Edgar Filing: METLIFE INC

e10vq

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 MARCH 31, 2010
OR
o		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. (Address of principal executive offices)		10166-0188 (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 o

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 o

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 o (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 o No þ

At April 30, 2010, 820,152,497 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

Table of Contents


	Page

Part I — Financial Information
Item 1. Financial Statements (at March 31, 2010 (Unaudited) and December 31, 2009 and for the Three Months Ended March 31, 2010 and 2009 (Unaudited))		5
Interim Condensed Consolidated Balance Sheets		5
Interim Condensed Consolidated Statements of Operations		6
Interim Condensed Consolidated Statements of Stockholders’ Equity		7
Interim Condensed Consolidated Statements of Cash Flows		9
Notes to the Interim Condensed Consolidated Financial Statements		11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		105
Item 3. Quantitative and Qualitative Disclosures About Market Risk		161
Item 4. Controls and Procedures		169
Part II — Other Information		169
Item 1. Legal Proceedings		169
Item 1A. Risk Factors		171
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		178
Item 6. Exhibits		179
Signatures		180
Exhibit Index		E-1
EX-10.1
EX-10.3
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

As used in this Form 10-Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999 (the “Holding Company”), and its subsidiaries, including Metropolitan Life Insurance Company (“MLIC”).

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the 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 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. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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 MetLife’s actual future results. 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: (i) difficult and adverse conditions in the global and domestic capital and credit markets; (ii) continued volatility and further deterioration of the capital and credit markets, which may affect the Company’s ability to seek financing or access its credit facilities; (iii) uncertainty about the effectiveness of the U.S. government’s plan to stabilize the financial system by injecting capital into financial institutions, purchasing large amounts of illiquid, mortgage-backed and other securities from financial institutions, or otherwise; (iv) exposure to financial and capital market risk; (v) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect the Company’s ability to raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require the Company to pledge collateral or make payments related to declines in value of specified assets; (vi) potential liquidity and other risks resulting from MetLife’s participation in a securities lending program and other transactions; (vii) investment losses and defaults, and changes to investment valuations; (viii) impairments of goodwill and realized losses or market value impairments to illiquid assets; (ix) defaults on the Company’s mortgage loans; (x) the impairment of other financial institutions; (xi) MetLife’s ability to identify any future acquisitions and consummate such acquisitions, including the acquisition of American Life Insurance Company (“Alico”), and to successfully integrate acquired businesses with minimal disruption; (xii) economic, political, currency and other risks relating to the Company’s international operations; (xiii) 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; (xiv) downgrades in MetLife, Inc.’s and its affiliates’ claims paying ability, financial strength or credit ratings; (xv) ineffectiveness of risk management policies and procedures, including with respect to guaranteed benefits (which may be affected by fair value adjustments arising from changes in the Company’s own credit spread) on certain of the Company’s variable annuity products; (xvi) availability and effectiveness of reinsurance or indemnification arrangements; (xvii) discrepancies between actual claims experience and assumptions used in setting prices for the Company’s products and establishing the liabilities for the Company’s obligations for future policy benefits and claims; (xviii) catastrophe losses; (xix) 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; (xx) unanticipated changes in industry trends; (xxi) changes in accounting standards, practices and/or policies; (xxii) changes in assumptions related to deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”) or goodwill; (xxiii) increased expenses relating to pension and postretirement benefit plans; (xxiv) deterioration in the experience of the “closed block” established in connection with the reorganization of

MLIC; (xxv) adverse results or other consequences from litigation, arbitration or regulatory investigations; (xxvi) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xxvii) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company’s products or services; (xxviii) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes; (xxix) the effectiveness of the Company’s programs and practices in avoiding giving its associates incentives to take excessive risks; (xxx) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the SEC; and (xxxi) any of the foregoing factors as they relate to Alico and its operations.

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.

Note Regarding Reliance on Statements in Our Contracts

In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:


	•	should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

	•	have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

	•	may apply standards of materiality in a way that is different from what may be viewed as material to investors; and

	•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife, Inc. and its subsidiaries may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife, Inc.’s other public filings, which are available without charge through the SEC website at www.sec.gov.

Part I — Financial Information


Item 1.	*Financial Statements*

MetLife, Inc.

