- 939 939 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (101) (81) (78) Transfers for Policy benefits and terminations...... -- (71) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (101) 787 861 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 443 2,444 (197) NET ASSETS: Beginning of year................................... 10,583 8,139 8,336 -------------------- -------------------- -------------------- End of year......................................... $ 11,026 $ 10,583 $ 8,139 ==================== ==================== ==================== ROYCE SMALL-CAP DIVISION ------------------------------------------------------------------- 2017 2016 2015 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 136 $ 1,115 $ 443 Net realized gains (losses)......................... (13,382) 6,182 12,813 Change in unrealized gains (losses) on investments.. 13,095 2,799 (19,154) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (151) 10,096 (5,898) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 10,945 21,194 278 Net transfers (including fixed account)............. (62,685) -- 12,275 Policy charges...................................... (1,574) (4,548) (4,053) Transfers for Policy benefits and terminations...... (96) (12,165) -- -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (53,410) 4,481 8,500 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (53,561) 14,577 2,602 NET ASSETS: Beginning of year................................... 68,550 53,973 51,371 -------------------- --------------------- -------------------- End of year......................................... $ 14,989 $ 68,550 $ 53,973 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016 and 2015. (b) Commenced April 28, 2014 and began transactions in 2015. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 174 The accompanying notes are an integral part of these financial statements. 175 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements, Notes and Schedules
Page ---------- Report of Independent Registered Public Accounting Firm.......................................... 2 Financial Statements at December 31, 2017 and 2016 and for the Years Ended December 31, 2017, 2016 and 2015: Consolidated Balance Sheets..................................................................... 3 Consolidated Statements of Operations........................................................... 4 Consolidated Statements of Comprehensive Income (Loss).......................................... 5 Consolidated Statements of Equity............................................................... 6 Consolidated Statements of Cash Flows........................................................... 7 Notes to the Consolidated Financial Statements.................................................. 9 Note 1 -- Business, Basis of Presentation and Summary of Significant Accounting Policies.... 9 Note 2 -- Segment Information............................................................... 28 Note 3 -- Disposition....................................................................... 34 Note 4 -- Insurance......................................................................... 34 Note 5 -- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles............................................................................... 46 Note 6 -- Reinsurance....................................................................... 49 Note 7 -- Closed Block...................................................................... 55 Note 8 -- Investments....................................................................... 57 Note 9 -- Derivatives....................................................................... 78 Note 10 -- Fair Value....................................................................... 93 Note 11 -- Long-term and Short-term Debt.................................................... 112 Note 12 -- Equity........................................................................... 114 Note 13 -- Other Expenses................................................................... 119 Note 14 -- Employee Benefit Plans........................................................... 120 Note 15 -- Income Tax....................................................................... 129 Note 16 -- Contingencies, Commitments and Guarantees........................................ 135 Note 17 -- Quarterly Results of Operations (Unaudited)...................................... 144 Note 18 -- Related Party Transactions....................................................... 145 Financial Statement Schedules at December 31, 2017 and 2016 and for the Years Ended December 31, 2017, 2016 and 2015: Schedule I -- Consolidated Summary of Investments -- Other Than Investments in Related Parties....................................................................................... 146 Schedule III -- Consolidated Supplementary Insurance Information................................ 147 Schedule IV -- Consolidated Reinsurance......................................................... 149
1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholder and the Board of Directors of Metropolitan Life Insurance Company Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and the schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP New York, New York March 19, 2018 We have served as the Company's auditor since at least 1968; however, the specific year has not been determined. 2 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2017 and 2016 (In millions, except share and per share data)
2017 2016 ------------- ------------- Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $157,809 and $155,141, respectively).............................................. $ 170,272 $ 163,120 Equity securities available-for-sale, at estimated fair value (cost: $1,579 and $1,785, respectively).............. 1,658 1,839 Mortgage loans (net of valuation allowances of $271 and $267, respectively; includes $520 and $566, respectively, under the fair value option)............................... 58,459 56,560 Policy loans................................................ 6,006 5,945 Real estate and real estate joint ventures (includes $1,077 and $1,124, respectively, relating to variable interest entities; includes $25 and $56, respectively, of real estate held-for-sale)...................................... 6,656 6,386 Other limited partnership interests (includes $0 and $14, respectively, relating to variable interest entities)...... 3,991 3,725 Short-term investments, principally at estimated fair value. 3,155 4,690 Other invested assets (includes $131 and $39, respectively, relating to variable interest entities).................... 14,911 17,255 ------------- ------------- Total investments......................................... 265,108 259,520 Cash and cash equivalents, principally at estimated fair value (includes $12 and $0, respectively, relating to variable interest entities)................................ 5,069 5,714 Accrued investment income................................... 2,042 2,019 Premiums, reinsurance and other receivables (includes $3 and $6, respectively, relating to variable interest entities).................................................. 22,098 22,383 Deferred policy acquisition costs and value of business acquired................................................... 4,348 4,743 Current income tax recoverable.............................. 64 -- Other assets (includes $2 and $3, respectively, relating to variable interest entities)................................ 4,741 4,346 Separate account assets..................................... 130,825 133,836 ------------- ------------- Total assets.............................................. $ 434,295 $ 432,561 ============= ============= Liabilities and Equity Liabilities Future policy benefits...................................... $ 119,415 $ 115,519 Policyholder account balances............................... 93,939 92,466 Other policy-related balances............................... 7,176 7,103 Policyholder dividends payable.............................. 499 510 Policyholder dividend obligation............................ 2,121 1,931 Payables for collateral under securities loaned and other transactions............................................... 19,871 20,815 Short-term debt............................................. 243 100 Long-term debt (includes $6 and $12, respectively, at estimated fair value, relating to variable interest entities).................................................. 1,667 1,589 Current income tax payable.................................. -- 50 Deferred income tax liability............................... 1,369 2,385 Other liabilities (includes $3 and $0, respectively, relating to variable interest entities).................... 27,409 29,497 Separate account liabilities................................ 130,825 133,836 ------------- ------------- Total liabilities......................................... 404,534 405,801 ------------- ------------- Contingencies, Commitments and Guarantees (Note 16) Equity Metropolitan Life Insurance Company stockholder's equity: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding................................................ 5 5 Additional paid-in capital.................................. 14,150 14,413 Retained earnings........................................... 10,035 9,033 Accumulated other comprehensive income (loss)............... 5,428 3,119 ------------- ------------- Total Metropolitan Life Insurance Company stockholder's equity................................................... 29,618 26,570 Noncontrolling interests.................................... 143 190 ------------- ------------- Total equity.............................................. 29,761 26,760 ------------- ------------- Total liabilities and equity.............................. $ 434,295 $ 432,561 ============= =============
See accompanying notes to the consolidated financial statements. 3 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Operations For the Years Ended December 31, 2017, 2016 and 2015 (In millions)
2017 2016 2015 ------------ ------------ ------------ Revenues Premiums........................................................................... $ 22,925 $ 22,393 $ 21,934 Universal life and investment-type product policy fees............................. 2,227 2,542 2,584 Net investment income.............................................................. 10,513 11,083 11,539 Other revenues..................................................................... 1,570 1,478 1,536 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities...................... (7) (87) (49) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)....................................................... 1 (10) (5) Other net investment gains (losses)................................................ 340 229 313 ------------ ------------ ------------ Total net investment gains (losses).............................................. 334 132 259 Net derivative gains (losses)...................................................... (344) (1,138) 881 ------------ ------------ ------------ Total revenues................................................................... 37,225 36,490 38,733 ------------ ------------ ------------ Expenses Policyholder benefits and claims................................................... 25,792 25,313 24,547 Interest credited to policyholder account balances................................. 2,235 2,233 2,183 Policyholder dividends............................................................. 1,097 1,200 1,264 Other expenses..................................................................... 5,135 5,803 6,258 ------------ ------------ ------------ Total expenses................................................................... 34,259 34,549 34,252 ------------ ------------ ------------ Income (loss) before provision for income tax...................................... 2,966 1,941 4,481 Provision for income tax expense (benefit)......................................... (561) 199 1,763 ------------ ------------ ------------ Net income (loss)................................................................ 3,527 1,742 2,718 Less: Net income (loss) attributable to noncontrolling interests................... 2 (8) -- ------------ ------------ ------------ Net income (loss) attributable to Metropolitan Life Insurance Company............ $ 3,525 $ 1,750 $ 2,718 ============ ============ ============
See accompanying notes to the consolidated financial statements. 4 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, 2017, 2016 and 2015 (In millions)
2017 2016 2015 -------------- --------- --------- Net income (loss)............. $ 3,527 $ 1,742 $ 2,718 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets...................... 4,079 406 (4,434) Unrealized gains (losses) on derivatives.................. (848) 36 559 Foreign currency translation adjustments.................. 26 13 (101) Defined benefit plans adjustment................... 129 217 342 -------------- --------- --------- Other comprehensive income (loss), before income tax.. 3,386 672 (3,634) Income tax (expense) benefit related to items of other comprehensive income (loss).. (1,077) (238) 1,285 -------------- --------- --------- Other comprehensive income (loss), net of income tax.. 2,309 434 (2,349) -------------- --------- --------- Comprehensive income (loss)... 5,836 2,176 369 Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income tax................ 2 (8) -- -------------- --------- --------- Comprehensive income (loss) attributable to Metropolitan Life Insurance Company.......... $ 5,834 $ 2,184 $ 369 ============== ========= =========
See accompanying notes to the consolidated financial statements. 5 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Equity For the Years Ended December 31, 2017, 2016 and 2015 (In millions)
Accumulated Total Additional Other Metropolitan Life Common Paid-in Retained Comprehensive Insurance Company Noncontrolling Total Stock Capital Earnings Income (Loss) Stockholder's Equity Interests Equity -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2014, as previously reported............... $ 5 $ 14,448 $ 12,470 $ 5,034 $ 31,957 $ 392 $ 32,349 Prior period revisions (Note 1)............... (164) (164) (164) -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2014................... 5 14,448 12,306 5,034 31,793 392 32,185 Capital contributions from MetLife, Inc...... 4 4 4 Returns of capital...... (11) (11) (11) Excess tax benefits related to stock-based compensation........... 3 3 3 Dividends paid to MetLife, Inc........... (1,489) (1,489) (1,489) Change in equity of noncontrolling interests.............. -- (20) (20) Net income (loss)....... 2,718 2,718 2,718 Other comprehensive income (loss), net of income tax............. (2,349) (2,349) (2,349) -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2015................... 5 14,444 13,535 2,685 30,669 372 31,041 Capital contributions from MetLife, Inc...... 10 10 10 Returns of capital...... (68) (68) (68) Excess tax benefits related to stock-based compensation........... 27 27 27 Dividends paid to MetLife, Inc........... (3,600) (3,600) (3,600) Dividend of subsidiaries (Note 3).. (2,652) (2,652) 2 (2,650) Change in equity of noncontrolling interests.............. -- (176) (176) Net income (loss)....... 1,750 1,750 (8) 1,742 Other comprehensive income (loss), net of income tax............. 434 434 434 -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2016................... 5 14,413 9,033 3,119 26,570 190 26,760 Capital contributions from MetLife, Inc...... 6 6 6 Returns of capital...... (20) (20) (20) Purchase of operating joint venture interest from an affiliate (Note 8)............... (249) (249) (249) Dividends paid to MetLife, Inc........... (2,523) (2,523) (2,523) Change in equity of noncontrolling interests.............. -- (49) (49) Net income (loss)....... 3,525 3,525 2 3,527 Other comprehensive income (loss), net of income tax............. 2,309 2,309 2,309 -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2017................... $ 5 $ 14,150 $ 10,035 $ 5,428 $ 29,618 $ 143 $ 29,761 ======== =========== ========== ============== ===================== =============== =========
See accompanying notes to the consolidated financial statements. 6 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows For the Years Ended December 31, 2017, 2016 and 2015 (In millions)
2017 2016 2015 ---------- ---------- ---------- Cash flows from operating activities Net income (loss)....................... $ 3,527 $ 1,742 $ 2,718 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expenses. 395 367 474 Amortization of premiums and accretion of discounts associated with investments, net...................... (823) (975) (848) (Gains) losses on investments and from sales of businesses, net.............. (334) (132) (259) (Gains) losses on derivatives, net..... 900 1,865 (426) (Income) loss from equity method investments, net of dividends or distributions......................... 314 483 320 Interest credited to policyholder account balances...................... 2,235 2,233 2,183 Universal life and investment-type product policy fees................... (2,227) (2,542) (2,584) Change in fair value option and trading securities.................... 17 406 278 Change in accrued investment income.... (40) 81 113 Change in premiums, reinsurance and other receivables..................... 277 (2,606) (135) Change in deferred policy acquisition costs and value of business acquired, net................................... 180 108 260 Change in income tax................... (2,200) (438) 238 Change in other assets................. 309 701 763 Change in insurance-related liabilities and policy-related balances.............................. 4,029 2,741 2,648 Change in other liabilities............ (156) 1,731 (461) Other, net............................. (49) 39 (16) ---------- ---------- ---------- Net cash provided by (used in) operating activities................. 6,354 5,804 5,266 ---------- ---------- ---------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities.............. 53,984 74,985 82,744 Equity securities...................... 831 859 651 Mortgage loans......................... 8,810 11,286 11,189 Real estate and real estate joint ventures.............................. 955 762 2,734 Other limited partnership interests.... 565 830 1,185 Purchases of: Fixed maturity securities.............. (55,973) (72,414) (76,594) Equity securities...................... (607) (771) (694) Mortgage loans......................... (10,680) (16,039) (16,268) Real estate and real estate joint ventures.............................. (885) (1,390) (823) Other limited partnership interests.... (794) (809) (668) Cash received in connection with freestanding derivatives............... 1,661 1,372 1,039 Cash paid in connection with freestanding derivatives............... (2,688) (2,451) (1,012) Net change in policy loans.............. (61) 85 357 Net change in short-term investments.... 1,623 694 (1,117) Net change in other invested assets..... (177) (434) (603) Net change in property, equipment and leasehold improvements................. (177) (227) 23 ---------- ---------- ---------- Net cash provided by (used in) investing activities................. $ (3,613) $ (3,662) $ 2,143 ---------- ---------- ----------
See accompanying notes to the consolidated financial statements. 7 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows -- (continued) For the Years Ended December 31, 2017, 2016 and 2015 (In millions)
2017 2016 2015 -------- -------- -------- Cash flows from financing activities Policyholder account balances: Deposits...................................................................... $ 70,258 $ 64,962 $ 60,216 Withdrawals................................................................... (70,215) (61,252) (61,248) Net change in payables for collateral under securities loaned and other transactions................................................................... (525) (696) (2,230) Long-term debt issued........................................................... 169 45 907 Long-term debt repaid........................................................... (92) (58) (673) Financing element on certain derivative instruments and other derivative related transactions, net...................................................... (300) (321) (66) Cash paid in connection with noncontrolling interests........................... (71) -- (159) Dividend of subsidiaries........................................................ -- (115) -- Dividends paid to MetLife, Inc.................................................. (2,523) (3,600) (1,489) Returns of capital.............................................................. (5) (68) (11) Return of capital associated with the purchase of operating joint venture interest from an affiliate (Note 8)............................................ (249) -- -- Other, net...................................................................... 164 24 2 -------- -------- -------- Net cash provided by (used in) financing activities........................... (3,389) (1,079) (4,751) -------- -------- -------- Effect of change in foreign currency exchange rates on cash and cash equivalents balances........................................................... 3 -- -- -------- -------- -------- Change in cash and cash equivalents........................................... (645) 1,063 2,658 Cash and cash equivalents, beginning of year.................................... 5,714 4,651 1,993 -------- -------- -------- Cash and cash equivalents, end of year........................................ $ 5,069 $ 5,714 $ 4,651 ======== ======== ======== Supplemental disclosures of cash flow information Net cash paid (received) for: Interest........................................................................ $ 105 $ 114 $ 123 ======== ======== ======== Income tax...................................................................... $ 1,693 $ 819 $ 1,217 ======== ======== ======== Non-cash transactions Capital contributions from MetLife, Inc......................................... $ 6 $ 10 $ 4 ======== ======== ======== Returns of capital.............................................................. $ 15 $ -- $ -- ======== ======== ======== Fixed maturity securities received in connection with pension risk transfer transactions................................................................... $ -- $ 985 $ 903 ======== ======== ======== Transfer of fixed maturity securities from affiliates........................... $ 292 $ 367 $ -- ======== ======== ======== Transfer of fixed maturity securities to affiliates............................. $ -- $ 3,940 $ -- ======== ======== ======== Transfer of mortgage loans to affiliates........................................ $ -- $ 626 $ -- ======== ======== ======== Deconsolidation of real estate investment vehicles (1): Reduction of long-term debt................................................... $ -- $ -- $ 543 ======== ======== ======== Reduction of real estate and real estate joint ventures....................... $ -- $ 354 $ 389 ======== ======== ======== Increase in noncontrolling interests.......................................... $ -- $ -- $ 153 ======== ======== ======== Reduction of noncontrolling interests......................................... $ -- $ 354 $ -- ======== ======== ======== Disposal of subsidiaries: Assets disposed................................................................. $ -- $ 27,476 $ -- Liabilities disposed............................................................ -- (24,572) -- -------- -------- -------- Net assets disposed........................................................... -- 2,904 -- Cash disposed................................................................... -- (115) -- Dividend of interests in subsidiaries........................................... -- (2,789) -- -------- -------- -------- Loss on dividend of interests in subsidiaries................................. $ -- $ -- $ -- ======== ======== ========
--------- (1) For the year ended December 31, 2015, amounts represent the impact of the consolidation of a real estate investment vehicle, offset by the subsequent deconsolidation of such real estate investment vehicle. See accompanying notes to the consolidated financial statements. 8 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Metropolitan Life Insurance Company and its subsidiaries (collectively, "MLIC" or the "Company") is a provider of insurance, annuities, employee benefits and asset management and is organized into two segments: U.S. and MetLife Holdings. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, "MetLife"). 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 on the consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions 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 business and operations. Actual results could differ from these estimates. Consolidation The accompanying consolidated financial statements include the accounts of Metropolitan Life Insurance 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. Intercompany accounts and transactions have been eliminated. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. Discontinued Operations The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in discontinued operations if certain criteria are met. A disposal of a component is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results. Separate Accounts Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts cannot be used to settle the liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: . such separate accounts are legally recognized; . assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; . investments are directed by the contractholder; and . all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets at their fair value, which is based on the estimated fair values of the underlying assets comprising the individual separate account portfolios. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line on the statements of operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Such fees are included in universal life and investment-type product policy fees on the statements of operations. 9 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. Revisions On December 15, 2017, MetLife, Inc. announced that it was undertaking a review of practices and procedures used to estimate its reserves related to certain Retirement and Income Solutions ("RIS") group annuitants who have been unresponsive or missing over time. As a result of this process, the Company increased reserves by $510 million, before income tax, to reinstate reserves previously released, and to reflect accrued interest and other related liabilities. Of this increase, $372 million was considered an error and, recording this amount in the fourth quarter of 2017 financial statements would have had a material effect on the results of operations for 2017. As a result of this adjustment, amounts previously reported have been immaterially restated. The impact of this revision to net income (loss) attributable to Metropolitan Life Insurance Company was a reduction of $21 million and $20 million for the years ended December 31, 2016 and 2015, respectively. In addition, the Company has corrected other unrelated immaterial errors which were previously recorded in the periods the Company identified them. The impact of the revisions is shown in the tables below:
December 31, 2016 ------------------------------- As Previously As Consolidated Balance Sheets Reported Revisions Revised ----------------------------------------------------------------- ---------- --------- ---------- (In millions) Liabilities Future policy benefits......................................... $ 115,556 $ (37) $ 115,519 Other policy-related balances.................................. $ 6,731 $ 372 $ 7,103 Deferred income tax liability.................................. $ 2,503 $ (118) $ 2,385 Total liabilities.............................................. $ 405,584 $ 217 $ 405,801 Equity Retained earnings.............................................. $ 9,250 $ (217) $ 9,033 Total Metropolitan Life Insurance Company stockholder's equity. $ 26,787 $ (217) $ 26,570 Total equity................................................... $ 26,977 $ (217) $ 26,760
For the Years Ended December 31, ------------------------------------------------------------- 2016 2015 ----------------------------- ------------------------------- As As Previously As Previously As Consolidated Statements of Operations Reported Revisions Revised Reported Revisions Revised ---------------------------------------------------- ---------- --------- -------- ---------- --------- ---------- (In millions, except per share data) Revenues Net investment income............................. $ 11,083 $ -- $ 11,083 $ 11,577 $ (38) $ 11,539 Total revenues.................................... $ 36,490 $ -- $ 36,490 $ 38,771 $ (38) $ 38,733 Expenses Policyholder benefits and claims.................. $ 25,291 $ 22 $ 25,313 $ 24,527 $ 20 $ 24,547 Total expenses.................................... $ 34,527 $ 22 $ 34,549 $ 34,232 $ 20 $ 34,252 Income (loss) before provision for income tax....... $ 1,963 $ (22) $ 1,941 $ 4,539 $ (58) $ 4,481 Provision for income tax expense (benefit).......... $ 207 $ (8) $ 199 $ 1,782 $ (19) $ 1,763 Net income (loss)................................... $ 1,756 $ (14) $ 1,742 $ 2,757 $ (39) $ 2,718 Net income (loss) attributable to Metropolitan Life Insurance Company.................................. $ 1,764 $ (14) $ 1,750 $ 2,757 $ (39) $ 2,718
10 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
For the Years Ended December 31, --------------------------------------------------------------- 2016 2015 ------------------------------ -------------------------------- As As Previously As Previously As Consolidated Statements of Comprehensive Income (Loss) Reported Revisions Revised Reported Revisions Revised ------------------------------------------------------ ---------- --------- -------- ---------- --------- ---------- (In millions) Net income (loss).................................. $ 1,756 $ (14) $ 1,742 $ 2,757 $ (39) $ 2,718 Comprehensive income (loss)........................ $ 2,190 $ (14) $ 2,176 $ 408 $ (39) $ 369 Comprehensive income (loss) attributable to Metropolitan Life Insurance Company............. $ 2,198 $ (14) $ 2,184 $ 408 $ (39) $ 369
As Previously As Consolidated Statements of Equity Reported Revisions Revised --------------------------------------------------------------- ---------- --------- --------- (In millions) Retained Earnings Balance at December 31, 2014................................. $ 12,470 $ (164) $ 12,306 Net income (loss)............................................ $ 2,757 $ (39) $ 2,718 Balance at December 31, 2015................................. $ 13,738 $ (203) $ 13,535 Net income (loss)............................................ $ 1,764 $ (14) $ 1,750 Balance at December 31, 2016................................. $ 9,250 $ (217) $ 9,033 Total Metropolitan Life Insurance Company Stockholder's Equity Balance at December 31, 2014................................. $ 31,957 $ (164) $ 31,793 Balance at December 31, 2015................................. $ 30,872 $ (203) $ 30,669 Balance at December 31, 2016................................. $ 26,787 $ (217) $ 26,570 Total Equity Balance at December 31, 2014................................. $ 32,349 $ (164) $ 32,185 Balance at December 31, 2015................................. $ 31,244 $ (203) $ 31,041 Balance at December 31, 2016................................. $ 26,977 $ (217) $ 26,760
11 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
For the Years Ended December 31, ------------------------------------------------------------ 2016 2015 ----------------------------- ----------------------------- As As Previously As Previously As Consolidated Statements of Cash Flows Reported Revisions Revised Reported Revisions Revised ------------------------------------------------------------- ---------- --------- -------- ---------- --------- -------- (In millions) Cash flows from operating activities Net income (loss)........................................... $ 1,756 $ (14) $ 1,742 $ 2,757 $ (39) $ 2,718 Change in income tax........................................ $ (430) $ (8) $ (438) $ 257 $ (19) $ 238 Change in insurance-related liabilities and policy-related balances................................................... $ 2,719 $ 22 $ 2,741 $ 2,628 $ 20 $ 2,648 Change in other liabilities................................. $ 1,731 $ -- $ 1,731 $ (499) $ 38 $ (461)
Summary of Significant Accounting Policies The following are the Company's significant accounting policies with references to notes providing additional information on such policies and critical accounting estimates relating to such policies. -------------------------------------------------------------------------------------------- Accounting Policy Note -------------------------------------------------------------------------------------------- Insurance 4 -------------------------------------------------------------------------------------------- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles 5 -------------------------------------------------------------------------------------------- Reinsurance 6 -------------------------------------------------------------------------------------------- Investments 8 -------------------------------------------------------------------------------------------- Derivatives 9 -------------------------------------------------------------------------------------------- Fair Value 10 -------------------------------------------------------------------------------------------- Employee Benefit Plans 14 -------------------------------------------------------------------------------------------- Income Tax 15 -------------------------------------------------------------------------------------------- Litigation Contingencies 16 --------------------------------------------------------------------------------------------
Insurance Future Policy Benefit Liabilities and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid, reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. For long-duration insurance contracts, assumptions such as mortality, morbidity and interest rates are "locked in" upon the issuance of new business. However, significant adverse changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then current assumptions and do not include a provision for adverse deviation. Premium deficiency reserves may also be established for short-duration contracts to provide for expected future losses. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts. 12 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Liabilities for universal and variable life policies with secondary guarantees and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing deferred policy acquisition costs ("DAC"), and are thus subject to the same variability and risk as further discussed herein. The assumptions of investment performance and volatility for variable products are consistent with historical experience of appropriate underlying equity indices, such as the Standard & Poor's Global Ratings ("S&P") 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company regularly reviews its estimates of liabilities for future policy benefits and compares them with its actual experience. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the period in which the changes occur. Policyholder account balances relate to contracts or contract features where the Company has no significant insurance risk. The Company issues directly and assumes through reinsurance certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit adjusted for withdrawals. These guarantees are accounted for as insurance liabilities or as embedded derivatives depending on how and when the benefit is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring (i) the occurrence of a specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable event, or (ii) annuitization. In certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is split and accounted for under both models. Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death benefits ("GMDBs"), the portion of guaranteed minimum income benefits ("GMIBs") that require annuitization, and the life-contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"). Guarantees accounted for as embedded derivatives in policyholder account balances include the non life-contingent portion of GMWBs, guaranteed minimum accumulation benefits ("GMABs") and the portion of GMIBs that do not require annuitization. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. Other Policy-Related Balances Other policy-related balances include policy and contract claims, premiums received in advance, unearned revenue liabilities, obligations assumed under structured settlements, policyholder dividends due and unpaid, and policyholder dividends left on deposit. The liability for policy and contract claims generally relates to incurred but not reported ("IBNR") death, disability, long-term care and dental claims, as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of IBNR claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premiums received in advance and applies the cash received to premiums when due. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits and margins, similar to DAC as discussed further herein. Such amortization is recorded in universal life and investment-type product policy fees. See Note 4 for additional information on obligations assumed under structured settlement assignments. 13 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Recognition of Insurance Revenues and Deposits Premiums related to traditional life and annuity contracts with life contingencies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided to recognize profits over the estimated lives of the insurance policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into earnings in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to short-duration non-medical health, disability and accident & health contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged to earnings include interest credited and benefit claims incurred in excess of related policyholder account balances. All revenues and expenses are presented net of reinsurance, as applicable. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include: . incremental direct costs of contract acquisition, such as commissions; . the portion of an employee's total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; and . other essential direct costs that would not have been incurred had a policy not been acquired or renewed. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Value of business acquired ("VOBA") is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. DAC and VOBA are amortized as follows: Products: In proportion to the following over estimated lives of the contracts: ------------------------------------------------------------------------------ . Nonparticipating and Actual and expected future gross non-dividend-paying traditional premiums. contracts: . Term insurance . Nonparticipating whole life insurance . Traditional group life insurance . Non-medical health insurance ------------------------------------------------------------------------------ . Participating, dividend-paying Actual and expected future gross traditional contracts margins. ------------------------------------------------------------------------------ . Fixed and variable universal life Actual and expected future gross contracts profits. . Fixed and variable deferred annuity contracts See Note 5 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included in other expenses. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated on the financial statements for reporting purposes. 14 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements ("DSI") to determine the recoverability of the asset. Value of distribution agreements acquired ("VODA") is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over useful lives ranging from 10 to 30 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired. Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC when there is a gain at inception on the ceding entity and to other liabilities when there is a loss at inception. The net cost of reinsurance is recognized as a component of other expenses when there is a gain at inception and as policyholder benefits and claims when there is a loss and is subsequently amortized on a basis consistent with the methodology used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums; and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established. For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Unearned premiums are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized immediately as a loss and are reported in the appropriate line item within the statement of operations. Any gain on such retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method. Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. 15 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With respect to GMIBs, a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net derivative gains (losses). Certain assumed GMWB, GMAB and GMIB are also accounted for as embedded derivatives with changes in estimated fair value reported in net derivative gains (losses). If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Investments Net Investment Income and Net Investment Gains (Losses) Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, impairment losses and changes in valuation allowances are reported within net investment gains (losses), unless otherwise stated herein. Fixed Maturity and Equity Securities The majority of the Company's fixed maturity and equity securities are classified as available-for-sale ("AFS") and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) ("OCI"), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales are determined on a specific identification basis. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts, and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount of prepayments of the underlying loans. See Note 8 "Fixed Maturity and Equity Securities AFS -- Methodology for Amortization of Premium and Accretion of Discount on Structured Securities." The amortization of premium and accretion of discount of fixed maturity securities also takes into consideration call and maturity dates. Dividends on equity securities are recognized when declared. The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value, as well as an analysis of the gross unrealized losses by severity and/or age as described in Note 8 "Fixed Maturity and Equity Securities AFS -- Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities." 16 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the OTTI recognized in earnings is the entire difference between the security's amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as an OTTI in earnings ("credit loss"). If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors ("noncredit loss") is recorded in OCI. With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the security's cost and its estimated fair value. Mortgage Loans The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 8. Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts. Also included in mortgage loans are residential mortgage loans for which the fair value option ("FVO") was elected and which are stated at estimated fair value. Changes in estimated fair value are recognized in net investment income. Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Real Estate Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, which is generally computed using the present value of expected future cash flows discounted at a rate commensurate with the underlying risks. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition for a reasonable price in comparison to its estimated fair value is classified as held-for-sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated. 17 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Real Estate Joint Ventures and Other Limited Partnership Interests The Company uses the equity method of accounting for equity securities when it has significant influence or at least 20% interest and for real estate joint ventures and other limited partnership interests ("investees") when it has more than a minor ownership interest or more than a minor influence over the investee's operations. The Company generally recognizes its share of the investee's earnings on a three-month lag in instances where the investee's financial information is not sufficiently timely or when the investee's reporting period differs from the Company's reporting period. The Company uses the cost method of accounting for investments in which it has virtually no influence over the investee's operations. The Company recognizes distributions on cost method investments when such distributions become payable or received. Because of the nature and structure of these cost method investments, they do not meet the characteristics of an equity security in accordance with applicable accounting standards. The Company routinely evaluates its equity method and cost method investments for impairment. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for impairment when the carrying value of such investments exceeds the net asset value ("NAV"). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is impaired. Short-term Investments Short-term investments include securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value. Short-term investments also include investments in affiliated money market pools. Other Invested Assets Other invested assets consist principally of the following: . Freestanding derivatives with positive estimated fair values which are described in "-- Derivatives" below. . Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method. See Note 15. . Loans to affiliates which are stated at unpaid principal balance and adjusted for any unamortized premium or discount. . Annuities funding structured settlement claims represent annuities funding claims assumed by the Company in its capacity as a structured settlements assignment company. The annuities are stated at their contract value, which represents the present value of the future periodic claim payments to be provided. The net investment income recognized reflects the amortization of discount of the annuity at its implied effective interest rate. See Note 4. . Leveraged leases which are recorded net of non-recourse debt. Income is recognized by applying the leveraged lease's estimated rate of return to the net investment in the lease. Leveraged leases derive investment returns in part from their income tax treatment. The Company regularly reviews residual values for impairment. . Direct financing leases gross investment is equal to the minimum lease payments plus the unguaranteed residual value. Income is recorded by applying the pre-tax internal rate of return to the investment balance. The Company regularly reviews lease receivables for impairment. . Funds withheld represent a receivable for amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying investments. . Investment in an operating joint venture that engages in insurance underwriting activities accounted for under the equity method. 18 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Securities Lending Program Securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection with securities lending transactions may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the Company's financial statements. The Company monitors the estimated fair value of the securities loaned on a daily basis and additional collateral is obtained as necessary throughout the duration of the loan. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, within net investment income. Repurchase Agreements The Company participates in short-term repurchase agreements with unaffiliated financial institutions. Under these agreements, the Company lends fixed maturity securities and receives cash as collateral in an amount generally equal to 95% to 100% of the estimated fair value of the securities loaned at the inception of the transaction. The associated liability is recorded at the amount of cash received. The Company monitors the estimated fair value of the collateral and the securities loaned throughout the duration of the transaction and additional collateral is obtained as necessary. Securities loaned under such transactions may be sold or re-pledged by the transferee. Derivatives Freestanding Derivatives Freestanding derivatives are carried on the Company's balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivatives carrying value in other invested assets or other liabilities. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows: Statement of Operations Presentation: Derivative: ----------------------------------------------------------------------------------------------------------- Policyholder benefits and claims Economic hedges of variable annuity guarantees included in future policy benefits ----------------------------------------------------------------------------------------------------------- Net investment income Economic hedges of equity method investments in joint ventures All derivatives held in relation to trading portfolios
Hedge Accounting To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows: . Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in estimated fair value of the hedged item attributable to the designated risk being hedged. . Cash flow hedge (a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses). 19 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item. In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net derivative gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses). Embedded Derivatives The Company sells variable annuities and issues certain insurance products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if: . the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings; . the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and . a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. 20 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition. Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring management's judgment are used to determine the estimated fair value of assets and liabilities. Employee Benefit Plans The Company sponsors and administers various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees who meet specified eligibility requirements of the sponsor and its participating affiliates. A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. The Company recognizes the funded status of each of its defined benefit pension and postretirement benefit plans, measured as the difference between the fair value of plan assets and the benefit obligation, which is the projected benefit obligation ("PBO") for pension benefits and the accumulated postretirement benefit obligation ("APBO") for other postretirement benefits in other assets or other liabilities. Actuarial gains and losses result from differences between the actual experience and the assumed experience on plan assets or PBO during a particular period and are recorded in accumulated OCI ("AOCI"). To the extent such gains and losses exceed 10% of the greater of the PBO or the estimated fair value of plan assets, the excess is amortized into net periodic benefit costs, generally over the average projected future service years of the active employees. In addition, prior service costs (credit) are recognized in AOCI at the time of the amendment and then amortized to net periodic benefit costs over the average projected future service years of the active employees. Net periodic benefit costs are determined using management's estimates and actuarial assumptions and are comprised of service cost, interest cost, settlement and curtailment costs, expected return on plan assets, amortization of net actuarial (gains) losses, and amortization of prior service costs (credit). Fair value is used to determine the expected return on plan assets. The Company also sponsors defined contribution plans for substantially all employees under which a portion of employee contributions is matched. Applicable matching contributions are made each payroll period. Accordingly, the Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as earned to the defined contribution plans, no liability for matching contributions is recognized on the balance sheets. Income Tax Metropolitan Life Insurance Company and its includable subsidiaries join with MetLife, Inc. and its includable subsidiaries in filing a consolidated U.S. life insurance and non-life insurance federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Current taxes (and the benefits of tax attributes such as losses) are allocated to Metropolitan Life Insurance Company and its subsidiaries under the consolidated tax return regulations and a tax sharing agreement. Under the consolidated tax return regulations, MetLife, Inc. has elected the "percentage method" (and 100% under such method) of reimbursing companies for tax attributes, e.g., net operating losses. As a result, 100% of tax attributes are reimbursed by MetLife, Inc. to the extent that consolidated federal income tax of the consolidated federal tax return group is reduced in a year by tax attributes. On an annual basis, each of the profitable subsidiaries pays to MetLife, Inc. the federal income tax which it would have paid based upon that year's taxable income. If Metropolitan Life Insurance Company or its includable subsidiaries has current or prior deductions and credits (including but not limited to losses) which reduce the consolidated tax liability of the consolidated federal tax return group, the deductions and credits are characterized as realized (or realizable) by Metropolitan Life Insurance Company and its includable subsidiaries when those tax attributes are realized (or realizable) by the consolidated federal tax return group, even if Metropolitan Life Insurance Company or its includable subsidiaries would not have realized the attributes on a stand-alone basis under a "wait and see" method. 21 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established against deferred tax assets when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. When making such determination the Company considers many factors, including: . the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; . the jurisdiction in which the deferred tax asset was generated; . the length of time that carryforward can be utilized in the various taxing jurisdictions; . future taxable income exclusive of reversing temporary differences and carryforwards; . future reversals of existing taxable temporary differences; . taxable income in prior carryback years; and . tax planning strategies. The Company may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, the effect of changes in tax laws, tax regulations, or interpretations of such laws or regulations, is recognized in net income tax expense (benefit) in the period of change. The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded on the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax expense. On December 22, 2017, President Trump signed into law H.R. 1, commonly referred to as the Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform"). See Note 15 for additional information on U.S. Tax Reform and related Staff Accounting Bulletin ("SAB") 118 provisional amounts. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Except as otherwise disclosed in Note 16, legal costs are recognized as incurred. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected on the Company's financial statements. Other Accounting Policies Stock-Based Compensation Stock-based compensation recognized on the Company's consolidated results of operations is allocated from MetLife, Inc. The accounting policies described below represent those that MetLife, Inc. applies in determining such allocated expenses. 22 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) MetLife, Inc. grants certain employees stock-based compensation awards under various plans that are subject to specific vesting conditions. With the exception of performance shares granted in 2013 and after which are re-measured quarterly, the cost of all stock-based transactions is measured at fair value at the grant date and recognized over the period during which a grantee is required to provide services in exchange for the award. Although the terms of MetLife, Inc.'s stock-based plans do not accelerate vesting upon the attainment of the applicable criteria for post-employment award continuation, the requisite service period subsequent to attaining such criteria is considered non-substantive. Accordingly, MetLife, Inc. recognizes compensation expense related to stock-based awards over the shorter of the requisite service period or the period to attainment of such criteria. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense when recognizing expense over the requisite service period. Cash and Cash Equivalents The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value. Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, as appropriate. The estimated life is generally 40 years for company occupied real estate property, from one to 25 years for leasehold improvements, and from three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1.2 billion and $1.3 billion at December 31, 2017 and 2016, respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $614 million and $673 million at December 31, 2017 and 2016, respectively. Related depreciation and amortization expense was $124 million, $139 million and $159 million for the years ended December 31, 2017, 2016 and 2015, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $1.7 billion and $1.5 billion at December 31, 2017 and 2016, respectively. Accumulated amortization of capitalized software was $1.3 billion and $1.1 billion at December 31, 2017 and 2016, respectively. Related amortization expense was $164 million, $132 million and $150 million for the years ended December 31, 2017, 2016 and 2015, respectively. Other Revenues Other revenues primarily include, in addition to items described elsewhere herein, prepaid legal plan fees, administrative service fees, and fees related to certain stable value products. Such fees are recognized in the period in which services are performed. Policyholder Dividends Policyholder dividends are approved annually by Metropolitan Life Insurance Company's board of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the appropriate level of statutory surplus to be retained by Metropolitan Life Insurance Company. Foreign Currency Assets, liabilities and operations of foreign affiliates and subsidiaries are recorded based on the functional currency of each entity. The determination of the functional currency is made based on the appropriate economic and management indicators. The local currencies of foreign operations are the functional currencies. Assets and liabilities of foreign affiliates and subsidiaries are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end and revenues and expenses are translated at the average exchange rates during the year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur. 23 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Goodwill Goodwill, which is included in other assets, represents the future economic benefits arising from net assets acquired in a business combination that are not individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter based upon data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless there is a significant identified impairment event. The impairment test is performed at the reporting unit level, which is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there may be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income. The Company tests goodwill for impairment by either performing a qualitative assessment or a two-step quantitative test. The qualitative assessment is an assessment of historical information and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company may elect not to perform the qualitative assessment for some or all of its reporting units and perform a two-step quantitative impairment test. In performing the two-step quantitative impairment test, the Company may determine the fair values of its reporting units by applying a market multiple, discounted cash flow, and/or an actuarial based valuation approach. For the 2017 annual goodwill impairment tests, the Company concluded that goodwill was not impaired. The goodwill balance was $70 million in the U.S segment and $31 million in the MetLife Holdings segment, at both December 31, 2017 and 2016. Adoption of New Accounting Pronouncements Effective January 1, 2017, the Company early adopted guidance relating to business combinations. The new guidance clarifies the definition of a business and requires that an entity apply certain criteria in order to determine when a set of assets and activities qualifies as a business. The adoption of this standard will result in fewer acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that do not qualify as businesses will be capitalized rather than expensed. The adoption did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2017, the Company retrospectively adopted guidance relating to consolidation. The new guidance does not change the characteristics of a primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held through related parties that are under common control with the reporting entity. The adoption did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2016, the Company retrospectively adopted guidance relating to short-duration contracts. The new guidance requires insurance entities to provide users of financial statements with more transparent information about initial claim estimates and subsequent adjustments to these estimates, including information on: (i) reconciling from the claim development table to the balance sheet liability, (ii) methodologies and judgments in estimating claims, and (iii) the timing and frequency of claims. The adoption did not have an impact on the Company's consolidated financial statements other than expanded disclosures in Note 4. 24 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and maximum exposure to loss as of December 31, 2016, disclosed in Note 8, reflect the application of the new guidance. Other Effective January 3, 2017, the Chicago Mercantile Exchange ("CME") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments impacted the accounting treatment of the Company's centrally cleared derivatives for which the CME serves as the central clearing party. As of the effective date, the application of the amended rulebook reduced gross derivative assets by $751 million, gross derivative liabilities by $603 million, accrued investment income by $55 million, accrued investment expense recorded within other liabilities by $10 million, collateral receivables recorded within premiums, reinsurance and other receivables of $226 million, and collateral payables recorded within payables for collateral under securities loaned and other transactions of $419 million. Future Adoption of New Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued new guidance on reporting comprehensive income (Accounting Standards Update ("ASU") 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from AOCI). The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate or law in U.S. Tax Reform is recognized. Early adoption is permitted. Current GAAP guidance requires that the effect of a change in tax laws or rates on deferred tax liabilities or assets to be included in income from continuing operations in the reporting period that includes the enactment date, even if the related income tax effects were originally charged or credited directly to AOCI. The new guidance allows a reclassification of AOCI to retained earnings for stranded tax effects resulting from U.S. Tax Reform. Also, the new guidance requires certain disclosures about stranded tax effects. The Company will early adopt the new guidance in the first quarter of 2018. The Company expects the impact of the new guidance at adoption will be a decrease to retained earnings as of January 1, 2018 of approximately $1.0 billion with a corresponding increase to AOCI. In August 2017, the FASB issued new guidance on hedging activities (ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities). The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings. Early adoption is permitted. The new guidance simplifies the application of hedge accounting in certain situations and amends the hedge accounting model to enable entities to better portray the economics of their risk management activities in the financial statements. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In March 2017, the FASB issued new guidance on purchased callable debt securities (ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities). The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings. Early adoption is permitted. The ASU shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. However, the new guidance does not require an accounting change for securities held at a discount whose discount continues to be amortized to maturity. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 25 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In March 2017, the FASB issued new guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost (ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost). The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. The guidance requires that an employer that offers to its employees defined benefit pension or other postretirement benefit plans report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item is not used, the line item used in the income statement to present the other components of net benefit cost must be disclosed. In addition, the guidance allows only the service cost component to be eligible for capitalization when applicable. The guidance should be applied retrospectively for the presentation of the service cost component in the income statement with a practical expedient for the estimation basis for applying the retrospective presentation requirements, and prospectively for the capitalization of the service component. The adoption of the new guidance will not have a material impact on the Company's consolidated financial statements. In February 2017, the FASB issued new guidance on derecognition of nonfinancial assets (ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment to retained earnings at the date of adoption. The new guidance clarifies the scope and accounting of a financial asset that meets the definition of an "in-substance nonfinancial asset" and defines the term "in-substance nonfinancial asset." The ASU also adds guidance for partial sales of nonfinancial assets. The adoption of the new guidance will not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued new guidance on goodwill impairment (ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The new guidance simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, if any. The Company expects the adoption of the new guidance will reduce the complexity involved with the evaluation of goodwill for impairment. The impact of this guidance will depend on the outcomes of future goodwill impairment tests. In November 2016, the FASB issued new guidance on restricted cash (ASU 2016-18, Statement of Cash Flows (Topic 230): A consensus of the FASB Emerging Issues Task Force). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, the new guidance requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance does not provide a definition of restricted cash or restricted cash equivalents. The adoption of the new guidance will not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis. The Company will apply the guidance as of January 1, 2018. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Based on the Company's assessment of the intra-entity asset transfers and related deferred income taxes that are in scope, the Company expects the adoption of the new guidance will not have a material impact on the Company's consolidated financial statements. 26 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all periods presented. Early adoption is permitted in any interim or annual period. The new guidance addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of the new guidance will not have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that an OTTI on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses. The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance. The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company is continuing to evaluate the overall impact of the new guidance on its consolidated financial statements. In February 2016, the FASB issued new guidance on leasing transactions (ASU 2016-02, Leases - Topic 842). The new guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective transition approach. Early adoption is permitted. The new guidance requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Leases would be classified as finance or operating leases and both types of leases will be recognized on the balance sheet. Lessor accounting will remain largely unchanged from current guidance except for certain targeted changes. The new guidance will also require new qualitative and quantitative disclosures. The Company's implementation efforts are primarily focused on the review of its existing lease contracts, identification of other contracts that may fall under the scope of the new guidance, and performing a gap analysis on the current state of lease-related activities compared with the future state of lease-related activities. The Company is currently evaluating the overall impact of the new guidance on its consolidated financial statements. In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, as amended by ASU 2018-03, Financial Instruments-Overall: Technical Corrections and Improvements, issued in February 2018) on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the FVO that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. Additionally, there will no longer be a requirement to assess equity securities for impairment since such securities will be measured at fair value through net income. The Company has assessed the population of financial instruments that are subject to the new guidance and has determined that the most significant impact will be the requirement to report changes in fair value in net income each reporting period for all equity securities currently classified as AFS and to a lesser extent, other limited partnership interests and real estate joint ventures that are currently accounted for under the cost method. The Company will utilize a modified retrospective approach to adopt the new guidance effective January 1, 2018. The expected impact related to the change in accounting for equity securities AFS will be $63 million of net unrealized investment gains, net of income tax, which will be reclassified from AOCI to retained earnings. The estimated financial statement impact related to cost method other limited partnership interests and real estate joint ventures was not material. 27 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers - Topic 606), effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company will apply the guidance retrospectively with a cumulative-effect adjustment as of January 1, 2018. The new guidance supersedes nearly all existing revenue recognition guidance under U.S. GAAP. However, it does not impact the accounting for insurance and investment contracts within the scope of Accounting Standards Codification (ASC) Topic 944, Financial Services - Insurance, leases, financial instruments and certain guarantees. For those contracts that are impacted, the new guidance requires an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. The Company identified revenue streams within the scope of the guidance that are all included within other revenues in the consolidated statements of operations and evaluated the related contracts, primarily consisting of prepaid legal plans and administrative-only contracts within the U.S. segment, and distribution and administrative services fees within the MetLife Holdings segment. As other revenues represents approximately 4% of consolidated total revenues for the year ended December 31, 2017, the modified retrospective adoption as of January 1, 2018, did not have a material impact on the Company's consolidated financial position and the Company has not identified any material prospective changes in the recognition and measurement of other revenue. The Company expects to expand its qualitative disclosures within the notes to the consolidated financial statements. Other Effective January 16, 2018, the London Clearing House ("LCH") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments will impact the accounting treatment of the Company's centrally cleared derivatives, for which the LCH serves as the central clearing party. The application of the amended rulebook is expected to reduce the gross derivative assets and liabilities, as well as the related collateral, recorded on the consolidated balance sheet for trades cleared through the LCH. The Company is currently evaluating the impact of these amendments on its consolidated financial statements. 2. Segment Information The Company is organized into two segments: U.S. and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. On August 4, 2017, MetLife, Inc. completed the separation of Brighthouse Financial, Inc. and its subsidiaries ("Brighthouse") through a distribution of 96,776,670 shares of the 119,773,106 shares of Brighthouse Financial, Inc. common stock outstanding, representing 80.8% of those shares, to MetLife, Inc. common shareholders (the "Separation"). MetLife, Inc. retained the remaining ownership interest of 22,996,436 shares, or 19.2%, of Brighthouse Financial, Inc. common stock outstanding. U.S. The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions. . The Group Benefits business offers insurance products and services which include life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers. . The Retirement and Income Solutions business offers a broad range of annuity and investment products, including capital market investment products, institutional income annuities, stable value and pension risk transfer products. This business also includes products to fund tort settlements, as well as postretirement benefits and company-, bank- or trust-owned life insurance. MetLife Holdings The MetLife Holdings segment consists of operations relating to products and businesses no longer actively marketed by the Company, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance. 28 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Corporate & Other Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including enterprise-wide strategic initiative restructuring charges and various start-up businesses (including the direct to consumer portion of the U.S. Direct business). Corporate & Other also includes the Company's ancillary international operations and interest expense related to the majority of the Company's outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. For the years ended December 31, 2016 and 2015, Corporate & Other includes business of the Company that was transferred to Brighthouse. In addition, Corporate & Other includes the elimination of intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings. Financial Measures and Segment Accounting Policies Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company's GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings allows analysis of the Company's performance and facilitates comparisons to industry results. Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. The financial measures of adjusted revenues and adjusted expenses focus on the Company's primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MLIC but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also includes the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MLIC that do not meet the criteria to be included in results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues: . Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees ("GMIB Fees"); and . Net investment income: (i) includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method and (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP. The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses: . Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) 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 earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment; . Amortization of DAC and 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; . Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and . Other expenses excludes costs related to noncontrolling interests and goodwill impairments. 29 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company's effective tax rate. Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2017, 2016 and 2015 and at December 31, 2017 and 2016. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife's and the Company's business. MetLife's economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife's management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income, net income (loss) or adjusted earnings. Net investment income is based upon the actual results of each segment's specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company's product pricing. 30 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
MetLife Corporate Total Year Ended December 31, 2017 U.S. Holdings & Other Total Adjustments Consolidated --------------------------------------------------- ---------- ---------- --------- ----------- ----------- ------------ (In millions) Revenues Premiums........................................... $ 19,496 $ 3,420 $ 9 $ 22,925 $ -- $ 22,925 Universal life and investment-type product policy fees.............................................. 1,004 1,126 -- 2,130 97 2,227 Net investment income.............................. 6,206 4,920 (243) 10,883 (370) 10,513 Other revenues..................................... 781 200 589 1,570 -- 1,570 Net investment gains (losses)...................... -- -- -- -- 334 334 Net derivative gains (losses)...................... -- -- -- -- (344) (344) ---------- ---------- --------- ----------- ----------- ------------ Total revenues................................... 27,487 9,666 355 37,508 (283) 37,225 ---------- ---------- --------- ----------- ----------- ------------ Expenses Policyholder benefits and claims and policyholder dividends......................................... 20,558 6,006 4 26,568 321 26,889 Interest credited to policyholder account balances. 1,459 779 -- 2,238 (3) 2,235 Capitalization of DAC.............................. (48) (13) -- (61) -- (61) Amortization of DAC and VOBA....................... 56 303 -- 359 (118) 241 Interest expense on debt........................... 11 8 87 106 -- 106 Other expenses..................................... 2,717 1,201 930 4,848 1 4,849 ---------- ---------- --------- ----------- ----------- ------------ Total expenses................................... 24,753 8,284 1,021 34,058 201 34,259 ---------- ---------- --------- ----------- ----------- ------------ Provision for income tax expense (benefit)......... 954 427 (368) 1,013 (1,574) (561) ---------- ---------- --------- ----------- ------------ Adjusted earnings................................ $ 1,780 $ 955 $ (298) 2,437 ========== ========== ========= Adjustments to: Total revenues..................................... (283) Total expenses..................................... (201) Provision for income tax (expense) benefit......... 1,574 ----------- Net income (loss).......................................... $ 3,527 $ 3,527 =========== ============
MetLife Corporate At December 31, 2017 U.S. Holdings & Other Total --------------------------------------- ---------- ---------- --------- ---------- (In millions) Total assets........................... $ 245,750 $ 163,397 $ 25,148 $ 434,295 Separate account assets................ $ 80,240 $ 50,585 $ -- $ 130,825 Separate account liabilities........... $ 80,240 $ 50,585 $ -- $ 130,825
31 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
MetLife Corporate Total Year Ended December 31, 2016 U.S. Holdings & Other Total Adjustments Consolidated --------------------------------------------------- ----------- ----------- ---------- ----------- ----------- ------------ (In millions) Revenues Premiums........................................... $ 17,921 $ 4,411 $ 61 $ 22,393 $ -- $ 22,393 Universal life and investment-type product policy fees.............................................. 988 1,236 216 2,440 102 2,542 Net investment income.............................. 6,075 5,606 (67) 11,614 (531) 11,083 Other revenues..................................... 750 110 618 1,478 -- 1,478 Net investment gains (losses)...................... -- -- -- -- 132 132 Net derivative gains (losses)...................... -- -- -- -- (1,138) (1,138) ----------- ----------- ---------- ----------- ----------- ----------- Total revenues................................... 25,734 11,363 828 37,925 (1,435) 36,490 ----------- ----------- ---------- ----------- ----------- ----------- Expenses Policyholder benefits and claims and policyholder dividends............................ 18,968 7,244 130 26,342 171 26,513 Interest credited to policyholder account balances. 1,297 907 32 2,236 (3) 2,233 Capitalization of DAC.............................. (60) (267) (5) (332) -- (332) Amortization of DAC and VOBA....................... 56 675 56 787 (346) 441 Interest expense on debt........................... 10 7 95 112 -- 112 Other expenses..................................... 2,770 1,850 825 5,445 137 5,582 ----------- ----------- ---------- ----------- ----------- ----------- Total expenses................................... 23,041 10,416 1,133 34,590 (41) 34,549 ----------- ----------- ---------- ----------- ----------- ----------- Provision for income tax expense (benefit)......... 963 274 (551) 686 (487) 199 ----------- ----------- ---------- ----------- ----------- Adjusted earnings................................ $ 1,730 $ 673 $ 246 2,649 =========== =========== ========== Adjustments to: Total revenues..................................... (1,435) Total expenses..................................... 41 Provision for income tax (expense) benefit......... 487 ----------- Net income (loss).................................................................... $ 1,742 $ 1,742 =========== ===========
MetLife Corporate At December 31, 2016 U.S. Holdings & Other Total ----------------------------- ------------ ------------ ----------- ------------ (In millions) Total assets................. $ 247,555 $ 163,024 $ 21,982 $ 432,561 Separate account assets...... $ 85,854 $ 47,982 $ -- $ 133,836 Separate account liabilities. $ 85,854 $ 47,982 $ -- $ 133,836
32 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
MetLife Corporate Total Year Ended December 31, 2015 U.S. Holdings & Other Total Adjustments Consolidated --------------------------------------------------- ----------- ----------- ---------- ----------- ----------- ------------ (In millions) Revenues Premiums........................................... $ 17,340 $ 4,527 $ 67 $ 21,934 $ -- $ 21,934 Universal life and investment-type product policy fees.............................................. 941 1,294 249 2,484 100 2,584 Net investment income.............................. 6,011 5,890 94 11,995 (456) 11,539 Other revenues..................................... 729 135 672 1,536 -- 1,536 Net investment gains (losses)...................... -- -- -- -- 259 259 Net derivative gains (losses)...................... -- -- -- -- 881 881 ----------- ----------- ---------- ----------- ---------- ----------- Total revenues................................... 25,021 11,846 1,082 37,949 784 38,733 ----------- ----------- ---------- ----------- ---------- ----------- Expenses Policyholder benefits and claims and policyholder dividends......................................... 18,415 7,207 125 25,747 64 25,811 Interest credited to policyholder account balances. 1,212 933 34 2,179 4 2,183 Capitalization of DAC.............................. (71) (409) (2) (482) -- (482) Amortization of DAC and VOBA....................... 59 527 44 630 112 742 Interest expense on debt........................... 5 4 113 122 -- 122 Other expenses..................................... 2,724 1,825 1,324 5,873 3 5,876 ----------- ----------- ---------- ----------- ---------- ----------- Total expenses................................... 22,344 10,087 1,638 34,069 183 34,252 ----------- ----------- ---------- ----------- ---------- ----------- Provision for income tax expense (benefit)......... 961 556 37 1,554 209 1,763 ----------- ----------- ---------- ----------- ----------- Adjusted earnings................................ $ 1,716 $ 1,203 $ (593) 2,326 =========== =========== ========== Adjustments to: Total revenues..................................... 784 Total expenses..................................... (183) Provision for income tax (expense) benefit......... (209) ----------- Net income (loss)................................ $ 2,718 $ 2,718 =========== ===========
The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company's segments, as well as Corporate & Other:
Years Ended December 31, ----------------------- 2017 2016 2015 ------- ------- ------- (In millions) Life insurance............................... $13,139 $13,907 $13,811 Accident & health insurance.................. 7,933 7,889 7,475 Annuities.................................... 5,390 4,379 4,548 Non-insurance................................ 260 238 220 ------- ------- ------- Total....................................... $26,722 $26,413 $26,054 ======= ======= =======
Substantially all of the Company's consolidated premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. Revenues derived from one U.S. customer were $2.8 billion, $2.8 billion and $2.7 billion for the years ended December 31, 2017, 2016 and 2015, respectively, which represented 11%, 10% and 10%, respectively, of consolidated premiums, universal life and investment-type product policy fees and other revenues. Revenues derived from any other customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2017, 2016 and 2015. 33 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 3. Disposition In December 2016, the Company distributed to MetLife, Inc. as a non-cash extraordinary dividend all of the issued and outstanding shares of common stock of its wholly-owned subsidiaries, New England Life Insurance Company ("NELICO") and General American Life Insurance Company ("GALIC"). The net book value of NELICO and GALIC at the time of the dividend was $2.9 billion, which was recorded as a dividend of retained earnings of $2.7 billion and a decrease to other comprehensive income of $254 million, net of income tax. As of the date of the dividend payment, the Company no longer consolidates the assets, liabilities and operations of NELICO and GALIC. 4. Insurance 34 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Insurance Liabilities Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
December 31, ----------------- 2017 2016 -------- -------- (In millions) U.S............... $131,224 $124,877 MetLife Holdings.. 89,012 89,874 Corporate & Other. 294 337 -------- -------- Total............ $220,530 $215,088 ======== ========
See Note 6 for discussion of affiliated reinsurance liabilities included in the table above. Future policy benefits are measured as follows: ------------------------------------------------------------------------------- Product Type: Measurement Assumptions: ------------------------------------------------------------------------------- Participating life Aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate, ranging from 3% to 7%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends. ------------------------------------------------------------------------------- Nonparticipating life Aggregate of the present value of future expected benefit payments and related expenses less the present value of future expected net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 2% to 11%. ------------------------------------------------------------------------------- Individual and group Present value of future expected payments. traditional fixed annuities Interest rate assumptions used in establishing after annuitization such liabilities range from 1% to 11%. ------------------------------------------------------------------------------- Non-medical health The net level premium method and assumptions as insurance to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. ------------------------------------------------------------------------------- Disabled lives Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 2% to 8%. ------------------------------------------------------------------------------- Participating business represented 4% of the Company's life insurance in-force at both December 31, 2017 and 2016. Participating policies represented 21%, 26% and 27% of gross traditional life insurance premiums for the years ended December 31, 2017, 2016 and 2015, respectively. Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross premium payments; and (ii) credited interest, ranging from less than 1% to 13%, less expenses, mortality charges and withdrawals. 35 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Guarantees The Company issues variable annuity products with guaranteed minimum benefits. GMABs, the non-life-contingent portion of GMWBs and the portion of certain GMIBs that do not require annuitization are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include: ------------------------------------------------------------------------------ Guarantee: Measurement Assumptions: ------------------------------------------------------------------------------ GMDBs . A return of purchase payment . Present value of expected death upon death even if the account benefits in excess of the value is reduced to zero. projected account balance recognizing the excess ratably over the accumulation period based on the present value of total expected assessments. . An enhanced death benefit may be . Assumptions are consistent with available for an additional fee. those used for amortizing DAC, and are thus subject to the same variability and risk. . Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index. . Benefit assumptions are based on the average benefits payable over a range of scenarios. ------------------------------------------------------------------------------ GMIBs . After a specified period of time . Present value of expected income determined at the time of benefits in excess of the issuance of the variable projected account balance at annuity contract, a minimum any future date of accumulation of purchase annuitization and recognizing payments, even if the account the excess ratably over the value is reduced to zero, that accumulation period based on can be annuitized to receive a present value of total expected monthly income stream that is assessments. not less than a specified amount. . Certain contracts also provide . Assumptions are consistent with for a guaranteed lump sum those used for estimating GMDB return of purchase premium in liabilities. lieu of the annuitization benefit. . Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. ------------------------------------------------------------------------------ GMWBs. . A return of purchase payment via . Expected value of the life partial withdrawals, even if contingent payments and the account value is reduced to expected assessments using zero, provided that cumulative assumptions consistent with withdrawals in a contract year those used for estimating the do not exceed a certain limit. GMDB liabilities. . Certain contracts include guaranteed withdrawals that are life contingent. ------------------------------------------------------------------------------ The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. 36 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows:
Universal and Variable Annuity Contracts Life Contracts ---------------- ---------------------- Secondary Paid-Up GMDBs GMIBs Guarantees Guarantees Total ----- ----- ---------- ---------- ------ (In millions) Direct: Balance at January 1, 2015... $ 196 $ 458 $541 $ 82 $1,277 Incurred guaranteed benefits. 37 80 86 9 212 Paid guaranteed benefits..... (1) -- -- -- (1) ----- ----- ---------- ---------- ------ Balance at December 31, 2015. 232 538 627 91 1,488 Incurred guaranteed benefits. 55 63 92 11 221 Paid guaranteed benefits..... (1) -- -- -- (1) Dispositions (1)............. (18) (134) (99) -- (251) ----- ----- ---------- ---------- ------ Balance at December 31, 2016. 268 467 620 102 1,457 Incurred guaranteed benefits. 58 112 105 7 282 Paid guaranteed benefits..... -- -- -- -- -- ----- ----- ---------- ---------- ------ Balance at December 31, 2017. $ 326 $ 579 $725 $109 $1,739 ===== ===== ========== ========== ====== Ceded: Balance at January 1, 2015... $ 37 $ 24 $305 $ 57 $ 423 Incurred guaranteed benefits. 14 2 49 6 71 Paid guaranteed benefits..... (1) -- -- -- (1) ----- ----- ---------- ---------- ------ Balance at December 31, 2015. 50 26 354 63 493 Incurred guaranteed benefits. 13 (8) (8) 8 5 Paid guaranteed benefits..... (1) -- -- -- (1) Dispositions (1)............. (18) (39) (97) -- (154) ----- ----- ---------- ---------- ------ Balance at December 31, 2016. 44 (21) 249 71 343 Incurred guaranteed benefits. (44) 21 23 5 5 Paid guaranteed benefits..... -- -- -- -- -- ----- ----- ---------- ---------- ------ Balance at December 31, 2017. $ -- $ -- $272 $ 76 $ 348 ===== ===== ========== ========== ====== Net: Balance at January 1, 2015... $ 159 $ 434 $236 $ 25 $ 854 Incurred guaranteed benefits. 23 78 37 3 141 Paid guaranteed benefits..... -- -- -- -- -- ----- ----- ---------- ---------- ------ Balance at December 31, 2015. 182 512 273 28 995 Incurred guaranteed benefits. 42 71 100 3 216 Paid guaranteed benefits..... -- -- -- -- -- Dispositions (1)............. -- (95) (2) -- (97) ----- ----- ---------- ---------- ------ Balance at December 31, 2016. 224 488 371 31 1,114 Incurred guaranteed benefits. 102 91 82 2 277 Paid guaranteed benefits..... -- -- -- -- -- ----- ----- ---------- ---------- ------ Balance at December 31, 2017. $ 326 $ 579 $453 $ 33 $1,391 ===== ===== ========== ========== ======
-------- (1) See Note 3. 37 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Information regarding the Company's guarantee exposure, which includes direct business, but excludes offsets from hedging or reinsurance, if any, was as follows at:
December 31, --------------------------------------------------------------- 2017 2016 ----------------------------- ----------------------------- In the At In the At Event of Death Annuitization Event of Death Annuitization -------------- ------------- -------------- ------------- (Dollars in millions) Annuity Contracts (1): Variable Annuity Guarantees: Total account value (2).................. $ 56,136 $ 25,257 $ 54,629 $ 24,310 Separate account value................... $ 45,431 $ 24,336 $ 43,359 $ 23,330 Net amount at risk....................... $ 990 (3) $ 353 (4) $ 1,386 (3) $ 328 (4) Average attained age of contractholders.... 66 years 65 years 65 years 64 years Other Annuity Guarantees: Total account value (2).................. N/A $ 141 N/A $ 141 Net amount at risk....................... N/A $ 92 (5) N/A $ 92 (5) Average attained age of contractholders.... N/A 52 years N/A 52 years December 31, --------------------------------------------------------------- 2017 2016 ----------------------------- ----------------------------- Secondary Paid-Up Secondary Paid-Up Guarantees Guarantees Guarantees Guarantees -------------- ------------- -------------- ------------- (Dollars in millions) Universal and Variable Life Contracts (1): Total account value (2).................. $ 4,679 $ 977 $ 4,306 $ 1,014 Net amount at risk (6)................... $ 46,704 $ 6,713 $ 49,161 $ 7,164 Average attained age of policyholders...... 54 years 62 years 53 years 62 years
-------- (1) The Company's annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) Includes the contractholder's investments in the general account and separate account, if applicable. (3) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (4) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved. (5) Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date. (6) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. 38 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Account balances of contracts with guarantees were invested in separate account asset classes as follows at:
December 31, --------------- 2017 2016 ------- ------- (In millions) Fund Groupings: Equity.......... $21,464 $19,929 Balanced........ 19,443 18,833 Bond............ 3,798 3,882 Money Market.... 57 64 ------- ------- Total.......... $44,762 $42,708 ======= =======
Obligations Assumed Under Structured Settlement Assignments The Company assumes structured settlement claim obligations as an assignment company. These liabilities are measured at the present value of the periodic claims to be provided and reported as other policy-related balances. The Company receives a fee for assuming these claim obligations and, as the assignee of the claim, is legally obligated to ensure periodic payments are made to the claimant. The Company purchases annuities from Brighthouse to fund these periodic payment claim obligations and designates payments to be made directly to the claimant by the affiliated annuity writer. These annuities funding structured settlement claims are recorded as an investment. See Note 1. See Note 8 for additional information on obligations assumed under structured settlement assignments. Obligations Under Funding Agreements The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated 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. During the years ended December 31, 2017, 2016 and 2015, the Company issued $42.7 billion, $39.7 billion and $35.1 billion, respectively, and repaid $41.4 billion, $38.5 billion and $35.5 billion, respectively, of such funding agreements. At December 31, 2017 and 2016, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $34.2 billion and $30.8 billion, respectively. Metropolitan Life Insurance Company is a member of the Federal Home Loan Bank ("FHLB") of New York. Holdings of common stock of the FHLB of New York, included in equity securities, were $733 million and $748 million at December 31, 2017 and 2016, respectively. 39 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) The Company has also entered into funding agreements with the FHLB of New York and a subsidiary of the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. ("Farmer Mac"). The liability for such funding agreements is included in policyholder account balances. Information related to such funding agreements was as follows at:
Liability Collateral ------------------------- ---------------------------------- December 31, ------------------------------------------------------------ 2017 2016 2017 2016 ------------ ------------ ---------------- ---------------- (In millions) FHLB of New York (1). $ 14,445 $ 14,445 $ 16,605 (2) $ 16,828 (2) Farmer Mac (3)....... $ 2,550 $ 2,550 $ 2,644 $ 2,645
-------- (1) Represents funding agreements issued to the FHLB of New York in exchange for cash and for which the FHLB of New York has been granted a lien on certain assets, some of which are in the custody of the FHLB of New York, including residential mortgage-backed securities ("RMBS"), to collateralize obligations under advances evidenced by funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of the FHLB of New York as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, the FHLB of New York's recovery on the collateral is limited to the amount of the Company's liability to the FHLB of New York. (2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value. (3) Represents funding agreements issued to a subsidiary of Farmer Mac, as well as 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 Farmer Mac. The obligations under these funding agreements are secured by a pledge of certain eligible agricultural mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of collateral presented is at carrying value. Liabilities for Unpaid Claims and Claim Expenses The following is information about incurred and paid claims development by segment as of December 31, 2017. Such amounts are presented net of reinsurance, and are not discounted. The tables present claims development and cumulative claim payments by incurral year. The development tables are only presented for significant short-duration product liabilities within each segment. Where practical, up to 10 years of history has been provided. The information about incurred and paid claims development prior to 2016 is presented as supplementary information, as described in Note 1. 40 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) U.S. Group Life - Term
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance At December 31, 2017 --------------------------------------------------------------------------------- ---------------------------- For the Years Ended December 31, Total IBNR --------------------------------------------------------------------------------- Liabilities Plus Cumulative (Unaudited) Expected Number of ----------------------------------------------------------- Development on Reported Incurral Year 2011 2012 2013 2014 2015 2016 2017 Reported Claims Claims ------------- --------- --------- --------- --------- --------- --------- ---------- ---------------- ----------- (Dollars in millions) 2011........ $ 6,318 $ 6,290 $ 6,293 $ 6,269 $ 6,287 $ 6,295 $ 6,294 $ 1 207,301 2012........ 6,503 6,579 6,569 6,546 6,568 6,569 3 208,626 2013........ 6,637 6,713 6,719 6,720 6,730 15 210,643 2014........ 6,986 6,919 6,913 6,910 5 210,797 2015........ 7,040 7,015 7,014 12 211,597 2016........ 7,125 7,085 21 206,610 2017........ 7,432 898 186,954 ---------- Total................................................................................ 48,034 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance (46,136) All outstanding liabilities for incurral years prior to 2011, net of reinsurance....... 5 ---------- Total unpaid claims and claim adjustment expenses, net of reinsurance................ $ 1,903 ==========
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance --------------------------------------------------------------------------------------- For the Years Ended December 31, --------------------------------------------------------------------------------------- (Unaudited) ------------------------------------------------------------- Incurral Year 2011 2012 2013 2014 2015 2016 2017 ------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ (In millions) 2011............ $ 4,982 $ 6,194 $ 6,239 $ 6,256 $ 6,281 $ 6,290 $ 6,292 2012............ 5,132 6,472 6,518 6,532 6,558 6,565 2013............ 5,216 6,614 6,664 6,678 6,711 2014............ 5,428 6,809 6,858 6,869 2015............ 5,524 6,913 6,958 2016............ 5,582 6,980 2017............ 5,761 ------------ Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance $ 46,136 ============
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2017:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ------------------------------------------------------------------------------------------- Years.............. 1 2 3 4 5 6 7 Group Life -- Term. 78.3% 20.0% 0.7% 0.2% 0.4% 0.1% --%
41 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Group Long-Term Disability
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance At December 31, 2017 --------------------------------------------------------------------------------- ---------------------------- For the Years Ended December 31, Total IBNR --------------------------------------------------------------------------------- Liabilities Plus Cumulative (Unaudited) Expected Number of ----------------------------------------------------------- Development on Reported Incurral Year 2011 2012 2013 2014 2015 2016 2017 Reported Claims Claims ------------- --------- --------- --------- --------- --------- --------- ---------- ---------------- ----------- (Dollars in millions) 2011........ $ 955 $ 916 $ 894 $ 914 $ 924 $ 923 $ 918 $ -- 21,642 2012........ 966 979 980 1,014 1,034 1,037 -- 20,085 2013........ 1,008 1,027 1,032 1,049 1,070 -- 21,123 2014........ 1,076 1,077 1,079 1,101 -- 22,838 2015........ 1,082 1,105 1,093 4 21,136 2016........ 1,131 1,139 26 17,585 2017........ 1,244 585 9,258 ---------- Total................................................................................ 7,602 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance (3,006) All outstanding liabilities for incurral years prior to 2011, net of reinsurance....... 2,539 ---------- Total unpaid claims and claim adjustment expenses, net of reinsurance................ $ 7,135 ==========
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance ------------------------------------------------------------------------------------------ For the Years Ended December 31, ------------------------------------------------------------------------------------------ (Unaudited) --------------------------------------------------------------- Incurral Year 2011 2012 2013 2014 2015 2016 2017 ------------- ----------- ------------ ------------ ------------ ------------ ------------ ------------- (In millions) 2011......... $ 44 $ 217 $ 337 $ 411 $ 478 $ 537 $ 588 2012......... 43 229 365 453 524 591 2013......... 43 234 382 475 551 2014......... 51 266 428 526 2015......... 50 264 427 2016......... 49 267 2017......... 56 ------------- Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance $ 3,006 =============
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2017:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ------------------------------------------------------------------------------------------ Years...................... 1 2 3 4 5 6 7 Group Long-Term Disability. 4.4% 18.8% 13.9% 8.5% 7.1% 6.4% 5.6%
Significant Methodologies and Assumptions Group Life - Term and Group Long-Term Disability incurred but not paid ("IBNP") liabilities are developed using a combination of loss ratio and development methods. Claims in the course of settlement are then subtracted from the IBNP liabilities, resulting in the IBNR liabilities. The loss ratio method is used in the period in which the claims are neither sufficient nor credible. In developing the loss ratios, any material rate increases that could change the underlying premium without affecting the estimated incurred losses are taken into account. For periods where sufficient and credible claim data exists, the development method is used based on the claim triangles which categorize claims according to both the period in which they were incurred and the period in which they were paid, adjudicated or reported. The end result is a triangle of known data that is used to develop known completion ratios and factors. Claims paid are then subtracted from the estimated ultimate incurred claims to calculate the IBNP liability. 42 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims (IBNR and pending). This is expressed as a percentage of the underlying claims liability and is based on past experience and the anticipated future expense structure. For Group Life - Term and Group Long-Term Disability, first year incurred claims and allocated loss adjustment expenses increased in 2017 compared to the 2016 incurral year due to the growth in the size of the business. There were no significant changes in methodologies during 2017. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Life - Term and Group Long-Term Disability are updated annually to reflect emerging trends in claim experience. No additional premiums or return premiums have been accrued as a result of the prior year development. Liabilities for Group Life - Term unpaid claims and claim adjustment expenses are not discounted. The liabilities for Group Long-Term Disability unpaid claims and claim adjustment expenses were $6.0 billion and $5.8 billion at December 31, 2017 and 2016, respectively. These amounts were discounted using interest rates ranging from 3% to 8%, based on the incurral year. The total discount applied to these liabilities was $1.3 billion at both December 31, 2017 and 2016. The amount of interest accretion recognized was $510 million, $565 million and $517 million for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts were reflected in policyholder benefits and claims. For Group Life - Term, claims were based upon individual death claims. For Group Long-Term Disability, claim frequency was determined by the number of reported claims as identified by a unique claim number assigned to individual claimants. Claim counts initially include claims that do not ultimately result in a liability. These claims are omitted from the claim counts once it is determined that there is no liability. The Group Long-Term Disability IBNR, included in the development tables above, was developed using discounted cash flows, and is presented on a discounted basis. 43 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claims adjustment expenses on the consolidated balance sheet was as follows at:
December 31, 2017 ---------------------------------- (In millions) Short-Duration: Unpaid claims and allocated claims adjustment expenses, net of reinsurance: U.S.: Group Life - Term....................................................................... $ 1,903 Group Long-Term Disability.............................................................. 7,135 ---------------- Total................................................................................. $ 9,038 Other insurance lines - all segments combined........................................... 504 ----------------- Total unpaid claims and allocated claims adjustment expenses, net of reinsurance...... 9,542 ----------------- Reinsurance recoverables on unpaid claims: U.S.: Group Life - Term....................................................................... 16 Group Long-Term Disability.............................................................. 95 ---------------- Total................................................................................. 111 Other insurance lines - all segments combined........................................... 29 ----------------- Total reinsurance recoverable on unpaid claims........................................ 140 ----------------- Total unpaid claims and allocated claims adjustment expense........................... 9,682 Discounting............................................................................. (1,272) ----------------- Liability for unpaid claims and claim adjustment liabilities - short-duration........... 8,410 Liability for unpaid claims and claim adjustment liabilities - all long-duration lines.. 3,680 ----------------- Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and other policy-related balances).................................. $ 12,090 =================
44 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Rollforward of Claims and Claim Adjustment Expenses Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:
Years Ended December 31, ----------------------------------------------- 2017 2016 (1) 2015 (2) --------------- --------------- --------------- (In millions) Balance at December 31 of prior period..... $ 11,621 $ 7,527 $ 7,310 Less: Reinsurance recoverables........... 1,251 273 286 --------------- --------------- --------------- Net balance at December 31 of prior period. 10,370 7,254 7,024 Cumulative adjustment (3).................. -- 3,277 -- --------------- --------------- --------------- Net balance at January 1,.................. 10,370 10,531 7,024 Incurred related to: Current year............................. 16,264 15,978 5,316 Prior years (4).......................... 175 322 13 --------------- --------------- --------------- Total incurred......................... 16,439 16,300 5,329 Paid related to: Current year............................. (12,212) (12,454) (3,415) Prior years.............................. (3,908) (3,905) (1,684) --------------- --------------- --------------- Total paid............................. (16,120) (16,359) (5,099) Dispositions (5)........................... -- (102) -- --------------- --------------- --------------- Net balance at December 31,................ 10,689 10,370 7,254 Add: Reinsurance recoverables............ 1,401 1,251 273 --------------- --------------- --------------- Balance at December 31,.................... $ 12,090 $ 11,621 $ 7,527 =============== =============== ===============
-------- (1) In addition to the revisions discussed in Note 1, at December 31, 2016, the Net balance decreased by $712 million and the Reinsurance recoverables increased by $712 million from those amounts previously reported primarily to correct for the improper classification of reinsurance recoverables. (2) Limited to group accident and non-medical health policies and contracts. (3) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the new short-duration contracts guidance which clarified the requirement to include claim information for long-duration contracts. The accumulated adjustment primarily reflects unpaid claim liabilities, net of reinsurance, for long-duration contracts as of the beginning of the period presented. Prior periods have not been restated. See Note 1. (4) During 2017, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment expenses associated with prior years increased due to events incurred in prior years but reported during current year. During 2016, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment expenses associated with prior years increased due to the implementation of new guidance related to short-duration contracts. (5) See Note 3. Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $75.2 billion and $73.6 billion at December 31, 2017 and 2016, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $55.6 billion and $60.2 billion at December 31, 2017 and 2016, respectively. The latter category consisted primarily of guaranteed interest contracts. The average interest rate credited on these contracts was 2.40% and 2.39% at December 31, 2017 and 2016, respectively. 45 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) For the years ended December 31, 2017, 2016 and 2015, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles See Note 1 for a description of capitalized acquisition costs. Nonparticipating and Non-Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts (term insurance, nonparticipating whole life insurance, traditional group life insurance, and non-medical health insurance) over the appropriate premium paying period in proportion to the actual and expected future gross premiums that were set at contract issue. The expected premiums are based upon the premium requirement of each policy and assumptions for mortality, morbidity, persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include provisions for adverse deviation, and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. Participating, Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. For participating contracts within the closed block (dividend-paying traditional contracts) future gross margins are also dependent upon changes in the policyholder dividend obligation. See Note 7. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales, are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances. Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses and persistency are reasonably likely to significantly impact the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. 46 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Factors Impacting Amortization Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, policyholder behavior and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. 47 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding DAC and VOBA was as follows:
