MET-2014.9.30-10Q
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________
Form 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission file number: 001-15787
 ________________________________________
MetLife, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
13-4075851
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
200 Park Avenue, New York, N.Y.
 
10166-0188
(Address of principal executive offices)
 
(Zip Code)
(212) 578-2211
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ
 
Accelerated filer o
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
 
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
At October 31, 2014, 1,136,042,027 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.
 
 


Table of Contents
 
 
 
Page
 
Item 1.
Financial Statements (at September 30, 2014 (Unaudited) and December 31, 2013 and for the Three Months and Nine Months Ended September 30, 2014 and 2013 (Unaudited))
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 6.
 
 
 
 
 
 

Table of Contents

As used in this Form 10‑Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates.
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10‑Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning, or are tied to future periods, in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.
Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of MetLife, Inc., its subsidiaries and affiliates. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”). These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the capital and credit markets, which may affect our ability to meet liquidity needs and access capital, including through our credit facilities, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets, including assets supporting risks ceded to certain of our captive reinsurers or hedging arrangements associated with those risks; (3) exposure to financial and capital market risks, including as a result of the disruption in Europe; (4) impact of comprehensive financial services regulation reform on us, as a potential non-bank systemically important financial institution, or otherwise; (5) numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact how we conduct our business, including those compelling the liquidation of certain financial institutions; (6) regulatory, legislative or tax changes relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products or services, or increase the cost or administrative burdens of providing benefits to employees; (7) adverse results or other consequences from litigation, arbitration or regulatory investigations; (8) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (9) investment losses and defaults, and changes to investment valuations; (10) changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (11) impairments of goodwill and realized losses or market value impairments to illiquid assets; (12) defaults on our mortgage loans; (13) the defaults or deteriorating credit of other financial institutions that could adversely affect us; (14) economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (15) downgrades in our claims paying ability, financial strength or credit ratings; (16) a deterioration in the experience of the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company; (17) availability and effectiveness of reinsurance or indemnification arrangements, as well as any default or failure of counterparties to perform; (18) differences between actual claims experience and underwriting and reserving assumptions; (19) ineffectiveness of risk management policies and procedures; (20) catastrophe losses; (21) increasing cost and limited market capacity for statutory life insurance reserve financings; (22) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, and for personnel; (23) exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (24) our ability to address difficulties, unforeseen liabilities, asset impairments, or rating agency actions arising from business acquisitions, including our acquisition of American Life Insurance Company and Delaware American Life Insurance Company, and integrating and managing the growth of such acquired businesses, or arising from dispositions of businesses or legal entity reorganizations; (25) the dilutive impact on our stockholders resulting from the settlement of our outstanding common equity units; (26) regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (27) MetLife, Inc.’s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (28) the possibility that MetLife, Inc.’s Board of Directors may influence the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; (29) changes in accounting standards, practices and/or policies; (30) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (31) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (32) inability to attract and retain sales representatives; (33) provisions of laws and our incorporation documents may delay, deter or prevent takeovers and corporate combinations involving MetLife; (34) the effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities, or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or other information security systems and management continuity planning; (35) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; and (36) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the SEC.
MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the SEC.

2
Table of Contents


Corporate Information

We announce financial and other information about MetLife to our investors through the MetLife Investor Relations Web page at www.metlife.com, as well as SEC filings, press releases, public conference calls and webcasts. MetLife encourages investors to visit the Investor Relations Web page from time to time, as information is updated and new information is posted. The information found on our website is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.
Note Regarding Reliance on Statements in Our Contracts
See “Exhibit Index — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

3
Table of Contents
MetLife, Inc.
Interim Condensed Consolidated Balance Sheets
September 30, 2014 (Unaudited) and December 31, 2013
(In millions, except share and per share data)

Part I — Financial Information
Item 1. Financial Statements
 
 
September 30, 2014
 
December 31, 2013
Assets
 
 
 
 
Investments:
 
 
 
 
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $341,198 and $333,599, respectively; includes $4,097 and $4,005, respectively, relating to variable interest entities)
 
$
368,070

 
$
350,187

Equity securities available-for-sale, at estimated fair value (cost: $3,111 and $3,012, respectively)
 
3,689

 
3,402

Fair value option and trading securities, at estimated fair value (includes $690 and $662, respectively, of actively traded securities; and $67 and $92, respectively, relating to variable interest entities)
 
17,246

 
17,423

Mortgage loans (net of valuation allowances of $307 and $322, respectively; includes $313 and $1,621, respectively, at estimated fair value, relating to variable interest entities; includes $298 and $338, respectively, under the fair value option)
 