Interim Condensed Consolidated Balance Sheets
March 31, 2010 (Unaudited) and December 31, 2009

(In millions, except share and per share data)


	March 31,			December 31,
	2010			2009

Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $238,061 and $229,709, respectively; includes $3,144 and $3,171, respectively, relating to variable interest entities)	$	239,566		$	227,642
Equity securities available-for-sale, at estimated fair value (cost: $3,106 and $3,187, respectively)		3,066			3,084
Trading securities, at estimated fair value (cost: $2,978 and $2,249, respectively; includes $274 and $0, respectively, relating to variable interest entities)		3,039			2,384
Mortgage loans:
Held-for-investment, at amortized cost (net of valuation allowances of $751 and $721, respectively; includes $7,065 and $0, respectively, relating to variable interest entities)		55,433			48,181
Held-for-sale, principally at estimated fair value		2,003			2,728

Mortgage loans, net		57,436			50,909
Policy loans		10,146			10,061
Real estate and real estate joint ventures held-for-investment (includes $19 and $18, respectively, relating to variable interest entities)		6,826			6,852
Real estate held-for-sale		40			44
Other limited partnership interests (includes $226 and $236, respectively, relating to variable interest entities)		5,753			5,508
Short-term investments		8,019			8,374
Other invested assets (includes $110 and $137, respectively, relating to variable interest entities)		12,327			12,709

Total investments		346,218			327,567
Cash and cash equivalents (includes $267 and $68, respectively, relating to variable interest entities)		9,202			10,112
Accrued investment income (includes $39 and $0, respectively, relating to variable interest entities)		3,392			3,173
Premiums, reinsurance and other receivables		17,554			16,752
Deferred policy acquisition costs and value of business acquired		18,697			19,256
Current income tax recoverable		—			316
Deferred income tax assets		149			1,228
Goodwill		5,049			5,047
Other assets (includes $10 and $16, respectively, relating to variable interest entities)		6,869			6,822
Separate account assets		158,436			149,041

Total assets	$	565,566		$	539,314

Liabilities and Stockholders’ Equity
Liabilities
Future policy benefits	$	137,516		$	135,879
Policyholder account balances		141,734			138,673
Other policyholder funds		8,682			8,446
Policyholder dividends payable		745			761
Payables for collateral under securities loaned and other transactions		25,982			24,196
Bank deposits		10,032			10,211
Short-term debt		318			912
Long-term debt (includes $7,164 and $64, respectively, relating to variable interest entities)		20,177			13,220
Collateral financing arrangements		5,297			5,297
Junior subordinated debt securities		3,191			3,191
Current income tax payable		66			—
Other liabilities (includes $96 and $26, respectively, relating to variable interest entities)		17,211			15,989
Separate account liabilities		158,436			149,041

Total liabilities		529,387			505,816

Contingencies, Commitments and Guarantees (Note 8)
Stockholders’ 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; 822,586,896 and 822,359,818 shares issued at March 31, 2010 and December 31, 2009, respectively; 819,393,009 and 818,833,810 shares outstanding at March 31, 2010 and December 31, 2009, respectively		8			8
Additional paid-in capital		16,871			16,859
Retained earnings		20,294			19,501
Treasury stock, at cost; 3,193,887 and 3,526,008 shares at March 31, 2010 and December 31, 2009, respectively		(172	)		(190	)
Accumulated other comprehensive loss		(1,191	)		(3,058	)

Total MetLife, Inc.’s stockholders’ equity		35,811			33,121
Noncontrolling interests		368			377

Total equity		36,179			33,498

Total liabilities and stockholders’ equity	$	565,566		$	539,314

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2010 and 2009 (Unaudited)

(In millions, except per share data)


	Three Months
	Ended
	March 31,
	2010			2009

Revenues
Premiums	$	6,854		$	6,122
Universal life and investment-type product policy fees		1,407			1,183
Net investment income		4,344			3,261
Other revenues		513			554
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(151	)		(553	)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive loss		59			—
Other net investment gains (losses), net		164			(353	)

Total net investment gains (losses)		72			(906	)

Total revenues		13,190			10,214

Expenses
Policyholder benefits and claims		7,537			6,582
Interest credited to policyholder account balances		1,143			1,168
Policyholder dividends		377			424
Other expenses		2,942			3,002

Total expenses		11,999			11,176

Income (loss) from continuing operations before provision for income tax		1,191			(962	)
Provision for income tax expense (benefit)		358			(377	)

Income (loss) from continuing operations, net of income tax		833			(585	)
Income (loss) from discontinued operations, net of income tax		1			37

Net income (loss)		834			(548	)
Less: Net income (loss) attributable to noncontrolling interests		(1	)		(4	)

Net income (loss) attributable to MetLife, Inc.		835			(544	)
Less: Preferred stock dividends		30			30