Years Ended December 31, ------------------------------------------------- 2017 2016 2015 --------------- --------------- --------------- (In millions) DAC: Balance at January 1,........................................... $ 4,714 $ 5,977 $ 5,905 Capitalizations................................................. 61 332 482 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 91 353 (111) Other expenses.................................................. (331) (791) (624) --------------- --------------- --------------- Total amortization............................................ (240) (438) (735) --------------- --------------- --------------- Unrealized investment gains (losses)............................ (215) (12) 325 Dispositions (1)................................................ -- (1,145) -- --------------- --------------- --------------- Balance at December 31,......................................... 4,320 4,714 5,977 --------------- --------------- --------------- VOBA: Balance at January 1,........................................... 29 66 70 Amortization related to: Other expenses.................................................. (1) (3) (7) --------------- --------------- --------------- Total amortization............................................ (1) (3) (7) --------------- --------------- --------------- Unrealized investment gains (losses)............................ -- 13 3 Dispositions (1)................................................ -- (47) -- --------------- --------------- --------------- Balance at December 31,......................................... 28 29 66 --------------- --------------- --------------- Total DAC and VOBA: Balance at December 31,......................................... $ 4,348 $ 4,743 $ 6,043 =============== =============== ===============
-------- (1) See Note 3. Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
December 31, --------------------------- 2017 2016 ------------- ------------- (In millions) U.S............... $ 413 $ 421 MetLife Holdings.. 3,930 4,317 Corporate & Other. 5 5 ------------- ------------- Total........... $ 4,348 $ 4,743 ============= =============
48 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding other intangibles was as follows:
Years Ended December 31, ---------------------------------- 2017 2016 2015 ---------- ---------- ---------- (In millions) DSI: Balance at January 1,................ $ 105 $ 130 $ 122 Capitalization....................... 1 4 8 Amortization......................... (8) (16) (21) Unrealized investment gains (losses). (5) 1 21 Dispositions (1)..................... $ -- $ (14) $ -- ---------- ---------- ---------- Balance at December 31,.............. $ 93 $ 105 $ 130 ========== ========== ========== VODA and VOCRA: Balance at January 1,................ $ 235 $ 265 $ 295 Amortization......................... (28) (30) (30) ---------- ---------- ---------- Balance at December 31,.............. $ 207 $ 235 $ 265 ========== ========== ========== Accumulated amortization............. $ 250 $ 222 $ 192 ========== ========== ==========
-------- (1)See Note 3. The estimated future amortization expense to be reported in other expenses for the next five years was as follows:
VOBA VODA and VOCRA ------------ -------------- (In millions) 2018.......................... $ 2 $ 26 2019.......................... $ 2 $ 24 2020.......................... $ 2 $ 22 2021.......................... $ 2 $ 19 2022.......................... $ 2 $ 17
6. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed in Note 8. U.S. For certain policies within its Group Benefits business, the Company generally retains most of the risk and only cedes particular risks on certain client arrangements. The majority of the Company's reinsurance activity within this business relates to client agreements for employer sponsored captive programs, risk-sharing agreements and multinational pooling. 49 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The Company's Retirement and Income Solutions business has periodically engaged in reinsurance activities, on an opportunistic basis. There were no such transactions during the periods presented. MetLife Holdings For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. For the periods presented, the Company reinsured 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount it retains. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. Catastrophe Coverage The Company has exposure to catastrophes which could contribute to significant fluctuations in its results of operations. The Company purchases catastrophe coverage to insure risks issued within territories that it believes are subject to the greatest catastrophic risks. Reinsurance Recoverables The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts, and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at December 31, 2017 and 2016 were not significant. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $1.9 billion of unsecured unaffiliated reinsurance recoverable balances at both December 31, 2017 and 2016. At December 31, 2017, the Company had $2.9 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $2.1 billion, or 72%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.3 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2016, the Company had $3.0 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $2.1 billion, or 70%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.4 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. The Company has reinsured with an unaffiliated third-party reinsurer 59% of the closed block through a modified coinsurance agreement. The Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has offset the modified coinsurance deposit with the deposit recoverable. 50 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:
Years Ended December 31, ---------------------------------------------- 2017 2016 2015 -------------- -------------- -------------- (In millions) Premiums Direct premiums............................................... $ 23,062 $ 21,931 $ 21,497 Reinsurance assumed........................................... 1,116 1,687 1,679 Reinsurance ceded............................................. (1,253) (1,225) (1,242) -------------- -------------- -------------- Net premiums................................................ $ 22,925 $ 22,393 $ 21,934 ============== ============== ============== Universal life and investment-type product policy fees Direct universal life and investment-type product policy fees. $ 2,492 $ 3,006 $ 3,050 Reinsurance assumed........................................... 12 60 58 Reinsurance ceded............................................. (277) (524) (524) -------------- -------------- -------------- Net universal life and investment-type product policy fees.. $ 2,227 $ 2,542 $ 2,584 ============== ============== ============== Other revenues Direct other revenues......................................... $ 930 $ 851 $ 875 Reinsurance assumed........................................... 35 (2) 5 Reinsurance ceded............................................. 605 629 656 -------------- -------------- -------------- Net other revenues.......................................... $ 1,570 $ 1,478 $ 1,536 ============== ============== ============== Policyholder benefits and claims Direct policyholder benefits and claims....................... $ 26,199 $ 25,248 $ 24,561 Reinsurance assumed........................................... 875 1,496 1,454 Reinsurance ceded............................................. (1,282) (1,431) (1,468) -------------- -------------- -------------- Net policyholder benefits and claims........................ $ 25,792 $ 25,313 $ 24,547 ============== ============== ============== Interest credited to policyholder account balances Direct interest credited to policyholder account balances..... $ 2,199 $ 2,279 $ 2,240 Reinsurance assumed........................................... 49 35 33 Reinsurance ceded............................................. (13) (81) (90) -------------- -------------- -------------- Net interest credited to policyholder account balances...... $ 2,235 $ 2,233 $ 2,183 ============== ============== ============== Other expenses Direct other expenses......................................... $ 4,489 $ 4,830 $ 5,448 Reinsurance assumed........................................... 138 583 340 Reinsurance ceded............................................. 508 390 470 -------------- -------------- -------------- Net other expenses.......................................... $ 5,135 $ 5,803 $ 6,258 ============== ============== ==============
51 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:
December 31, ----------------------------------------------------------------------------------- 2017 2016 ----------------------------------------- ----------------------------------------- Total Total Balance Balance Direct Assumed Ceded Sheet Direct Assumed Ceded Sheet --------- --------- ---------- --------- --------- --------- ---------- --------- (In millions) Assets Premiums, reinsurance and other receivables...................... $ 2,491 $ 448 $ 19,159 $ 22,098 $ 2,212 $ 620 $ 19,551 $ 22,383 Deferred policy acquisition costs and value of business acquired... 4,581 17 (250) 4,348 4,977 55 (289) 4,743 --------- --------- ---------- --------- --------- --------- ---------- --------- Total assets.................... $ 7,072 $ 465 $ 18,909 $ 26,446 $ 7,189 $ 675 $ 19,262 $ 27,126 ========= ========= ========== ========= ========= ========= ========== ========= Liabilities Future policy benefits............ $118,077 $ 1,342 $ (4) $119,415 $113,883 $ 1,640 $ (4) $115,519 Policyholder account balances..... 93,758 181 -- 93,939 91,889 577 -- 92,466 Other policy-related balances..... 6,914 247 15 7,176 6,727 358 18 7,103 Other liabilities................. 8,498 2,242 16,669 27,409 10,735 2,229 16,533 29,497 --------- --------- ---------- --------- --------- --------- ---------- --------- Total liabilities............... $227,247 $ 4,012 $ 16,680 $247,939 $223,234 $ 4,804 $ 16,547 $244,585 ========= ========= ========== ========= ========= ========= ========== =========
In December 2016, the Company recaptured two reinsurance agreements which covered 90% of the liabilities on certain participating whole life insurance policies issued between April 1, 2000 and December 31, 2001 which were reinsured by an unaffiliated company. This recapture resulted in an increase in DAC and VOBA of $95 million, a decrease in premiums, reinsurance and other receivables of $697 million, and a decrease in other liabilities of $713 million. The Company recognized a gain of $72 million, net of income tax, for the year ended December 31, 2016, as a result of this transaction. Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $14.3 billion and $14.5 billion at December 31, 2017 and 2016, respectively. The deposit liabilities on reinsurance were $1.9 billion and $2.2 billion at December 31, 2017 and 2016, respectively. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MetLife Reinsurance Company of Charleston ("MRC"), MetLife Reinsurance Company of Vermont, Metropolitan Tower Life Insurance Company and GALIC, all of which are related parties. Additionally, the Company has reinsurance agreements with Brighthouse Life Insurance Company ("Brighthouse Insurance"), Brighthouse Life Insurance Company of NY ("Brighthouse NY") and NELICO, former subsidiaries of MetLife, Inc. that were part of the Separation. See Note 2. 52 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated statements of operations was as follows:
Years Ended December 31, ------------------------------------- 2017 2016 2015 ----------- ------------ ------------ (In millions) Premiums Reinsurance assumed.......................................... $ 122 $ 727 $ 701 Reinsurance ceded............................................ (132) (45) (40) ----------- ------------ ------------ Net premiums............................................... $ (10) $ 682 $ 661 =========== ============ ============ Universal life and investment-type product policy fees Reinsurance assumed.......................................... $ 12 $ 60 $ 58 Reinsurance ceded............................................ (19) (138) (141) ----------- ------------ ------------ Net universal life and investment-type product policy fees. $ (7) $ (78) $ (83) =========== ============ ============ Other revenues Reinsurance assumed.......................................... $ 37 $ (1) $ 5 Reinsurance ceded............................................ 563 575 607 ----------- ------------ ------------ Net other revenues......................................... $ 600 $ 574 $ 612 =========== ============ ============ Policyholder benefits and claims Reinsurance assumed.......................................... $ 69 $ 697 $ 652 Reinsurance ceded............................................ (122) (110) (106) ----------- ------------ ------------ Net policyholder benefits and claims....................... $ (53) $ 587 $ 546 =========== ============ ============ Interest credited to policyholder account balances Reinsurance assumed.......................................... $ 47 $ 34 $ 32 Reinsurance ceded............................................ (13) (81) (90) ----------- ------------ ------------ Net interest credited to policyholder account balances..... $ 34 $ (47) $ (58) =========== ============ ============ Other expenses Reinsurance assumed.......................................... $ 40 $ 490 $ 245 Reinsurance ceded............................................ 600 570 578 ----------- ------------ ------------ Net other expenses......................................... $ 640 $ 1,060 $ 823 =========== ============ ============
Information regarding the significant effects of affiliated reinsurance included on the consolidated balance sheets was as follows at:
December 31, -------------------------------------------------- 2017 2016 ------------------------ ------------------------ Assumed Ceded Assumed Ceded ----------- ------------ ----------- ------------ (In millions) Assets Premiums, reinsurance and other receivables...................... $ 47 $ 12,762 $ 229 $ 13,334 Deferred policy acquisition costs and value of business acquired. -- (180) 38 (198) ----------- ------------ ----------- ------------ Total assets................................................... $ 47 $ 12,582 $ 267 $ 13,136 =========== ============ =========== ============ Liabilities Future policy benefits........................................... $ 380 $ (4) $ 663 $ (4) Policyholder account balances.................................... 166 -- 563 -- Other policy-related balances.................................... 104 15 212 18 Other liabilities................................................ 1,858 12,970 1,853 13,065 ----------- ------------ ----------- ------------ Total liabilities.............................................. $ 2,508 $ 12,981 $ 3,291 $ 13,079 =========== ============ =========== ============
53 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The Company ceded two blocks of business to an affiliate on a 75% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and were $16 million and $10 million at December 31, 2017 and 2016, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($6) million, ($2) million and $12 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were $0 and $460 million at December 31, 2017 and 2016, respectively. Net derivative gains (losses) associated with the embedded derivatives were ($110) million, $33 million and $47 million for the years ended December 31, 2017, 2016 and 2015, respectively. Certain contractual features of the closed block agreement with MRC create an embedded derivative, which is separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivative related to the funds withheld associated with this reinsurance agreement is included within other liabilities and was $882 million and $767 million at December 31, 2017 and 2016, respectively. Net derivative gains (losses) associated with the embedded derivative were ($115) million, ($73) million and $404 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company assumes risks from affiliates related to guaranteed minimum benefit guarantees written directly by the affiliates. These assumed reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with these agreements are included within policyholder account balances and were $3 million and $390 million at December 31, 2017 and 2016, respectively. Net derivative gains (losses) associated with the embedded derivatives were $263 million, ($32) million and ($55) million for the years ended December 31, 2017, 2016 and 2015, respectively. In January 2017, Brighthouse NY and NELICO recaptured risks related to certain variable annuities, including guaranteed minimum benefits, reinsured by the Company. This recapture resulted in a decrease in cash and cash equivalents of $34 million, a decrease in premiums, reinsurance and other receivables of $77 million, a decrease in future policy benefits of $79 million, a decrease in policyholder account balances of $387 million and an increase in other liabilities of $76 million. The Company recognized a gain of $178 million, net of income tax, for the year ended December 31, 2017, as a result of these transactions. In January 2017, the Company recaptured risks related to guaranteed minimum benefit guarantees on certain variable annuities reinsured by Brighthouse Insurance. This recapture resulted in an increase in investments and cash and cash equivalents of $428 million and a decrease in premiums, reinsurance and other receivables of $565 million. The Company recognized a loss of $89 million, net of income tax, for the year ended December 31, 2017, as a result of this transaction. In April 2016, Brighthouse Insurance recaptured risks related to certain single premium deferred annuity contracts from the Company. As a result of this recapture, the significant effects to the Company were a decrease in investments and cash and cash equivalents of $4.3 billion and a decrease in DAC of $87 million, offset by a decrease in other liabilities of $4.0 billion. The Company recognized a loss of $95 million, net of income tax, for the year ended December 31, 2016, as a result of this recapture. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $13 million and $293 million of unsecured affiliated reinsurance recoverable balances at December 31, 2017 and 2016, respectively. Affiliated reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on affiliated reinsurance were $11.5 billion and $11.7 billion at December 31, 2017 and 2016, respectively. The deposit liabilities on affiliated reinsurance were $1.8 billion and $2.2 billion at December 31, 2017 and 2016, respectively. 54 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block On April 7, 2000 (the "Demutualization Date"), Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company's plan of reorganization, as amended (the "Plan of Reorganization"). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years from the Demutualization Date. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block are greater than the expected cumulative earnings of the closed block, the Company will pay the excess to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block are less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings. 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. 55 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) 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. Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
December 31, ----------------------------- 2017 2016 -------------- -------------- (In millions) Closed Block Liabilities Future policy benefits.............................................................. $ 40,463 $ 40,834 Other policy-related balances....................................................... 222 257 Policyholder dividends payable...................................................... 437 443 Policyholder dividend obligation.................................................... 2,121 1,931 Current income tax payable.......................................................... -- 4 Other liabilities................................................................... 212 196 -------------- -------------- Total closed block liabilities.................................................... 43,455 43,665 -------------- -------------- Assets Designated to the Closed Block Investments: Fixed maturity securities available-for-sale, at estimated fair value............... 27,904 27,220 Equity securities available-for-sale, at estimated fair value....................... 70 100 Mortgage loans...................................................................... 5,878 5,935 Policy loans........................................................................ 4,548 4,553 Real estate and real estate joint ventures.......................................... 613 655 Other invested assets............................................................... 731 1,246 -------------- -------------- Total investments................................................................. 39,744 39,709 Accrued investment income........................................................... 477 467 Premiums, reinsurance and other receivables; cash and cash equivalents.............. 14 86 Current income tax recoverable...................................................... 35 -- Deferred income tax assets.......................................................... 36 177 -------------- -------------- Total assets designated to the closed block....................................... 40,306 40,439 -------------- -------------- Excess of closed block liabilities over assets designated to the closed block..... 3,149 3,226 -------------- -------------- Amounts included in AOCI: Unrealized investment gains (losses), net of income tax............................. 1,863 1,517 Unrealized gains (losses) on derivatives, net of income tax......................... (7) 95 Allocated to policyholder dividend obligation, net of income tax.................... (1,379) (1,255) -------------- -------------- Total amounts included in AOCI.................................................... 477 357 -------------- -------------- Maximum future earnings to be recognized from closed block assets and liabilities. $ 3,626 $ 3,583 ============== ==============
Information regarding the closed block policyholder dividend obligation was as follows:
Years Ended December 31, ---------------------------------------- 2017 2016 2015 ------------- ------------- ------------ (In millions) Balance at January 1,......................................... $ 1,931 $ 1,783 $ 3,155 Change in unrealized investment and derivative gains (losses). 190 148 (1,372) ------------- ------------- ------------ Balance at December 31,....................................... $ 2,121 $ 1,931 $ 1,783 ============= ============= ============
56 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) Information regarding the closed block revenues and expenses was as follows:
Years Ended December 31, ---------------------------------------- 2017 2016 2015 ------------ ------------ ------------ (In millions) Revenues Premiums...................................................................... $ 1,736 $ 1,804 $ 1,850 Net investment income......................................................... 1,818 1,902 1,982 Net investment gains (losses)................................................. 1 (10) (23) Net derivative gains (losses)................................................. (32) 25 27 ------------ ------------ ------------ Total revenues.............................................................. 3,523 3,721 3,836 ------------ ------------ ------------ Expenses Policyholder benefits and claims.............................................. 2,453 2,563 2,564 Policyholder dividends........................................................ 976 953 1,015 Other expenses................................................................ 125 133 143 ------------ ------------ ------------ Total expenses.............................................................. 3,554 3,649 3,722 ------------ ------------ ------------ Revenues, net of expenses before provision for income tax expense (benefit). (31) 72 114 Provision for income tax expense (benefit).................................... 12 24 41 ------------ ------------ ------------ Revenues, net of expenses and provision for income tax expense (benefit).... $ (43) $ 48 $ 73 ============ ============ ============
Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block. 8. Investments See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies. Investment Risks and Uncertainties Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements. The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities ("ABS") and certain structured investment transactions) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. 57 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Fixed Maturity and Equity Securities AFS Fixed Maturity and Equity Securities AFS by Sector The following table presents the fixed maturity and equity securities AFS by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including RMBS, ABS and commercial mortgage-backed securities ("CMBS") (collectively, "Structured Securities").
December 31, 2017 December 31, 2016 ---------------------------------------------------- ---------------------------------------------------- Gross Unrealized Gross Unrealized Cost or ----------------------------- Estimated Cost or ----------------------------- Estimated Amortized Temporary OTTI Fair Amortized Temporary OTTI Fair Cost Gains Losses Losses (1) Value Cost Gains Losses Losses (1) Value ---------- --------- --------- ---------- ---------- ---------- --------- --------- ---------- ---------- (In millions) Fixed maturity securities: U.S. corporate....... $ 53,291 $ 5,037 $ 238 $ -- $ 58,090 $ 52,665 $ 4,079 $ 586 $ -- $ 56,158 U.S. government and agency.............. 35,021 3,755 231 -- 38,545 32,834 3,238 457 -- 35,615 Foreign corporate.... 24,367 1,655 426 -- 25,596 24,596 957 1,196 -- 24,357 RMBS................. 21,735 1,039 181 (41) 22,634 22,786 911 290 (10) 23,417 ABS.................. 7,808 73 15 -- 7,866 7,567 32 95 -- 7,504 State and political subdivision......... 6,310 1,245 3 1 7,551 6,252 928 44 -- 7,136 CMBS................. 5,390 124 26 -- 5,488 4,876 118 59 -- 4,935 Foreign government... 3,887 641 26 -- 4,502 3,565 507 74 -- 3,998 ---------- --------- -------- ------- ---------- ---------- --------- -------- ------- ---------- Total fixed maturity securities........ $ 157,809 $ 13,569 $ 1,146 $ (40) $ 170,272 $ 155,141 $ 10,770 $ 2,801 $ (10) $ 163,120 ========== ========= ======== ======= ========== ========== ========= ======== ======= ========== Equity securities: Common stock......... $ 1,190 $ 75 $ 14 $ -- $ 1,251 $ 1,220 $ 91 $ 12 $ -- $ 1,299 Non-redeemable preferred stock..... 389 21 3 -- 407 565 14 39 -- 540 ---------- --------- -------- ------- ---------- ---------- --------- -------- ------- ---------- Total equity securities........ $ 1,579 $ 96 $ 17 $ -- $ 1,658 $ 1,785 $ 105 $ 51 $ -- $ 1,839 ========== ========= ======== ======= ========== ========== ========= ======== ======= ==========
-------- (1) Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also "-- Net Unrealized Investment Gains (Losses)." The Company held non-income producing fixed maturity securities with an estimated fair value of $4 million and less than $1 million with unrealized gains (losses) of ($3) million and less than $1 million at December 31, 2017 and 2016, respectively. Methodology for Amortization of Premium and Accretion of Discount on Structured Securities Amortization of premium and accretion of discount on Structured Securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for Structured Securities are estimated using inputs obtained from third-party specialists and based on management's knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis. 58 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2017:
Due After Five Due After One Years Total Fixed Due in One Year Through Through Ten Due After Ten Structured Maturity Year or Less Five Years Years Years Securities Securities ------------ ------------- -------------- ------------- ---------- ----------- (In millions) Amortized cost....... $ 6,372 $ 34,198 $ 30,434 $ 51,872 $ 34,933 $ 157,809 Estimated fair value. $ 6,362 $ 35,197 $ 32,042 $ 60,683 $ 35,988 $ 170,272
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at:
December 31, 2017 December 31, 2016 ------------------------------------------- ------------------------------------------- Equal to or Greater Equal to or Greater Less than 12 Months than 12 Months Less than 12 Months than 12 Months --------------------- --------------------- --------------------- --------------------- Estimated Gross Estimated Gross Estimated Gross Estimated Gross Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Value Losses ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (Dollars in millions) Fixed maturity securities: U.S. corporate.................... $ 3,727 $ 57 $ 2,523 $ 181 $ 8,406 $ 337 $ 2,260 $ 249 U.S. government and agency........ 13,905 76 3,018 155 6,032 457 -- -- Foreign corporate................. 1,677 43 3,912 383 5,343 336 4,523 860 RMBS.............................. 3,673 30 3,332 110 6,662 187 1,707 93 ABS............................... 732 3 358 12 1,482 12 1,714 83 State and political subdivision... 106 1 120 3 943 43 17 1 CMBS.............................. 844 6 193 20 922 15 432 44 Foreign government................ 247 6 265 20 581 26 309 48 ---------- ------- ---------- ------- ---------- --------- ---------- --------- Total fixed maturity securities. $ 24,911 $ 222 $ 13,721 $ 884 $ 30,371 $ 1,413 $ 10,962 $ 1,378 ========== ======= ========== ======= ========== ========= ========== ========= Equity securities: Common stock...................... $ 88 $ 14 $ 2 $ -- $ 58 $ 12 $ 10 $ -- Non-redeemable preferred stock.... 42 -- 41 3 139 6 120 33 ---------- ------- ---------- ------- ---------- --------- ---------- --------- Total equity securities......... $ 130 $ 14 $ 43 $ 3 $ 197 $ 18 $ 130 $ 33 ========== ======= ========== ======= ========== ========= ========== ========= Total number of securities in an unrealized loss position......... 1,327 1,108 3,076 940 ========== ========== ========== ==========
59 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities Evaluation and Measurement Methodologies Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to Structured Securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed maturity securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating agencies. The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows: . The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment. . When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management's best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies. . Additional considerations are made when assessing the unique features that apply to certain Structured Securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security. . When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described above, as well as any private and public sector programs to restructure such securities. With respect to securities that have attributes of debt and equity ("perpetual hybrid securities"), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security's cost and its estimated fair value with a corresponding charge to earnings. 60 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value. In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows. Current Period Evaluation Based on the Company's current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company's current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at December 31, 2017. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities decreased $1.7 billion during the year ended December 31, 2017 to $1.1 billion. The decrease in gross unrealized losses for the year ended December 31, 2017 was primarily attributable to narrowing credit spreads and strengthening foreign currencies on non-functional currency denominated fixed maturity securities. At December 31, 2017, $109 million of the total $1.1 billion of gross unrealized losses were from 24 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. Gross unrealized losses on equity securities decreased $34 million during the year ended December 31, 2017 to $17 million. Investment Grade Fixed Maturity Securities Of the $109 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $68 million, or 62%, were related to gross unrealized losses on 10 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $109 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $41 million, or 38%, were related to gross unrealized losses on 14 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily industrial and utility securities) and CMBS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty including concerns over lower oil prices in the energy sector. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers and evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security. 61 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
December 31, ----------------------------------------------- 2017 2016 ----------------------- ----------------------- Carrying % of Carrying % of Value Total Value Total ------------ ---------- ------------ ---------- (Dollars in millions) Mortgage loans: Commercial..................... $ 35,440 60.6% $ 34,008 60.1% Agricultural................... 12,712 21.8 12,358 21.9 Residential.................... 10,058 17.2 9,895 17.5 ------------ ---------- ------------ ---------- Subtotal (1)................. 58,210 99.6 56,261 99.5 Valuation allowances........... (271) (0.5) (267) (0.5) ------------ ---------- ------------ ---------- Subtotal mortgage loans, net. 57,939 99.1 55,994 99.0 Residential -- FVO............. 520 0.9 566 1.0 ------------ ---------- ------------ ---------- Total mortgage loans, net.... $ 58,459 100.0% $ 56,560 100.0% ============ ========== ============ ==========
-------- (1)Purchases of mortgage loans, primarily residential, were $3.1 billion and $2.9 billion for the years ended December 31, 2017 and 2016, respectively. The Company originates and acquires unaffiliated mortgage loans and simultaneously sells a portion to affiliates under master participation agreements. The aggregate amount of unaffiliated mortgage loan participation interests sold by the Company to affiliates during the years ended December 31, 2017, 2016 and 2015 were $2.5 billion, $3.6 billion and $3.0 billion, respectively. In connection with the mortgage loan participations, the Company collected mortgage loan principal and interest payments from unaffiliated borrowers on behalf of affiliates and remitted such receipts to the affiliates in the amount of $1.8 billion, $2.1 billion and $1.8 billion during the years ended December 31, 2017, 2016 and 2015, respectively. Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential -- FVO is presented in Note 10. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. 62 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:
Evaluated Collectively for Impaired Evaluated Individually for Credit Losses Credit Losses Loans -------------------------------------------------------- -------------------------- --------------------- Impaired Loans with a Impaired Loans without a Valuation Allowance Valuation Allowance -------------------------------- ----------------------- Unpaid Unpaid Average Principal Recorded Valuation Principal Recorded Recorded Valuation Carrying Recorded Balance Investment Allowances Balance Investment Investment Allowances Value Investment ---------- ---------- ---------- ----------- ----------- -------------- ----------- ---------- ---------- (In millions) December 31, 2017 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 35,440 $ 173 $ -- $ 5 Agricultural...... 22 21 2 27 27 12,664 38 46 32 Residential....... -- -- -- 358 324 9,734 58 324 285 ---------- --------- --------- ----------- ----------- -------------- ----------- ---------- --------- Total........... $ 22 $ 21 $ 2 $ 385 $ 351 $ 57,838 $ 269 $ 370 $ 322 ========== ========= ========= =========== =========== ============== =========== ========== ========= December 31, 2016 Commercial........ $ -- $ -- $ -- $ 12 $ 12 $ 33,996 $ 167 $ 12 $ 30 Agricultural...... 11 9 1 27 27 12,322 37 35 49 Residential....... -- -- -- 265 241 9,654 62 241 188 ---------- --------- --------- ----------- ----------- -------------- ----------- ---------- --------- Total........... $ 11 $ 9 $ 1 $ 304 $ 280 $ 55,972 $ 266 $ 288 $ 267 ========== ========= ========= =========== =========== ============== =========== ========== =========
The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $120 million, $60 million and $84 million, respectively, for the year ended December 31, 2015. Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows:
Commercial Agricultural Residential Total -------------- ------------- ------------- -------------- (In millions) Balance at January 1, 2015..... $ 182 $ 35 $ 41 $ 258 Provision (release)............ 2 2 30 34 Charge-offs, net of recoveries. (19) -- (16) (35) -------------- ------------- ------------- -------------- Balance at December 31, 2015... 165 37 55 257 Provision (release)............ 6 1 23 30 Charge-offs, net of recoveries. -- -- (16) (16) Dispositions (1)............... (4) -- -- (4) -------------- ------------- ------------- -------------- Balance at December 31, 2016... 167 38 62 267 Provision (release)............ 6 4 8 18 Charge-offs, net of recoveries. -- (2) (12) (14) -------------- ------------- ------------- -------------- Balance at December 31, 2017... $ 173 $ 40 $ 58 $ 271 ============== ============= ============= ==============
-------- (1) See Note 3. 63 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Valuation Allowance Methodology Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company's experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available. Commercial and Agricultural Mortgage Loan Portfolio Segments The Company typically uses several years of historical experience in establishing non-specific valuation allowances which capture multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for commercial and agricultural mortgage loans. All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio. For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company's ongoing review of its commercial mortgage loan portfolio. For agricultural mortgage loans, the Company's primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated. 64 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Residential Mortgage Loan Portfolio Segment The Company's residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company's historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments. For residential mortgage loans, the Company's primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss. Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at:
Recorded Investment ---------------------------------------------------- Debt Service Coverage Ratios Estimated -------------------------------- % of Fair % of > 1.20x 1.00x - 1.20x < 1.00x Total Total Value Total ---------- ------------- ------- ---------- -------- ---------- --------- (Dollars in millions) December 31, 2017 Loan-to-value ratios: Less than 65%......... $ 29,346 $ 1,359 $ 198 $ 30,903 87.2% $ 31,563 87.5% 65% to 75%............ 3,245 95 114 3,454 9.7 3,465 9.6 76% to 80%............ 149 171 57 377 1.1 363 1.0 Greater than 80%...... 400 159 147 706 2.0 665 1.9 ---------- --------- ------- ---------- -------- ---------- --------- Total............... $ 33,140 $ 1,784 $ 516 $ 35,440 100.0% $ 36,056 100.0% ========== ========= ======= ========== ======== ========== ========= December 31, 2016 Loan-to-value ratios: Less than 65%......... $ 29,352 $ 1,036 $ 564 $ 30,952 91.0% $ 31,320 91.2% 65% to 75%............ 2,522 -- 198 2,720 8.0 2,694 7.9 76% to 80%............ 116 -- -- 116 0.3 115 0.3 Greater than 80%...... 118 27 75 220 0.7 214 0.6 ---------- --------- ------- ---------- -------- ---------- --------- Total............... $ 32,108 $ 1,063 $ 837 $ 34,008 100.0% $ 34,343 100.0% ========== ========= ======= ========== ======== ========== =========
65 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at:
December 31, --------------------------------------------------- 2017 2016 ------------------------- ------------------------- Recorded % of Recorded % of Investment Total Investment Total ------------- ----------- ------------- ----------- (Dollars in millions) Loan-to-value ratios: Less than 65%......... $ 12,082 95.0% $ 11,829 95.7% 65% to 75%............ 581 4.6 424 3.4 76% to 80%............ 40 0.3 17 0.2 Greater than 80%...... 9 0.1 88 0.7 ------------- ----------- ------------- ----------- Total............... $ 12,712 100.0% $ 12,358 100.0% ============= =========== ============= ===========
The estimated fair value of agricultural mortgage loans was $12.8 billion and $12.5 billion at December 31, 2017 and 2016, respectively. Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at:
December 31, ---------------------------------------------------- 2017 2016 -------------------------- ------------------------- Recorded % of Recorded % of Investment Total Investment Total -------------- ----------- ------------- ----------- (Dollars in millions) Performance indicators: Performing.............. $ 9,614 95.6% $ 9,563 96.6% Nonperforming........... 444 4.4 332 3.4 -------------- ----------- ------------- ----------- Total................. $ 10,058 100.0% $ 9,895 100.0% ============== =========== ============= ===========
The estimated fair value of residential mortgage loans was $10.6 billion and $10.3 billion at December 31, 2017 and 2016, respectively. Past Due and Nonaccrual Mortgage Loans The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both December 31, 2017 and 2016. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans -- 60 days and agricultural mortgage loans -- 90 days. The past due and nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:
Greater than 90 Days Past Due and Past Due Still Accruing Interest Nonaccrual ----------------------------------- ----------------------------------- ----------------------------------- December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- (In millions) Commercial... $ -- $ -- $ -- $ -- $ -- $ -- Agricultural. 134 127 125 104 36 23 Residential.. 444 332 -- -- 444 332 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Total..... $ 578 $ 459 $ 125 $ 104 $ 480 $ 355 ================= ================= ================= ================= ================= =================
66 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Modified in a Troubled Debt Restructuring The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concessions granted are considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring. For the year ended December 31, 2017, the Company had 500 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $120 million and $108 million pre-modification and post-modification, respectively. For the year ended December 31, 2016, the Company had 557 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $136 million and $122 million pre-modification and post-modification, respectively. For the years ended December 31, 2017 and 2016, the Company did not have a significant amount of agricultural mortgage loans and no commercial mortgage loans modified in a troubled debt restructuring. For both the years ended December 31, 2017 and 2016, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring with subsequent payment default. Other Invested Assets Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), tax credit and renewable energy partnerships, loans to affiliates, annuities funding structured settlement claims and leveraged and direct financing leases. See "-- Related Party Investment Transactions" for information regarding loans to affiliates and annuities funding structured settlement claims. Tax Credit Partnerships The carrying value of tax credit partnerships was $1.8 billion and $1.7 billion at December 31, 2017 and 2016, respectively. Losses from tax credit partnerships included within net investment income were $259 million, $166 million, and $163 million for the years ended December 31, 2017, 2016 and 2015, respectively. Leveraged and Direct Financing Leases Investment in leveraged and direct financing leases consisted of the following at:
December 31, -------------------------------------------- 2017 2016 --------------------- ---------------------- Direct Direct Leveraged Financing Leveraged Financing Leases Leases Leases Leases ----------- --------- ----------- ---------- (In millions) Rental receivables, net.......................... $ 911 $ 278 $ 1,171 $ 300 Estimated residual values........................ 649 42 690 42 ----------- --------- ----------- ---------- Subtotal....................................... 1,560 320 1,861 342 Unearned income.................................. (448) (113) (572) (127) ----------- --------- ----------- ---------- Investment in leases, net of non-recourse debt. $ 1,112 $ 207 $ 1,289 $ 215 =========== ========= =========== ==========
Rental receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 15 years but in certain circumstances can be over 25 years, while the payment periods for direct financing leases range from one to 20 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At December 31, 2017 and 2016, all leveraged lease receivables and direct financing rental receivables were performing. 67 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The deferred income tax liability related to leveraged leases was $875 million and $1.3 billion at December 31, 2017 and 2016, respectively. Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $3.1 billion and $4.7 billion at December 31, 2017 and 2016, respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI, future policy benefits and the policyholder dividend obligation that would result from the realization of the unrealized gains (losses) are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses) included in AOCI, were as follows:
Years Ended December 31, --------------------------------------- 2017 2016 2015 ------------ ------------ ----------- (In millions) Fixed maturity securities......................................................... $ 12,349 $ 7,912 $ 7,331 Fixed maturity securities with noncredit OTTI losses included in AOCI............. 40 10 (39) ------------ ------------ ----------- Total fixed maturity securities................................................. 12,389 7,922 7,292 Equity securities................................................................. 119 72 27 Derivatives....................................................................... 1,396 2,244 2,208 Other............................................................................. 1 16 137 ------------ ------------ ----------- Subtotal........................................................................ 13,905 10,254 9,664 ------------ ------------ ----------- Amounts allocated from: Future policy benefits............................................................ (19) (9) (7) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.................. -- (1) -- DAC, VOBA and DSI................................................................. (790) (569) (572) Policyholder dividend obligation.................................................. (2,121) (1,931) (1,783) ------------ ------------ ----------- Subtotal........................................................................ (2,930) (2,510) (2,362) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI............................................................... (14) (3) 14 Deferred income tax benefit (expense)............................................. (3,704) (2,690) (2,542) ------------ ------------ ----------- Net unrealized investment gains (losses)........................................ 7,257 5,051 4,774 Net unrealized investment gains (losses) attributable to noncontrolling interests. -- -- (1) ------------ ------------ ----------- Net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company.............................................................. $ 7,257 $ 5,051 $ 4,773 ============ ============ ===========
68 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The changes in net unrealized investment gains (losses) were as follows:
Years Ended December 31, ------------------------------------- 2017 2016 2015 ----------- ----------- ----------- (In millions) Balance at January 1,................................................................ $ 5,051 $ 4,773 $ 7,273 Fixed maturity securities on which noncredit OTTI losses have been recognized........ 30 49 27 Unrealized investment gains (losses) during the year................................. 3,621 541 (7,580) Unrealized investment gains (losses) relating to: Future policy benefits............................................................... (10) (2) 1,957 DAC and VOBA related to noncredit OTTI losses recognized in AOCI..................... 1 (1) 3 DAC, VOBA and DSI.................................................................... (221) 3 346 Policyholder dividend obligation..................................................... (190) (148) 1,372 Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI.................................................................. (11) (17) (11) Deferred income tax benefit (expense)................................................ (1,014) (148) 1,386 ----------- ----------- ----------- Net unrealized investment gains (losses)........................................... 7,257 5,050 4,773 Net unrealized investment gains (losses) attributable to noncontrolling interests........................................................................... -- 1 -- ----------- ----------- ----------- Balance at December 31,.............................................................. $ 7,257 $ 5,051 $ 4,773 =========== =========== =========== Change in net unrealized investment gains (losses)................................... $ 2,206 $ 277 $ (2,500) Change in net unrealized investment gains (losses) attributable to noncontrolling interests........................................................................... -- 1 -- ----------- ----------- ----------- Change in net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company................................................................... $ 2,206 $ 278 $ (2,500) =========== =========== ===========
Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company's equity, other than the U.S. government and its agencies, at both December 31, 2017 and 2016. Securities Lending Elements of the securities lending program are presented below at:
December 31, ----------------------- 2017 2016 ----------- ----------- (In millions) Securities on loan: (1) Amortized cost..................................... $ 13,887 $ 15,694 Estimated fair value............................... $ 14,852 $ 16,496 Cash collateral received from counterparties (2)..... $ 15,170 $ 16,807 Security collateral received from counterparties (3). $ 11 $ 14 Reinvestment portfolio -- estimated fair value....... $ 15,188 $ 16,821
-------- (1)Included within fixed maturity securities. (2)Included within payables for collateral under securities loaned and other transactions. (3)Security collateral received from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. 69 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements was as follows at:
December 31, 2017 December 31, 2016 -------------------------------------- -------------------------------------- Remaining Tenor of Securities Remaining Tenor of Securities Lending Agreements Lending Agreements ----------------------------- ----------------------------- Over Over 1 Month 1 to 6 1 Month 1 to 6 Open (1) or Less Months Total Open (1) or Less Months Total -------- ------- ------- -------- -------- ------- ------- -------- (In millions) Cash collateral liability by loaned security type: U.S. government and agency......................... $ 2,927 $ 5,279 $ 6,964 $ 15,170 $ 4,033 $ 5,640 $ 7,134 $ 16,807 ======= ======= ======= ======== ======= ======= ======= ========
-------- (1) The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2017 was $2.9 billion, all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, U.S. government and agency securities, ABS and U.S. corporate securities) and short-term investments with 62% invested in agency RMBS, U.S. government and agency securities, short-term investments, cash equivalents or held in cash. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Repurchase Agreements Elements of the short-term repurchase agreements are presented below at:
December 31, 2017 ----------------- (In millions) Securities on loan: (1) Amortized cost............................... $ 900 Estimated fair value......................... $ 1,031 Cash collateral received from counterparties (2). $ 1,000 Reinvestment portfolio -- estimated fair value... $ 1,000
-------- (1) Included within fixed maturity securities, short-term investments and cash equivalents. (2) Included within payables for collateral under securities loaned and other transactions. 70 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements was as follows at:
December 31, 2017 --------------------- Remaining Tenor of Repurchase Agreements ---------- 1 Month or Less Total ---------- ---------- (In millions) Cash collateral liability by loaned security type: U.S. government and agency......................... $ 1,000 $ 1,000 ========== ==========
The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including U.S. government and agency securities, agency RMBS and ABS), short-term investments and cash equivalents, with 66% invested in U.S. government and agency securities, agency RMBS, short-term investments, cash equivalents or held in cash. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit and Pledged as Collateral Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:
December 31, ----------------------- 2017 2016 ----------- ----------- (In millions) Invested assets on deposit (regulatory deposits)............. $ 49 $ 47 Invested assets pledged as collateral (1).................... 20,775 20,750 ----------- ----------- Total invested assets on deposit and pledged as collateral. $ 20,824 $ 20,797 =========== ===========
-------- (1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4), derivative transactions (see Note 9) and secured debt (See Note 11). See "-- Securities Lending" and "-- Repurchase Agreements" for information regarding securities on loan and Note 7 for information regarding investments designated to the closed block. Purchased Credit Impaired Investments Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired ("PCI") investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI. 71 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The Company's PCI investments were as follows at:
December 31, ------------------------- 2017 2016 ------------ ------------ Fixed Maturity Securities ------------------------- (In millions) Outstanding principal and interest balance (1). $ 4,607 $ 5,859 Carrying value (2)............................. $ 3,825 $ 4,598
-------- (1)Represents the contractually required payments, which include contractual principal, whether or not currently due, and accrued interest. (2)Estimated fair value plus accrued interest. The following table presents information about PCI investments acquired during the periods indicated:
Years Ended December 31, ------------------------- 2017 2016 ---------- ------------ Fixed Maturity Securities ------------------------- (In millions) Contractually required payments (including interest). $ 107 $ 1,831 Cash flows expected to be collected (1).............. $ 78 $ 1,644 Fair value of investments acquired................... $ 72 $ 1,206
-------- (1)Represents undiscounted principal and interest cash flow expectations at the date of acquisition. The following table presents activity for the accretable yield on PCI investments:
Years Ended December 31, -------------------------- 2017 2016 ------------ ------------ Fixed Maturity Securities -------------------------- (In millions) Accretable yield, January 1,........................ $ 1,678 $ 1,784 Investments purchased............................... 6 438 Accretion recognized in earnings.................... (273) (277) Disposals........................................... (42) (138) Reclassification (to) from nonaccretable difference. 102 (129) ------------ ------------ Accretable yield, December 31,...................... $ 1,471 $ 1,678 ============ ============
Collectively Significant Equity Method Investments The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $11.5 billion at December 31, 2017. The Company's maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $2.9 billion at December 31, 2017. Except for certain real estate joint ventures, the Company's investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities. 72 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company's consolidated pre-tax income (loss) for two of the three most recent annual periods: 2017 and 2016. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company's proportionate share of the assets, liabilities, or earnings of such entities. The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2017, 2016 and 2015. Aggregate total assets of these entities totaled $450.0 billion and $385.3 billion at December 31, 2017 and 2016, respectively. Aggregate total liabilities of these entities totaled $59.5 billion and $48.5 billion at December 31, 2017 and 2016, respectively. Aggregate net income (loss) of these entities totaled $35.0 billion, $27.6 billion and $23.4 billion for the years ended December 31, 2017, 2016 and 2015, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses). Variable Interest Entities The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE's primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party's relationship with or involvement in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. Consolidated VIEs Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company's obligation to the VIEs is limited to the amount of its committed investment. The following table presents the total assets and total liabilities relating to investment related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at December 31, 2017 and 2016.