58,038

 
57,706

Policy loans (includes $3 and $2, respectively, relating to variable interest entities)
 
11,756

 
11,764

Real estate and real estate joint ventures (includes $8 and $1,141, respectively, relating to variable interest entities, includes $173 and $186, respectively, of real estate held-for-sale)
 
10,393

 
10,712

Other limited partnership interests (includes $53 and $53, respectively, relating to variable interest entities)
 
8,214

 
7,401

Short-term investments, principally at estimated fair value (includes $35 and $8, respectively, relating to variable interest entities)
 
12,240

 
13,955

Other invested assets, principally at estimated fair value (includes $56 and $78, respectively, relating to variable interest entities)
 
17,905

 
16,229

Total investments
 
507,551

 
488,779

Cash and cash equivalents, principally at estimated fair value (includes $61 and $70, respectively, relating to variable interest entities)
 
8,783

 
7,585

Accrued investment income (includes $23 and $26, respectively, relating to variable interest entities)
 
4,380

 
4,255

Premiums, reinsurance and other receivables (includes $33 and $22, respectively, relating to variable interest entities)
 
23,814

 
21,859

Deferred policy acquisition costs and value of business acquired (includes $240 and $255, respectively, relating to variable interest entities)
 
25,503

 
26,706

Goodwill
 
10,216

 
10,542

Other assets (includes $135 and $152, respectively, relating to variable interest entities)
 
8,900

 
8,369

Separate account assets (includes $1,140 and $1,033, respectively, relating to variable interest entities)
 
319,480

 
317,201

Total assets
 
$
908,627

 
$
885,296

Liabilities and Equity
 
 
 
 
Liabilities
 
 
 
 
Future policy benefits (includes $557 and $516, respectively, relating to variable interest entities)
 
$
189,282

 
$
187,942

Policyholder account balances (includes $63 and $56, respectively, relating to variable interest entities)
 
215,226

 
212,885

Other policy-related balances (includes $197 and $123, respectively, relating to variable interest entities)
 
15,026

 
15,214

Policyholder dividends payable
 
710

 
675

Policyholder dividend obligation
 
2,825

 
1,771

Payables for collateral under securities loaned and other transactions
 
33,776

 
30,411

Short-term debt
 
100

 
175

Long-term debt (includes $186 and $1,868, respectively, at estimated fair value, relating to variable interest entities)
 
16,389

 
18,653

Collateral financing arrangements
 
4,196

 
4,196

Junior subordinated debt securities
 
3,193

 
3,193

Current income tax payable
 
293

 
186

Deferred income tax liability
 
11,357

 
6,643

Other liabilities (includes $75 and $88, respectively, relating to variable interest entities)
 
25,373

 
23,168

Separate account liabilities (includes $1,140 and $1,033, respectively, relating to variable interest entities)
 
319,480

 
317,201

Total liabilities
 
837,226

 
822,313

Contingencies, Commitments and Guarantees (Note 14)
 

 

Redeemable noncontrolling interests
 
102

 
887

Equity
 
 
 
 
MetLife, Inc.’s stockholders’ equity:
 
 
 
 
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized: 84,000,000 shares issued and outstanding; $2,100 aggregate liquidation preference
 
1

 
1

Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,130,449,364 and 1,125,224,024 shares issued at September 30, 2014 and December 31, 2013, respectively; 1,119,087,159 and 1,122,030,137 shares outstanding at September 30, 2014 and December 31, 2013, respectively
 
11

 
11

Additional paid-in capital
 
29,488

 
29,277

Retained earnings
 
30,928

 
27,332

Treasury stock, at cost; 11,362,205 and 3,193,887 shares at September 30, 2014 and December 31, 2013, respectively
 
(615
)
 
(172
)
Accumulated other comprehensive income (loss)
 
10,992

 
5,104

Total MetLife, Inc.’s stockholders’ equity
 
70,805

 
61,553

Noncontrolling interests
 
494

 
543

Total equity
 
71,299

 
62,096

Total liabilities and equity
 
$
908,627

 
$
885,296

See accompanying notes to the interim condensed consolidated financial statements.