Net income (loss) available to MetLife, Inc.’s common shareholders	$	805		$	(574	)

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.98		$	(0.76	)

Diluted	$	0.97		$	(0.76	)

Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	$	0.98		$	(0.71	)

Diluted	$	0.97		$	(0.71	)

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2010 (Unaudited)

(In millions)


													Accumulated Other Comprehensive Loss
													Net
													Unrealized						Foreign			Defined			Total
					Additional					Treasury			Investment			Other-Than-			Currency			Benefit			MetLife, Inc.’s
	Preferred		Common		Paid-in		Retained			Stock			Gains			Temporary			Translation			Plans			Stockholders’			Noncontrolling			Total
	Stock		Stock		Capital		Earnings			at Cost			(Losses)			Impairments			Adjustments			Adjustment			Equity			Interests			Equity

Balance at December 31, 2009	$	1	$	8	$	16,859	$	19,501		$	(190	)	$	(817	)	$	(513	)	$	(183	)	$	(1,545	)	$	33,121		$	377		$	33,498
Cumulative effect of change in accounting principle, net of income tax (Note 1)								(12	)					31			11									30						30

Balance at January 1, 2010		1		8		16,859		19,489			(190	)		(786	)		(502	)		(183	)		(1,545	)		33,151			377			33,528
Stock-based compensation						12					18															30						30
Dividends on preferred stock								(30	)																	(30	)					(30	)
Change in equity of noncontrolling interests																													(14	)		(14	)
Comprehensive income (loss):
Net income (loss)								835																		835			(1	)		834
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax														78												78						78
Unrealized investment gains (losses), net of related offsets and income tax														1,696			(29	)								1,667			(1	)		1,666
Foreign currency translation adjustments, net of income tax																				61						61			7			68
Defined benefit plans adjustment, net of income tax																							19			19						19

Other comprehensive income (loss)																										1,825			6			1,831

Comprehensive income (loss)																										2,660			5			2,665

Balance at March 31, 2010	$	1	$	8	$	16,871	$	20,294		$	(172	)	$	988		$	(531	)	$	(122	)	$	(1,526	)	$	35,811		$	368		$	36,179

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Stockholders’ Equity — (Continued)
For the Three Months Ended March 31, 2009 (Unaudited)

(In millions)


														Accumulated Other
														Comprehensive Loss
														Net
														Unrealized			Foreign			Defined			Total
					Additional						Treasury			Investment			Currency			Benefit			MetLife, Inc.’s
	Preferred		Common		Paid-in			Retained			Stock			Gains			Translation			Plans			Stockholders’			Noncontrolling			Total
	Stock		Stock		Capital			Earnings			at Cost			(Losses)			Adjustments			Adjustment			Equity			Interests			Equity

Balance at December 31, 2008	$	1	$	8	$	15,811		$	22,403		$	(236	)	$	(12,564	)	$	(246	)	$	(1,443	)	$	23,734		$	251		$	23,985
Common stock issuance — newly issued shares						1,035																		1,035						1,035
Treasury stock transactions, net						20						6												26						26
Deferral of stock-based compensation						(6	)																	(6	)					(6	)
Dividends on preferred stock									(30	)														(30	)					(30	)
Change in equity of noncontrolling interests																											80			80
Comprehensive income (loss):
Net loss									(544	)														(544	)		(4	)		(548	)
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax															19									19						19
Unrealized investment gains (losses), net of related offsets and income tax															(924	)								(924	)		(8	)		(932	)
Foreign currency translation adjustments, net of income tax																		(240	)					(240	)					(240	)
Defined benefit plans adjustment, net of income tax																					40			40						40

Other comprehensive income (loss)																								(1,105	)		(8	)		(1,113	)

Comprehensive income (loss)																								(1,649	)		(12	)		(1,661	)

Balance at March 31, 2009	$	1	$	8	$	16,860		$	21,829		$	(230	)	$	(13,469	)	$	(486	)	$	(1,403	)	$	23,110		$	319		$	23,429

See accompanying notes to the interim condensed consolidated financial statements.

MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2010 and 2009 (Unaudited)

(In millions)


	Three Months
	Ended
	March 31,
	2010			2009

Net cash provided by (used in) operating activities	$	2,871		$	(985	)

Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		14,896			18,118
Equity securities		255			356
Mortgage loans		1,152			1,105
Real estate and real estate joint ventures		18			37
Other limited partnership interests		97			394
Purchases of:
Fixed maturity securities		(22,518	)		(24,229	)
Equity securities		(134	)		(481	)
Mortgage loans		(1,156	)		(984	)
Real estate and real estate joint ventures		(176	)		(174	)
Other limited partnership interests		(166	)		(162	)
Cash received in connection with freestanding derivatives		465			2,427
Cash paid in connection with freestanding derivatives		(725	)		(1,124	)
Sales of businesses, net of cash disposed of $0 and $180, respectively		—			(46	)
Net change in policy loans		(85	)		(49	)
Net change in short-term investments		386			2,982
Net change in other invested assets		128			267
Other, net		(35	)		(55	)

Net cash used in investing activities		(7,598	)		(1,618	)

Cash flows from financing activities
Policyholder account balances:
Deposits		17,321			22,392
Withdrawals		(14,194	)		(23,065	)
Net change in bank deposits		(218	)		604
Net change in payables for collateral under securities loaned and other transactions		1,786			(6,718	)
Net change in short-term debt		(594	)		3,219
Long-term debt issued		163			469
Long-term debt repaid		(322	)		(112	)
Collateral financing arrangements issued		—			50
Debt issuance costs		—			(3	)
Common stock issued to settle stock forward contracts		—			1,035
Dividends on preferred stock		(30	)		(30	)
Other, net		(67	)		(9	)

Net cash provided by (used in) financing activities		3,845			(2,168	)

Effect of change in foreign currency exchange rates on cash balances		(28	)		(44	)

Change in cash and cash equivalents		(910	)		(4,815	)
Cash and cash equivalents, beginning of period		10,112			24,239

Cash and cash equivalents, end of period	$	9,202		$	19,424

Cash and cash equivalents, subsidiaries held-for-sale, beginning of period	$	—		$	32

Cash and cash equivalents, subsidiaries held-for-sale, end of period	$	—		$	—

MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows — (Continued)
For the Three Months Ended March 31, 2010 and 2009 (Unaudited)

(In millions)


	Three Months
	Ended
	March 31,
	2010			2009

Cash and cash equivalents, from continuing operations, beginning of period	$	10,112		$	24,207

Cash and cash equivalents, from continuing operations, end of period	$	9,202		$	19,424

Supplemental disclosures of cash flow information:
Net cash paid (received) during the period for:
Interest	$	258		$	113

Income tax	$	(88	)	$	85

Non-cash transactions during the period:
Remarketing of debt securities:
Fixed maturity securities redeemed	$	—		$	32

Long-term debt issued	$	—		$	1,035

Junior subordinated debt securities redeemed	$	—		$	1,067

Real estate and real estate joint ventures acquired in satisfaction of debt	$	8		$	1

See accompanying notes to the interim condensed consolidated financial statements.

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 (the “Holding Company”), and its subsidiaries, including Metropolitan Life Insurance Company (“MLIC”). MetLife is a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Asia Pacific and Europe, Middle East and India regions. Through its subsidiaries and affiliates, MetLife offers life insurance, annuities, auto and homeowners insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions.

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 the Company’s accounting policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

The accompanying interim condensed consolidated financial statements include the accounts of the Holding Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. See “— Adoption of New Accounting Pronouncements.” Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item. See Note 6. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting for investments in equity securities in which it has a significant influence or more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint venture’s or partnership’s operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint venture’s or the partnership’s operations.

Certain amounts in the prior year periods’ interim condensed consolidated financial statements have been reclassified to conform with the 2010 presentation. Such reclassifications include $604 million reclassified from policyholder account balances to net change in bank deposits within cash flows from financing activities in the consolidated statements of cash flows for the three months ended March 31, 2009. In addition, $2,427 million and ($1,124) million were reclassified from net change in other invested assets to cash received in connection with freestanding derivatives and cash paid in connection with freestanding derivatives, respectively, within cash flows from investing activities in the consolidated statements of cash flows for the three months ended March 31, 2009. See also Note 14 for reclassifications related to discontinued operations.

The accompanying interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at March 31, 2010, its consolidated results of operations for the three months ended March 31, 2010 and 2009, its consolidated cash flows for the three months ended March 31, 2010 and 2009, and its consolidated statements of stockholders’ equity for the three months ended March 31, 2010 and 2009, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2009 consolidated balance sheet

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

data was derived from audited consolidated financial statements included in MetLife’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), which includes 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 2009 Annual Report.