December 31, --------------------------------------------- 2017 2016 ---------------------- ---------------------- Total Total Total Total Assets Liabilities Assets Liabilities ---------- ----------- ---------- ----------- (In millions) Real estate joint ventures (1)... $ 1,077 $ -- $ 1,124 $ -- Renewable energy partnership (2). 116 3 -- -- Other investments (3)............ 32 6 62 12 ---------- ----------- ---------- ----------- Total.......................... $ 1,225 $ 9 $ 1,186 $ 12 ========== =========== ========== ===========
-------- (1) The Company consolidates certain affiliated real estate joint ventures. At both December 31, 2017 and 2016, the Company and its affiliates invested $1.0 billion and $85 million, respectively, in these affiliated real estate joint ventures. (2) Assets of the renewable energy partnership, primarily consisting of other invested assets, were consolidated in prior periods. As a result of the Separation and a reassessment in 2017, the renewable energy partnership was determined to be a consolidated VIE. (3) Other investments is comprised primarily of other invested assets. The Company consolidates entities 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 liable for any principal or interest shortfalls should any arise. 73 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
December 31, ----------------------------------------------------------- 2017 2016 ----------------------------- ----------------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) ------------- --------------- ------------- --------------- (In millions) Fixed maturity securities AFS: Structured Securities (2)......... $ 34,284 $ 34,284 $ 34,912 $ 34,912 U.S. and foreign corporate........ 1,166 1,166 1,167 1,167 Other limited partnership interests. 3,561 5,765 3,383 5,674 Other invested assets............... 2,172 2,506 2,089 2,666 Real estate joint ventures.......... 38 43 81 95 ------------- --------------- ------------- --------------- Total............................. $ 41,221 $ 43,764 $ 41,632 $ 44,514 ============= =============== ============= ===============
-------- (1) The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company's return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $117 million and $150 million at December 31, 2017 and 2016, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2)For these variable interests, the Company's involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. As described in Note 16, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during each of the years ended December 31, 2017, 2016 and 2015. During 2017, the Company securitized certain residential mortgage loans and acquired an interest in the related RMBS issued. While the Company has a variable interest in the issuer of the securities, it is not the primary beneficiary of the issuer of the securities since it does not have any rights to remove the servicer or veto rights over the servicer's actions. The carrying value and the estimated fair value of mortgage loans sold during 2017 were $319 million and $339 million, respectively, resulting in a gain of $20 million during the year ended December 31, 2017, which was included within net investment gains (losses). The estimated fair value of RMBS acquired in connection with the securitization was $52 million. Included in the carrying amount and maximum exposure to loss for Structured Securities presented above at December 31, 2017 were $51 million of such investments. See Note 10 for information on how the estimated fair value of mortgage loans and RMBS is determined, the valuation approaches and key inputs, their placement in the fair value hierarchy, and for certain RMBS, quantitative information about the significant unobservable inputs and the sensitivity of their estimated fair value to changes in those inputs. 74 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Income The components of net investment income were as follows:
Years Ended December 31, ----------------------------------- 2017 2016 2015 ----------- ----------- ----------- (In millions) Investment income: Fixed maturity securities......................... $ 7,057 $ 7,653 $ 7,930 Equity securities................................. 97 90 91 Mortgage loans.................................... 2,647 2,539 2,514 Policy loans...................................... 310 404 435 Real estate and real estate joint ventures........ 446 488 743 Other limited partnership interests............... 625 413 519 Cash, cash equivalents and short-term investments. 74 43 25 Operating joint venture........................... 19 9 9 Other............................................. 133 207 149 ----------- ----------- ----------- Subtotal........................................ 11,408 11,846 12,415 Less: Investment expenses......................... 895 763 876 ----------- ----------- ----------- Net investment income........................... $ 10,513 $ 11,083 $ 11,539 =========== =========== ===========
See "-- Variable Interest Entities" for discussion of consolidated securitization entities ("CSEs"). See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. 75 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows:
Years Ended December 31, ---------------------------------- 2017 2016 2015 ---------- ---------- ---------- (In millions) Total gains (losses) on fixed maturity securities: Total OTTI losses recognized -- by sector and industry: U.S. and foreign corporate securities -- by industry: Consumer............................................................... $ (5) $ -- $ (21) Industrial............................................................. -- (58) -- Utility................................................................ -- (20) (15) Communications......................................................... -- (3) -- ---------- ---------- ---------- Total U.S. and foreign corporate securities.......................... (5) (81) (36) RMBS................................................................... -- (16) (17) State and political subdivision........................................ (1) -- (1) ---------- ---------- ---------- OTTI losses on fixed maturity securities recognized in earnings...... (6) (97) (54) Fixed maturity securities -- net gains (losses) on sales and disposals. 23 169 (114) ---------- ---------- ---------- Total gains (losses) on fixed maturity securities.................... 17 72 (168) ---------- ---------- ---------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by sector: Common stock........................................................... (23) (75) (37) Non-redeemable preferred stock......................................... (1) -- -- ---------- ---------- ---------- OTTI losses on equity securities recognized in earnings.............. (24) (75) (37) Equity securities -- net gains (losses) on sales and disposals......... 7 19 -- ---------- ---------- ---------- Total gains (losses) on equity securities............................ (17) (56) (37) ---------- ---------- ---------- Mortgage loans......................................................... (34) (20) (90) Real estate and real estate joint ventures............................. 607 142 430 Other limited partnership interests.................................... (52) (59) (66) Other.................................................................. (115) (32) (18) ---------- ---------- ---------- Subtotal............................................................. 406 47 51 ---------- ---------- ---------- Non-investment portfolio gains (losses)................................ (72) 85 208 ---------- ---------- ---------- Total net investment gains (losses).................................. $ 334 $ 132 $ 259 ========== ========== ==========
See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($142) million, $89 million and $125 million for the years ended December 31, 2017, 2016 and 2015, respectively. 76 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Sales or Disposals and Impairments of Fixed Maturity and Equity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown in the table below.
Years Ended December 31, ------------------------------------------------------------------- 2017 2016 2015 2017 2016 2015 ---------- ---------- ---------- --------- --------- --------- Fixed Maturity Securities Equity Securities ---------------------------------- ------------------------------- (In millions) Proceeds........................ $ 34,483 $ 58,812 $ 60,957 $ 738 $ 146 $ 105 ========== ========== ========== ========= ========= ========= Gross investment gains.......... $ 278 $ 755 $ 584 $ 18 $ 28 $ 28 Gross investment losses......... (255) (586) (698) (11) (9) (28) OTTI losses..................... (6) (97) (54) (24) (75) (37) ---------- ---------- ---------- --------- --------- --------- Net investment gains (losses). $ 17 $ 72 $ (168) $ (17) $ (56) $ (37) ========== ========== ========== ========= ========= =========
Credit Loss Rollforward The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI:
Years Ended December 31, ---------------------- 2017 2016 ---------- ---------- (In millions) Balance at January 1,................................................................................ $ 157 $ 188 Additions: Initial impairments -- credit loss OTTI on securities not previously impaired...................... 1 1 Additional impairments -- credit loss OTTI on securities previously impaired....................... -- 13 Reductions: Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI. (47) (43) Securities impaired to net present value of expected future cash flows............................. -- (1) Increase in cash flows -- accretion of previous credit loss OTTI................................... (1) (1) ---------- ---------- Balance at December 31,.............................................................................. $ 110 $ 157 ========== ==========
Related Party Investment Transactions The Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Invested assets transferred to and from affiliates were as follows:
Years Ended December 31, ------------------------------ 2017 2016 2015 -------- ---------- ---------- (In millions) Estimated fair value of invested assets transferred to affiliates... $ 453 $ 5,678 $ 1,003 Amortized cost of invested assets transferred to affiliates......... $ 416 $ 5,338 $ 941 Net investment gains (losses) recognized on transfers............... $ 37 $ 340 $ 62 Estimated fair value of invested assets transferred from affiliates. $ 306 $ 1,583 $ 237
In January 2017, the Company received transferred investments with an estimated fair value of $292 million, which are included in the table above, in addition to $275 million in cash related to the recapture of risks from minimum benefit guarantees on certain variable annuities previously reinsured by Brighthouse Insurance. In April 2016, the Company transferred investments and cash and cash equivalents with an amortized cost and estimated fair value of $4.0 billion and $4.3 billion, 77 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) respectively, for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse Insurance, which are included in the table above. Also, in November 2016, the Company transferred investments and cash and cash equivalents with an amortized cost and estimated fair value of $863 million and $933 million, respectively, for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse NY, which are included in the table above. See Note 6 for additional information related to these transfers. The unpaid principal balance of MetLife, Inc. affiliated loans held by the Company totals $1.8 billion, bear interest at the following fixed rates, payable semiannually, and are due as follows: $500 million at 3.54% due on June 30, 2019, $250 million at 3.57% due on October 1, 2019, $358 million at 5.64% due on July 15, 2021 and $467 million at 5.86% due on December 16, 2021. In September 2016, an affiliated loan for $250 million matured and, subsequently, a new loan was issued for $250 million, which bears interest, payable semiannually, at a fixed rate of 3.03% and matures on September 30, 2020. The carrying value of these MetLife, Inc. affiliated loans totaled $1.8 billion at both December 31, 2017 and 2016, and are included in other invested assets. Net investment income from these affiliated loans was $78 million, $91 million and $95 million for the years ended December 31, 2017, 2016 and 2015, respectively. As a structured settlements assignment company, the Company purchases annuities from Brighthouse to fund the periodic structured settlement claim payment obligations it assumes. Each annuity purchased is contractually designated to the assumed claim obligation it funds. The aggregate annuity contract values recorded, for which the Company has also recorded unpaid claim obligations of equal amounts, were $1.3 billion at both December 31, 2017 and 2016. The related net investment income and corresponding policyholder benefits and claims recognized were $69 million and $64 million for the years ended December 31, 2017 and 2016, respectively. The Company holds a surplus note from American Life Insurance Company, an affiliate, which was included in other invested assets, with a carrying value of $100 million at both December 31, 2017 and 2016. The loan, which bears interest at a fixed rate of 3.17%, payable semiannually, is due on June 30, 2020. Net investment income from this surplus note was $3 million for each of the three years ended December 31, 2017, 2016 and 2015. The Company holds preferred stock of Metropolitan Property and Casualty Insurance Company, an affiliate, which was included in other invested assets, with a carrying value of $315 million at both December 31, 2017 and 2016. Dividends are payable quarterly at a variable rate. Net investment income from the affiliated preferred stock dividends was $6 million, $5 million and $4 million for the years ended December 31, 2017, 2016 and 2015, respectively. In March 2017, the Company purchased from Brighthouse Insurance an interest in an operating joint venture for $286 million, which was settled in cash in April 2017. The Company provides investment administrative services to certain affiliates. The related investment administrative service charges to these affiliates were $73 million, $172 million and $157 million for the years ended December 31, 2017, 2016 and 2015, respectively. See "-- Variable Interest Entities" for information on investments in affiliated real estate joint ventures. See "-- Mortgage Loans -- Mortgage Loans by Portfolio Segment" for discussion of mortgage loan participation agreements with affiliates. 9. Derivatives Accounting for Derivatives See Note 1 for a description of the Company's accounting policies for derivatives and Note 10 for information about the fair value hierarchy for derivatives. Derivative Strategies The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. 78 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter ("OTC") market. Certain of the Company's OTC derivatives are cleared and settled through central clearing counterparties ("OTC-cleared"), while others are bilateral contracts between two counterparties ("OTC-bilateral"). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets. Interest Rate Derivatives The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards. Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships. The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. government and agency, or other fixed maturity security. Structured interest rate swaps are included in interest rate swaps and are not designated as hedging instruments. Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Interbank Offered Rate ("LIBOR"), calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships. The Company purchases interest rate caps primarily to protect its floating rate liabilities against rises in interest rates above a specified level and against interest rate exposure arising from mismatches between assets and liabilities, and interest rate floors primarily to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options. The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and nonqualifying hedging relationships. In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships. 79 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) A synthetic guaranteed interest contract ("GIC") is a contract that simulates the performance of a traditional GIC through the use of financial instruments. Under a synthetic GIC, the policyholder owns the underlying assets. The Company guarantees a rate of return on those assets for a premium. Synthetic GICs are not designated as hedging instruments. Foreign Currency Exchange Rate Derivatives The Company uses foreign currency exchange rate derivatives, including foreign currency swaps and foreign currency forwards, to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying hedging relationships. In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company utilizes foreign currency forwards in nonqualifying hedging relationships. Credit Derivatives The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations and involuntary restructuring for corporate obligors, as well as repudiation, moratorium or governmental intervention for sovereign obligors. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. ("ISDA") deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships. The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency securities, or other fixed maturity securities. These credit default swaps are not designated as hedging instruments. The Company also entered into certain purchased and written credit default swaps held in relation to trading portfolios for the purpose of generating profits on short-term differences in price. These credit default swaps were not designated as hedging instruments. As of December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships. 80 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Equity Derivatives The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps. Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the underlying equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships. In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships. In an equity total return swap, the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and LIBOR, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships. 81 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Primary Risks Managed by Derivatives The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the Company's derivatives, excluding embedded derivatives, held at:
December 31, -------------------------------------------------------------------- 2017 2016 --------------------------------- ---------------------------------- Estimated Fair Value Estimated Fair Value ---------------------- ---------------------- Gross Gross Notional Notional Primary Underlying Risk Exposure Amount Assets Liabilities Amount Assets Liabilities -------------------------------- ---------- --------- ------------ ----------- --------- ------------ (In millions) Derivatives Designated as Hedging Instruments: Fair value hedges: Interest rate swaps...... Interest rate.................... $ 3,826 $ 2,289 $ 3 $ 4,993 $ 2,221 $ 6 Foreign currency swaps... Foreign currency exchange rate... 1,082 47 17 1,200 29 224 ---------- --------- ---------- ----------- --------- ---------- Subtotal................................................. 4,908 2,336 20 6,193 2,250 230 ---------- --------- ---------- ----------- --------- ---------- Cash flow hedges: Interest rate swaps...... Interest rate.................... 3,337 234 -- 1,793 325 26 Interest rate forwards... Interest rate.................... 3,333 -- 127 4,033 -- 370 Foreign currency swaps... Foreign currency exchange rate... 22,287 795 1,078 20,080 1,435 1,604 ---------- --------- ---------- ----------- --------- ---------- Subtotal................ 28,957 1,029 1,205 25,906 1,760 2,000 ---------- --------- ---------- ----------- --------- ---------- Total qualifying hedges.................................. 33,865 3,365 1,225 32,099 4,010 2,230 ---------- --------- ---------- ----------- --------- ---------- Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate swaps...... Interest rate.................... 43,028 1,722 336 32,662 2,514 879 Interest rate floors..... Interest rate.................... 7,201 91 -- 9,001 173 2 Interest rate caps....... Interest rate.................... 53,079 78 2 78,358 112 3 Interest rate futures.... Interest rate.................... 2,257 1 2 2,342 3 -- Interest rate options.... Interest rate.................... 7,525 142 11 850 144 1 Interest rate forwards... Interest rate.................... -- -- -- 396 -- 3 Interest rate total return swaps............ Interest rate.................... 1,048 8 2 1,549 2 127 Synthetic GICs........... Interest rate.................... 11,318 -- -- 5,566 -- -- Foreign currency swaps... Foreign currency exchange rate... 6,739 547 164 8,175 1,247 58 Foreign currency forwards Foreign currency exchange rate... 961 16 7 1,396 52 18 Credit default swaps -- purchased............... Credit........................... 980 7 8 961 12 6 Credit default swaps -- written................. Credit........................... 7,874 181 -- 8,025 119 8 Equity futures........... Equity market.................... 1,282 5 1 1,851 10 -- Equity index options..... Equity market.................... 14,408 384 476 11,119 260 426 Equity variance swaps.... Equity market.................... 3,530 45 169 5,579 69 193 Equity total return swaps Equity market.................... 1,077 -- 39 1,013 1 42 ---------- --------- ---------- ----------- --------- ---------- Total non-designated or nonqualifying derivatives........ 162,307 3,227 1,217 168,843 4,718 1,766 ---------- --------- ---------- ----------- --------- ---------- Total.................................................... $ 196,172 $ 6,592 $ 2,442 $ 200,942 $ 8,728 $ 3,996 ========== ========= ========== =========== ========= ==========
82 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Based on gross notional amounts, a substantial portion of the Company's derivatives was not designated or did not qualify as part of a hedging relationship at both December 31, 2017 and 2016. The Company's use of derivatives includes (i) derivatives that serve as macro hedges of the Company's exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship; (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income; and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged. Net Derivative Gains (Losses) The components of net derivative gains (losses) were as follows:
Years Ended December 31, ---------------------------------------- 2017 2016 2015 ----------- ---------------- ---------- (In millions) Freestanding derivatives and hedging gains (losses) (1). $ (771) $ (715) $ 463 Embedded derivatives gains (losses)..................... 427 (423) 418 ----------- ---------------- ---------- Total net derivative gains (losses).................... $ (344) $ (1,138) $ 881 =========== ================ ==========
-------- (1)Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships, which are not presented elsewhere in this note. The following table presents earned income on derivatives:
Years Ended December 31, -------------------------------------- 2017 2016 2015 ----------- ------------ ------------ (In millions) Qualifying hedges: Net investment income.............................. $ 302 $ 280 $ 227 Interest credited to policyholder account balances. (64) (1) 28 Nonqualifying hedges: Net investment income.............................. -- (1) (5) Net derivative gains (losses)...................... 406 577 518 Policyholder benefits and claims................... 5 4 2 ----------- ------------ ------------ Total............................................. $ 649 $ 859 $ 770 =========== ============ ============
83 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Nonqualifying Derivatives and Derivatives for Purposes Other Than Hedging The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or not qualifying as hedging instruments:
Net Net Policyholder Derivative Investment Benefits and Gains (Losses) Income (1) Claims (2) -------------- ---------- ------------ (In millions) Year Ended December 31, 2017 Interest rate derivatives.................. $ (343) $ 1 $ -- Foreign currency exchange rate derivatives. (746) -- -- Credit derivatives -- purchased............ (16) -- -- Credit derivatives -- written.............. 102 -- -- Equity derivatives......................... (536) (6) (216) -------------- ---------- ------------ Total..................................... $ (1,539) $ (5) $ (216) ============== ========== ============ Year Ended December 31, 2016 Interest rate derivatives.................. $ (1,088) $ -- $ -- Foreign currency exchange rate derivatives. 726 -- -- Credit derivatives -- purchased............ (23) -- -- Credit derivatives -- written.............. 48 -- -- Equity derivatives......................... (457) (14) (94) -------------- ---------- ------------ Total..................................... $ (794) $ (14) $ (94) ============== ========== ============ Year Ended December 31, 2015 Interest rate derivatives.................. $ (243) $ -- $ -- Foreign currency exchange rate derivatives. 678 -- -- Credit derivatives -- purchased............ 17 (3) -- Credit derivatives -- written.............. (57) -- -- Equity derivatives......................... (152) (11) -- -------------- ---------- ------------ Total..................................... $ 243 $ (14) $ -- ============== ========== ============
-------- (1)Changes in estimated fair value related to economic hedges of equity method investments in joint ventures and derivatives held in relation to trading portfolios. As of December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. (2)Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits. Fair Value Hedges The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities; and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities. 84 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses):
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) Year Ended December 31, 2017 Interest rate swaps: Fixed maturity securities..................... $ 4 $ (5) $ (1) Policyholder liabilities (1).................. (69) 134 65 Foreign currency swaps: Foreign-denominated fixed maturity securities. (24) 27 3 Foreign-denominated policyholder account balances (2)................................. 65 (43) 22 --------------- -------------- --------------- Total............................................................... $ (24) $ 113 $ 89 =============== ============== =============== Year Ended December 31, 2016 Interest rate swaps: Fixed maturity securities..................... $ 8 $ (9) $ (1) Policyholder liabilities (1).................. (109) 90 (19) Foreign currency swaps: Foreign-denominated fixed maturity securities. 10 (9) 1 Foreign-denominated policyholder account balances (2)................................. (95) 92 (3) --------------- -------------- --------------- Total............................................................... $(186) $ 164 $(22) =============== ============== =============== Year Ended December 31, 2015 Interest rate swaps: Fixed maturity securities..................... $ 4 $ -- $ 4 Policyholder liabilities (1).................. (4) (6) (10) Foreign currency swaps: Foreign-denominated fixed maturity securities. 14 (5) 9 Foreign-denominated policyholder account balances (2)................................. (240) 231 (9) --------------- -------------- --------------- Total............................................................... $(226) $ 220 $ (6) =============== ============== ===============
-------- (1)Fixed rate liabilities reported in policyholder account balances or future policy benefits. (2)Fixed rate or floating rate liabilities. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. Cash Flow Hedges The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed rate investments. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $20 million, $17 million and $14 million for the years ended December 31, 2017, 2016 and 2015, respectively. At both December 31, 2017 and 2016, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed five years. 85 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) At December 31, 2017 and 2016, the balance in AOCI associated with cash flow hedges was $1.4 billion and $2.2 billion, respectively. The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity:
Amount and Location Amount and Location Amount of Gains of Gains (Losses) of Gains (Losses) Derivatives in Cash Flow (Losses)Deferred in Reclassified from Recognized in Income Hedging Relationships AOCI on Derivatives AOCI into Income (Loss) (Loss) on Derivatives ------------------------ ------------------- ----------------------------- --------------------- (Effective Portion) (Effective Portion) (Ineffective Portion) - ------------------- ----------------------------- --------------------- Net Derivative Net Investment Net Derivative Gains (Losses) Income Gains (Losses) -------------- -------------- --------------------- (In millions) Year Ended December 31, 2017 Interest rate swaps...... $ 73 $ 24 $ 16 $ 18 Interest rate forwards... 210 (11) 2 (2) Foreign currency swaps... (161) 938 (1) -- Credit forwards.......... -- 1 1 -- ------------------- -------------- -------------- --------------------- Total.................. $ 122 $ 952 $ 18 $ 16 =================== ============== ============== ===================== Year Ended December 31, 2016 Interest rate swaps...... $ 58 $ 57 $ 12 $ -- Interest rate forwards... (366) (1) 3 -- Foreign currency swaps... 167 (251) (1) -- Credit forwards.......... -- 3 1 -- ------------------- -------------- -------------- --------------------- Total.................. $ (141) $ (192) $ 15 $ -- =================== ============== ============== ===================== Year Ended December 31, 2015 Interest rate swaps...... $ 76 $ 83 $ 11 $ 2 Interest rate forwards... (3) 4 2 -- Foreign currency swaps... (92) (679) (1) 7 Credit forwards.......... -- 1 1 -- ------------------- -------------- -------------- --------------------- Total.................. $ (19) $ (591) $ 13 $ 9 =================== ============== ============== =====================
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2017, the Company expected to reclassify ($11) million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $7.9 billion and $8.0 billion at December 31, 2017 and 2016, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At December 31, 2017 and 2016, the Company would have received $181 million and $111 million, respectively, to terminate all of these contracts. 86 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
December 31, ----------------------------------------------------------------------------- 2017 2016 -------------------------------------- -------------------------------------- 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 Maturity (2) Swaps Swaps Maturity (2) ----------------------------------------- ---------- -------------- ------------ ---------- -------------- ------------ ( Dollars in millions) Aaa/Aa/A Single name credit default swaps (3)..... $ 3 $ 159 2.8 $ 1 $ 229 2.7 Credit default swaps referencing indices. 42 2,193 2.7 32 2,093 3.5 -------- ------------ ------- ------------ Subtotal............................... 45 2,352 2.7 33 2,322 3.4 ---------- -------------- ---------- -------------- Baa Single name credit default swaps (3)..... 4 416 1.5 3 563 2.2 Credit default swaps referencing indices. 111 4,761 5.2 61 4,730 5.1 ---------- -------------- ---------- -------------- Subtotal............................... 115 5,177 4.9 64 5,293 4.8 ---------- -------------- ---------- -------------- Ba Single name credit default swaps (3)..... 1 105 3.4 (2) 115 4.2 Credit default swaps referencing indices. -- -- -- -- -- -- ---------- -------------- ---------- -------------- Subtotal............................... 1 105 3.4 (2) 115 4.2 ---------- -------------- ---------- -------------- B Single name credit default swaps (3)..... 2 20 3.5 -- 70 1.8 Credit default swaps referencing indices. 18 220 5.0 16 225 5.0 ---------- -------------- ---------- -------------- Subtotal............................... 20 240 4.9 16 295 4.2 ---------- -------------- ---------- -------------- Total.................................. $ 181 $ 7,874 4.2 $ 111 $ 8,025 4.4 ======== ============ ======= ============
-------- (1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's Investors Service ("Moody's"), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used. (2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. (3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions. The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. As a result, the maximum amounts of potential future recoveries available to offset the $7.9 billion and $8.0 billion from the table above were $27 million and $30 million at December 31, 2017 and 2016, respectively. 87 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Credit Risk on Freestanding Derivatives The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company's derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements. The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company's OTC-bilateral derivative transactions are governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. Substantially all of the Company's ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives. The Company's OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives. See Note 10 for a description of the impact of credit risk on the valuation of derivatives. 88 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The estimated fair values of the Company's net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
December 31, -------------------------------------------------- 2017 2016 - ------------------------ ------------------------ Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement Assets Liabilities Assets Liabilities -------------------------------------------------------------------- ----------- ----------- ----------- ----------- (In millions) Gross estimated fair value of derivatives: OTC-bilateral (1).................................................... $ 6,478 $ 2,203 $ 7,926 $ 3,349 OTC-cleared (1), (6)................................................. 168 216 905 611 Exchange-traded...................................................... 6 3 13 -- ----------- ----------- ----------- ----------- Total gross estimated fair value of derivatives (1)................ 6,652 2,422 8,844 3,960 Amounts offset on the consolidated balance sheets.................... -- -- -- -- ----------- ----------- ----------- ----------- Estimated fair value of derivatives presented on the consolidated balance sheets (1), (6)........................................... 6,652 2,422 8,844 3,960 Gross amounts not offset on the consolidated balance sheets: Gross estimated fair value of derivatives: (2) OTC-bilateral........................................................ (1,891) (1,891) (2,737) (2,737) OTC-cleared.......................................................... (31) (31) (391) (391) Exchange-traded...................................................... -- -- -- -- Cash collateral: (3), (4) OTC-bilateral........................................................ (3,448) -- (3,418) -- OTC-cleared.......................................................... (131) (179) (497) (217) Exchange-traded...................................................... -- -- -- -- Securities collateral: (5) OTC-bilateral........................................................ (954) (312) (1,560) (609) OTC-cleared.......................................................... -- (6) -- -- Exchange-traded...................................................... -- (3) -- -- ----------- ----------- ----------- ----------- Net amount after application of master netting agreements and collateral........................................................ $ 197 $ -- $ 241 $ 6 =========== =========== =========== ===========
-------- (1)At December 31, 2017 and 2016, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $60 million and $116 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($20) million and ($36) million, respectively. (2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals. (3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. (4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At December 31, 2017 and 2016, the Company received excess cash collateral of $122 million and $77 million, respectively, and provided excess cash collateral of $9 million and $9 million, respectively, which is not included in the table above due to the foregoing limitation. 89 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) (5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at December 31, 2017, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31, 2017 and 2016, the Company received excess securities collateral with an estimated fair value of $30 million and $21 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2017 and 2016, the Company provided excess securities collateral with an estimated fair value of $152 million and $75 million, respectively, for its OTC-bilateral derivatives, and $299 million and $531 million, respectively, for its OTC-cleared derivatives, and $50 million and $116 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. (6)Effective January 3, 2017, the CME amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. See Note 1 for further information on the CME amendments. The Company's collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the amount owed by that party reaches a minimum transfer amount. A small number of these arrangements also include financial strength or credit rating contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in credit ratings of Metropolitan Life Insurance Company and/or the credit ratings of the counterparty. In addition, substantially all of the Company's netting agreements for derivatives contain provisions that require both Metropolitan Life Insurance Company and the counterparty to maintain a specific investment grade financial strength or credit rating from each of Moody's and S&P. If a party's financial strength or credit ratings were to fall below that specific investment grade financial strength or credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party's reasonable valuation of the derivatives. 90 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value of the Company's OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The table also presents the incremental collateral that Metropolitan Life Insurance Company would be required to provide if there was a one-notch downgrade in its financial strength or credit rating, as applicable, at the reporting date or if its financial strength or credit rating, as applicable, at the reporting date sustained a downgrade to a level that triggered full overnight collateralization or termination of the derivative position. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.