4
Table of Contents

MetLife, Inc.
Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Three Months and Nine Months Ended September 30, 2014 and 2013 (Unaudited)
(In millions, except per share data)

 
Three Months 
 Ended 
 September 30,
 
Nine Months 
 Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
Revenues
 
 
 
 
 
 
 
Premiums
$
9,703

 
$
9,094

 
$
28,795

 
$
27,403

Universal life and investment-type product policy fees
2,628

 
2,372

 
7,507

 
7,034

Net investment income
5,410

 
5,026

 
15,704

 
16,385

Other revenues
518

 
476

 
1,486

 
1,446

Net investment gains (losses):
 
 
 
 
 
 
 
Other-than-temporary impairments on fixed maturity securities
(17
)
 
(13
)
 
(40
)
 
(77
)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)
(14
)
 
(21
)
 
(16
)
 
(56
)
Other net investment gains (losses)
140

 
(51
)
 
(371
)
 
472

Total net investment gains (losses)
109

 
(85
)
 
(427
)
 
339

Net derivative gains (losses)
478

 
(546
)
 
1,132

 
(2,866
)
Total revenues
18,846

 
16,337

 
54,197

 
49,741

Expenses
 
 
 
 
 
 
 
Policyholder benefits and claims
9,512

 
9,472

 
28,824

 
27,827

Interest credited to policyholder account balances
1,817

 
1,600

 
4,995

 
6,036

Policyholder dividends
347

 
312

 
1,047

 
954

Other expenses
4,218

 
3,977

 
12,603

 
12,140

Total expenses
15,894

 
15,361

 
47,469

 
46,957

Income (loss) from continuing operations before provision for income tax
2,952

 
976

 
6,728

 
2,784

Provision for income tax expense (benefit)
858

 
3

 
1,916

 
308

Income (loss) from continuing operations, net of income tax
2,094

 
973

 
4,812

 
2,476

Income (loss) from discontinued operations, net of income tax
—

 
2

 
(3
)
 
1

Net income (loss)
2,094

 
975

 
4,809

 
2,477

Less: Net income (loss) attributable to noncontrolling interests
—

 
3

 
21

 
17

Net income (loss) attributable to MetLife, Inc.
2,094

 
972

 
4,788

 
2,460

Less: Preferred stock dividends
30

 
30

 
91

 
91

Net income (loss) available to MetLife, Inc.’s common shareholders
$
2,064

 
$
942

 
$
4,697

 
$
2,369

Comprehensive income (loss)
$
1,972

 
$
(188
)
 
$
10,682

 
$
(3,891
)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax
(56
)
 
(58
)
 
6

 
(54
)
Comprehensive income (loss) attributable to MetLife, Inc.
$
2,028

 
$
(130
)
 
$
10,676

 
$
(3,837
)
Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
 
 
 
 
 
 
 
Basic
$
1.83

 
$
0.85

 
$
4.17

 
$
2.15

Diluted
$
1.81

 
$
0.84

 
$
4.12

 
$
2.14

Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
 
 
 
 
 
 
 
Basic
$
1.83

 
$
0.85

 
$
4.17

 
$
2.15

Diluted
$
1.81

 
$
0.84

 
$
4.12

 
$
2.14

Cash dividends declared per common share
$
0.350

 
$
—

 
$
0.975

 
$
0.735

See accompanying notes to the interim condensed consolidated financial statements.


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Table of Contents

MetLife, Inc.
Interim Condensed Consolidated Statements of Equity
For the Nine Months Ended September 30, 2014 (Unaudited)
(In millions)
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Treasury
Stock
at Cost
 
Net
Unrealized
Investment
Gains 
(Losses)
 
Other-Than-
Temporary
Impairments
 
Foreign
Currency
Translation
Adjustments
 
Defined
Benefit Plans
Adjustment
 
Total
MetLife, Inc.’s
Stockholders’
Equity
 
Noncontrolling
Interests (1)
 
Total
Equity
Balance at December 31, 2013
$
1

 
$
11

 
$
29,277

 
$
27,332

 
$
(172
)
 
$
8,553

 
$
(139
)
 
$
(1,659
)
 
$
(1,651
)
 
$
61,553

 
$
543

 
$
62,096

Treasury stock acquired in connection with share repurchases
 
 
 
 
 
 
 
 
(443
)
 
 
 
 
 
 
 
 
 
(443
)
 
 
 
(443
)
Stock-based compensation
 
 
 
 
211

 
 
 
 
 
 
 
 
 
 
 
 
 
211

 
 
 
211

Dividends on preferred stock
 
 
 
 
 
 
(91
)
 
 
 
 
 
 
 
 
 
 
 
(91
)
 
 
 
(91
)
Dividends on common stock
 
 
 
 
 
 
(1,101
)
 
 
 
 
 
 
 
 
 
 
 
(1,101
)
 