Adoption of New Accounting Pronouncements

Financial Instruments

Effective January 1, 2010, the Company adopted new guidance related to financial instrument transfers and consolidation of VIEs. The financial instrument transfer guidance eliminates the concept of a qualified special purpose entity (“QSPE”), eliminates the guaranteed mortgage securitization exception, changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The new consolidation guidance changes the definition of the primary beneficiary as well as the method of determining whether an entity is a primary beneficiary of a VIE from a quantitative model to a qualitative model. Under the new qualitative model, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or receive benefits that could be significant to the VIE is considered to be the primary beneficiary of the VIE. The guidance also changes when reassessment is needed and requires enhanced disclosures, including the effects of a company’s involvement with VIEs on its financial statements.

As a result of the adoption of this guidance, the Company consolidated certain former QSPEs that were previously accounted for as fixed maturity commercial mortgage-backed securities and equity security collateralized debt obligations. The Company also elected the fair value option for all of the consolidated assets and liabilities of these entities. Upon consolidation, the Company recorded $278 million of securities classified as trading securities, $6,769 million of commercial mortgage loans and $6,822 million of long-term debt based on estimated fair values at January 1, 2010 and de-recognized $179 million in fixed maturity securities and less than $1 million in equity securities. The consolidation also resulted in a decrease in retained earnings of $12 million, net of income tax, and an increase in accumulated other comprehensive income of $42 million, net of income tax, as of January 1, 2010. For the three months ended March 31, 2010, the Company recorded $109 million of net investment income on the consolidated assets, $106 million of interest expense in other expenses on the related long-term debt, and $10 million in net investment gains to remeasure the assets and liabilities at their estimated fair values as of March 31, 2010.

In addition, the Company also deconsolidated certain partnerships for which the Company does not have the power to direct activities and for which the Company has concluded it is no longer the primary beneficiary. These deconsolidations did not result in a cumulative effect adjustment to retained earnings and did not have a material impact on the Company’s consolidated financial statements.

Also effective January 1, 2010, the Company adopted new guidance that indefinitely defers the above changes relating to the Company’s interests in entities that have all the attributes of an investment company or for which it is industry practice to apply measurement principles for financial reporting that are consistent with those applied by an investment company. As a result of the deferral, the above guidance did not apply to certain real estate joint ventures and other limited partnership interests held by the Company.

Fair Value

Effective January 1, 2010, the Company adopted new guidance that requires new disclosures about significant transfers in and/or out of Levels 1 and 2 of the fair value hierarchy and activity in Level 3 (Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements). In addition, this guidance provides clarification of existing disclosure requirements

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

about level of disaggregation and inputs and valuation techniques. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In April 2010, the Financial Accounting Standards Board issued new guidance regarding accounting for investment funds determined to be variable interest entities (“VIEs”) (ASU 2010-15, How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments). Under this guidance, an insurance entity would not be required to consolidate a voting-interest investment fund when it holds the majority of the voting interests of the fund through its separate accounts. In addition, an insurance entity would not consider the interests held through separate accounts for the benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contract holder is a related party. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2010. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.


2.	Pending Acquisition

On March 7, 2010, the Holding Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with ALICO Holdings LLC (the “Seller”) and American International Group, Inc., pursuant to which the Holding Company agreed to acquire all of the issued and outstanding capital stock of American Life Insurance Company (“Alico”) and Delaware American Life Insurance Company. The transaction is expected to close by the end of 2010, subject to certain regulatory approvals and determinations, as well as other customary closing conditions.

Pursuant to the Stock Purchase Agreement, the Holding Company will (i) pay $6.8 billion to the Seller in cash, and (ii) issue to the Seller (a) 78,239,712 shares of its common stock, (b) 6,857,000 shares of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock of the Holding Company, which will be convertible into approximately 68,570,000 shares of the Holding Company’s common stock upon a favorable vote of the Holding Company’s stockholders and (c) $3.0 billion aggregate stated amount of equity units of the Holding Company (together, the “Securities”), consisting of (x) forward purchase contracts obligating the holder to purchase a variable number of shares of the Holding Company’s common stock on three specified future dates (to be determined at closing, approximately two, three and four years after closing, with an aggregate purchase price of $1 billion payable on each of those dates) for a fixed amount per purchase contract, and (y) an interest in shares of the Holding Company’s preferred stock. At a future date, the interest in the preferred stock forming part of the equity units will be mandatorily exchanged for an interest in debt securities of the Company, which will be subject to remarketing and sold to investors. Holders of the equity units who elect to include their debt securities in a remarketing can use the proceeds thereof to meet their obligations under the forward purchase contracts. The aggregate amount of the Holding Company’s common stock to be issued to the Seller in connection with the transaction is expected to be 214.6 million to 231.5 million shares, consisting of 78.2 million shares to be issued at closing, 68.6 million shares to be issued upon conversion of the Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock (with the stockholder vote on such conversion to be held within one year after the closing) and between 67.8 million and 84.7 million shares of common stock, in total, issuable upon settlement of the purchase contracts forming part of the equity units (in three tranches approximately two, three and four years after the closing). The ownership of the Securities is subject to an investor rights agreement, which grants to the Seller certain rights and sets forth certain agreements with respect to the Seller’s ownership, voting and transfer of the Securities. The Seller has indicated that it intends to monetize the Securities over time, subject to market conditions, following the lapse of agreed-upon minimum holding periods. See Note 7 for discussion of a related commitment letter signed by the Holding Company with various financial institutions for a senior credit facility.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