December 31, -------------------------------------------------------------------- 2017 2016 ---------------------------------- --------------------------------- Derivatives Derivatives Derivatives Derivatives Subject to Not Subject Subject to Not Subject Financial to Financial Financial to Financial Strength- Strength- Strength- Strength- Contingent Contingent Contingent Contingent Provisions Provisions Total Provisions Provisions Total ------------ ------------- ------- ----------- ------------- ------- (In millions) Estimated Fair Value of Derivatives in a Net Liability Position (1)........................... $ 313 $ -- $ 313 $ 612 $ -- $ 612 Estimated Fair Value of Collateral Provided: Fixed maturity securities......................... $ 399 $ -- $ 399 $ 684 $ -- $ 684 Cash.............................................. $ -- $ -- $ -- $ -- $ -- $ -- Estimated Fair Value of Incremental Collateral Provided Upon: One-notch downgrade in financial strength or credit rating, as applicable..................... $ -- $ -- $ -- $ -- $ -- $ -- Downgrade in financial strength or credit rating, as applicable, to a level that triggers full overnight collateralization or termination of the derivative position.......................... $ -- $ -- $ -- $ -- $ -- $ --
------------- (1)After taking into consideration the existence of netting agreements. Embedded Derivatives The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and certain GMIBs; affiliated ceded reinsurance of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; affiliated assumed reinsurance of guaranteed minimum benefits related to GMWBs, GMABs, and certain GMIBs; funds withheld on ceded reinsurance and affiliated funds withheld on ceded reinsurance; fixed annuities with equity indexed returns; and certain debt and equity securities. 91 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at:
December 31, -------------------- Balance Sheet Location 2017 2016 -------------------------------------------- -------- ---------- (In millions) Embedded derivatives within asset host contracts: Ceded guaranteed minimum benefits......... Premiums, reinsurance and other receivables. $ -- $ 460 Options embedded in debt or equity securities............................... Investments................................. (113) (78) -------- ---------- Embedded derivatives within asset host contracts..................................... $ (113) $ 382 ======== ========== Embedded derivatives within liability host contracts: Direct guaranteed minimum benefits........ Policyholder account balances............... $ (94) $ 169 Assumed guaranteed minimum benefits....... Policyholder account balances............... 3 390 Funds withheld on ceded reinsurance....... Other liabilities........................... 898 777 Fixed annuities with equity indexed returns.................................. Policyholder account balances............... 69 17 -------- ---------- Embedded derivatives within liability host contracts................................. $ 876 $ 1,353 ======== ==========
The following table presents changes in estimated fair value related to embedded derivatives:
Years Ended December 31, ---------------------------------------- 2017 2016 2015 ------------ -------------- ------------ (In millions) Net derivative gains (losses) (1), (2). $ 427 $ (423) $ 418
------------- (1)The valuation of direct and assumed guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were ($65) million, $76 million and $29 million for the years ended December 31, 2017, 2016 and 2015, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were less than $1 million, ($29) million and ($4) million for the years ended December 31, 2017, 2016 and 2015, respectively. (2)See Note 6 for discussion of affiliated net derivative gains (losses). 92 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value When developing estimated fair values, the Company considers three broad valuation approaches: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation approach to use, given what is being measured and the availability of sufficient inputs, giving priority to observable inputs. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. 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. Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at: 93 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2017 --------------------------------------------------------------------- Fair Value Hierarchy --------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ----------------- ---------------- ----------------- (In millions) Assets Fixed maturity securities: U.S. corporate........................................... $ -- $ 54,629 $ 3,461 $ 58,090 U.S. government and agency............................... 18,802 19,743 -- 38,545 Foreign corporate........................................ -- 21,471 4,125 25,596 RMBS..................................................... -- 19,372 3,262 22,634 ABS...................................................... -- 7,079 787 7,866 State and political subdivision.......................... -- 7,551 -- 7,551 CMBS..................................................... -- 5,461 27 5,488 Foreign government....................................... -- 4,471 31 4,502 ---------------- ----------------- ---------------- ----------------- Total fixed maturity securities........................ 18,802 139,777 11,693 170,272 ---------------- ----------------- ---------------- ----------------- Equity securities........................................ 399 893 366 1,658 Short-term investments................................... 2,056 1,092 7 3,155 Residential mortgage loans -- FVO........................ -- -- 520 520 Derivative assets: (1) Interest rate............................................ 1 4,556 8 4,565 Foreign currency exchange rate........................... -- 1,405 -- 1,405 Credit................................................... -- 149 39 188 Equity market............................................ 5 363 66 434 ---------------- ----------------- ---------------- ----------------- Total derivative assets................................ 6 6,473 113 6,592 ---------------- ----------------- ---------------- ----------------- Embedded derivatives within asset host contracts (2)..... -- -- -- -- Separate account assets (3).............................. 23,571 106,294 960 130,825 ---------------- ----------------- ---------------- ----------------- Total assets........................................... $ 44,834 $ 254,529 $ 13,659 $ 313,022 ================ ================= ================ ================= Liabilities Derivative liabilities: (1) Interest rate............................................ $ 2 $ 351 $ 130 $ 483 Foreign currency exchange rate........................... -- 1,261 5 1,266 Credit................................................... -- 8 -- 8 Equity market............................................ 1 515 169 685 ---------------- ----------------- ---------------- ----------------- Total derivative liabilities........................... 3 2,135 304 2,442 ---------------- ----------------- ---------------- ----------------- Embedded derivatives within liability host contracts (2). -- -- 876 876 Long-term debt........................................... -- -- -- -- Separate account liabilities (3)......................... -- 7 2 9 ---------------- ----------------- ---------------- ----------------- Total liabilities...................................... $ 3 $ 2,142 $ 1,182 $ 3,327 ================ ================= ================ =================
94 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2016 ----------------------------------------------------------------- Fair Value Hierarchy -------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ---------------- ---------------- -------------- (In millions) Assets Fixed maturity securities: U.S. corporate........................................... $ -- $ 51,303 $ 4,855 $ 56,158 U.S. government and agency............................... 17,597 18,018 -- 35,615 Foreign corporate........................................ -- 20,373 3,984 24,357 RMBS..................................................... -- 19,719 3,698 23,417 ABS...................................................... -- 6,745 759 7,504 State and political subdivision.......................... -- 7,126 10 7,136 CMBS..................................................... -- 4,851 84 4,935 Foreign government....................................... -- 3,977 21 3,998 ---------------- ---------------- ---------------- -------------- Total fixed maturity securities........................ 17,597 132,112 13,411 163,120 ---------------- ---------------- ---------------- -------------- Equity securities........................................ 408 1,011 420 1,839 Short-term investments................................... 2,945 1,720 25 4,690 Residential mortgage loans -- FVO........................ -- -- 566 566 Derivative assets: (1) Interest rate............................................ 3 5,489 2 5,494 Foreign currency exchange rate........................... -- 2,763 -- 2,763 Credit................................................... -- 101 30 131 Equity market............................................ 10 226 104 340 ---------------- ---------------- ---------------- -------------- Total derivative assets................................ 13 8,579 136 8,728 ---------------- ---------------- ---------------- -------------- Embedded derivatives within asset host contracts (2)..... -- -- 460 460 Separate account assets (3).............................. 27,633 105,055 1,148 133,836 ---------------- ---------------- ---------------- -------------- Total assets........................................... $ 48,596 $ 248,477 $ 16,166 $ 313,239 ================ ================ ================ ============== Liabilities Derivative liabilities: (1) Interest rate............................................ $ -- $ 917 $ 500 $ 1,417 Foreign currency exchange rate........................... -- 1,902 2 1,904 Credit................................................... -- 14 -- 14 Equity market............................................ -- 468 193 661 ---------------- ---------------- ---------------- -------------- Total derivative liabilities........................... -- 3,301 695 3,996 ---------------- ---------------- ---------------- -------------- Embedded derivatives within liability host contracts (2). -- -- 1,353 1,353 Long-term debt........................................... -- -- 74 74 Separate account liabilities (3)......................... -- 16 7 23 ---------------- ---------------- ---------------- -------------- Total liabilities...................................... $ -- $ 3,317 $ 2,129 $ 5,446 ================ ================ ================ ==============
------------- (1)Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on 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. (2)Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the consolidated balance sheets. At December 31, 2017 and 2016, debt and equity securities also included embedded derivatives of ($113) million and ($78) million, respectively. 95 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (3)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. Separate account liabilities presented in the tables above represent derivative liabilities. The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy. Investments Valuation Controls and Procedures On behalf of the Company's and MetLife, Inc.'s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee that is independent of the trading and investing functions and comprised of senior management, provides oversight of control systems and valuation policies for securities, mortgage loans and derivatives. On a quarterly basis, this committee reviews and approves new transaction types and markets, ensures that observable market prices and market-based parameters are used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. This committee also provides oversight of the selection of independent third-party pricing providers and the controls and procedures to evaluate third-party pricing. Periodically, the Chief Accounting Officer reports to the Audit Committee of the Board of Directors of each of MetLife, Inc. and Metropolitan Life Insurance Company regarding compliance with fair value accounting standards. The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management's knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices received from independent brokers, also referred to herein as "consensus pricing," represent a reasonable estimate of fair value by considering such pricing relative to the Company's knowledge of the current market dynamics and current pricing for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker quotations represent less than 1% of the total estimated fair value of fixed maturity securities and 1% of the total estimated fair value of Level 3 fixed maturity securities at December 31, 2017. The Company also applies a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management's best estimate is used. Securities, Short-term Investments and Long-term Debt When available, the estimated fair value of these financial instruments is 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. 96 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. 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. When observable inputs are not available, the market standard valuation methodologies 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 these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances. The estimated fair value of long-term debt is determined on a basis consistent with the methodologies described herein for securities. 97 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs. ----------------------------------------------------------------------------- Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs ----------------------------------------------------------------------------- Fixed maturity securities ----------------------------------------------------------------------------- U.S. corporate and Foreign corporate securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market and Principally the market approach. income approaches. Key Inputs: Key Inputs: . quoted prices in markets that . illiquidity premium are not active . benchmark yields; spreads off . delta spread adjustments to benchmark yields; new reflect specific issuances; issuer rating credit-related issues . trades of identical or . credit spreads comparable securities; duration . Privately-placed securities . quoted prices in markets are valued using the that are not active for additional key inputs: identical or similar . market yield curve; call securities that are less provisions liquid and based on lower . observable prices and spreads levels of trading activity for similar public or private than securities classified securities that in Level 2 incorporate the credit . independent non-binding quality and industry sector broker quotations of the issuer . delta spread adjustments to reflect specific credit-related issues ----------------------------------------------------------------------------- U.S. government and agency, State and political subdivision and Foreign government securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market approach. Principally the market approach. Key Inputs: Key Inputs: . quoted prices in markets that .independent non-binding broker are not active quotations . benchmark U.S. Treasury yield . quoted prices in markets that or other yields are not active for identical or similar securities that are less liquid and based on . the spread off the U.S. lower levels of trading Treasury yield curve for the activity than securities identical security classified in Level 2 . issuer ratings and issuer spreads; broker-dealer quotes .credit spreads . comparable securities that are actively traded ----------------------------------------------------------------------------- Structured Securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market and Principally the market and income approaches. income approaches. Key Inputs: Key Inputs: . quoted prices in markets that are not active . credit spreads . spreads for actively traded . quoted prices in markets securities; spreads off that are not active for benchmark yields identical or similar . expected prepayment speeds securities that are less and volumes liquid and based on lower . current and forecasted loss levels of trading activity severity; ratings; geographic than securities classified region in Level 2 . weighted average coupon and . independent non-binding weighted average maturity broker quotations . average delinquency rates; debt-service coverage ratios . issuance-specific information, including, but not limited to: . collateral type; structure of the security; vintage of the loans . payment terms of the underlying assets . payment priority within the tranche; deal performance ----------------------------------------------------------------------------- 98 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Level 2 Level 3 Instrument Observable Inputs Unobservable Inputs --------------------------------------------------------------------------------------------------------------------------- Equity securities --------------------------------------------------------------------------------------------------------------------------- Valuation Approaches: Principally the market approach. Valuation Approaches: Principally the market and income approaches. Key Input: Key Inputs: . quoted prices in markets that are not considered active . credit ratings; issuance structures . quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2 . independent non-binding broker quotations --------------------------------------------------------------------------------------------------------------------------- Short-term investments --------------------------------------------------------------------------------------------------------------------------- . Short-term investments are of a similar nature and . Short-term investments are of a similar nature and class to the fixed maturity and equity securities class to the fixed maturity and equity securities described above; accordingly, the valuation described above; accordingly, the valuation approaches and observable inputs used in their approaches and unobservable inputs used in their valuation are also similar to those described above. valuation are also similar to those described above. --------------------------------------------------------------------------------------------------------------------------- Residential mortgage loans -- FVO --------------------------------------------------------------------------------------------------------------------------- . N/A Valuation Approaches: Principally the market approach. Valuation Techniques and Key Inputs: These investments are based primarily on matrix pricing or other similar techniques that utilize inputs from mortgage servicers that are unobservable or cannot be derived principally from, or corroborated by, observable market data. --------------------------------------------------------------------------------------------------------------------------- Separate account assets and Separate account liabilities (1) --------------------------------------------------------------------------------------------------------------------------- Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly --------------------------------------------------------------------------------------------------------------------------- Key Input: . N/A . quoted prices or reported NAV provided by the fund managers --------------------------------------------------------------------------------------------------------------------------- Other limited partnership interests --------------------------------------------------------------------------------------------------------------------------- . N/A Valued giving consideration to the underlying holdings of the partnerships and by applying a premium or discount, if appropriate. Key Inputs: .liquidity; bid/ask spreads; performance record of the fund manager .other relevant variables that may impact the exit value of the particular partnership interest ---------------------------------------------------------------------------------------------------------------------------
-------- (1)Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under "-- Securities, Short-term Investments and Long-term Debt" and "-- Derivatives -- Freestanding Derivatives." Derivatives The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. The valuation controls and procedures for derivatives are described in "-- Investments." The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared 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. 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 management believes they are consistent with what other market participants would use when pricing such instruments. 99 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made 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. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared 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 OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, 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. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Freestanding Derivatives Level 2 Valuation Approaches and Key Inputs: This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3. Level 3 Valuation Approaches and Key Inputs: These valuation methodologies generally use the same inputs as described in the corresponding sections 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. Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:
Instrument Interest Rate Foreign Currency Credit Equity Market Exchange Rate --------------------------------------------------------------------------------------------------------------------------------- Inputs common to . swap yield curves .swap yield curves .swap yield curves .swap yield curves Level 2 and Level 3 . basis curves .basis curves .credit curves .spot equity index levels by instrument type . interest rate .currency spot rates .recovery rates .dividend yield curves volatility (1) .cross currency basis .equity volatility (1) curves --------------------------------------------------------------------------------------------------------------------------------- Level 3 . swap yield curves (2) .swap yield curves (2) .swap yield curves (2) .dividend yield curves . basis curves (2) .basis curves (2) .credit curves (2) (2) . repurchase rates .cross currency basis .credit spreads .equity volatility (1), curves (2) .repurchase rates (2) .currency correlation .independent non-binding .correlation between broker quotations model inputs (1)
-------- (1)Option-based only. (2)Extrapolation beyond the observable limits of the curve(s). 100 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Embedded Derivatives Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, certain affiliated ceded reinsurance agreements related to such variable annuity guarantees, equity or bond indexed crediting rates within certain funding agreements and those related to funds withheld on ceded reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain 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 on the consolidated balance sheets. The Company's actuarial department calculates the fair value of these embedded derivatives, which are estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates. Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.'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 as compared to MetLife, Inc. 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, GMABs and GMWBs previously described. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also ceded directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives) but where the reinsurance agreement contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). 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 with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. 101 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) 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 described in "-- Investments -- Securities, Short-term Investments and Long-term Debt." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on 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 a nonperformance risk adjustment. 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. Embedded Derivatives Within Asset and Liability Host Contracts Level 3 Valuation Approaches and Key Inputs: Direct and assumed guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, 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 curves 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 the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in "-- 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 the income approach. The valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curves 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. Transfers between Levels Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the period. Transfers between Levels 1 and 2: For assets and liabilities measured at estimated fair value and still held at December 31, 2017 and December 31, 2016, there were no transfers between Levels 1 and 2. 102 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Transfers into or out of Level 3: 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. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
December 31, 2017 ---------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- --------------- ----------- Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) 83 - 142 111 Market pricing Quoted prices (4) 10 - 443 123 -------------------------------------------------------------------------------------- RMBS................................. Market pricing Quoted prices (4) -- - 126 94 -------------------------------------------------------------------------------------- ABS.................................. Market pricing Quoted prices (4) 27 - 104 100 Consensus pricing Offered quotes (4) 100 - 101 100 -------------------------------------------------------------------------------------- Derivatives Interest rate........................ Present value techniques Swap yield (6) 200 - 300 Repurchase rates (8) (5) - 5 -------------------------------------------------------------------------------------- Foreign currency exchange rate....... Present value Swap yield (6) (14) - (3) techniques -------------------------------------------------------------------------------------- Credit............................... Present value Credit spreads (9) -- - -- techniques Consensus pricing Offered quotes (10) -------------------------------------------------------------------------------------- Equity market........................ Present value Volatility (11) 11% - 31% techniques or option pricing models Correlation (12) 10% - 30% -------------------------------------------------------------------------------------- Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 0% - 0.09% Ages 41 - 60 0.04% - 0.65% Ages 61 - 115 0.26% - 100% Lapse rates: Durations 1 - 10 0.25% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 3% - 100% Utilization rates 0% - 25% Withdrawal rates 0.25% - 10% Long-term equity 17.40% - 25% volatilities Nonperformance risk 0.02% - 0.44% spread
December 31, 2016 ---------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- --------------- ----------- Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) 18 - 138 106 Market pricing Quoted prices (4) 25 700 117 ------------------------------------------------------------------------------------ RMBS................................. Market pricing Quoted prices (4) 19 - 137 91 ------------------------------------------------------------------------------------ ABS.................................. Market pricing Quoted prices (4) 20 - 106 99 Consensus pricing Offered quotes (4) 98 - 100 100 ------------------------------------------------------------------------------------ Derivatives Interest rate........................ Present value techniques Swap yield (6) 200 - 300 Repurchase rates (8) (44) - 18 ------------------------------------------------------------------------------------ Foreign currency exchange rate....... Present value Swap yield (6) 50 - 236 techniques ------------------------------------------------------------------------------------ Credit............................... Present value Credit spreads (9) 97 - 98 techniques Consensus pricing Offered quotes (10) ------------------------------------------------------------------------------------ Equity market........................ Present value Volatility (11) 14% - 32% techniques or option pricing models Correlation (12) 40% - 40% ------------------------------------------------------------------------------------ Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 0% - 0.09% Ages 41 - 60 0.04% - 0.65% Ages 61 - 115 0.26% - 100% Lapse rates: Durations 1 - 10 0.25% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 3% - 100% Utilization rates 0% - 25% Withdrawal rates 0.25% - 10% Long-term equity 17.40% - 25% volatilities Nonperformance risk 0.04% - 0.57% spread
Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------------- ----------------------- ----------------- Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) Increase Market pricing Quoted prices (4) Increase ------------------------------------------------------------------------ RMBS................................. Market pricing Quoted prices (4) Increase (5) ------------------------------------------------------------------------ ABS.................................. Market pricing Quoted prices (4) Increase (5) Consensus pricing Offered quotes (4) Increase (5) ------------------------------------------------------------------------ Derivatives Interest rate........................ Present value techniques Swap yield (6) Increase (7) Repurchase rates (8) Decrease (7) ------------------------------------------------------------------------ Foreign currency exchange rate....... Present value Swap yield (6) Increase (7) techniques ------------------------------------------------------------------------ Credit............................... Present value Credit spreads (9) Decrease (7) techniques Consensus pricing Offered quotes (10) ------------------------------------------------------------------------ Equity market........................ Present value Volatility (11) Increase (7) techniques or option pricing models Correlation (12) ------------------------------------------------------------------------ Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 Decrease (13) Ages 41 - 60 Decrease (13) Ages 61 - 115 Decrease (13) Lapse rates: Durations 1 - 10 Decrease (14) Durations 11 - 20 Decrease (14) Durations 21 - 116 Decrease (14) Utilization rates Increase (15) Withdrawal rates (16) Long-term equity Increase (17) volatilities Nonperformance risk Decrease (18) spread
-------- (1) The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities. 103 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) The impact of a decrease in input would have the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions. (3) Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations. (4) Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par. (5) Changes in the assumptions used for the probability of default are accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates. (6) Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (7) Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions. (8) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points. (9) Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps. (10)At both December 31, 2017 and 2016, independent non-binding broker quotations were used in the determination of less than 1% of the total net derivative estimated fair value. (11)Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (12)Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations. (13)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (14)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (15)The utilization rate assumption estimates the percentage of contractholders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract's withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. 104 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (16)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (17)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (18)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value measurement of assets and liabilities classified within Level 3 that are not included in the preceding table. Generally, all other classes of securities classified within Level 3, including those within separate account assets and embedded derivatives within funds withheld related to certain ceded reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. This includes matrix pricing and discounted cash flow methodologies, inputs such as 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, as well as independent non-binding broker quotations. The residential mortgage loans -- FVO and long-term debt are valued using independent non-binding broker quotations and internal models including matrix pricing and discounted cash flow methodologies using current interest rates. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in "-- Nonrecurring Fair Value Measurements." 105 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) 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):
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------- Fixed Maturity Securities ---------------------------------------------------------- State and Structured Political Foreign Equity Corporate (1) Securities Subdivision Government Securities --------------- ------------- ------------- ------------- ------------- (In millions) Balance, January 1, 2016................ $ 8,282 $ 4,416 $ 33 $ 275 $ 328 Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ -- 100 1 -- (24) Total realized/unrealized gains (losses) included in AOCI.............. (39) 47 2 (1) 21 Purchases (4)........................... 1,967 1,821 -- 7 23 Sales (4)............................... (1,226) (1,339) -- (40) (15) Issuances (4)........................... -- -- -- -- -- Settlements (4)......................... -- -- -- -- -- Transfers into Level 3 (6).............. 848 18 7 -- 282 Transfers out of Level 3 (6)............ (993) (522) (33) (220) (195) ------------- ------------- ---------- ------------- ------------- Balance, December 31, 2016.............. 8,839 4,541 10 21 420 Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ (2) 95 -- -- -- Total realized/unrealized gains (losses) included in AOCI.............. 416 109 -- -- 17 Purchases (4)........................... 2,451 900 -- 19 14 Sales (4)............................... (1,408) (1,282) -- (2) (51) Issuances (4)........................... -- -- -- -- -- Settlements (4)......................... -- -- -- -- -- Transfers into Level 3 (6).............. 58 63 -- -- -- Transfers out of Level 3 (6)............ (2,768) (350) (10) (7) (34) ------------- ------------- ---------- ------------- ------------- Balance, December 31, 2017.............. $ 7,586 $ 4,076 $ -- $ 31 $ 366 ============= ============= ========== ============= ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015: (7).............................. $ 7 $ 102 $ -- $ 1 $ -- ============= ============= ========== ============= ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (7).............................. $ -- $ 101 $ 1 $ -- $ (29) ============= ============= ========== ============= ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2017: (7).............................. $ (7) $ 83 $ -- $ -- $ (17) ============= ============= ========== ============= ============= Gains (Losses) Data for the year ended December 31, 2015...................... Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ $ 38 $ 101 $ -- $ 1 $ 12 Total realized/unrealized gains (losses) included in AOCI.............. $ (399) $ (67) $ -- $ (1) $ (53)
106 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------------------- Residential Separate Short-term Mortgage Net Net Embedded Account Long-term Investments Loans - FVO Derivatives (8) Derivatives (9) Assets (10) Debt ----------- ------------ --------------- --------------- ------------ ------------ (In millions) Balance, January 1, 2016...... $ 200 $ 314 $ (23) $ 186 $ 1,520 $ (36) Total realized/unrealized gains (losses) included in net income (loss) (2) (3) (5) -- 8 (168) (870) (2) -- Total realized/unrealized gains (losses) included in AOCI......................... -- -- (366) -- -- -- Purchases (4)................. 28 297 27 -- 375 -- Sales (4)..................... (3) (11) -- -- (474) -- Issuances (4)................. -- -- -- -- 62 (46) Settlements (4)............... -- (42) (29) (209) (51) 8 Transfers into Level 3 (6).... -- -- -- -- 19 -- Transfers out of Level 3 (6).. (200) -- -- -- (308) -- ----------- ------------ ----------- ------------ ------------ ------------ Balance, December 31, 2016.... 25 566 (559) (893) 1,141 (74) Total realized/unrealized gains (losses) included in net income (loss) (2) (3).... -- 40 21 450 (8) -- Total realized/unrealized gains (losses) included in AOCI......................... -- -- 207 -- -- -- Purchases (4)................. 6 175 -- -- 186 -- Sales (4)..................... -- (179) -- -- (80) -- Issuances (4)................. -- -- -- -- 1 -- Settlements (4)............... -- (82) 140 (433) (93) 34 Transfers into Level 3 (6).... -- -- -- -- 35 -- Transfers out of Level 3 (6).. (24) -- -- -- (224) 40 ----------- ------------ ----------- ------------ ------------ ------------ Balance, December 31, 2017.... $ 7 $ 520 $ (191) $ (876) $ 958 $ -- =========== ============ =========== ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015: (7)....... $ -- $ 20 $ (24) $ 461 $ -- $ -- =========== ============ =========== ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (7)....... $ -- $ 8 $ (166) $ (863) $ -- $ -- =========== ============ =========== ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2017: (7)....... $ -- $ 27 $ (18) $ 452 $ -- $ -- =========== ============ =========== ============ ============ ============ Gains (Losses) Data for the year ended December 31, 2015. Total realized/unrealized gains (losses) included in net income (loss) (2) (3).... $ -- $ 20 $ (27) $ 447 $ 15 $ -- Total realized/unrealized gains (losses) included in AOCI......................... $ -- $ -- $ (2) $ -- $ -- $ --
-------- (1) Comprised of U.S. and foreign corporate securities. (2) Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans -- FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivatives gains (losses). (3) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (4) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. Sales for the year ended December 31, 2016 included financial instruments related to the disposition of NELICO and GALIC of $345 million for corporate securities, $117 million for Structured Securities, $38 million for foreign government securities and less than $1 million for equity securities. See Note 3. (5) Includes $420 million for net embedded derivatives for the year ended December 31, 2016 related to the disposition of NELICO and GALIC. See Note 3. 107 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (7) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). (8) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (9) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (10)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 (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). Separate account assets and liabilities are presented net for the purposes of the rollforward. Fair Value Option The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The following table presents information for residential mortgage loans which are accounted for under the FVO and were initially measured at fair value.
December 31, ------------- 2017 2016 ------ ------ (In millions) Unpaid principal balance................................................................ $ 650 $ 794 Difference between estimated fair value and unpaid principal balance.................... (130) (228) ------ ------ Carrying value at estimated fair value.................................................. $ 520 $ 566 ====== ====== Loans in nonaccrual status.............................................................. $ 198 $ 214 Loans more than 90 days past due........................................................ $ 94 $ 137 Loans in nonaccrual status or more than 90 days past due, or both -- difference between aggregate estimated fair value and unpaid principal balance............................ $(102) $(150)
Nonrecurring Fair Value Measurements The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment). The estimated fair values for these assets were determined using significant unobservable inputs (Level 3).
At December 31, Years Ended December 31, ------------------------------------------- --------------------------------------------- 2017 2016 2015 2017 2016 2015 ------------- -------------- -------------- ------------- -------------- --------------- Carrying Value After Measurement Gains (Losses) ------------------------------------------- --------------------------------------------- (In millions) Other limited partnership interests (1)...... $ 58 $ 95 $ 57 $ (65) $ (59) $ (31) Other assets (2).... $ -- $ -- $ -- $ 4 $ (30) $ --
-------- 108 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (1)For these cost method investments, estimated fair value is determined from information provided on the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various 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. Distributions 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. The Company estimates that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2017 and 2016 were not significant. (2)During the year ended December 31, 2016, the Company recognized an impairment of computer software in connection with the sale to Massachusetts Mutual Life Insurance Company ("MassMutual") of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MetLife's affiliated broker-dealer, MetLife Securities, Inc., a wholly-owned subsidiary of MetLife, Inc. (collectively, the "U.S. Retail Advisor Force Divestiture"). See Note 18. Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the "-- Recurring Fair Value Measurements" section. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
December 31, 2017 ---------------------------------------------------------------- Fair Value Hierarchy -------------------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------ ------------ ------------ ------------ ------------ (In millions) Assets Mortgage loans.............................. $ 57,939 $ -- $ -- $ 59,465 $ 59,465 Policy loans................................ $ 6,006 $ -- $ 261 $ 6,797 $ 7,058 Other limited partnership interests......... $ 214 $ -- $ -- $ 212 $ 212 Other invested assets....................... $ 2,260 $ -- $ 2,028 $ 154 $ 2,182 Premiums, reinsurance and other receivables. $ 15,024 $ -- $ 679 $ 14,859 $ 15,538 Liabilities Policyholder account balances............... $ 75,323 $ -- $ -- $ 76,452 $ 76,452 Long-term debt.............................. $ 1,661 $ -- $ 2,021 $ -- $ 2,021 Other liabilities........................... $ 13,954 $ -- $ 547 $ 13,490 $ 14,037 Separate account liabilities................ $ 61,757 $ -- $ 61,757 $ -- $ 61,757
109 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2016 ---------------------------------------------------------------- Fair Value Hierarchy -------------------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------ ------------ ------------ ------------ ------------ (In millions) Assets Mortgage loans.............................. $ 55,994 $ -- $ -- $ 57,171 $ 57,171 Policy loans................................ $ 5,945 $ -- $ 258 $ 6,695 $ 6,953 Other limited partnership interests......... $ 336 $ -- $ -- $ 362 $ 362 Other invested assets....................... $ 2,263 $ -- $ 2,151 $ 151 $ 2,302 Premiums, reinsurance and other receivables. $ 14,888 $ -- $ 368 $ 15,421 $ 15,789 Liabilities Policyholder account balances............... $ 72,944 $ -- $ -- $ 74,052 $ 74,052 Long-term debt.............................. $ 1,503 $ -- $ 1,755 $ -- $ 1,755 Other liabilities........................... $ 14,731 $ -- $ 894 $ 13,920 $ 14,814 Separate account liabilities................ $ 65,545 $ -- $ 65,545 $ -- $ 65,545
The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Mortgage Loans The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk, or is determined from pricing for similar loans. Policy Loans Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans 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 by 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. Policy loans with variable interest rates are classified within Level 2 and the estimated fair value 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. Other Limited Partnership Interests The estimated fair values of these cost method investments are generally based on the Company's share of the NAV as provided on 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. Other Invested Assets These other invested assets are principally comprised of loans to affiliates. The estimated fair value of loans to affiliates is determined by discounting the expected future cash flows using market interest rates currently available for instruments with similar terms and remaining maturities. 110 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Premiums, Reinsurance and Other Receivables Premiums, reinsurance and other receivables are principally comprised of certain amounts recoverable under reinsurance agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and amounts receivable for securities sold but not yet settled. Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using interest rates determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements, classified within Level 2, 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. Policyholder Account Balances These policyholder account balances include investment contracts which primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts ("TCA"). The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance risk in the liability. Long-term Debt The estimated fair value of long-term debt is principally determined using market standard valuation methodologies. Valuations of instruments are based primarily on quoted prices in markets that are not active or using matrix pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable inputs including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues. Other Liabilities Other liabilities consist primarily of amounts due for securities purchased but not yet settled, funds withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance agreements, and amounts payable under certain assumed reinsurance agreements, which are recorded using the deposit method of accounting. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which are not materially different from the carrying values, with the exception of certain deposit type reinsurance payables. For such payables, the estimated fair value is determined as the present value of expected future cash flows, which are discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty. Separate Account Liabilities Separate account liabilities represent those balances due to policyholders under contracts that are classified as investment contracts. 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. 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 value of those assets approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate account liabilities are similar to those described for separate account assets. 111 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Long-term and Short-term Debt Long-term and short-term debt outstanding, excluding debt relating to CSEs, was as follows:
December 31, --------------------------------------------------------------- Interest Rates (1) 2017 2016 ---------------------- ------------------------------- ------------------------------- Unamortized Unamortized Weighted Face Discount and Carrying Face Discount and Carrying Range Average Maturity Value Issuance Costs Value Value Issuance Costs Value (2) ------------- -------- ----------- ------- -------------- -------- ------ -------------- --------- (In millions) Surplus notes - affiliated........ 7.38% - 7.38% 7.38% 2037 $ 700 $ (10) $ 690 $ 700 $ (10) $ 690 Surplus notes (2).. 7.80% - 7.88% 7.83% 2024 - 2025 400 (3) 397 400 (3) 397 Other notes (3).... 2.20% - 7.29% 4.56% 2018 - 2058 578 (4) 574 494 (4) 490 ------- -------- ------ ------ -------- ------ Total long-term debt............. 1,678 (17) 1,661 1,594 (17) 1,577 ------- -------- ------ ------ -------- ------ Total short-term debt.............. 243 -- 243 100 -- 100 ------- -------- ------ ------ -------- ------ Total............ $1,921 $ (17) $1,904 $1,694 $ (17) $1,677 ======= ======== ====== ====== ======== ======
-------- (1)Range of interest rates and weighted average interest rates are for the year ended December 31, 2017. (2)In December 2016, the $107 million 7.625% surplus notes were deconsolidated due to the disposition of GALIC. See Note 3. (3)During 2017, a subsidiary issued $139 million of long-term debt to a third party. The aggregate maturities of long-term debt at December 31, 2017 for the next five years and thereafter are $20 million in 2018, $0 in each of 2019, 2020 and 2021, $346 million in 2022 and $1.3 billion thereafter. Unsecured senior debt which consists of senior notes and other notes rank highest in priority. Payments of interest and principal on Metropolitan Life Insurance Company's surplus notes are subordinate to all other obligations and may be made only with the prior approval of the New York State Department of Financial Services. Term Loans MetLife Private Equity Holdings, LLC ("MPEH"), a wholly-owned indirect investment subsidiary, borrowed $350 million in December 2015 under a five-year credit agreement included within other notes in the table above. In November 2017, this agreement was amended to extend the maturity to November 2022, change the amount MPEH may borrow on a revolving basis to $75 million from $100 million, and change the interest rate to a variable rate of three-month LIBOR plus 3.25%, payable quarterly, from a variable rate of three-month LIBOR plus 3.70%. In connection with the initial borrowing in 2015, $6 million of costs were incurred, and additional costs of $1 million were incurred in connection with the 2017 amendment, which have been capitalized and are being amortized over the term of the loans. MPEH has pledged invested assets to secure the loans; however these loans are non-recourse to Metropolitan Life Insurance Company. Debt Repayments In December 2015, a wholly-owned real estate subsidiary of the Company repaid in cash $110 million of its mortgage loans issued to Brighthouse Insurance due in January 2016. In November 2015, the Company repaid in cash, at maturity, $188 million of surplus notes issued to MetLife Mexico S.A., an affiliate. The redemption was approved by the New York Superintendent of Financial Services (the "Superintendent"). In November 2015, the Company repaid in cash, at maturity, $200 million of surplus notes. The redemption was approved by the Superintendent. During 2015, a wholly-owned real estate subsidiary of the Company repaid in cash $132 million of its 7.26% mortgage loans issued to Brighthouse Insurance due in January 2020. 112 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Long-term and Short-term Debt (continued) Short-term Debt Short-term debt with maturities of one year or less was as follows:
December 31, ----------------------------- 2017 2016 -------------- -------------- (Dollars in millions) Commercial paper.......... $ 100 $ 100 Short-term borrowings (1). 143 -- -------------- -------------- Total short-term debt..... $ 243 $ 100 ============== ============== Average daily balance..... $ 129 $ 100 Average days outstanding.. 97 days 40 days
-------- (1) Represents short-term debt related to repurchase agreements, secured by assets of a subsidiary. During the years ended December 31, 2017, 2016 and 2015, the weighted average interest rate on short-term debt was 1.63%, 0.42% and 0.15%, respectively. Interest Expense Interest expense included in other expenses was $106 million, $112 million and $122 million for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts include $52 million, $52 million and $67 million of interest expense related to affiliated debt for the years ended December 31, 2017, 2016 and 2015, respectively. Credit and Committed Facilities At December 31, 2017, MetLife, Inc. and MetLife Funding, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company ("MetLife Funding"), maintained a $3.0 billion unsecured revolving credit facility (the "Credit Facility"), and Missouri Reinsurance, Inc. ("MoRe"), a wholly-owned subsidiary of Metropolitan Life Insurance Company, had access to a committed bank facility of MetLife, Inc., which provides letters of credit for the benefit of certain affiliates of MetLife, Inc., including Metropolitan Life Insurance Company and certain of its subsidiaries, subject to bank consent (the "Committed Facility"). When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements. Credit Facility The Company's Credit Facility is used for general corporate purposes, to support the borrowers' commercial paper programs and for the issuance of letters of credit. Total fees associated with the Credit Facility were $5 million, $8 million and $4 million for the years ended December 31, 2017, 2016 and 2015, respectively, and were included in other expenses. Information on the Credit Facility at December 31, 2017 was as follows:
Letters of Credit Maximum Used by the Letters of Credit Unused Borrower(s) Expiration Capacity Company (1) Used by Affiliates (1) Drawdowns Commitments ----------- ------------------ ----------------- ----------------- ---------------------- ---------- ------------- (In millions) MetLife, Inc. and MetLife Funding, Inc...... December 2021 (2) $ 3,000 (2) $ 57 $ 73 $ -- $ 2,870
------------- (1) MetLife, Inc. and MetLife Funding are severally liable for their respective obligations under the Credit Facility. MetLife Funding was not an applicant under letters of credit outstanding as of December 31, 2017 and is not responsible for any reimbursement obligations under such letters of credit. (2) All borrowings under the Credit Facility must be repaid by December 20, 2021, except that letters of credit outstanding upon termination may remain outstanding until December 20, 2022. 113 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Long-term and Short-term Debt (continued) Committed Facility Letters of credit issued under the Committed Facility are used for collateral for certain of the Company's affiliated reinsurance liabilities. Total fees associated with the Committed Facility were $5 million, $4 million and $4 million for the years ended December 31, 2017, 2016 and 2015, respectively, and were included in other expenses. MoRe had $395 million in letters of credit outstanding and there was no remaining availability under the Committed Facility at December 31, 2017. The Committed Facility matures on June 20, 2018. In addition to the Committed Facility, see also "-- Term Loans" for information about the undrawn line of credit facility in the amount of $75 million. Debt and Facility Covenants Certain of the Company's debt instruments and the Credit Facility contain various administrative, reporting, legal and financial covenants. The Company believes it was in compliance with all applicable covenants at December 31, 2017. 12. Equity Stock-Based Compensation Plans The Company does not issue any awards payable in its common stock or options to purchase its common stock. An affiliate employs the personnel who conduct most of the Company's business. In accordance with a services agreement with that affiliate, the Company bears a proportionate share of stock-based compensation expense for those employees. Stock-based compensation expense relate to Stock Options, Performance Shares, and Restricted Stock Units under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan and the MetLife, Inc. 2015 Stock and Incentive Compensation Plan, most of which MetLife, Inc. granted in the first quarter of each year. The Company's expense related to stock-based compensation included in other expenses was $74 million, $89 million and $85 million for the years ended December 31, 2017, 2016 and 2015, respectively. Statutory Equity and Income See Note 3 for information on the disposition of NELICO and GALIC. The state of domicile of Metropolitan Life Insurance Company imposes risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). Regulatory compliance is determined by a ratio of a company's total adjusted capital, calculated in the manner prescribed by the NAIC ("TAC") to its authorized control level RBC, calculated in the manner prescribed by the NAIC ("ACL RBC"), based on the statutory-based filed financial statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC ("CAL RBC"). The CAL RBC ratios for Metropolitan Life Insurance Company were in excess of 370% and 400% at December 31, 2017 and December 31, 2016, respectively. Metropolitan Life Insurance Company's foreign insurance operations are regulated by applicable authorities of the countries in which each entity operates and are subject to minimum capital and solvency requirements in those countries before corrective action commences. The aggregate required capital and surplus of Metropolitan Life Insurance Company's foreign insurance operations was $279 million and the aggregate actual regulatory capital and surplus was $389 million as of the date of the most recent required capital adequacy calculation for each jurisdiction. Each of those foreign insurance operations exceeded minimum capital and solvency requirements of their respective countries for all periods presented. Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. The NAIC has adopted the Codification of Statutory Accounting Principles ("Statutory Codification"). Statutory Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by the state insurance department may impact the effect of Statutory Codification on the statutory capital and surplus of Metropolitan Life Insurance Company. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt, reporting of reinsurance agreements and valuing securities on a different basis. 114 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three years. Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries have no material state prescribed accounting practices, except as described below. New York has adopted certain prescribed accounting practices, primarily consisting of the continuous Commissioners' Annuity Reserve Valuation Method, which impacts deferred annuities, and the New York Special Consideration Letter, which mandates certain assumptions in asset adequacy testing. The collective impact of these prescribed accounting practices decreased the statutory capital and surplus of Metropolitan Life Insurance Company for the years ended December 31, 2017 and 2016 by an amount of $1.1 billion and $909 million, respectively, in excess of the amount of the decrease had capital and surplus been measured under NAIC guidance. The tables below present amounts from Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries, which are derived from their respective statutory-basis financial statements as filed with the insurance regulators. Statutory net income (loss) was as follows:
Years Ended December 31, ----------------------------------- Company State of Domicile 2017 2016 2015 -------------------------------------------- ----------------- ----------- ----------- ----------- (In millions) Metropolitan Life Insurance Company (1)..... New York $ 1,982 $ 3,444 $ 3,703 New England Life Insurance Company (1)...... Massachusetts N/A N/A $ 157 General American Life Insurance Company (1). Missouri N/A N/A $ 204
------------- (1)In December 2016, Metropolitan Life Insurance Company distributed all of the issued and outstanding shares of common stock of each of NELICO and GALIC to MetLife, Inc., in the form of a non-cash extraordinary dividend. Statutory capital and surplus was as follows at:
December 31, ------------------------------ Company 2017 2016 ------------------------------------ -------------- --------------- (In millions) Metropolitan Life Insurance Company. $ 10,384 $ 11,195
Dividend Restrictions The table below sets forth the dividends permitted to be paid by Metropolitan Life Insurance Company to MetLife, Inc. without insurance regulatory approval and dividends paid:
2018 2017 2016 ------------------- ---------------- ------------------ Permitted Without Company Approval Paid (1) Paid (1) (2) ------------------------------------ ------------------- ---------------- ------------------ (In millions) Metropolitan Life Insurance Company. $ 3,075 $ 2,523 $ 5,740
-------- (1)Reflects all amounts paid, including those requiring regulatory approval. (2)In 2016, Metropolitan Life Insurance Company paid an ordinary cash dividend to MetLife, Inc. in the amount of $3.6 billion. In addition, in December 2016, Metropolitan Life Insurance Company distributed to MetLife, Inc. as a non-cash extraordinary dividend all of the issued and outstanding shares of common stock of each of NELICO and GALIC in the amount of $981 million and $1.2 billion, respectively, as calculated on a statutory basis. 115 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Under New York State Insurance Law, Metropolitan Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to MetLife, Inc. in any calendar year based on either of two standards. Under one standard, Metropolitan Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay dividends out of earned surplus (defined as positive unassigned funds (surplus) excluding 85% of the change in net unrealized capital gains or losses (less capital gains tax), for the immediately preceding calendar year), in an amount up to the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year. In addition, under this standard, Metropolitan Life Insurance Company may not, without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain from operations, excluding realized capital gains, was negative. Under the second standard, if dividends are paid out of other than earned surplus, Metropolitan Life Insurance Company may, without prior insurance regulatory clearance, pay an amount up to the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, Metropolitan Life Insurance Company will be permitted to pay a dividend to MetLife, Inc. in excess of the amounts allowed under both standards only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent either approves the distribution of the dividend or does not disapprove the dividend within 30 days of its filing. Under New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. There was no dividend paid to Metropolitan Life Insurance Company by its former insurance subsidiaries in 2016. See Note 3. 116 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Accumulated Other Comprehensive Income (Loss) Information regarding changes in the balances of each component of AOCI attributable to Metropolitan Life Insurance Company was as follows:
Unrealized Foreign Defined Investment Gains Unrealized Currency Benefit (Losses), Net of Gains (Losses) Translation Plans Related Offsets (1) on Derivatives Adjustments Adjustment Total -------------------- -------------- ------------- --------------- ------------- (In millions) Balance at December 31, 2014... $ 6,200 $ 1,073 $ (3) $ (2,236) $ 5,034 OCI before reclassifications... (4,839) (19) (101) 113 (4,846) Deferred income tax benefit (expense)........... 1,715 6 30 (40) 1,711 ------------- ----------- ------------ --------------- ------------- AOCI before reclassifications, net of income tax............... 3,076 1,060 (74) (2,163) 1,899 Amounts reclassified from AOCI................ 405 578 -- 229 1,212 Deferred income tax benefit (expense)........... (144) (202) -- (80) (426) ------------- ----------- ------------ --------------- ------------- Amounts reclassified from AOCI, net of income tax..... 261 376 -- 149 786 ------------- ----------- ------------ --------------- ------------- Balance at December 31, 2015... 3,337 1,436 (74) (2,014) 2,685 OCI before reclassifications... 792 (141) (11) (4) 636 Deferred income tax benefit (expense)........... (286) 49 3 (5) (239) ------------- ----------- ------------ --------------- ------------- AOCI before reclassifications, net of income tax............... 3,843 1,344 (82) (2,023) 3,082 Amounts reclassified from AOCI................ 71 177 -- 191 439 Deferred income tax benefit (expense)........... (26) (62) -- (60) (148) ------------- ----------- ------------ --------------- ------------- Amounts reclassified from AOCI, net of income tax..... 45 115 -- 131 291 ------------- ----------- ------------ --------------- ------------- Dispositions (2)..... (456) -- 23 30 (403) Deferred income tax benefit (expense)........... 160 -- (8) (3) 149 ------------- ----------- ------------ --------------- ------------- Dispositions, net of income tax..... (296) -- 15 27 (254) ------------- ----------- ------------ --------------- ------------- Balance at December 31, 2016... 3,592 1,459 (67) (1,865) 3,119 OCI before reclassifications... 3,977 122 26 (30) 4,095 Deferred income tax benefit (expense)........... (1,287) (43) (6) 11 (1,325) ------------- ----------- ------------ --------------- ------------- AOCI before reclassifications, net of income tax............... 6,282 1,538 (47) (1,884) 5,889 Amounts reclassified from AOCI................ 102 (970) -- 159 (709) Deferred income tax benefit (expense)........... (33) 338 -- (57) 248 ------------- ----------- ------------ --------------- ------------- Amounts reclassified from AOCI, net of income tax..... 69 (632) -- 102 (461) ------------- ----------- ------------ --------------- ------------- Balance at December 31, 2017... $ 6,351 $ 906 $ (47) $ (1,782) $ 5,428 ============= =========== ============ =============== =============
-------- (1) See Note 8 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation. (2) See Note 3. 117 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Information regarding amounts reclassified out of each component of AOCI was as follows:
Consolidated Statement of AOCI Components Amounts Reclassified from AOCI Operations Locations ------------------------------------------------- ---------------------------------------- ------------------------------ Years Ended December 31, ---------------------------------------- 2017 2016 2015 ---------- ------------- ------------- (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses).......... $ 12 $ 10 $ (208) Net investment gains (losses) Net unrealized investment gains (losses).......... 3 21 31 Net investment income Net unrealized investment gains (losses).......... (117) (102) (228) Net derivative gains (losses) ---------- ------------- ------------- Net unrealized investment gains (losses), before income tax..................................... (102) (71) (405) Income tax (expense) benefit...................... 33 26 144 ---------- ------------- ------------- Net unrealized investment gains (losses), net of income tax..................................... (69) (45) (261) ---------- ------------- ------------- Unrealized gains (losses) on derivatives--cash flow hedges: Interest rate swaps............................... 24 57 83 Net derivative gains (losses) Interest rate swaps............................... 16 12 11 Net investment income Interest rate forwards............................ (11) (1) 4 Net derivative gains (losses) Interest rate forwards............................ 2 3 2 Net investment income Foreign currency swaps............................ 938 (251) (679) Net derivative gains (losses) Foreign currency swaps............................ (1) (1) (1) Net investment income Credit forwards................................... 1 3 1 Net derivative gains (losses) Credit forwards................................... 1 1 1 Net investment income ---------- ------------- ------------- Gains (losses) on cash flow hedges, before income tax..................................... 970 (177) (578) Income tax (expense) benefit...................... (338) 62 202 ---------- ------------- ------------- Gains (losses) on cash flow hedges, net of income tax..................................... 632 (115) (376) ---------- ------------- ------------- Defined benefit plans adjustment: (1)............. Amortization of net actuarial gains (losses)...... (179) (198) (233) Amortization of prior service (costs) credit...... 20 7 4 ---------- ------------- ------------- Amortization of defined benefit plan items, before income tax.............................. (159) (191) (229) Income tax (expense) benefit...................... 57 60 80 ---------- ------------- ------------- Amortization of defined benefit plan items, net of income tax.................................. (102) (131) (149) ---------- ------------- ------------- Total reclassifications, net of income tax....... $ 461 $ (291) $ (786) ========== ============= =============
-------- (1)These AOCI components are included in the computation of net periodic benefit costs. See Note 14. 118 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Other Expenses Information on other expenses was as follows:
Years Ended December 31, ------------------------------------------- 2017 2016 2015 ------------- ------------- ------------- (In millions) General and administrative expenses..... $ 2,608 $ 2,598 $ 3,063 Pension, postretirement and postemployment benefit costs........... 167 251 241 Premium taxes, other taxes, and licenses & fees........................ 273 367 358 Commissions and other variable expenses. 1,801 2,366 2,214 Capitalization of DAC................... (61) (332) (482) Amortization of DAC and VOBA............ 241 441 742 Interest expense on debt................ 106 112 122 ------------- ------------- ------------- Total other expenses................... $ 5,135 $ 5,803 $ 6,258 ============= ============= =============
Certain prior year amounts have been reclassified to conform to the current year presentation, which has been revised to align the expense categories with the Company's businesses. The reclassifications did not result in a change to total other expenses. Capitalization of DAC and Amortization of DAC and VOBA See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See also Note 7 for a description of the DAC amortization impact associated with the closed block. Interest Expense on Debt See Note 11 for additional information on interest expense on debt. Affiliated Expenses Commissions and other variable expenses, capitalization of DAC and amortization of DAC and VOBA include the impact of affiliated reinsurance transactions. See Notes 6, 11 and 18 for a discussion of affiliated expenses included in the table above. Income Tax See Note 15 for information on the charge related to income tax for the year ended December 31, 2015. Restructuring Charges In 2016, the Company completed a previous enterprise-wide strategic initiative. These restructuring charges are included in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate & Other. Information regarding restructuring charges was as follows:
Years Ended December 31, -------------------------------------------------------- 2016 2015 ---------------------------- --------------------------- Lease and Lease and Asset Asset Severance Impairment Total Severance Impairment Total --------- ----------- ------ --------- ---------- ------ (In millions) Balance at January 1,.............................................. $ 17 $ 4 $ 21 $ 31 $ 6 $ 37 Restructuring charges.............................................. -- 1 1 52 4 56 Cash payments...................................................... (17) (4) (21) (66) (6) (72) ------ ----- ------ ------ ------- ------ Balance at December 31,............................................ $ -- $ 1 $ 1 $ 17 $ 4 $ 21 ====== ===== ====== ====== ======= ====== Total restructuring charges incurred since inception of initiative. $ 306 $ 47 $ 353 $ 306 $ 46 $ 352 ====== ===== ====== ====== ======= ======
119 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans Pension and Other Postretirement Benefit Plans The Company sponsors and administers various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering employees who meet specified eligibility requirements. Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits that are primarily based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay, as well as interest credits, determined annually based upon the annual rate of interest on 30-year U.S. Treasury securities, for each account balance. The nonqualified pension plans provide supplemental benefits in excess of limits applicable to a qualified plan. Participating affiliates are allocated an equitable share of net expense related to the plans, proportionate to other expenses being allocated to these affiliates. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. Employees of MetLife who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total costs of postretirement medical benefits. Employees of MetLife hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. Participating affiliates are allocated a proportionate share of net expense and contributions related to the postemployment and other postretirement plans. 120 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Obligations and Funded Status
December 31, ------------------------------------------------------------------- 2017 2016 ---------------------------------- ------------------------------- Other Other Pension Postretirement Pension Postretirement Benefits (1) Benefits Benefits (1) Benefits ---------------- ---------------- ------------- ---------------- (In millions) Change in benefit obligations: Benefit obligations at January 1,...................... $ 9,837 $ 1,742 $ 9,760 $ 1,905 Service costs.......................................... 169 6 203 9 Interest costs......................................... 415 75 415 82 Plan participants' contributions....................... -- 33 -- 33 Net actuarial (gains) losses........................... 618 (96) 298 (119) Divestitures, settlements and curtailments (2)......... 3 2 (270) (8) Change in benefits and other........................... -- -- (11) (43) Benefits paid.......................................... (563) (106) (558) (117) Effect of foreign currency translation................. -- -- -- -- ---------------- ---------------- ------------- ---------------- Benefit obligations at December 31,.................. 10,479 1,656 9,837 1,742 ---------------- ---------------- ------------- ---------------- Change in plan assets: Estimated fair value of plan assets at January 1,...... 8,721 1,379 8,490 1,372 Actual return on plan assets........................... 947 124 620 75 Divestitures (2)....................................... -- -- (155) -- Plan participants' contributions....................... -- 33 -- 33 Employer contributions................................. 266 (4) 324 16 Benefits paid.......................................... (563) (106) (558) (117) ---------------- ---------------- ------------- ---------------- Estimated fair value of plan assets at December 31,.. 9,371 1,426 8,721 1,379 ---------------- ---------------- ------------- ---------------- Over (under) funded status at December 31,........... $ (1,108) $ (230) $ (1,116) $ (363) ================ ================ ============= ================ Amounts recognized on the consolidated balance sheets: Other assets........................................... $ 55 $ 160 $ -- $ -- Other liabilities...................................... (1,163) (390) (1,116) (363) ---------------- ---------------- ------------- ---------------- Net amount recognized................................ $ (1,108) $ (230) $ (1,116) $ (363) ================ ================ ============= ================ AOCI: Net actuarial (gains) losses........................... $ 2,831 $ (55) $ 2,839 $ 93 Prior service costs (credit)........................... (10) (26) (11) (48) ---------------- ---------------- ------------- ---------------- AOCI, before income tax.............................. $ 2,821 $ (81) $ 2,828 $ 45 ================ ================ ============= ================ Accumulated benefit obligation....................... $ 10,180 N/A $ 9,557 N/A ================ =============
------------- (1) Includes nonqualified unfunded plans, for which the aggregate PBO was $1.2 billion at December 31, 2017 and $1.1 billion at December 31, 2016. (2) Divestitures for the year ended December 31, 2016 include amounts related to the disposition of NELICO and GALIC. See Note 3. 121 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Information for pension plans with PBOs in excess of plan assets and accumulated benefit obligations ("ABO") in excess of plan assets was as follows at:
December 31, ----------------------------------------------------------------- 2017 2016 2017 2016 ------------ ------------ ------------ ------------ PBO Exceeds Estimated Fair Value ABO Exceeds Estimated Fair Value of Plan Assets of Plan Assets -------------------------------- -------------------------------- (In millions) Projected benefit obligations....... $ 1,163 $ 9,837 $ 1,163 $ 1,093 Accumulated benefit obligations..... $ 1,116 $ 9,557 $ 1,116 $ 1,046 Estimated fair value of plan assets. $ -- $ 8,721 $ -- $ --
Net Periodic Benefit Costs The components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in OCI were as follows:
Years Ended December 31, ----------------------------------------------------------------------------------- 2017 2016 2015 -------------------------- -------------------------- --------------------------- Other Other Other Pension Postretirement Pension Postretirement Pension Postretirement Benefits Benefits Benefits Benefits Benefits Benefits --------- --------------- --------- --------------- ---------- --------------- (In millions) Net periodic benefit costs: Service costs........................... $ 169 $ 6 $ 203 $ 9 $ 217 $ 15 Interest costs.......................... 415 75 415 82 404 88 Settlement and curtailment costs (1).... 3 2 1 30 -- -- Expected return on plan assets.......... (509) (72) (527) (74) (538) (80) Amortization of net actuarial (gains) losses................................. 189 -- 188 10 190 43 Amortization of prior service costs (credit)............................... (1) (22) (1) (6) (1) (3) Allocated to affiliates................. (48) 1 (64) (9) (59) (18) --------- --------------- --------- --------------- ---------- --------------- Total net periodic benefit costs (credit)............................. 218 (10) 215 42 213 45 --------- --------------- --------- --------------- ---------- --------------- Other changes in plan assets and benefit obligations recognized in OCI: Net actuarial (gains) losses............ 181 (148) 176 (121) 50 (156) Prior service costs (credit)............ -- -- (11) (40) -- (7) Dispositions (2)........................ -- -- (32) 2 -- -- Amortization of net actuarial (gains) losses................................. (189) -- (188) (10) (190) (43) Amortization of prior service (costs) credit................................. 1 22 1 6 1 3 --------- --------------- --------- --------------- ---------- --------------- Total recognized in OCI................ (7) (126) (54) (163) (139) (203) --------- --------------- --------- --------------- ---------- --------------- Total recognized in net periodic benefit costs and OCI................ $ 211 $ (136) $ 161 $(121) $ 74 $ (158) ========= =============== ========= =============== ========== ===============
-------- (1) The Company recognized curtailment charges in 2016 on certain postretirement benefit plans in connection with the U.S. Retail Advisor Force Divestiture See Note 18. (2) See Note 3. The estimated net actuarial (gains) losses and prior service costs (credit) for the defined benefit pension plans and other postretirement benefit plans that will be amortized from AOCI into net periodic benefit costs over the next year are $171 million and ($1) million, and ($6) million and ($19) million, respectively. 122 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Assumptions Assumptions used in determining benefit obligations were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- December 31, 2017 Weighted average discount rate..... 3.65% 3.70% Rate of compensation increase...... 2.25% - 8.50% N/A December 31, 2016 Weighted average discount rate..... 4.30% 4.45% Rate of compensation increase...... 2.25% - 8.50% N/A
Assumptions used in determining net periodic benefit costs were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- Year Ended December 31, 2017 Weighted average discount rate.......................... 4.30% 4.45% Weighted average expected rate of return on plan assets. 6.00% 5.36% Rate of compensation increase........................... 2.25% - 8.50% N/A Year Ended December 31, 2016 Weighted average discount rate.......................... 4.13% 4.37% Weighted average expected rate of return on plan assets. 6.00% 5.53% Rate of compensation increase........................... 2.25% - 8.50% N/A Year Ended December 31, 2015 Weighted average discount rate.......................... 4.10% 4.10% Weighted average expected rate of return on plan assets. 6.25% 5.70% Rate of compensation increase........................... 2.25% - 8.50% N/A
The weighted average discount rate is determined annually based on the yield, measured on a yield to worst basis, of a hypothetical portfolio constructed of high quality debt instruments available on the valuation date, which would provide the necessary future cash flows to pay the aggregate PBO when due. The weighted average expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long-term historical returns of the plan assets by sector, adjusted for the Company's long-term expectations on the performance of the markets. While the precise expected rate of return derived using this approach will fluctuate from year to year, the Company's policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. The weighted average expected rate of return on plan assets for use in that plan's valuation in 2018 is currently anticipated to be 5.75% for pension benefits and 5.11% for other postretirement benefits. 123 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
December 31, --------------------------------------------- 2017 2016 ---------------------- ---------------------- Before Age 65 and Before Age 65 and Age 65 older Age 65 older --------- ------------ --------- ------------ Following year............................................. 5.6% 6.6% 6.8% 13% Ultimate rate to which cost increase is assumed to decline. 4.0% 4.3% 4.0% 4.3% Year in which the ultimate trend rate is reached........... 2086 2098 2077 2092
Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A 1% change in assumed healthcare costs trend rates would have the following effects as of December 31, 2017:
One Percent One Percent Increase Decrease ------------- ------------- (In millions) Effect on total of service and interest costs components. $ 9 $ (8) Effect of accumulated postretirement benefit obligations. $ 186 $ (154)
Plan Assets The Company provides MetLife employees with benefits under various Employee Retirement Income Security Act of 1974 ("ERISA") benefit plans. These include qualified pension plans, postretirement medical plans and certain retiree life insurance coverage. The assets of the Company's qualified pension plans are held in an insurance group annuity contract, and the vast majority of the assets of the postretirement medical plan and backing the retiree life coverage are held in a trust which largely utilizes insurance contracts to hold the assets. All of these contracts are issued by the Company, and the assets under the contracts are held in insurance separate accounts that have been established by the Company. The underlying assets of the separate accounts are principally comprised of cash and cash equivalents, short-term investments, fixed maturity and equity securities, derivatives, real estate, private equity investments and hedge fund investments. The insurance contract provider engages investment management firms ("Managers") to serve as sub-advisors for the separate accounts based on the specific investment needs and requests identified by the plan fiduciary. These Managers have portfolio management discretion over the purchasing and selling of securities and other investment assets pursuant to the respective investment management agreements and guidelines established for each insurance separate account. The assets of the qualified pension plans and postretirement medical plans (the "Invested Plans") are well diversified across multiple asset categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given asset category or with any of the given Managers. 124 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with investment policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters. Specifically, investment policies are oriented toward (i) maximizing the Invested Plan's funded status; (ii) minimizing the volatility of the Invested Plan's funded status; (iii) generating asset returns that exceed liability increases; and (iv) targeting rates of return in excess of a custom benchmark and industry standards over appropriate reference time periods. These goals are expected to be met through identifying appropriate and diversified asset classes and allocations, ensuring adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and managing the Invested Plan's investments. Independent investment consultants are periodically used to evaluate the investment risk of the Invested Plan's assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and management strategies and recommend asset allocations. Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of an asset or asset class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an asset, asset class, interest rates or any other financial variable. Derivatives are also prohibited for use in creating exposures to securities, currencies, indices or any other financial variable that is otherwise restricted. The table below summarizes the actual weighted average allocation of the estimated fair value of total plan assets by asset class at December 31 for the years indicated and the approved target allocation by major asset class at December 31, 2017 for the Invested Plans:
December 31, --------------------------------------------------------------------------------- 2017 2016 ----------------------------------------- --------------------------------------- Other Postretirement Other Postretirement Pension Benefits Benefits (1) Pension Benefits Benefits (1) -------------------- -------------------- ------------------ -------------------- Actual Actual Actual Actual Target Allocation Target Allocation Allocation Allocation -------- ----------- -------- ----------- ------------------ -------------------- Asset Class Fixed maturity securities 82% 82% 85% 84% 81% 76% Equity securities (2).... 10% 10% 15% 15% 11% 24% Alternative securities (3).......... 8% 8% --% 1% 8% --% ----------- ----------- ------------------ -------------------- Total assets............ 100% 100% 100% 100% =========== =========== ================== ====================
-------- (1) Other postretirement benefits do not reflect postretirement life insurance plan assets invested in fixed maturity securities. (2) Equity securities percentage includes derivative assets. (3) Alternative securities primarily include hedge, private equity and real estate funds. Estimated Fair Value The pension and other postretirement benefit plan assets are categorized into a three-level fair value hierarchy, as described in Note 10, based upon the significant input with the lowest level in its valuation. The Level 2 asset category includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The estimated fair value of such separate accounts is based upon reported NAV provided by fund managers and this value represents the amount at which transfers into and out of the respective separate account are effected. These separate accounts provide reasonable levels of price transparency and can be corroborated through observable market data. Directly held investments are primarily invested in U.S. and foreign government and corporate securities. The Level 3 asset category includes separate accounts that are invested in assets that provide little or no price transparency due to the infrequency with which the underlying assets trade and generally require additional time to liquidate in an orderly manner. Accordingly, the values for separate accounts invested in these alternative asset classes are based on inputs that cannot be readily derived from or corroborated by observable market data. 125 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The pension and other postretirement plan assets measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are summarized as follows:
December 31, 2017 ----------------------------------------------------------------------------------- Pension Benefits Other Postretirement Benefits ----------------------------------------- ----------------------------------------- Fair Value Hierarchy Fair Value Hierarchy ----------------------------- ----------------------------- Total Total Estimated Estimated Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Fair Value --------- --------- --------- ----------- --------- --------- --------- ----------- (In millions) Assets Fixed maturity securities: Corporate......................... $ -- $ 3,726 $ 1 $ 3,727 $ 20 $ 362 $ -- $ 382 U.S. government bonds............. 1,256 528 -- 1,784 269 6 -- 275 Foreign bonds..................... -- 937 -- 937 -- 94 -- 94 Federal agencies.................. 35 134 -- 169 -- 17 -- 17 Municipals........................ -- 335 -- 335 -- 28 -- 28 Short-term investments............ 135 192 -- 327 8 391 -- 399 Other (1)......................... 7 383 9 399 -- 68 -- 68 --------- --------- --------- ----------- --------- --------- --------- ----------- Total fixed maturity securities. 1,433 6,235 10 7,678 297 966 -- 1,263 --------- --------- --------- ----------- --------- --------- --------- ----------- Equity securities: Common stock - domestic........... 480 91 -- 571 80 -- -- 80 Common stock - foreign............ 317 -- 3 320 73 -- -- 73 --------- --------- --------- ----------- --------- --------- --------- ----------- Total equity securities......... 797 91 3 891 153 -- -- 153 --------- --------- --------- ----------- --------- --------- --------- ----------- Other investments................. -- 144 622 766 -- 9 -- 9 Derivative assets................. 33 2 1 36 1 -- -- 1 --------- --------- --------- ----------- --------- --------- --------- ----------- Total assets.................... $ 2,263 $ 6,472 $ 636 $ 9,371 $ 451 $ 975 $ -- $ 1,426 ========= ========= ========= =========== ========= ========= ========= ===========
126 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued)
December 31, 2016 ------------------------------------------------------------------------------------ Pension Benefits Other Postretirement Benefits ------------------------------------------ ----------------------------------------- Fair Value Hierarchy Fair Value Hierarchy ------------------------------ ----------------------------- Total Total Estimated Estimated Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Fair Value --------- --------- --------- ----------- --------- --------- --------- ----------- (In millions) Assets Fixed maturity securities: Corporate......................... $ -- $ 3,406 $ -- $ 3,406 $ 20 $ 305 $ -- $ 325 U.S. government bonds............. 1,655 4 -- 1,659 210 1 -- 211 Foreign bonds..................... -- 775 -- 775 -- 72 -- 72 Federal agencies.................. -- 196 -- 196 -- 28 -- 28 Municipals........................ -- 313 -- 313 -- 23 -- 23 Short-term investments............ 118 212 -- 330 13 416 -- 429 Other (1)......................... -- 362 9 371 -- 55 -- 55 --------- --------- --------- ----------- --------- --------- --------- ----------- Total fixed maturity securities. 1,773 5,268 9 7,050 243 900 -- 1,143 --------- --------- --------- ----------- --------- --------- --------- ----------- Equity securities: Common stock - domestic........... 474 -- -- 474 113 -- -- 113 Common stock - foreign............ 380 -- -- 380 122 -- -- 122 --------- --------- --------- ----------- --------- --------- --------- ----------- Total equity securities......... 854 -- -- 854 235 -- -- 235 --------- --------- --------- ----------- --------- --------- --------- ----------- Other investments................. -- 105 634 739 -- -- -- -- Derivative assets................. 16 (2) 64 78 1 -- -- 1 --------- --------- --------- ----------- --------- --------- --------- ----------- Total assets.................... $ 2,643 $ 5,371 $ 707 $ 8,721 $ 479 $ 900 $ -- $ 1,379 ========= ========= ========= =========== ========= ========= ========= ===========
------------- (1) Other primarily includes money market securities, mortgage-backed securities, collateralized mortgage obligations and ABS. 127 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs was as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) -------------------------------------------------------------------- Pension Benefits -------------------------------------------------------------------- Equity Fixed Maturity Securities Securities ------------------------------ ---------- Common Foreign Stock - Other Derivative Corporate Bonds Other (1) Foreign Investments Assets ---------- -------- ---------- ---------- ------------- ------------ (In millions) Balance, January 1, 2016......................... $ 78 $ 17 $ 7 $ -- $ 722 $ 75 Realized gains (losses).......................... 3 -- -- -- (1) 3 Unrealized gains (losses)........................ 3 (4) 1 -- 32 (18) Purchases, sales, issuances and settlements, net. (22) (3) -- -- (119) 6 Transfers into and/or out of Level 3............. (62) (10) 1 -- -- (2) ---------- -------- ---------- ---------- ------------- ------------ Balance, December 31, 2016....................... $ -- $ -- $ 9 $ -- $ 634 $ 64 Realized gains (losses).......................... (10) -- -- 2 -- (22) Unrealized gains (losses)........................ 10 -- -- -- (12) 6 Purchases, sales, issuances and settlements, net. -- -- 7 (4) -- (47) Transfers into and/or out of Level 3............. 1 -- (7) 5 -- -- ---------- -------- ---------- ---------- ------------- ------------ Balance, December 31, 2017....................... $ 1 $ -- $ 9 $ 3 $ 622 $ 1 ========== ======== ========== ========== ============= ============
-------- (1) Other includes ABS and collateralized mortgage obligations. For the years ended December 31, 2017 and 2016, there were no other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs. Expected Future Contributions and Benefit Payments It is the Company's practice to make contributions to the qualified pension plan to comply with minimum funding requirements of ERISA. In accordance with such practice, no contributions are required for 2018. The Company expects to make discretionary contributions to the qualified pension plan of $150 million in 2018. For information on employer contributions, see "-- Obligations and Funded Status." Benefit payments due under the nonqualified pension plans are primarily funded from the Company's general assets as they become due under the provision of the plans, therefore benefit payments equal employer contributions. The Company expects to make contributions of $70 million to fund the benefit payments in 2018. Postretirement benefits are either: (i) not vested under law; (ii) a non-funded obligation of the Company; or (iii) both. Current regulations do not require funding for these benefits. The Company uses its general assets, net of participant's contributions, to pay postretirement medical claims as they come due. As permitted under the terms of the governing trust document, the Company may be reimbursed from plan assets for postretirement medical claims paid from their general assets. The Company expects to make contributions of $50 million towards benefit obligations in 2018 to pay postretirement medical claims. 128 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Gross benefit payments for the next 10 years, which reflect expected future service where appropriate, are expected to be as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- (In millions) 2018..................... $ 562 $ 85 2019..................... $ 571 $ 88 2020..................... $ 587 $ 88 2021..................... $ 591 $ 87 2022..................... $ 606 $ 88 2023-2027................ $ 3,227 $ 443
Additional Information As previously discussed, most of the assets of the pension benefit plans are held in a group annuity contract issued by the Company while some of the assets of the postretirement benefit plans are held in a trust which largely utilizes life insurance contracts issued by the Company to hold such assets. Total revenues from these contracts recognized on the consolidated statements of operations were $56 million, $57 million and $55 million for the years ended December 31, 2017, 2016 and 2015, respectively, and included policy charges and net investment income from investments backing the contracts and administrative fees. Total investment income (loss), including realized and unrealized gains (losses), credited to the account balances was $1.1 billion, $660 million and ($130) million for the years ended December 31, 2017, 2016 and 2015, respectively. The terms of these contracts are consistent in all material respects with those the Company offers to unaffiliated parties that are similarly situated. Defined Contribution Plans The Company sponsors defined contribution plans for substantially all MetLife employees under which a portion of employee contributions are matched. The Company contributed $65 million, $73 million and $72 million for the years ended December 31, 2017, 2016 and 2015, respectively. 15. Income Tax On December 22, 2017, President Trump signed into law U.S. Tax Reform. U.S. Tax Reform includes numerous changes in tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%, which took effect for taxable years beginning on or after January 1, 2018. U.S. Tax Reform moves the United States from a worldwide tax system to a participation exemption system by providing corporations a 100% dividends received deduction ("DRD") for dividends distributed by a controlled foreign corporation. To transition to that new system, U.S. Tax Reform imposes a one-time deemed repatriation tax on unremitted earnings and profits at a rate of 8.0% for illiquid assets and 15.5% for cash and cash equivalents. 129 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The incremental financial statement impact related to U.S. Tax Reform was as follows:
U.S. Tax Reform --------------- (In millions) Income (loss) before provision for income tax...................................... $ (66) Provision for income tax expense (benefit): Deferred tax revaluation........................................................... (1,112) --------------- Total provision for income tax expense (benefit).................................. (1,112) --------------- Income (loss), net of income tax................................................... 1,046 Income tax (expense) benefit related to items of other comprehensive income (loss). 133 --------------- Increase to net equity from U.S. Tax Reform........................................ $ 1,179 ===============
In accordance with SAB 118 issued by the U.S. Securities and Exchange Commission ("SEC") in December 2017, the Company has recorded provisional amounts for certain items for which the income tax accounting is not complete. For these items, the Company has recorded a reasonable estimate of the tax effects of U.S. Tax Reform. The estimates will be reported as provisional amounts during a measurement period, which will not exceed one year from the date of enactment of U.S. Tax Reform. The Company may reflect adjustments to its provisional amounts upon obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of the enactment date that, if known, would have affected the income tax effects initially reported as provisional amounts. The following items are considered provisional estimates due to complexities and ambiguities in U.S. Tax Reform which resulted in incomplete accounting for the tax effects of these provisions. Further guidance, either legislative or interpretive, and analysis will be required to complete the accounting for these items: . Deemed Repatriation Transition Tax - The Company has recorded a $1 million charge for this item. . Global Intangible Low-Tax Income - U.S. Tax Reform imposes a minimum tax on global intangible low-tax income, which is generally the excess income of foreign subsidiaries over a 10% rate of routine return on tangible business assets. The Company has not yet formally adopted an accounting policy for this item. For the year ended December 31, 2017, the Company did not record a tax charge and tax incurred in future periods related to global intangible low-tax income will be recorded in the period incurred. . Compensation and Fringe Benefits - U.S. Tax Reform limits certain employer deductions for fringe benefit and related expenses and also repeals the exception allowing the deduction of certain performance-based compensation paid to certain senior executives. The Company has recorded an $8 million tax charge, included within the deferred tax revaluation. . Alternative Minimum Tax Credits - U.S. Tax Reform eliminates the corporate alternative minimum tax and allows for minimum tax credit carryforwards to be used to offset future regular tax or to be refunded over the next few years. However, pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued for corporations claiming refundable prior year alternative minimum tax credits are subject to a sequestration rate of 6.6%. The application of this fee to refunds in future years is subject to further guidance. Additionally, the sequestration reduction rate in effect at the time is subject to uncertainty. The Company has recorded a $7 million tax charge included within the deferred tax revaluation. . Tax Credit Partnerships - Certain tax credit partnership investments derive returns in part from income tax credits. The Company recognizes changes in tax attributes at the partnership level when reported by the investee in its financial information. U.S. Tax Reform may impact the tax attributes of tax credit partnerships. However, investee financial information is not yet available to enable the Company to determine the impacts of U.S. Tax Reform. Accordingly, the Company has applied prior law to these equity method investments in accordance with SAB 118. During the one year measurement period under SAB 118, the impacts of U.S. Tax Reform will be recognized as the investee financial information is made available. 130 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The provision for income tax was as follows:
Years Ended December 31, ------------------------- 2017 2016 2015 -------- ------ ------- (In millions) Current: Federal..................................... $ 1,511 $ 675 $1,384 State and local............................. 4 5 20 Foreign..................................... 14 40 36 -------- ------ ------- Subtotal................................... 1,529 720 1,440 -------- ------ ------- Deferred: Federal..................................... (2,099) (539) 296 Foreign..................................... 9 18 27 -------- ------ ------- Subtotal................................... (2,090) (521) 323 -------- ------ ------- Provision for income tax expense (benefit). $ (561) $ 199 $1,763 ======== ====== =======
The Company's income (loss) before income tax expense (benefit) from domestic and foreign operations was as follows:
Years Ended December 31, -------------------------- 2017 2016 2015 -------- ------- ------- (In millions) Income (loss): Domestic....... $ 4,045 $2,379 $4,409 Foreign........ (1,079) (438) 72 -------- ------- ------- Total......... $ 2,966 $1,941 $4,481 ======== ======= =======
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported was as follows:
Years Ended December 31, ------------------------- 2017 2016 2015 -------- ------ ------- (In millions) Tax provision at U.S. statutory rate........ $ 1,039 $ 679 $1,569 Tax effect of: Dividend received deduction................. (65) (79) (82) Tax-exempt income........................... (49) (38) (24) Prior year tax (1).......................... (29) (33) 558 Low income housing tax credits.............. (278) (270) (221) Other tax credits........................... (101) (98) (68) Foreign tax rate differential............... -- 1 (4) Change in valuation allowance............... -- (1) (1) U.S. Tax Reform impact (2).................. (1,089) -- -- Other, net.................................. 11 38 36 -------- ------ ------- Provision for income tax expense (benefit). $ (561) $ 199 $1,763 ======== ====== =======
-------- 131 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) (1) As discussed further below, for the year ended December 31, 2015, prior year tax includes a $557 million non-cash charge related to an uncertain tax position. (2) U.S. Tax Reform impact of ($1.1) billion excludes ($23) million of tax provision at the U.S. statutory rate for a total tax reform benefit of ($1.1) billion. Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:
December 31, ------------------ 2017 2016 -------- -------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables..... $ 1,361 $ 292 Net operating loss carryforwards............. 23 27 Employee benefits............................ 595 828 Tax credit carryforwards..................... 1,127 947 Litigation-related and government mandated... 117 212 Other........................................ 437 460 -------- -------- Total gross deferred income tax assets..... 3,660 2,766 Less: Valuation allowance.................... 20 20 -------- -------- Total net deferred income tax assets....... 3,640 2,746 -------- -------- Deferred income tax liabilities: Investments, including derivatives........... 1,989 1,234 Intangibles.................................. 32 53 DAC.......................................... 673 1,150 Net unrealized investment gains.............. 2,313 2,693 Other........................................ 2 1 -------- -------- Total deferred income tax liabilities...... 5,009 5,131 -------- -------- Net deferred income tax asset (liability).. $(1,369) $(2,385) ======== ========
The Company has not recorded an additional valuation allowance benefit or charge related to certain state net operating loss carryforwards for the year ended December 31, 2017. The valuation allowance reflects management's assessment, based on available information, that it is more likely than not that the deferred income tax asset for certain state net operating loss carryforwards will not be realized. The tax benefit will be recognized when management believes that it is more likely than not that these deferred income tax assets are realizable. 132 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The following table sets forth the domestic and state net operating loss carryforwards for tax purposes at December 31, 2017.