 
 
(1,101
)
Change in equity of noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
(55
)
 
(55
)
Net income (loss)
 
 
 
 
 
 
4,788

 
 
 
 
 
 
 
 
 
 
 
4,788

 
21

 
4,809

Other comprehensive income (loss), net of income tax
 
 
 
 
 
 
 
 
 
 
6,206

 
69

 
(501
)
 
114

 
5,888

 
(15
)
 
5,873

Balance at September 30, 2014
$
1

 
$
11

 
$
29,488

 
$
30,928

 
$
(615
)
 
$
14,759

 
$
(70
)
 
$
(2,160
)
 
$
(1,537
)
 
$
70,805

 
$
494

 
$
71,299

__________________
(1)
Net income (loss) attributable to noncontrolling interests excludes losses of redeemable noncontrolling interests of less than $1 million.
See accompanying notes to the interim condensed consolidated financial statements.

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Table of Contents


MetLife, Inc.
Interim Condensed Consolidated Statements of Equity — (Continued)
For the Nine Months Ended September 30, 2013 (Unaudited)
(In millions)
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Additional Paid-in Capital
 
Retained
Earnings
 
Treasury
Stock
at Cost
 
Net
Unrealized
Investment
Gains
(Losses)
 
Other-Than-
Temporary
Impairments
 
Foreign
Currency
Translation
Adjustments
 
Defined
Benefit Plans
Adjustment
 
Total
MetLife, Inc.’s
Stockholders’
Equity
 
Noncontrolling
Interests (1)
 
Total
Equity
Balance at December 31, 2012
$
1

 
$
11

 
$
28,011

 
$
25,205

 
$
(172
)
 
$
14,642

 
$
(223
)
 
$
(533
)
 
$
(2,489
)
 
$
64,453

 
$
384

 
$
64,837

Common stock issuance
 
 
—

 
1,000

 
 
 
 
 
 
 
 
 
 
 
 
 
1,000

 
 
 
1,000

Stock-based compensation
 
 
 
 
249

 
 
 
 
 
 
 
 
 
 
 
 
 
249

 
 
 
249

Dividends on preferred stock
 
 
 
 
 
 
(91
)
 
 
 
 
 
 
 
 
 
 
 
(91
)
 
 
 
(91
)
Dividends on common stock
 
 
 
 
 
 
(808
)
 
 
 
 
 
 
 
 
 
 
 
(808
)
 
 
 
(808
)
Change in equity of noncontrolling interests
 
 
 
 
(39
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(39
)
 
11

 
(28
)
Net income (loss)
 
 
 
 
 
 
2,460

 
 
 
 
 
 
 
 
 
 
 
2,460

 
17

 
2,477

Other comprehensive income (loss), net of income tax
 
 
 
 
 
 
 
 
 
 
(5,389
)
 
70

 
(1,085
)
 
107

 
(6,297
)
 
(71
)
 
(6,368
)
Balance at September 30, 2013
$
1

 
$
11

 
$
29,221

 
$
26,766

 
$
(172
)
 
$
9,253

 
$
(153
)
 
$
(1,618
)
 
$
(2,382
)
 
$
60,927

 
$
341

 
$
61,268

__________________
(1)
Net income (loss) attributable to noncontrolling interests excludes gains of redeemable noncontrolling interests of less than $1 million.
See accompanying notes to the interim condensed consolidated financial statements.


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MetLife, Inc.
Interim Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2014 and 2013 (Unaudited)
(In millions)

 
Nine Months 
 Ended 
 September 30,
 
2014
 
2013
Net cash provided by (used in) operating activities
$
10,950

 
$
9,984

Cash flows from investing activities
 
 
 
Sales, maturities and repayments of:
 
 
 
Fixed maturity securities
85,187

 
95,972

Equity securities
455

 
567

Mortgage loans
10,917

 
8,000

Real estate and real estate joint ventures
532

 
323

Other limited partnership interests
555

 
546

Purchases of:
 
 
 
Fixed maturity securities
(94,085
)
 
(93,304
)
Equity securities
(455
)
 
(812
)
Mortgage loans
(11,772
)
 
(9,570
)
Real estate and real estate joint ventures
(1,382
)
 
(991
)
Other limited partnership interests
(1,338
)
 
(1,077
)
Cash received in connection with freestanding derivatives
977

 
1,333

Cash paid in connection with freestanding derivatives
(2,530
)
 
(5,593
)
Sales of businesses, net of cash and cash equivalents disposed of $262 and $13, respectively
452

 
386

Sale of bank deposits
—

 
(6,395
)
Purchases of investments in insurance joint ventures
(277
)
 
—

Net change in policy loans
(19
)
 
(93
)
Net change in short-term investments
1,496

 
4,272

Net change in other invested assets
(251
)
 
(121
)
Other, net
(131
)
 
(18
)
Net cash provided by (used in) investing activities
(11,669
)
 
(6,575
)
Cash flows from financing activities
 
 
 
Policyholder account balances:
 
 
 
Deposits
73,855

 
60,168

Withdrawals
(71,301
)
 
(65,141
)
Net change in payables for collateral under securities loaned and other transactions
3,481

 
(1,821
)
Net change in bank deposits
—

 
8

Net change in short-term debt
(75
)
 
—

Long-term debt issued
1,000

 
—

Long-term debt repaid
(2,802
)
 
(765
)
Common stock issued, net of issuance costs
—

 
1,000

Treasury stock acquired in connection with share repurchases
(443
)
 
—

Dividends on preferred stock
(91
)
 
(91
)
Dividends on common stock
(1,101
)
 
(808
)
Other, net
(546
)
 
(134
)
Net cash provided by (used in) financing activities
1,977

 
(7,584
)
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
(60
)
 
(187
)
Change in cash and cash equivalents
1,198

 
(4,362
)
Cash and cash equivalents, beginning of period
7,585

 
15,738

Cash and cash equivalents, end of period
$
8,783

 
$
11,376

Supplemental disclosures of cash flow information
 
 
 
Net cash paid (received) for:
 
 
 
Interest
$
841

 
$
891

Income tax
$
413

 
$
539

Non-cash transactions:
 
 
 
Real estate and real estate joint ventures acquired in satisfaction of debt
$
3

 
$
55

Deconsolidation of MetLife Core Property Fund (see Note 6):
 
 
 
Reduction of redeemable noncontrolling interests
$
774

 
$
—

Reduction of long-term debt
$
413

 
$
—

Reduction of real estate and real estate joint ventures
$
1,132

 
$
—

See accompanying notes to the interim condensed consolidated financial statements.

8
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)


1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
“MetLife” or the “Company” refers to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is a global provider of life insurance, annuities, employee benefits and asset management. MetLife is organized into six segments: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and Europe, the Middle East and Africa (“EMEA”).
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements. 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 estimates.
The accompanying interim condensed consolidated financial statements include the accounts of MetLife, Inc. 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.
Certain international subsidiaries have a fiscal year cutoff of November 30. Accordingly, the Company’s interim condensed consolidated financial statements reflect the assets and liabilities of such subsidiaries as of August 31, 2014 and November 30, 2013 and the operating results of such subsidiaries for the three months and nine months ended August 31, 2014 and 2013.
The Company uses the equity method of accounting for investments in equity securities when it has significant influence or at least 20% interest and for investments in 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, but does not have a controlling financial interest. 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.
Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the 2014 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.
The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2013 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife, Inc.’s Annual Report on Form 10‑K for the year ended December 31, 2013 (the “2013 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2013 Annual Report.

9
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Adoption of New Accounting Pronouncements
Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations and disclosures of disposals of components of an entity. The guidance increases the threshold for a disposal to qualify as a discontinued operation, expands the disclosures for discontinued operations and requires new disclosures for certain disposals that do not meet the definition of a discontinued operation. Disposals must now represent a strategic shift that has or will have a major effect on the entity’s operations and financial results to qualify as discontinued operations. As discussed in Note 3, the Company sold its wholly-owned subsidiary, MetLife Assurance Limited (“MAL”). As a result of the adoption of this new guidance, the results of operations of MAL and the loss on sale have been included in income from continuing operations.
Effective January 1, 2014, the Company adopted new guidance regarding the presentation of an unrecognized tax benefit. The new guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, when the carryforwards are not available at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position or the applicable tax law does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented in the financial statements as a liability and will not be combined with the related deferred tax asset. The adoption was prospectively applied and resulted in a reduction to other liabilities and a corresponding increase to deferred income tax liability in the amount of $277 million.
Effective January 1, 2014, the Company adopted new guidance regarding foreign currency that requires an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. For an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The new guidance did not have a material impact on the financial statements upon adoption.
Effective January 1, 2014, the Company adopted new guidance regarding liabilities that requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. In addition, the amendments require an entity to disclose the nature and amount of the obligation, as well as other information about the obligation. The new guidance did not have a material impact on the financial statements upon adoption.
Effective January 1, 2014, the Company adopted new guidance on other expenses which address how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act. The amendments in this standard specify that the liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using the straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. In accordance with the adoption of the new accounting pronouncement on January 1, 2014, the Company recorded $57 million in other liabilities, and a corresponding deferred cost, in other assets.