Net Operating Loss Carryforwards -------------------------------- Domestic State -------- ----- (In millions) Expiration: 2018-2022... $-- $ 49 2023-2027... -- 64 2028-2032... -- 13 2033-2037... 12 2 Indefinite.. -- -- -------- ----- $12 $128 == ===
The following table sets forth the general business credits, foreign tax credits, and other credit carryforwards for tax purposes at December 31, 2017.
Tax Credit Carryforwards ------------------------------------------ General Business Credits Foreign Tax Credits Other ---------------- ------------------- ----- (In millions) Expiration: 2018-2022... $ -- $10 $ -- 2023-2027... -- 88 -- 2028-2032... 232 -- -- 2033-2037... 832 -- -- Indefinite.. -- -- 194 ---------------- ------------------- ----- $1,064 $98 $194 ================ =================== =====
The Company participates in a tax sharing agreement with MetLife, Inc., as described in Note 1. Pursuant to this tax sharing agreement, the amounts due from affiliates included $203 million and $60 million for the years ended December 31, 2017 and 2016, respectively. The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the Internal Revenue Service ("IRS") and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state, or local income tax examinations for years prior to 2007, except for i) 2000 through 2002 where the IRS disallowance relates to certain tax credits claimed, for which in April 2015, the Company received a Statutory Notice of Deficiency (the "Notice") and paid the tax thereon in September 2015 (see note (1) below); and ii) 2003 through 2006, where the IRS disallowance relates predominantly to certain tax credits claimed and the Company is engaged with IRS Appeals. Management believes it has established adequate tax liabilities and final resolution for the years 2000 through 2006 is not expected to have a material impact on the Company's consolidated financial statements. The IRS audit cycle for the years 2007-2009, which began in December of 2015, is scheduled to conclude in 2018. 133 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The Company's liability for unrecognized tax benefits may increase or decrease in the next 12 months. For example, federal tax legislation could impact unrecognized tax benefits. A reasonable estimate of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
Years Ended December 31, --------------------------------------------- 2017 2016 2015 ------------- ------------- --------------- (In millions) Balance at January 1,......................................................... $ 931 $ 1,075 $ 546 Additions for tax positions of prior years (1)................................ -- 7 558 Reductions for tax positions of prior years (2)............................... (38) (109) -- Additions for tax positions of current year................................... 4 6 4 Reductions for tax positions of current year.................................. (1) -- -- Settlements with tax authorities.............................................. (6) (48) (33) ------------- ------------- --------------- Balance at December 31,....................................................... $ 890 $ 931 $ 1,075 ============= ============= =============== Unrecognized tax benefits that, if recognized would impact the effective rate. $ 890 $ 931 $ 1,060 ============= ============= ===============
-------- (1) The significant increase in 2015 is related to a non-cash charge the Company recorded to net income of $792 million, net of tax. The charge was related to an uncertain tax position and was comprised of a $557 million charge included in provision for income tax expense (benefit) and a $362 million ($235 million, net of tax) charge included in other expenses. This charge is the result of the Company's consideration of certain decisions of the U.S. Court of Appeals for the Second Circuit upholding the disallowance of foreign tax credits claimed by other corporate entities not affiliated with the Company. The Company's action relates to tax years from 2000 to 2009, during which MLIC held non-U.S. investments in support of its life insurance business through a United Kingdom investment subsidiary that was structured as a joint venture at the time. (2) Included for 2016 is the impact of the dividend by Metropolitan Life Insurance Company of all of the issued and outstanding shares of common stock of each of NELICO and GALIC to MetLife, Inc. The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while penalties are included in income tax expense. Interest was as follows:
Years Ended December 31, -------------------------------- 2017 2016 2015 --------- ---------- ---------- (In millions) Interest recognized on the consolidated statements of operations (1)...... $ 47 $ (33) $ 382 December 31, ---------------------- 2017 2016 ---------- ---------- (In millions) Interest included in other liabilities on the consolidated balance sheets. $ 653 $ 606
-------- (1) The significant increase in 2015 is related to the non-cash charge discussed above. 134 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The Company had no penalties for the years ended December 31, 2017, 2016 and 2015. There has been no change in the Company's position on the disallowance of its foreign tax credits by the IRS. The Company continues to contest the disallowance of these foreign tax credits by the IRS as management believes the facts strongly support the Company's position. The Company will defend its position vigorously and does not expect any additional charges related to this matter. Also related to the aforementioned foreign tax credit matter, on April 9, 2015, the IRS issued the Notice to the Company. The Notice asserted that the Company owes additional taxes and interest for 2000 through 2002 primarily due to the disallowance of foreign tax credits. The transactions that are the subject of the Notice continue through 2009, and it is likely that the IRS will seek to challenge these later periods. On September 18, 2015, the Company paid the assessed tax and interest of $444 million for 2000 through 2002. On November 19, 2015, $9 million of this amount was refunded from the IRS as an overpayment of interest. On May 30, 2017, the Company filed a claim for refund with the IRS for the remaining tax and interest. Prior to U.S. Tax Reform, the DRD related to variable life insurance and annuity contracts was generally based on a company specific percentage referred to as the company's share. The calculation of this amount was subject to significant dispute between taxpayers and the IRS. U.S. Tax Reform eliminated this dispute by fixing the calculation to a specific percentage subsequent to 2017. For the years ended December 31, 2017, 2016 and 2015, the Company recognized an income tax benefit of $60 million, $75 million and $76 million, respectively, related to the separate account DRD. The 2017 benefit included an expense of $1 million related to a true-up of the 2016 tax return. 16. 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, at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will 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 reasonably estimated at December 31, 2017. 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 to management, management does not believe any such charges are likely to have a material effect on the Company's financial position. 135 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) 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, the Company has not made an accrual. As of December 31, 2017, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $325 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 Metropolitan Life Insurance Company 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. Metropolitan Life Insurance Company has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company's employees during the period from the 1920's through approximately the 1950's and allege that Metropolitan Life Insurance Company 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. Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company. Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life Insurance Company's defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company'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 Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company's motions. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials. 136 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) The approximate total number of asbestos personal injury claims pending against Metropolitan Life Insurance Company as of the dates indicated, the approximate number of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos personal injury claims at or during those years are set forth in the following table:
December 31, -------------------------------------------- 2017 2016 2015 -------------- -------------- -------------- (In millions, except number of claims) Asbestos personal injury claims at year end. 62,930 67,223 67,787 Number of new claims during the year........ 3,514 4,146 3,856 Settlement payments during the year (1)..... $ 48.6 $ 50.2 $ 56.1
-------- (1) Settlement payments represent payments made by Metropolitan Life Insurance Company during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life Insurance Company's attorneys' fees and expenses. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company 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. 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 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. Metropolitan Life Insurance Company'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 Metropolitan Life Insurance Company, including claims settled but not yet paid; (ii) the probable and reasonably estimable liability for asbestos claims not yet asserted against Metropolitan Life Insurance Company, but which Metropolitan Life Insurance Company believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life Insurance Company'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. 137 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Metropolitan Life Insurance Company 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 United States, 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, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through December 31, 2017. Metropolitan Life Insurance Company increased its recorded liability for asbestos-related claims to $551 million at December 31, 2017. Regulatory Matters The Company receives and responds to subpoenas or other inquiries seeking a broad range of information 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"). The issues involved in information requests and regulatory matters vary widely. The Company cooperates in these inquiries. In the Matter of Chemform, Inc. Site, Pompano Beach, Broward County, Florida In July 2010, the Environmental Protection Agency ("EPA") advised Metropolitan Life Insurance Company 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 Metropolitan Life Insurance Company (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. In September 2012, the EPA, Metropolitan Life Insurance Company and the third party executed an Administrative Order on Consent under which Metropolitan Life Insurance Company and the third party agreed to be responsible for certain environmental testing at the Chemform Site. The EPA may seek additional costs if the environmental testing identifies issues. The EPA and Metropolitan Life Insurance Company have reached a settlement in principal on the EPA's claim for past costs. The Company estimates that the aggregate cost to resolve this matter, including the settlement for claims of past costs and the costs of environmental testing, will not exceed $300 thousand. Sales Practices Regulatory Matters. Regulatory authorities in a 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 Metropolitan Life Insurance Company. 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. Unclaimed Property Litigation Alleging that MetLife, Inc., Metropolitan Life Insurance Company, and several other insurance companies violated the New York False Claims Act (the "Act") by filing false unclaimed property reports from 1986 to 2017 with New York to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualization in the late 1990s, Total Asset Recovery Services ("The Relator") has brought an action under the qui tam provision of the Act on behalf of itself and New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator seeks treble damages and other relief. The Company intends to defend this action vigorously. Total Control Accounts Litigation Metropolitan Life Insurance Company is a defendant in a lawsuit related to its use of retained asset accounts, known as TCAs, as a settlement option for death benefits. 138 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Owens v. Metropolitan Life Insurance Company (N.D. Ga., filed April 17, 2014) Plaintiff filed this class action lawsuit on behalf of all persons for whom Metropolitan Life Insurance Company established a TCA, to pay death benefits under an ERISA plan. The action alleges that Metropolitan Life Insurance Company's use of the TCA as the settlement option for life insurance benefits under some group life insurance policies violates Metropolitan Life Insurance Company's fiduciary duties under ERISA. As damages, plaintiff seeks disgorgement of profits that Metropolitan Life Insurance Company realized on accounts owned by members of the class. In addition, plaintiff, on behalf of a subgroup of the class, seeks interest under Georgia's delayed settlement interest statute, alleging that the use of the TCA as the settlement option did not constitute payment. On September 27, 2016, the court denied Metropolitan Life Insurance Company's summary judgment motion in full and granted plaintiff's partial summary judgment motion. On September 29, 2017, the court certified a nationwide class. The court also certified a Georgia subclass. The Company intends to defend this action vigorously. Inquiries into Pension Benefits The Company informed its primary state regulator, the New York State Department of Financial Services ("NYDFS"), about its practices in connection with the payment of certain pension benefits to annuitants and related matters. The NYDFS is examining the issue. The Division of Enforcement of the SEC is also investigating this matter and several additional regulators, including, but not limited to, the Massachusetts Securities Division, have made inquiries into these practices, including as to related disclosures. It is possible that other jurisdictions may pursue similar investigations or inquiries. On February 13, 2018, the Company announced that in connection with a review of practices and procedures used to estimate reserves related to certain RIS group annuitants who have been unresponsive or missing over time, the Company had identified a material weakness in its internal control over financial reporting related to certain RIS group annuity reserves. In conjunction with the material weakness, the Company increased reserves by $510 million pre-tax to reinstate reserves previously released, and to reflect accrued interest and other related liabilities. See Note 1. The Company is exposed to regulatory investigations, and could be exposed to additional legal actions. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, ERISA, or other laws or regulations. The Company could incur significant costs in connection with these actions. The Company's increase in reserves does not reflect, and the Company has not recorded an accrual for, any such potential amounts. An estimate of the possible loss or range of loss cannot be made at this time. Other Litigation Sun Life Assurance Company of Canada Indemnity Claim In 2006, Sun Life Assurance Company of Canada ("Sun Life"), as successor to the purchaser of Metropolitan Life Insurance Company's Canadian operations, filed a lawsuit in Toronto, seeking a declaration that Metropolitan Life Insurance Company remains liable for "market conduct claims" related to certain individual life insurance policies sold by Metropolitan Life Insurance Company that were subsequently transferred to Sun Life. 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 Metropolitan Life Insurance Company's motion for summary judgment. Both parties agreed to consider the indemnity claim through arbitration. In September 2010, Sun Life notified Metropolitan Life Insurance Company that a purported class action lawsuit was filed against Sun Life in Toronto alleging sales practices claims regarding the policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. On August 30, 2011, Sun Life notified Metropolitan Life Insurance Company that another purported class action lawsuit was filed against Sun Life in Vancouver, BC alleging sales practices claims regarding certain of the same policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. Sun Life contends that Metropolitan Life Insurance Company is obligated to indemnify Sun Life for some or all of the claims in these lawsuits. These sales practices cases against Sun Life are ongoing. 139 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Voshall v. Metropolitan Life Insurance Company (Superior Court of the State of California, County of Los Angeles, April 8, 2015) Plaintiff filed this putative class action lawsuit on behalf of himself and all persons covered under a long-term group disability income insurance policy issued by Metropolitan Life Insurance Company to public entities in California between April 8, 2011 and April 8, 2015. Plaintiff alleges that Metropolitan Life Insurance Company improperly reduced benefits by including cost of living adjustments and employee paid contributions in the employer retirement benefits and other income that reduces the benefit payable under such policies. Plaintiff asserts causes of action for declaratory relief, violation of the California Business & Professions Code, breach of contract and breach of the implied covenant of good faith and fair dealing. The Company intends to defend this action vigorously. Martin v. Metropolitan Life Insurance Company (Superior Court of the State of California, County of Contra Costa, filed December 17, 2015) Plaintiffs filed this putative class action lawsuit on behalf of themselves and all California persons who have been charged compound interest by Metropolitan Life Insurance Company in life insurance policy and/or premium loan balances within the last four years. Plaintiffs allege that Metropolitan Life Insurance Company has engaged in a pattern and practice of charging compound interest on life insurance policy and premium loans without the borrower authorizing such compounding, and that this constitutes an unlawful business practice under California law. Plaintiffs assert causes of action for declaratory relief, violation of California's Unfair Competition Law and Usury Law, and unjust enrichment. Plaintiffs seek declaratory and injunctive relief, restitution of interest, and damages in an unspecified amount. On April 12, 2016, the court granted Metropolitan Life Insurance Company's motion to dismiss. Plaintiffs have appealed this ruling. Lau v. Metropolitan Life Insurance Company (S.D.N.Y. filed, December 3, 2015) This putative class action lawsuit was filed by a single defined contribution plan participant on behalf of all ERISA plans whose assets were invested in Metropolitan Life Insurance Company's "Group Annuity Contract Stable Value Funds" within the past six years. The suit alleges breaches of fiduciary duty under ERISA and challenges the "spread" with respect to the stable value fund group annuity products sold to retirement plans. The allegations focus on the methodology Metropolitan Life Insurance Company uses to establish and reset the crediting rate, the terms under which plan participants are permitted to transfer funds from a stable value option to another investment option, the procedures followed if an employer terminates a contract, and the level of disclosure provided. Plaintiff seeks declaratory and injunctive relief, as well as damages in an unspecified amount. The parties have settled and the court has dismissed the action. Newman v. Metropolitan Life Insurance Company (N.D. Ill., filed March 23, 2016) Plaintiff filed this putative class action alleging causes of action for breach of contract, fraud, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, based on Metropolitan Life Insurance Company's class-wide increase in premiums charged for long-term care insurance policies. Plaintiff alleges a class consisting of herself and all persons over age 65 who selected a Reduced Pay at Age 65 payment feature and whose premium rates were increased after age 65. Plaintiff asserts that premiums could not be increased for these class members and/or that marketing material was misleading as to Metropolitan Life Insurance Company's right to increase premiums. Plaintiff seeks unspecified compensatory, statutory and punitive damages as well as recessionary and injunctive relief. On April 12, 2017, the court granted Metropolitan Life Insurance Company's motion, dismissing the action with prejudice. Plaintiff appealed this ruling to the United States Court of Appeals for the Seventh Circuit and on February 6, 2018, the Seventh Circuit reversed and remanded for further proceedings, ruling that plaintiff is entitled to relief on her contract claim. Miller, et al. v. MetLife, Inc., et al. (C.D. Cal., filed April 7, 2017) Plaintiffs filed this putative class action against MetLife, Inc. and Metropolitan Life Insurance Company in the U.S. District Court for the Central District of California, purporting to assert claims on behalf of all persons who replaced their MetLife Optional Term Life or Group Universal Life policy with a Group Variable Universal Life policy wherein MetLife allegedly charged smoker rates for certain non-smokers. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On September 25, 2017, plaintiffs dismissed the action and refiled the complaint in U.S. District Court for the Southern District of New York. On November 9, 2017, plaintiffs dismissed MetLife, Inc. without prejudice from the action. Metropolitan Life Insurance Company intends to defend this action vigorously. 140 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017) Plaintiffs filed this putative class and collective action on behalf of themselves and all current and former long-term disability ("LTD") claims specialists between February 2011 and the present for alleged wage and hour violations under the Fair Labor Standards Act, the New York Labor Law, and the Connecticut Minimum Wage Act. The suit alleges that Metropolitan Life Insurance Company improperly reclassified the plaintiffs and similarly situated LTD claims specialists from non-exempt to exempt from overtime pay in November 2013. As a result, they and members of the putative class were no longer eligible for overtime pay even though they allege they continued to work more than 40 hours per week. The Company intends to defend this action vigorously. 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, other products or the misuse of client assets. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys' fees. The Company continues to defend vigorously 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. 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, investor 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 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 effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. 141 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Assets and liabilities held for insolvency assessments were as follows:
December 31, ------------------------- 2017 2016 ------------ ------------ (In millions) Other Assets: Premium tax offset for future discounted and undiscounted assessments.................... $ 51 $ 24 Premium tax offsets currently available for paid assessments............................ 49 32 ------------ ------------ Total....................................... $ 100 $ 56 ============ ============ Other Liabilities: Insolvency assessments....................... $ 66 $ 37 ============ ============
Commitments Leases The Company, as lessee, has entered into various lease and sublease agreements for office space, information technology, aircrafts and other equipment. Future minimum gross rental payments relating to these lease arrangements are as follows:
Amount --------------- (In millions) 2018.......................... $ 144 2019.......................... 130 2020.......................... 134 2021.......................... 132 2022.......................... 130 Thereafter.................... 673 --------------- Total........................ $ 1,343 ===============
In 2017, the Company assigned certain leases to an affiliate, effective January 1, 2018. The future minimum gross rental payments associated with those leases have been omitted from the above table. The Company, as assignor, remains liable under the leases to the extent that the affiliate, as assignee, cannot meet any obligations. Total minimum rental payments to be received in the future under non-cancelable subleases were $546 million as of December 31, 2017. Operating lease expense was $187 million, $204 million, and $191 million for the years ended December 31, 2017, 2016, and 2015, respectively. Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.3 billion and $3.9 billion at December 31, 2017 and 2016, respectively. Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $3.9 billion and $4.2 billion at December 31, 2017 and 2016, respectively. 142 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $127 million, with a cumulative maximum of $407 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company's recorded liabilities were $4 million and $5 million at December 31, 2017 and 2016, respectively, for indemnities, guarantees and commitments. 143 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Quarterly Results of Operations (Unaudited) The unaudited quarterly results of operations for 2017 and 2016 are summarized in the table below:
Three Months Ended -------------------------------------------------------------------------------------------------------- March 31, June 30, September 30, --------------------------------- --------------------------------- ---------------------------------- As As As Previously As Previously As Previously As Reported Revisions (1) Revised Reported Revisions (1) Revised Reported Revisions (1) Revised ---------- ------------- -------- ---------- ------------- -------- ---------- ------------- --------- (In millions) 2017 Total revenues...... $ 8,645 $ -- $ 8,645 $ 9,342 $ -- $ 9,342 $ 10,286 $ -- $ 10,286 Total expenses...... $ 7,972 $ 6 $ 7,978 $ 8,528 $ 6 $ 8,534 $ 9,356 $ 55 $ 9,411 Net income (loss)........ $ 551 $ (4) $ 547 $ 648 $ (4) $ 644 $ 743 $ (35) $ 708 Less: Net income (loss) attributable to noncontrolling interests..... $ 1 $ -- $ 1 $ 2 $ -- $ 2 $ 5 $ -- $ 5 Net income (loss) attributable to Metropolitan Life Insurance Company....... $ 550 $ (4) $ 546 $ 646 $ (4) $ 642 $ 738 $ (35) $ 703 2016 Total revenues...... $ 8,794 $ -- $ 8,794 $ 9,082 $ -- $ 9,082 $ 9,876 $ -- $ 9,876 Total expenses...... $ 8,196 $ 9 $ 8,205 $ 8,749 $ 4 $ 8,753 $ 9,123 $ 3 $ 9,126 Net income (loss)........ $ 496 $ (6) $ 490 $ 326 $ (3) $ 323 $ 630 $ (2) $ 628 Less: Net income (loss) attributable to noncontrolling interests..... $ -- $ -- $ -- $ (2) $ -- $ (2) $ (7) $ -- $ (7) Net income (loss) attributable to Metropolitan Life Insurance Company....... $ 496 $ (6) $ 490 $ 328 $ (3) $ 325 $ 637 $ (2) $ 635
---------------------------------- December 31, --------------------------------- As Previously As Reported Revisions (1) Revised ---------- ------------- -------- 2017 Total revenues...... $ 8,952 $ -- $ 8,952 Total expenses...... $ 8,336 $ -- $ 8,336 Net income (loss)........ $ 1,628 $ -- $ 1,628 Less: Net income (loss) attributable to noncontrolling interests..... $ (6) $ -- $ (6) Net income (loss) attributable to Metropolitan Life Insurance Company....... $ 1,634 $ -- $ 1,634 2016 Total revenues...... $ 8,738 $ -- $ 8,738 Total expenses...... $ 8,459 $ 6 $ 8,465 Net income (loss)........ $ 304 $ (3) $ 301 Less: Net income (loss) attributable to noncontrolling interests..... $ 1 $ -- $ 1 Net income (loss) attributable to Metropolitan Life Insurance Company....... $ 303 $ (3) $ 300
-------- (1) See Note 1 for information on prior period revisions. 144 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 18. Related Party Transactions Service Agreements The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include personnel, policy administrative functions and distribution services. For certain agreements, charges are based on various performance measures or activity-based costing. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual cost incurred by the Company and/or affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $2.2 billion, $2.1 billion and $2.1 billion for the years ended December 31, 2017, 2016 and 2015, respectively. Revenues received from affiliates related to these agreements, recorded in universal life and investment-type product policy fees, were $93 million, $138 million and $135 million for the years ended December 31, 2017, 2016 and 2015, respectively. Revenues received from affiliates related to these agreements, recorded in other revenues, were $141 million, $113 million and $151 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company also entered into agreements with affiliates to provide additional services necessary to conduct the affiliates' activities. Typical services provided under these agreements include management, policy administrative functions, investment advice and distribution services. Expenses incurred by the Company related to these agreements, included in other expenses, were $1.4 billion for the year ended December 31, 2017 and $1.5 billion for both of the years ended December 31, 2016, and 2015, and were reimbursed to the Company by these affiliates. The Company had net payables to affiliates, related to the items discussed above, of $205 million and $165 million at December 31, 2017 and 2016, respectively. See Notes 6, 8, 11, 12 and 14 for additional information on related party transactions. Sales Distribution Services In July 2016, MetLife, Inc. completed the U.S. Retail Advisor Force Divestiture. MassMutual assumed all of the liabilities related to such assets and that arise or occur after the closing of the sale. 145 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule I Consolidated Summary of Investments -- Other Than Investments in Related Parties December 31, 2017 (In millions)
Estimated Amount at Cost or Fair Which Shown on Amortized Cost (1) Value Balance Sheet Types of Investments ---------------------- -------------- -------------------- Fixed maturity securities: Bonds: U.S. government and agency securities........ $ 35,021 $ 38,545 $ 38,545 Public utilities............................. 6,721 7,626 7,626 State and political subdivision securities... 6,310 7,551 7,551 Foreign government securities................ 3,887 4,502 4,502 All other corporate bonds.................... 70,159 75,178 75,178 ---------------------- -------------- -------------------- Total bonds................................ 122,098 133,402 133,402 Mortgage-backed and asset-backed securities.. 34,933 35,988 35,988 Redeemable preferred stock................... 778 882 882 ---------------------- -------------- -------------------- Total fixed maturity securities............ 157,809 170,272 170,272 ---------------------- -------------- -------------------- Equity securities: Common stock: Industrial, miscellaneous and all other.... 1,128 1,181 1,181 Public utilities........................... 62 70 70 Non-redeemable preferred stock............... 389 407 407 ---------------------- -------------- -------------------- Total equity securities.................... 1,579 1,658 1,658 ---------------------- -------------- -------------------- Mortgage loans............................... 58,459 58,459 Policy loans................................. 6,006 6,006 Real estate and real estate joint ventures... 6,612 6,612 Real estate acquired in satisfaction of debt. 44 44 Other limited partnership interests.......... 3,991 3,991 Short-term investments....................... 3,155 3,155 Other invested assets........................ 14,911 14,911 ---------------------- -------------------- Total investments......................... $ 252,566 $ 265,108 ====================== ====================
-------- (1) Cost or amortized cost for fixed maturity securities and mortgage loans represents original cost reduced by repayments, valuation allowances and impairments from other-than-temporary declines in estimated fair value that are charged to earnings and adjusted for amortization of premiums or accretion of discounts; for equity securities, cost represents original cost reduced by impairments from other-than-temporary declines in estimated fair value; for real estate, cost represents original cost reduced by impairments and depreciation; for real estate joint ventures and other limited partnership interests, cost represents original cost reduced for impairments or original cost adjusted for equity in earnings and distributions. 146 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information December 31, 2017, 2016 and 2015 (In millions)
Future Policy Benefits, Other Policy-Related DAC Balances and Policyholder Policyholder and Policyholder Dividend Account Dividends Unearned Unearned Segment VOBA Obligation Balances Payable Premiums (1), (2) Revenue (1) ------------------ -------- ----------------------- ------------ ------------ ----------------- ------------ 2017 U.S............... $ 413 $ 61,665 $ 69,559 $ -- $ 165 $ 23 MetLife Holdings.. 3,930 66,753 24,380 499 162 179 Corporate & Other. 5 294 -- -- -- -- -------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 4,348 $ 128,712 $ 93,939 $ 499 $ 327 $ 202 ======== ======================= ============ ============ ================= ============ 2016 U.S............... $ 421 $ 58,234 $ 66,643 $ -- $ 133 $ 30 MetLife Holdings.. 4,317 65,982 25,823 510 167 182 Corporate & Other. 5 337 -- -- -- -- -------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 4,743 $ 124,553 $ 92,466 $ 510 $ 300 $ 212 ======== ======================= ============ ============ ================= ============ 2015 U.S............... $ 418 $ 56,429 $ 63,716 $ -- $ 136 $ 33 MetLife Holdings.. 5,000 70,276 29,827 621 171 201 Corporate & Other. 625 1,506 877 3 1 321 -------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 6,043 $ 128,211 $ 94,420 $ 624 $ 308 $ 555 ======== ======================= ============ ============ ================= ============
-------- (1) Amounts are included within the future policy benefits, other policy-related balances and policyholder dividend obligation column. (2) Includes premiums received in advance. 147 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information -- (continued) December 31, 2017, 2016 and 2015 (In millions)
Policyholder Amortization of Benefits and DAC and Premiums and Claims and VOBA Universal Life Net Interest Credited Charged to and Investment-Type Investment to Policyholder Other Other Segment Product Policy Fees Income Account Balances Expenses Expenses (1) ------------------ ------------------- ----------- ----------------- --------------- ------------- 2017 U.S............... $ 20,500 $ 6,012 $ 22,019 $ 56 $ 2,680 MetLife Holdings.. 4,643 4,758 6,004 185 2,293 Corporate & Other. 9 (257) 4 -- 1,018 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 25,152 $ 10,513 $ 28,027 $ 241 $ 5,991 =================== =========== ================= =============== ============= 2016 U.S............... $ 18,909 $ 5,811 $ 20,263 $ 56 $ 2,721 MetLife Holdings.. 5,739 5,355 7,128 342 2,797 Corporate & Other. 287 (83) 155 43 1,044 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 24,935 $ 11,083 $ 27,546 $ 441 $ 6,562 =================== =========== ================= =============== ============= 2015 U.S............... $ 18,281 $ 5,848 $ 19,613 $ 59 $ 2,658 MetLife Holdings.. 5,910 5,601 6,951 631 2,678 Corporate & Other. 327 90 166 52 1,444 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 24,518 $ 11,539 $ 26,730 $ 742 $ 6,780 =================== =========== ================= =============== =============
-------- (1) Includes other expenses and policyholder dividends, excluding amortization of DAC and VOBA charged to other expenses. 148 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule IV Consolidated Reinsurance December 31, 2017, 2016 and 2015 (Dollars in millions)
% Amount Assumed Gross Amount Ceded Assumed Net Amount to Net ------------- ---------- ---------- ----------- ---------- 2017 Life insurance in-force..... $ 3,377,964 $ 266,895 $ 490,033 $ 3,601,102 13.6% ============= ========== ========== =========== Insurance premium Life insurance (1).......... $ 16,022 $ 1,132 $ 1,097 $ 15,987 6.9% Accident & health insurance. 7,040 121 19 6,938 0.3% ------------- ---------- ---------- ----------- Total insurance premium.... $ 23,062 $ 1,253 $ 1,116 $ 22,925 4.9% ============= ========== ========== =========== 2016 Life insurance in-force..... $ 3,013,618 $ 277,693 $ 777,037 $ 3,512,962 22.1% ============= ========== ========== =========== Insurance premium Life insurance (1).......... $ 14,931 $ 1,101 $ 1,668 $ 15,498 10.8% Accident & health insurance. 7,000 124 19 6,895 0.3% ------------- ---------- ---------- ----------- Total insurance premium.... $ 21,931 $ 1,225 $ 1,687 $ 22,393 7.5% ============= ========== ========== =========== 2015 Life insurance in-force..... $ 3,035,399 $ 361,355 $ 811,435 $ 3,485,479 23.3% ============= ========== ========== =========== Insurance premium Life insurance (1).......... $ 14,449 $ 1,143 $ 1,638 $ 14,944 11.0% Accident & health insurance. 7,048 99 41 6,990 0.6% ------------- ---------- ---------- ----------- Total insurance premium.... $ 21,497 $ 1,242 $ 1,679 $ 21,934 7.7% ============= ========== ========== ===========
-------- (1) Includes annuities with life contingencies. For the year ended December 31, 2017, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $16.2 billion and $1.3 billion, respectively, and life insurance premiums of $132 million and $122 million, respectively. For the year ended December 31, 2016, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $17.6 billion and $258.3 billion, respectively, and life insurance premiums of $45 million and $727 million, respectively. For the year ended December 31, 2015, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $23.1 billion and $276.7 billion, respectively, and life insurance premiums of $40 million and $701 million, respectively. 149 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL PART C: OTHER INFORMATION ITEM 26. EXHIBITS (a) Resolution of the Board of Directors of Metropolitan Life effecting the establishment of Metropolitan Life Separate Account UL (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-47927) filed April 30, 1997.) (b) None (c) (i) Form of Broker Agreement (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-47927) filed April 30, 1997.) (ii) Schedule of Sales Commissions (Incorporated by reference from "Sales and Administration of the Policies" in the Prospectus included herein and "Distribution of the Policies That Include the Equity Options" in the Statement of Additional Information included herein.) (iii) Forms of Selling Agreement (Incorporated herein by reference to Post-Effective Amendment No. 18 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed on April 30, 2004.) (iv) Form of Retail Sales Agreement (Incorporation herein by reference to Post-Effective Amendment No. 9 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed September 10, 2007.) (v) Form of Amended and Restated Principal Underwriting Agreement with MLIDC (Incorporated herein by reference to Post-Effective Amendment No. 20 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716/ 811-04001) filed April 10, 2018). (vi) Enterprise Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated February 2010 (Incorporated herein by reference to Exhibit 3(b)(ii) Post-Effective Amendment No. 14 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed April 13, 2010.) (vii) Master Retail Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated September 2012 (Incorporated herein by reference to Post-Effective Amendment No. 27 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 11, 2013.) (d) (i) Variable Additional Insurance Rider (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-6 (File No. 333-40161) as filed on April 20, 1998.) (ii) L98 fixed benefit Life Insurance Policy (Incorporated herein by reference to the Registrant's Registration Statement on Form S-6 (File No. 333-40161) filed November 13, 1997.) (iii) Form of Variable Additional Benefit Rider (Incorporated herein by reference to Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-6 (File No. 333-40161) filed April 13, 1999.) (e) Applications (see (d)(i), (d) (ii) and (d)(iii) above) (f) (i) Restated Charter and By-Laws of Metropolitan Life (Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registrant's Registration Statement on Form S-6 (File No. 333- 40161) filed April 6, 2000.) (ii) Amended Restated Charter and By-Laws of Metropolitan Life (Incorporated herein by reference to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333- 83716) filed March 5, 2002.) (iii) Amended and Restated By-Laws of Metropolitan Life (Incorporated herein by reference to Exhibit 3(b)(ii) Post-Effective Amendment No. 14 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed April 13, 2010.) (g) None (h) (i) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC and Metropolitan Life Insurance Company (8/31/07) (Incorporated herein by reference to Post- Effective Amendment No. 12 to the Registrant's Registration Statement on Form N-6 (File No. 333-40161) filed April 18, 2008.) (ii) Participation Agreement with Met Investors Series Trust (Incorporated herein by reference to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333- 83716) filed March 5, 2002.) (iii) Amendments to the Participation Agreements with Met Investors Series Trust and Metropolitan Series Fund, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 25 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 12, 2012.) (iv) Participation Agreement dated March 6, 2017 by and among Brighthouse Funds Trust I, Metropolitan Life Insurance Company, Brighthouse Investment Advisers, LLC and Brighthouse Securities, LLC. Filed with Post-Effective Amendment No. 19 to Registration Statement File No. 333-176654/811-04001 for Metropolitan Life Separate Account E on Form N-4, filed April 12, 2017 and is hereby incorporated by reference. (v) Participation Agreement dated March 6, 2017 by and among Brighthouse Funds Trust I, Metropolitan Life Insurance Company, Brighthouse Investment Advisers, LLC and Brighthouse Securities, LLC. Filed with Post-Effective Amendment No. 19 to Registration Statement File No. 333-176654/811-04001 for Metropolitan Life Separate Account E on Form N-4, filed April 12, 2017 and is hereby incorporated by reference. (i) None (j) None (k) Opinion and Consent of Marie C. Swift as to the legality of the securities being registered (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registrant's Registration Statement on Form N-6 (File No. 333-40161) filed on April 30, 2004.) (l) Actuarial Opinion (Incorporated herein by reference to Post-Effective Amendment No. 12 to the Registrant's Registration Statement on Form N-6 (File No. 333-40161) filed April 18, 2008.) (m) Calculation Exhibit (Incorporated herein by reference to Post-Effective Amendment No. 12 to the Registrant's Registration Statement on Form N-6 (File No. 333-40161) filed April 18, 2008.) (n) Consent of Independent Registered Public Accounting Firm (Filed herewith) (o) None (p) None (q) (i) Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-47927) filed April 30, 1997.) (ii) Addendum to Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) (Incorporation herein by reference to Post-Effective Amendment No. 3 to Paragon Separate Account B's Registration Statement on Form N-6 (File No. 333-133675) filed January 16, 2008.) (r) Powers of Attorney (Incorporated herein by reference to Post-Effective Amendment No. 32 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927/811-06025) filed April 17, 2018). ITEM 27. DIRECTORS AND OFFICERS OF DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR ------------------------------------- ------------------------------------------------------------- Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer MetLife, Inc. and Metropolitan Life and a Director Insurance Company 200 Park Avenue New York, NY 10166
Cheryl W. Grise Director MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Carlos M. Gutierrez Director Co-Chair Albright Stonebridge Group (ASG) 555 Thirteenth Street, N.W. Suite 300 West Washington, DC 20004
Gerald L. Hassell Former Chairman of the Board The Bank of New York Mellon Corporation 200 Park Avenue New York, NY 10166 David L. Herzog Former Chief Financial Officer AIG 200 Park Avenue New York, NY 10166 R. Glenn Hubbard Director Dean and Russell L. Carson Professor of Finance and Economics Graduate School of Business Columbia University Uris Hall, Room 101 3022 Broadway New York, NY 10027-6902
Alfred F. Kelly, Jr. Director MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Edward J. Kelly, III Director MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
William E. Kennard Director MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
James M. Kilts Director Founding Partner Centerview Capital 3 Greenwich Office Park, 2nd Floor Greenwich, CT 06831
Catherine R. Kinney Director MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Denise M. Morrison Director President and Chief Executive Officer Campbell Soup Company One Campbell Place Camden, NJ 08103
Set forth below is a list of certain principal officers of Metropolitan Life Insurance Company. The principal business address of each principal officer is 200 Park Avenue, New York, NY 10166 unless otherwise noted below.