10
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Future Adoption of New Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance on transfers and servicing (Accounting Standards Update (“ASU”) 2014‑11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure), effective prospectively for fiscal years beginning after December 15, 2014 and interim periods within those years. The new guidance requires that repurchase-to-maturity transactions and repurchase financing arrangements be accounted for as secured borrowings and provides for enhanced disclosures, including the nature of collateral pledged and the time to maturity. Certain interim period disclosures for repurchase agreements and securities lending transactions are not required until the second quarter of 2015. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014‑09, Revenue from Contracts with Customers (Topic 606)), effective retrospectively for fiscal years beginning after December 15, 2016 and interim periods within those years. Early adoption of this standard is not permitted. The new guidance will supersede nearly all existing revenue recognition guidance under GAAP; however, it will not impact the accounting for insurance contracts, leases, financial instruments and guarantees. For those contracts that are impacted by the new guidance, the guidance will require 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 to, in exchange for those goods or services. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
In January 2014, the FASB issued new guidance regarding investments (ASU 2014‑01, Investments — Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects), effective retrospectively for fiscal years beginning after December 15, 2014 and interim reporting periods within those years. The new guidance is applicable to investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity that meets certain conditions is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance on the statement of operations as a component of income tax expense (benefit). The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
2. Segment Information
MetLife is organized into six segments, reflecting three broad geographic regions: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and EMEA. In addition, the Company reports certain of its results of operations in Corporate & Other.
Americas
The Americas consists of the following segments:
Retail
The Retail segment offers a broad range of protection products and services and a variety of annuities to individuals and employees of corporations and other institutions, and is organized into two businesses: Life & Other and Annuities. Life & Other insurance products and services include variable life, universal life, term life and whole life products. Additionally, through broker-dealer affiliates, the Company offers a full range of mutual funds and other securities products. Life & Other products and services also include individual disability income products and personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance. Annuities includes a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs.
Group, Voluntary & Worksite Benefits
The Group, Voluntary & Worksite Benefits segment offers a broad range of protection products and services to individuals and corporations, as well as other institutions and their respective employees. Group insurance products and services include variable life, universal life and term life products. Group insurance products and services also include dental, group short- and long-term disability and accidental death and dismemberment (“AD&D”) coverages. Voluntary & Worksite products and services include personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance offered to employees on a voluntary basis. The Voluntary & Worksite business also includes long-term care, prepaid legal plans and critical illness products.

11
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)

Corporate Benefit Funding
The Corporate Benefit Funding segment offers a broad range of annuity and investment products, including guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This segment also includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives.
Latin America
The Latin America segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident & health insurance, group medical, dental, credit insurance, endowment and retirement & savings products written in Latin America. The Latin America segment also includes U.S. sponsored direct business, comprised of group and individual products sold through sponsoring organizations and affinity groups. Products included are life, dental, group short- and long-term disability, AD&D coverages, property & casualty and other accident & health coverages, as well as non-insurance products such as identity protection.
Asia
The Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident & health insurance, fixed and variable annuities, credit insurance and endowment products.
EMEA
The EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident & health insurance, credit insurance, annuities, endowment and retirement & savings products.
Corporate & Other
Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges, and various business activities such as start-up and certain run-off businesses. Start-up businesses include expatriate benefits insurance, as well as direct and digital marketing products. Corporate & Other also includes assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan. Under this in-force reinsurance agreement, the Company reinsures living and death benefit guarantees issued in connection with variable annuity products. Corporate & Other also includes the investment management business through which the Company offers fee-based investment management services to institutional clients. Additionally, Corporate & Other includes interest expense related to the majority of the Company’s outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also 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
Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating 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.
Operating earnings is defined as operating revenues less operating expenses, both net of income tax.
Operating revenues and operating expenses exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife and are referred to as divested businesses. Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). Operating expenses also excludes goodwill impairments.

12
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)

The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating 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 guaranteed minimum income benefits (“GMIBs”) fees (“GMIB Fees”);
•
Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
•
Other revenues are adjusted for settlements of foreign currency earnings hedges.
The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating 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) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);
•
Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances (“PABs”) but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;
•
Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;
•
Amortization of negative VOBA excludes amounts related to Market Value Adjustments;
•
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
•
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition and integration costs.
Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance. In addition to the tax impact of the adjustments mentioned above, provision for income tax expense (benefit) also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.
In the first quarter of 2014, MetLife, Inc. began reporting the operations of MAL as divested business. See Note 3. Consequently, the results for Corporate Benefit Funding decreased by $2 million, net of $0 of income tax, and $11 million, net of $5 million of income tax, for the three months and nine months ended September 30, 2013, respectively. Also, the results for Corporate & Other decreased by $3 million, net of $2 million of income tax, and $10 million, net of $6 million of income tax, for the three months and nine months ended September 30, 2013, respectively.
Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months and nine months ended September 30, 2014 and 2013. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for operating 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 the Company’s business.

13
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)

The Company’s economic capital model 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 and applying an industry standard method for the inclusion of diversification benefits among risk types.
For the Company’s domestic segments, 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, operating earnings or income (loss) from continuing operations, net of income tax.
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.

14
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)

 
 
Operating Earnings
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2014
 
Retail
 
Group,
Voluntary
& Worksite
Benefits
 
Corporate
Benefit
Funding
 
Latin
America
 
Total
 
Asia
 
EMEA
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
1,869

 
$
4,010

 
$
451

 
$
794

 
$
7,124

 
$
1,939

 
$
581

 
$
41

 
$
9,685

 
$
18

 
$
9,703

Universal life and investment-type product policy fees
 
1,311

 
180

 
60

 
328

 
1,879

 
487

 
127

 
29

 
2,522

 
106

 
2,628

Net investment income
 
1,983

 
473

 
1,493

 
346

 
4,295

 
730

 
131

 
37

 
5,193

 
217

 
5,410

Other revenues
 
275

 
103

 
71

 
7

 
456

 
27

 
22

 
13

 
518

 
—

 
518

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
109

 
109

Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
478

 
478

Total revenues
 
5,438

 
4,766

 
2,075

 
1,475

 
13,754

 
3,183

 
861

 
120

 
17,918

 
928

 
18,846

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
2,555

 
3,729

 
1,033

 
719

 
8,036

 
1,535

 
252

 
31

 
9,854

 
5

 
9,859

Interest credited to policyholder account balances
 
567

 
38

 
279

 
97

 
981

 
394

 
43

 
8

 
1,426

 
391

 
1,817

Capitalization of DAC
 
(239
)
 
(37
)
 
(11
)
 
(97
)
 
(384
)
 
(507
)
 
(165
)
 
(15
)
 
(1,071
)
 
—

 
(1,071
)
Amortization of DAC and VOBA
 
335

 
38

 
5

 
101

 
479

 
367

 
152

 
1

 
999

 
55

 
1,054

Amortization of negative VOBA
 
—

 
—

 
—

 
—

 
—

 
(89
)
 
(7
)
 
—

 
(96
)
 
(11
)
 
(107
)
Interest expense on debt
 
(1
)
 
—

 
2

 
—

 
1

 
—

 
—

 
291

 
292

 
3

 
295

Other expenses
 
1,156

 
634

 
139

 
417

 
2,346

 
1,026

 
454

 
177

 
4,003

 
44

 
4,047

Total expenses
 
4,373

 
4,402

 
1,447

 
1,237

 
11,459

 
2,726

 
729

 
493

 
15,407

 
487

 
15,894

Provision for income tax expense (benefit)
 
366

 
127

 
220

 
86

 
799

 
151

 
36

 
(330
)
 
656

 
202

 
858

Operating earnings
 
$
699

 
$
237

 
$
408

 
$
152

 
$
1,496

 
$
306

 
$
96

 
$
(43
)
 
1,855

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
928

 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(487
)
 
 
 
 
Provision for income tax (expense) benefit
 
(202
)
 
 
 
 
Income (loss) from continuing operations, net of income tax
 
$
2,094

 
 
 
$
2,094



15
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)



Operating Earnings






Americas












Three Months Ended September 30, 2013

Retail

Group,
Voluntary
& Worksite
Benefits

Corporate
Benefit
Funding

Latin
America

Total

Asia

EMEA

Corporate
& Other

Total

Adjustments

Total
Consolidated


(In millions)
Revenues






















Premiums

$
1,607

 
$
3,767

 
$
450

 
$
692

 
$
6,516

 
$
1,922

 
$
586

 
$
30

 
$
9,054

 
$
40

 
$
9,094

Universal life and investment-type product policy fees

1,257

 
171

 
54

 
222

 
1,704

 
438

 
100

 
34

 
2,276

 
96

 
2,372

Net investment income

1,928

 
459

 
1,384

 
354

 
4,125

 
696

 
124

 
53

 
4,998

 
28

 
5,026

Other revenues

267

 
103

 
68

 
—

 
438

 
22

 
21

 
5

 
486

 
(10
)
 