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS WITH DEPOSITOR ------------------------------------- --------------------------------------------------------------- Steven A. Kandarian Chairman, President and Chief Executive Officer and a Director
Michel A. Khalaf President - U.S. Business & EMEA
Karl R. Erhardt Executive Vice President and Chief Auditor
Steven J. Goulart Executive Vice President, Interim President - Asia and Chief Investment Officer
John C.R. Hele Executive Vice President and Chief Financial Officer
Esther Lee Executive Vice President and Global Chief Marketing Officer
Martin J. Lippert Executive Vice President and Global Technology & Operations Officer
John McCallion Executive Vice President and Treasurer
William C. O'Donnell Executive Vice President and Chief Accounting Officer
Susan Podlogar Executive Vice President and Chief Human Resources Officer
Douglas A. Rayvid Executive Vice President and Chief Compliance Officer
Rebecca Tadikonda Executive Vice President and Chief Strategy Officer
Ramy Tadros Executive Vice President and Chief Risk Officer
Michael Zarcone Executive Vice President
Stephen W. Gauster Senior Vice President and Interim General Counsel
ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT The registrant is a separate account of Metropolitan Life Insurance Company under the New York Insurance law. Under said law the assets allocated to the separate account are the property of Metropolitan Life Insurance Company. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. The following outline indicates those persons who are controlled by or under common control with Metropolitan Life Insurance Company: ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF December 31, 2017 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2017. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, if any) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Home Loans, LLC (DE) C. Metropolitan Tower Life Insurance Company (DE) 1. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 2. Plaza Drive Properties, LLC (DE) 3. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. d) 1320 Venture LLC (DE) i) 1320 Owner LP (DE) - a 99.9% limited partnership of 1320 Owner LP is held by 1320 Venture LLC and 0.1% general partnership is held by 1320 GP LLC. e) 1320 GP LLC (DE) 4. MetLife Assignment Company, Inc. (DE) D. MetLife Chile Inversiones Limitada (Chile) - 72.35109659% is owned by MetLife, Inc., 24.8823628% by American Life Insurance Company ("ALICO"), 2.76654057% is owned by Inversiones MetLife Holdco Dos Limitada and 0.00000004% is owned by Natiloportem Holdings, LLC. 1. MetLife Chile Seguros de Vida S.A. (Chile) - 99.996% of MetLife Chile Seguros de Vida S.A. is held by MetLife Chile Inversiones Limitada and 0.003% by International Technical and Advisory Services Limited ("ITAS") and the rest by third parties. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile) - 99.9% of MetLife Chile Administradora de Mutuos Hipotecarios S.A. is held by MetLife Chile Seguros de Vida S.A. and 0.1% is held by MetLife Chile Inversiones Limitada. 2. Inversiones MetLife Holdco Tres Limitada (Chile) - 97.13% of Inversiones MetLife Holdco Tres Limitada is owned by MetLife Chile Inversiones Limitada and 2.87% is owned by Inversiones MetLife Holdco Dos Limitada. a) AFP Provida S.A. (Chile) - 42.3815% of AFP Provida S.A. is owned by Inversiones MetLife Holdco Dos Limitada., 42.3815% is owned by Inversiones MetLife Holdco Tres Limitada, 10.9224% is owned by MetLife Chile Inversiones Limitada and the remainder is owned by the public. i) Provida Internacional S.A. (Chile) - 99.99% of Provida Internacional S.A. is owned by AFP Provida S.A and 0.01% is owned by MetLife Chile Inversiones Limitada. 1) AFP Genesis Administradora de Fondos y Fidecomisos S.A. (Ecuador) - 99.9% of AFP Genesis Administradora de Fondos y Fidecomisos S.A. is owned by Provida Internacional S.A. and 0.1% by AFP Provida S.A. MetLife Chile Seguros Generales S.A. (Chile) - 99.98% of MetLife Chile Seguros Generales, S.A. is owned by MetLife Chile Inversiones Limitada and 0.02% is owned by Inversiones MetLife Holdco Dos Limitada. E. Enterprise General Insurance Agency, Inc. (DE) F. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. MetLife Auto & Home Insurance Agency, Inc. (RI) 5. Metropolitan Group Property and Casualty Insurance Company (RI) 6. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 7. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) G. Newbury Insurance Company, Limited (DE) H. MetLife Investors Group, LLC (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Investments Securities, LLC (DE) I. Metropolitan Life Insurance Company ("MLIC") (NY) 1. 334 Madison Euro Investments, Inc. (DE) 2. St. James Fleet Investments Two Limited (Cayman Islands) a) Park Twenty Three Investments Company (United Kingdom) i) Convent Station Euro Investments Four Company (United Kingdom) 1) OMI MLIC Investments Limited (Cayman Islands) 3. Sandpiper Cove Associates II, LLC (DE) 4. MLIC Asset Holdings II LLC (DE) a) El Conquistador MAH II LLC (DE) 5. CC Holdco Manager, LLC (DE) 6. Alternative Fuels I, LLC (DE) 7. Transmountain Land & Livestock Company (MT) 8. HPZ Assets LLC (DE) 9. Missouri Reinsurance, Inc. (Cayman Islands) 10. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 11. ML New River Village III, LLC (DE) 12. MetLife RC SF Member, LLC (DE) 13. 23rd Street Investments, Inc. (DE) a) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. b) MetLife Capital, Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. i) Long Island Solar Farm, LLC ("LISF")(DE) - 9.61% membership interest is held by Brighthouse Renewables Holding, LLC and 90.39% membership interest is held by LISF Solar Trust in which MetLife Capital Limited Partnership has 100% beneficial interest. ii) Met Canada Solar ULC (Canada) 14. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 15. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 16. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 17. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 18. Corporate Real Estate Holdings, LLC (DE) 19. MetLife Tower Resources Group, Inc. (DE) 20. ML Sentinel Square Member, LLC (DE) 21. MetLife Securitization Depositor LLC (DE) 22. WFP 1000 Holding Company GP, LLC (DE) 23. White Oak Royalty Company (OK) 24. 500 Grant Street GP LLC (DE) 25. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC. 26. MetLife Mall Ventures Limited Partnership (DE) - 99% LP interest of MetLife Mall Ventures Limited Partnership is owned by MLIC and 1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 27. MetLife Retirement Services LLC (NJ) 28. Euro CL Investments, LLC (DE) 29. MEX DF Properties, LLC (DE) a) MPLife, S. de R.L. de C.V. (Mexico) - 99.99% of MPLife, S. de R.L. de C.V. is owned by MEX DF Properties, LLC and 0.01% is owned by Euro CL Investments LLC. 30. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company. 31. MetLife Properties Ventures, LLC (DE) 32. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) - 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 33. MLIC Asset Holdings LLC (DE) 34. 85 Broad Street Mezzanine LLC (DE) 35. The Building at 575 Fifth Avenue Mezzanine LLC (DE) a) The Building at 575 Fifth Retail Holding LLC (DE) i) The Building at 575 Fifth Retail Owner LLC (DE) 36. ML Bridgeside Apartments LLC (DE) 37. MetLife Chino Member, LLC (DE) 38. MLIC CB Holdings LLC (DE) 39. MetLife CC Member, LLC (DE) - 95.122% of MetLife CC Member, LLC is owned by Metropolitan Life Insurance Company and 4.878% is owned by General American Life Insurance Company. 40. Oconee Hotel Company, LLC (DE) 41. Oconee Land Company, LLC (DE) a) Oconee Land Development Company, LLC (DE) b) Oconee Golf Company, LLC (DE) c) Oconee Marina Company, LLC (DE) 2 42. 1201 TAB Manager, LLC (DE) 43. MetLife 1201 TAB Member, LLC (DE) - 96.9% of MetLife 1201 TAB Member, LLC is owned by Metropolitan Life Insurance Company and 3.1% is owned by Metropolitan Property and Casualty Insurance Company. 44. MetLife LHH Member, LLC (DE) - 99% of MetLife LHH Member, LLC is owned by Metropolitan Life Insurance Company, and 1% is owned by General American Life Insurance Company. 45. 1001 Properties, LLC (DE) 46. 6104 Hollywood, LLC (DE) 47. Boulevard Residential, LLC (DE) 48. ML-AI MetLife Member 3, LLC (DE) 49. Sandpiper Cove Associates, LLC (DE) - 90.59% membership interest of Sandpiper Cove Associates, LLC is owned by MLIC and 9.41% is owned by Metropolitan Tower Realty Company. 50. Marketplace Residences, LLC (DE) 51. ML Swan Mezz, LLC (DE) a) ML Swan GP, LLC (DE) 52. ML Dolphin Mezz, LLC (DE) a) ML Dolphin GP, LLC (DE) 53. Haskell East Village, LLC (DE) 54. MetLife Cabo Hilton Member, LLC (DE) - 83.1% of MetLife Cabo Hilton Member, LLC is owned by MLIC, 16.9% by General American Life Insurance Company 55. 150 North Riverside PE Member LLC (DE) - MLIC owns an 81.45% membership interest; General American Life Insurance Company owns a 13.32% membership interest, and Metropolitan Tower Life Insurance Company owns a 5.23% membership interest 56. ML Terraces, LLC (DE) 57. Chestnut Flats Wind, LLC (DE) 58. MetLife 425 MKT Member, LLC (DE) 59. MetLife OFC Member, LLC (DE) 60. MetLife THR Investor, LLC (DE) 61. ML Southmore, LLC (DE) - 99% of ML Southmore, LLC is owned by MLIC and 1% by General American Life Insurance Company. 62. ML - AI MetLife Member 1, LLC (DE) - 95.199% of the membership interest is owned by MLIC and 4.801% by Metropolitan Property and Casualty Insurance Company. 63. MetLife CB W/A, LLC (DE) 64. MetLife Camino Ramon Member, LLC (DE) - 99% of MetLife Camino Ramon Member, LLC is owned by MLIC and 1% by General American Life Insurance Company. 65. 10700 Wilshire, LLC (DE) 66. Viridian Miracle Mile, LLC (DE) 67. MetLife 555 12th Member, LLC (DE) - 94.6% is owned by MLIC and 5.4% by General American Life Insurance Company 68. MetLife OBS Member, LLC (DE) 69. MetLife 1007 Stewart, LLC (DE) 70. ML-AI MetLife Member 2, LLC (DE) - 98.97% of ML-AI MetLife Member 2, LLC's ownership interest is owned by MLIC and 1.03% by General American Life Insurance Company. 71. MetLife Treat Towers Member, LLC (DE) 72. MetLife FM Hotel Member, LLC (DE) a) LHCW Holdings (U.S.) LLC (DE) i) LHC Holdings (U.S.) LLC (DE) 1) LHCW Hotel Holding LLC (DE) aa) LHCW Hotel Holding (2002) LLC (DE) bb) LHCW Hotel Operating Company (2002) LLC (DE) 73. ML Mililani Member, LLC (DE)- is owned at 95% by MLIC and 5% by General American Life Insurance Company. 74. MetLife SP Holdings, LLC (DE) a) MetLife Private Equity Holdings, LLC (DE) 75. Buford Logistics Center, LLC (DE) 76. MetLife Park Tower Member, LLC (DE) a) Park Tower REIT, Inc. (DE) i) Park Tower JV Member, LLC (DE) 77. MCPP Owners, LLC (DE) - 84.503% is owned by MLIC, 0.603% by General American Life Insurance Company, 1.616% by Metropolitan Tower Life Insurance Company, and 13.278% by MTL Leasing, LLC. 78. MetLife HCMJV 1 GP, LLC (DE) 79. MetLife ConSquare Member, LLC (DE) 80. MetLife Ontario Street Member, LLC (DE) 81. 1925 WJC Owner, LLC (DE) 82. MetLife Member Solaire, LLC (DE) 83. Sino-US United MetLife Insurance Company, Ltd. - 50% of Sino-US United MetLife Insurance Company, Ltd. Is owned by MLIC and 50% is owned by a third party. 84. MetLife Property Ventures Canada ULC (Canada) 85. MetLife Canadian Property Ventures, LLC (NY) J. MetLife Capital Trust IV (DE) 3 K. MetLife Investment Advisors, LLC (DE) 1. MetLife Alternatives GP, LLC (DE) a) MetLife International PE Fund I, LP (Cayman Islands) - 92.593% of the Limited Partnership interests of this entity is owned by MetLife Insurance K.K., 4.115% is owned by MetLife Mexico S.A., 2.716% is owned by MetLife Limited (Hong Kong) and the remaining 0.576% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. b) MetLife International PE Fund II, LP (Cayman Islands) - 94.54% of the limited partnership interests of MetLife International PE Fund II, LP is owned by MetLife Insurance K.K., 2.77% is owned by MetLife Limited (Hong Kong), 2.1% by MetLife Mexico, S.A. and 0.59% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. c) MetLife International HF Partners, LP (Cayman Islands) - 88.22% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K. and 9.47% is owned by MetLife Insurance Company of Korea Limited, 2.29% is owned by MetLife Limited (Hong Kong) and 0.02% is owned by MetLife Alternatives, GP d) MetLife International PE Fund III, LP - 88.93% of the limited partnership interests of MetLife International PE Fund III LP is owned by MetLife Insurance K.K, 7.91% is owned by MetLife Insurance Company of Korea Limited, 2.61% is owned by MetLife Limited (Hong Kong), and 0.55% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. e) MetLife International PE Fund IV, LP (Cayman Islands) - 94.70% of the limited partnership interests of MetLife International PE Fund IV, LP is owned by MetLife Insurance K.K, 3.79% is owned by MetLife Insurance Company of Korea Limited, 1.51% is owned by Metlife Limited (Hong Kong). f) MetLife International PE Fund V, LP (Cayman Islands) - MetLife Insurance K.K. (81.699%); MetLife Limited (Hong Kong) (15.033%); MetLife Insurance Company of Korea (3.268%). g) MetLife International PE Fund VI, LP (Cayman Islands) - MetLife Insurance K.K. (95.652%); MetLife Insurance Company of Korea (4.348%) 2. MetLife Loan Asset Management LLC (DE) 3. MetLife Core Property Fund GP, LLC (DE) a) MetLife Core Property Fund, LP (DE) - MetLife Core Property Fund GP, LLC is the general partner of MetLife Core Property Fund, LP (the "Fund"). A substantial majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 20.06%, Metropolitan Life Insurance Company (on behalf of Separate Account 746) owns 3.24%, MetLife Insurance Company of Korea Limited owns 2.91%, General American Life Insurance Company owns 0.07% and Brighthouse Life Insurance Company owns 0.14%. i) MetLife Core Property REIT, LLC (DE) 1) MetLife Core Property Holdings, LLC (DE) - MetLife Core Property Holdings, LLC also holds the following single-property limited liability companies: MCP Alley 24 East, LLC, MCP Block 23 Member, LLC, MCP Denver Pavilions Member, LLC, MCP Seventh and Osborne Retail Member, LLC, MCP Seventh and Osborne MF Member, LLC, MCP SoCal Industrial-Springdale, LLC, MCP SoCal Industrial-Redondo, LLC, MCP SoCal Industrial-Concourse, LLC, MCP SoCal Industrial-Kellwood, LLC, MCP SoCal Industrial-Bernardo, LLC, MCP SoCal Industrial-Anaheim, LLC, MCP SoCal Industrial-LAX, LLC, MCP SoCal Industrial-Fullerton, LLC, MCP SoCal Industrial-Ontario, LLC, MCP SoCal Industrial-Loker, LLC, MCP Paragon Point, LLC, MCP 4600 South Syracuse, LLC, MCP The Palms Doral, LLC, MCP Waterford Atrium, LLC, MCP EnV Chicago, LLC, MCP 100 Congress Member, LLC, MCP 1900 McKinney, LLC, MCP 550 West Washington, LLC, MCP Main Street Village, LLC, MCP Lodge At Lakecrest LLC, MCP Ashton South End, LLC, MCP 3040 Post Oak, LLC, MCP Plaza at Legacy, LLC, MCP VOA Holdings, LLC, MCP VOA I& III, LLC, MCP VOA II, LLC, MCP Highland Park Lender, LLC, MCP One Westside, LLC, MCP 7 Riverway, LLC, MCP Trimble Campus, LLC, MCP 9020 Murphy Road, LLC, MCP Buford Logistics Center 2 Member, LLC, MCP Buford Logistics Center Building B, LLC and MCPF Acquisition, LLC, MCP 60 11th Street Member, LLC, MCP Magnolia Park Member, LLC, and MCP Fife Enterprise Center, LLC, MCP Northyards Holdco, LLC, MCP Northyards Owner, LLC, MCP Northyards Master Lessee, LLC, 60 11th Street, LLC, Magnolia Park GreenvilleVenture, LLC, Magnolia Park Greenville, LLC, MCP 22745 & 22755 Relocation Drive LLC, MCP DMCBP Phase II Member, LLC, MetLife Core Property TRS, LLC, MCP Seattle Gateweay I Member, LLC, and MCP Seattle Gateway II Member, LLC, MCP Mountain Technology TRS, LLC, and MCP Burnside Member, LLC. aa) MCP Property Management, LLC (DE) 4. MIM Property Management, LLC (DE) 5. MetLife Commercial Mortgage Income Fund GP, LLC (DE) a) MetLife Commercial Mortgage Income Fund, LP (DE) - MetLife Commercial Mortgage Income Fund GP, LLC is the general partner of MetLife Commercial Mortgage Income Fund, LP (the "Fund"). A majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 33.20%, Brighthouse Life Insurance Company owns 11.14%, MetLife Insurance Company of Korea, Limited owns 2.96%, MetLife Limited owns 3.54%, and Metropolitan Life Insurance Company of Hong Kong Limited owns 0.41%. i) MetLife Commercial Mortgage REIT, LLC (DE) 1) MetLife Commercial Mortgage Originator, LLC (DE) aa) MCMIF Holdco I, LLC (DE) 6. MLIA SBAF Manager, LLC (DE) L. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) a) MetLife Services East Private Limited (India) - 99.99% is owned by MetLife Solutions Pte. Ltd. and .01% by Natiloportem Holdings, LLC b) MetLife Global Operations Support Center Private Limited (India) - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, LLC. M. SafeGuard Health Enterprises, Inc. (DE) 1. MetLife Health Plans, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) N. Cova Life Management Company (DE) O. MetLife Reinsurance Company of Charleston (SC) P. MetLife Reinsurance Company of Vermont (VT) Q. Delaware American Life Insurance Company (DE) R. Federal Flood Certification LLC (TX) S. MetLife Global Benefits, Ltd. (Cayman Islands) T. Inversiones Metlife Holdco Dos Limitada (Chile) - 99.99946% of Inversiones MetLife Holdco Dos Limitada is owned by MetLife, Inc., 0.000535% is owned by MetLife International Holdings, LLC and 0.0000054% is owned by Natiloportem Holdings, LLC. Z. MetLife Consumer Services, Inc. (DE) AA. MetLife Global, Inc. (DE) AB. Brighthouse Financial, Inc. (DE) - On August 4, 2017, MetLife, Inc.("MET") distributed approximately 80.8% of the shares of Brighthouse Financial, Inc.'s ("BHF") common stock to MET's common shareholders. As a result, MET's ownership of the BHF shares of common stock decreased to approximately 19.2%. MET granted BHF an irrevocable proxy to vote all of its remaining shares of BHF's common stock in proportion to the votes of BHF's other common shareholders. Consequently, MET does not have any voting power over any BHF shares that it still owns. Nevertheless, for the BHF subsidiary insurance companies domiciled in Delaware and New York (Brighthouse Life Insurance Company and Brighthouse Life Insurance Company of NY, respectively) BHF and its affiliates (including these insurance companies) are deemed to be affiliates of MET by their domiciliary state insurance regulators. Accordingly, BHF and its affiliates continue to appear on the MET organizational chart. 1. Brighthouse Holdings, LLC (DE) a. New England Life Insurance Company (MA) b. Brighthouse Securities, LLC (DE) c. Brighthouse Services, LLC (DE) d. Brighthouse Investment Advisers, LLC (DE) e. Brighthouse Life Insurance Company (DE i. Brighthouse Reinsurance Company of Delaware (DE) - 100% is owned in the aggregate by Brighthouse Life Insurance Company. ii. Brighthouse Life Insurance Company of NY (NY) iii. Brighthouse Connecticut Properties Ventures, LLC (DE) iv. Euro TL Investments LLC (DE) v. Euro TI Investments LLC (DE) vi. Brighthouse Assignment Company (CT) vii. TLA Holdings LLC (DE) viii. TLA Holdings II LLC (DE) ix. ML 1065 Hotel, LLC (DE) x. TIC European Real Estate LP, LLC (DE) xi. The Prospect Company (DE) xii. Brighthouse Renewables Holding, LLC (DE) i. Greater Sandhill I, LLC (DE) xiii. Daniel/Brighthouse Midtown Atlanta Master Limited Liability Company (DE) i. 1075 Peachtree, LLC (DE) AC. MetLife Insurance Brokerage, Inc. (NY) 4 AD. American Life Insurance Company (ALICO) (DE) 1. MetLife Insurance K.K. (Japan) a) Communication One Kabushiki Kaisha (Japan) 2. MetLife Global Holding Company I GmbH (SWISS) (Switzerland) a) MetLife, Life Insurance Company (Egypt) - 84.125% of MetLife, Life Insurance Company is owned by MetLife Global Holding Company I GmbH and the remaining interests are owned by third parties. b) MetLife Global Holding Company II GmbH (Swiss II) (Switzerland) i) MetLife Emeklilik ve Hayat A.S. (Turkey) - 99.98% of MetLife Emeklilik ve Hayat A.S. is owned by Metlife Global Holding Company II GmbH (Swiss II) and the remainder by third parties. ii) ALICO European Holdings Limited (Ireland) 1) ZAO Master D (Russia) aa) Joint-Stock Company MetLife Insurance Company (Russia) - 51% of Joint Stock Company MetLife Insurance Company is owned by ZAO Master D and 49% is owned by MetLife Global Holding Company II GmbH. iii) MetLife Asia Holding Company Pte. Ltd. (Singapore) 1) MetLife Innovation Centre Pte. Ltd. (Singapore) iv) MetLife Reinsurance Company of Bermuda Ltd. (Bermuda) v) MetLife Investment Management Limited (United Kingdom) vi) MM Global Operations Support Center, S.A. de C.V. (Mexico) - 99.999509% of MM Global Operations Support Center, S.A. de C.V. is held by MetLife Global Holding Company II GmbH (Swiss) and 0.00049095% is held by MetLife Global Holding Company I GmbH (Swiss). 1. Fundacion MetLife Mexico, A.C. (Mexico) vii) MetLife Colombia Seguros de Vida S.A. (Colombia) - 89.9999659747771405% of MetLife Colombia Seguros de Vida S.A. is owned by MetLife Global Holding Company II GmbH, 10.0000311579287982% is owned by MetLife Global Holding Company I GmbH, 0.000000955764687% is owned by International Technical and Advisory Services Limited, 0.000000955764687% is owned by Borderland Investments Limited and 0.000000955764687% by Natiloportem Holdings, LLC. viii) PJSC MetLife (Ukraine) - 99.9988% of PJSC MetLife is owned by MetLife Global Holding Company II GmbH, .0006% is owned by ITAS and the remaining .0006% is owned by Borderland Investments Limited. ix) MetLife Innovation Centre Limited (Ireland) x) MetLife EU Holding Company Limited (Ireland) 1) MetLife Europe d.a.c (Ireland) - MetLife EU Holding Company Limited holds 96.00315040176985% of this entity. ALICO holds 3.996758255760741% and ITAS holds 0.000091342469407%. 1. MetLife Pension Trustees Limited (United Kingdom) 2) Agenvita S.r.l. (Italy) 3) MetLife Europe Insurance d.a.c (Ireland) - MetLife Europe Insurance d.a.c. is held by MetLife EU Holding Company Limited at 93% and the remaining 7% is held by Alico. 4) MetLife Europe Services Limited (Ireland) 5) MetLife Services, Sociedad Limitada (Spain) 6) MetLife Slovakia S.r.o. (Slovakia) - 99.956% of MetLife Slovakia S.r.o. is owned by MetLife EU Holding Company Limited and 0.044% is owned by ITAS. 7) MetLife Solutions S.A.S. (France) 8) Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. (Romania) - 99.9836% of Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. is owned by MetLife EU Holding Company Limited and 0.0164% is owned by MetLife Services Sp z.o.o. 9) MetLife Towarzystwo Ubiezpieczen na Zycie I Reasekuracji S.A. (Poland) aa) MetLife Services Sp z.o.o. (Poland) bb) MetLife Towarzystwo Funduszy Inwestycyjnych, S.A. (Poland) cc) MetLife Powszechne Towarzystwo Emerytalne S.A. (Poland) 10) MetLife Services Cyprus Limited (Cyprus) aa) Hellenic Alico Life Insurance Company, Ltd. (Cyprus) - 27.5% of Hellenic Alico Life Insurance Company, Ltd. Is owned by MetLife Services Cyprus Limited and the remaining is owned by a third party. 11) MetLife Services EOOD (Bulgaria) 12) MetLife Life Insurance S.A. (Greece) aa) MetLife Mutual Fund Company (Greece) - 90% of MetLife Mutual Fund Company is owned by MetLife Life Insurance S.A. (Greece) and the remaining by a third party. 13) First American-Hungarian Insurance Agency Limited (Hungary) 14) UBB-MetLife Zhivotozastrahovatelno Drujestvo AD (Bulgaria) - 40% of UBB-MetLife Zhivotozastrahovatelno Drujestvo AD is owned by MetLife EU Holding Company Limited and the rest by third parties. xi) MetLife Investment Management Holdings (Ireland)Limited 1) MetLife Investments Asia Limited (Hong Kong) 2) MetLife Syndicated Bank Loan Lux GP, S.a.r.l. (Luxembourg) aa) MetLife BL Feeder (Cayman), LP (Cayman Islands) bb) MetLife BL Feeder, LP (DE) cc) MetLife Syndicated Bank Loan Fund, SCSp (Luxembourg) xii) ALICO Operations LLC (DE) 1) MetLife Asset Management Corp. (Japan) 2) MetLife Seguros S.A. (Uruguay) xiii) MetLife International Holdings, LLC (DE) 1) Natiloportem Holdings, LLC (DE) aa) Excelencia Operativa y Tecnologica, S.A. de C.V. (Mexico) - 99% of Excelencia Operativa y Tecnologica, S.A. de C.V. is held by Natiloportem Holdings, LLC and 1% by MetLife Mexico Servicios S.A. de C.V. i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. 2) PNB MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, LLC and 74% is owned by third parties. 3) Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, Inc. and 0.00065% is owned by Natiloporterm Holdings, LLC. 4) MetLife Seguros S.A. (Argentina)- 95.5242% is owned by MetLife International Holdings, LLC, 2.6753% is owned by Natiloportem Holdings, LLC and 1.8005% by ITAS. 5) Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)-66.662% is owned by MetLife International Holdings, LLC, 33.337% is owned by MetLife Worldwide Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 6) MetLife Administradora de Fundos Multipatrocinados Ltda. (Brazil) - 99.99998% of MetLife Administradora de Fundos Multipatrocinados Ltda. is owned by MetLife International Holdings, LLC and 0.00002% by Natiloportem Holdings, LLC. 7) MetLife Seguros de Retiro S.A. (Argentina) - 96.8897% is owned by MetLife International Holdings, LLC, 3.1102% is owned by Natiloportem Holdings, LLC and 0.0001% by ITAS 8) Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, LLC and 95% is owned by MetLife International Holdings, LLC. 9) Compania Inversora MetLife S.A. (Argentina) - 95.46% is owned by MetLife International Holdings, LLC and 4.54% is owned by Natiloportem Holdings, LLC. aa) MetLife Servicios S.A. (Argentina) - 18.87% of the shares of MetLife Servicios S.A. are held by Compania Inversora MetLife S.A., 79.88% is owned by MetLife Seguros S.A., . 99% is held by Natiloportem Holdings, LLC and . 26% is held by MetLife Seguros de Retiro S.A. 10) MetLife Worldwide Holdings, LLC (DE) aa) MetLife Limited (Hong Kong) i) BIDV MetLife Life Insurance Limited Liability Company (Vietnam) - 60% of BIDV MetLife Life Insurance Limited Liability Company is held by MetLife Limited (Hong Kong) and the remainder by third parties 11) MetLife International Limited, LLC (DE) 12) MetLife Planos Odontologicos Ltda. (Brazil) - 99.999% is owned by MetLife International Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 13) MetLife Asia Limited (Hong Kong) 14) AmMetLife Insurance Berhad (Malaysia) - 50.000001% of AmMetLife Insurance Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 15) AmMetLife Takaful Berhad (Malaysia) - 49.999999% of AmMetLife Takaful Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 16) MAXIS GBN S.A.S. (France) - 50% of MAXIS GBN S.A.S. is held by MetLife International Holdings, LLC and the remainder by third parties. 17) MetLife Mas S.A. de C.V. (Mexico) - 99.99964399% MetLife Mas, SA de CV is owned by MetLife International Holdings, LLC and .00035601% is owned by International Technical and Advisory Services Limited. 5 18) MetLife Ireland Holdings One Limited (Ireland) aa) MetLife Global Holdings Corporation S.A. de C.V. (Mexico/Ireland) - 98.9% is owned by MetLife Ireland Holdings One Limited and 1.1% is owned by MetLife International Limited, LLC. i) MetLife Ireland Treasury d.a.c (Ireland) 1) MetLife General Insurance Limited (Australia) 2) MetLife Insurance Limited (Australia) - 91.16468% of MetLife Insurance Limited (Australia) is owned by MetLife Ireland Treasury d.a.c and 8.83532% is owned by MetLife Global Holdings Corp. S.A. de C.V. aaa) The Direct Call Centre PTY Limited (Australia) bbb) MetLife Investments PTY Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investments PTY Limited ("MIPL"). MIPL is a wholly owned subsidiary of MetLife Insurance Limited. ii) Metropolitan Global Management, LLC (DE/Ireland) - 99.7% is owned by MetLife Global Holdings Corporation S.A. de C.V. and 0.3% is owned by MetLife International Holdings, LLC. aaa) MetLife Mexico Holdings, S. de R.L. de C.V. (Mexico) - 99.99995% is owned by Metropolitan Global Management, LLC, and .00005% is owned by Excelencia Operativa y Tecnologica,S.A. de C.V. bbb) MetLife Pensiones Mexico S.A. (Mexico)- 97.5125% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 2.4875% is owned by MetLife International Holdings, LLC. ccc) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 2% is owned by MetLife International Holdings, LLC. ddd) MetLife Mexico S.A. (Mexico)- 99.050271% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 0.949729% is owned by MetLife International Holdings, LLC. 1) MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. aaaa) Met1 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. bbbb) Met2 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. cccc) MetA SIEFORE Adicional, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. dddd) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. eeee) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. ffff) Met0 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. 2) ML Capacitacion Comercial S.A. de C.V.(Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. eee) MetLife Insurance Company of Korea Limited (South Korea)- 14.64% is owned by MetLife Mexico, S.A. and 85.36% is owned by Metropolitan Global Management, LLC. 1) MetLife Financial Services, Co., Ltd. (South Korea) 3. International Investment Holding Company Limited (Russia) 4. Borderland Investments Limited (DE) a) ALICO Hellas Single Member Limited Liability Company (Greece) 5. International Technical and Advisory Services Limited ("ITAS") (DE) 6. ALICO Properties, Inc. (DE) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. a) Global Properties, Inc. (DE) 7. MetLife American International Group and Arab National Bank Cooperative Insurance Company (Saudi Arabia) - 30% of MetLife American International Group and Arab National Bank Cooperative Insurance Company is owned by ALICO and the remaining interest by third parties. The Delaware Department of Insurance approved a disclaimer of affiliation and therefore, this company is not considered an affiliate under Delaware Law. AF. General American Life Insurance Company (MO) a. GALIC Holdings LLC (DE) AG. MetLife European Holdings, LLC (DE) AH. MetLife Investment Management Holdings, LLC (DE) a) Logan Circle Partners GP, LLC (PA) b) Logan Circle Partners, L.P. (PA) i) Logan Circle Partners I LLC (PA) ii) Logan Circle Partners Investment Management, LLC (DE) c) MetLife Real Estate Lending Manager LLC (DE) d) MetLife Real Estate Lending LLC (DE) 1) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. 2) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. 3) The MetLife, Inc. organizational chart does not include real estate joint ventures and partnerships of which MetLife, Inc. and/or its subsidiaries is an investment partner. In addition, certain inactive subsidiaries have also been omitted. 4) MetLife Services EEIG is a cost-sharing mechanism used in the EU for EU- affiliated members. 6 ITEM 29. INDEMNIFICATION As described in their respective governing documents, MetLife, Inc. (the ultimate parent of the Depositor and MetLife Investors Distribution Company, the Registrant's principal underwriter (the "Underwriter")), which is incorporated in the state of Delaware, and the Depositor, which is incorporated in the state of New York, shall indemnify any person who is made or is threatened to be made a party to any civil or criminal suit, or any administrative or investigative proceeding, by reason of the fact that such person is or was a director or officer of the respective company, under certain circumstances, against liabilities and expenses incurred by such person. MetLife, Inc. also has adopted a policy to indemnify employees ("MetLife Employees") of MetLife, Inc. or its affiliates ("MetLife"), including any MetLife Employees serving as directors or officers of the Depositor or the Underwriter. Under the policy, MetLife, Inc. will, under certain circumstances, indemnify MetLife Employees for losses and expenses incurred in connection with legal actions threatened or brought against them as a result of their service to MetLife. The policy excludes MetLife directors and others who are not MetLife Employees, whose rights to indemnification, if any, are as described in the charter, bylaws or other arrangement of the relevant company. MetLife, Inc. also maintains a Directors and Officers Liability and Corporate Reimbursement Insurance Policy under which the Depositor and the Underwriter, as well as certain other subsidiaries of MetLife, are covered. MetLife, Inc. also has secured a Financial Institutions Bond. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company, pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 30. PRINCIPAL UNDERWRITERS (a) MetLife Investors Distribution Company is the principal underwriter and distributor of the Policies. MetLife Investors Distribution Company is the principal underwriter for the following investment companies: General American Separate Account Two General American Separate Account Eleven General American Separate Account Twenty-Eight General American Separate Account Twenty-Nine Metropolitan Life Separate Account E Metropolitan Life Separate Account UL Metropolitan Life Variable Annuity Separate Account II Metropolitan Tower Separate Account One Metropolitan Tower Separate Account Two New England Life Retirement Investment Account New England Variable Annuity Fund I Paragon Separate Account A Paragon Separate Account B Paragon Separate Account C Paragon Separate Account D Security Equity Separate Account Twenty-Six Security Equity Separate Account Twenty-Seven Separate Account No. 13S (b) The following persons are the officers and directors of MetLife Investors Distribution Company. The principal business address for MetLife Investors Distribution Company is 200 Park Avenue, New York, NY 10166.
NAME AND PRINCIPAL BUSINESS OFFICE POSITIONS AND OFFICES WITH UNDERWRITER ------------------------------------ --------------------------------------------------- Elizabeth M. Forget Chairman of the Board, President, CEO and Director 200 Park Avenue New York, NY 10166
Todd Nevenhoven Vice President and Director 4700 Westown Pkwy Suite 200 West Des Moines, IA 50266
Bradd Chignoli Director 501 Route 22 Bridgewater, NJ 08807
Derrick Kelson Director Gragg Building 11225 North Community House Road Charlotte, NC 28277
Thomas A. Schuster Director 200 Park Avenue New York, NY 10166
Todd Katz Executive Vice President 501 Route 22 Bridgewater, NJ 08807
Marlene B. Debel Executive Vice President 200 Park Avenue New York, NY 100166
Elisabeth Bedore Vice President and Chief Compliance Officer One MetLife Way Whippany, NJ 07981
Tyla L. Reynolds Vice President and Secretary 600 North King Street Wilmington DE 19801
Charles Connery Vice President and Treasurer One MetLife Way Whippany, NJ 07981
Jamie Zaretsky Chief Legal Officer 200 Park Avenue New York, NY 10166
(c) Compensation from the Registrant.
(3) COMPENSATION ON (2) EVENTS OCCASIONING NET UNDERWRITING THE DEDUCTION OF A (4) (5) (1) DISCOUNTS AND DEFERRED SALES BROKERAGE OTHER NAME OF PRINCIPAL UNDERWRITER COMMISSIONS LOAD COMMISSIONS COMPENSATION --------------------------------------------- ------------------ -------------------- ------------- ------------- MetLife Investors Distribution Company....... $19,616 $0 $0 $0
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS The following companies will maintain possession of the documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder: (a) Registrant (b) Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 (c) MetLife Investors Distribution Company 200 Park Avenue New York, NY 10166 (d) MetLife 18210 Crane Nest Drive Tampa, FL 33647 (e) MetLife One Financial Center Boston, MA 02111 ITEM 32. MANAGEMENT SERVICES Not applicable ITEM 33. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the Policies offered and sold pursuant to this amended Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life under the Policies. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the city of Bridgewater, and the state of New Jersey, on this 17th day of April 2018. METROPOLITAN LIFE SEPARATE ACCOUNT UL (Registrant) BY: METROPOLITAN LIFE INSURANCE COMPANY (Depositor) BY: /s/ Sabrina K Model ----------------------------------- Sabrina K. Model Vice President BY: METROPOLITAN LIFE INSURANCE COMPANY (Depositor) BY: /s/ Sabrina K Model ----------------------------------- Sabrina K. Model Vice President SIGNATURES As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on April 17, 2018. Signature Title --------- ----- * ---------------------------------- Steven Kandarian Chairman, President, Chief Executive Officer and Director * ---------------------------------- Cheryl W. Grise Director * ---------------------------------- Carlos Gutierrez Director * ---------------------------------- Gerald L. Hassell Director * ---------------------------------- David Herzog Director * ---------------------------------- R. Glenn Hubbard Director * ---------------------------------- Alfred F. Kelly, Jr. Director * ---------------------------------- Edward J. Kelly, III Director * ---------------------------------- William E. Kennard Director * ---------------------------------- James Kilts Director * ---------------------------------- Catherine Kinney Director * ---------------------------------- Denise M. Morrison Director By: /s/ Heather Harker -------------------------- Heather Harker Attorney-In-Fact April 17, 2018 * Metropolitan Life Insurance Company. Executed by Heather Harker, on behalf of those indicated pursuant to powers of attorney as filed with Post-Effective Amendment No. 32 to Registration Statement File Nos. 033-47927/811-06025 filed on April 17, 2018 and hereby incorporated by reference.. Exhibit Index Item 26(n) Consent of Independent Registered Public Accounting Firm