476

Net investment gains (losses)

—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(85
)
 
(85
)
Net derivative gains (losses)

—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(546
)
 
(546
)
Total revenues

5,059

 
4,500

 
1,956

 
1,268

 
12,783

 
3,078

 
831

 
122

 
16,814

 
(477
)
 
16,337

Expenses

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends

2,234

 
3,527

 
1,071

 
637

 
7,469

 
1,506

 
243

 
25

 
9,243

 
541

 
9,784

Interest credited to policyholder account balances

582

 
38

 
292

 
106

 
1,018

 
407

 
37

 
10

 
1,472

 
128

 
1,600

Capitalization of DAC

(318
)
 
(37
)
 
(2
)
 
(103
)
 
(460
)
 
(515
)
 
(173
)
 
(5
)
 
(1,153
)
 
—

 
(1,153
)
Amortization of DAC and VOBA

315

 
37

 
4

 
63

 
419

 
393

 
166

 
1

 
979

 
(138
)
 
841

Amortization of negative VOBA

—

 
—

 
—

 
(1
)
 
(1
)
 
(99
)
 
(13
)
 
—

 
(113
)
 
(13
)
 
(126
)
Interest expense on debt

(1
)
 
—

 
3

 
—

 
2

 
—

 
—

 
286

 
288

 
29

 
317

Other expenses

1,245

 
595

 
129

 
395

 
2,364

 
1,040

 
443

 
179

 
4,026

 
72

 
4,098

Total expenses

4,057

 
4,160

 
1,497

 
1,097

 
10,811

 
2,732

 
703

 
496

 
14,742

 
619

 
15,361

Provision for income tax expense (benefit)

343

 
114

 
161

 
38

 
656

 
89

 
43

 
(241
)
 
547

 
(544
)
 
3

Operating earnings

$
659

 
$
226

 
$
298

 
$
133

 
$
1,316

 
$
257

 
$
85

 
$
(133
)
 
1,525

 
 
 
 
Adjustments to:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(477
)
 
 
 
 
Total expenses

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(619
)
 
 
 
 
Provision for income tax (expense) benefit

544





Income (loss) from continuing operations, net of income tax

$
973




$
973



16
Table of Contents
MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2. Segment Information (continued)



Operating Earnings






Americas












Nine Months Ended September 30, 2014

Retail

Group,
Voluntary
& Worksite
Benefits

Corporate
Benefit
Funding

Latin
America

Total

Asia

EMEA

Corporate
& Other

Total

Adjustments

Total
Consolidated


(In millions)
Revenues






















Premiums

$
5,405


$
12,050


$
1,438


$
2,242


$
21,135


$
5,742


$
1,762


$
116


$
28,755


$
40


$
28,795

Universal life and investment-type product policy fees

3,814


538


172


956


5,480


1,276


353


96


7,205


302


7,507

Net investment income

5,960


1,384


4,346


1,003


12,693


2,140


388


152


15,373


331


15,704

Other revenues

785


314


214


23


1,336


78


49


39


1,502


(16
)

1,486

Net investment gains (losses)

—


—


—


—


—


—


—


—


—


(427
)

(427
)
Net derivative gains (losses)

—


—


—


—


—


—


—


—


—


1,132


1,132

Total revenues

15,964


14,286


6,170


4,224


40,644


9,236


2,552


403


52,835


1,362


54,197

Expenses






















Policyholder benefits and claims and policyholder dividends

7,400


11,299


3,194


2,066


23,959


4,357


784


91


29,191


680


29,871

Interest credited to policyholder account balances

1,683


117


844


295


2,939


1,175


112


26


4,252


743


4,995

Capitalization of DAC

(722
)

(107
)

(30
)

(279
)

(1,138
)

(1,458
)

(511
)

(41
)

(3,148
)

(1
)

(3,149
)
Amortization of DAC and VOBA

1,142


109


15


261


1,527


1,067


476


4


3,074


100


3,174

Amortization of negative VOBA

—


—


—


(1
)

(1
)

(275
)

(22
)

—


(298
)

(35
)

(333
)
Interest expense on debt

(1
)

—


6


—


5


—


—


880


885


34


919

Other expenses

3,475


1,900


393


1,231