3.	Investments

Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company’s fixed maturity and equity securities and the percentage that each sector represents by the respective total holdings for the periods shown. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairment (“OTTI”) loss:


	March 31, 2010
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gain		Loss		Loss		Value		Total
	(In millions)

Fixed Maturity Securities:
U.S. corporate securities	$	72,883	$	3,230	$	1,973	$	7	$	74,133		31.0	%
Residential mortgage-backed securities (“RMBS”)		43,786		1,351		1,550		607		42,980		17.9
Foreign corporate securities		38,869		2,180		944		—		40,105		16.7
U.S. Treasury, agency and government guaranteed securities (1)		30,981		778		1,018		—		30,741		12.8
Commercial mortgage-backed securities (“CMBS”)		16,680		507		692		—		16,495		6.9
Asset-backed securities (“ABS”)		14,686		254		871		177		13,892		5.8
Foreign government securities		11,969		1,272		77		—		13,164		5.5
State and political subdivision securities		8,188		185		334		—		8,039		3.4
Other fixed maturity securities		19		—		2		—		17		—

Total fixed maturity securities (2),(3)	$	238,061	$	9,757	$	7,461	$	791	$	239,566		100.0	%

Equity Securities:
Common stock	$	1,507	$	117	$	8	$	—	$	1,616		52.7	%
Non-redeemable preferred stock (2)		1,599		90		239		—		1,450		47.3

Total equity securities (4)	$	3,106	$	207	$	247	$	—	$	3,066		100.0	%


	December 31, 2009
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gain		Loss		Loss		Value		Total
	(In millions)

Fixed Maturity Securities:
U.S. corporate securities	$	72,075	$	2,821	$	2,699	$	10	$	72,187		31.7	%
RMBS		45,343		1,234		1,957		600		44,020		19.3
Foreign corporate securities		37,254		2,011		1,226		9		38,030		16.7
U.S. Treasury, agency and government guaranteed securities (1)		25,712		745		1,010		—		25,447		11.2
CMBS		16,555		191		1,106		18		15,622		6.9
ABS		14,272		189		1,077		222		13,162		5.8
Foreign government securities		11,010		1,076		139		—		11,947		5.2
State and political subdivision securities		7,468		151		411		—		7,208		3.2
Other fixed maturity securities		20		1		2		—		19		—

Total fixed maturity securities (2),(3)	$	229,709	$	8,419	$	9,627	$	859	$	227,642		100.0	%

Equity Securities:
Common stock	$	1,537	$	92	$	8	$	—	$	1,621		52.6	%
Non-redeemable preferred stock (2)		1,650		80		267		—		1,463		47.4

Total equity securities (4)	$	3,187	$	172	$	275	$	—	$	3,084		100.0	%

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(1)		The Company has classified within the U.S. Treasury, agency and government guaranteed securities caption certain corporate fixed maturity securities issued by U.S. financial institutions that were guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) pursuant to the FDIC’s Temporary Liquidity Guarantee Program (“FDIC Program”) of $323 million and $407 million at estimated fair value with unrealized gains of $3 million and $2 million at March 31, 2010 and December 31, 2009, respectively.

(2)		Upon acquisition, the Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more debt-like characteristics. The Company classifies perpetual securities with an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more equity-like characteristics, as equity securities within non-redeemable preferred stock. Many of such securities have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as “perpetual hybrid securities.” The following table presents the perpetual hybrid securities held by the Company at:

March 31, 2010

December 31, 2009

Estimated

Classification

Fair

Consolidated Balance Sheets

Sector Table

Primary Issuers

Value

(In millions)

Equity securities

Non-redeemable preferred stock

Non-U.S. financial institutions

1,134

988

Equity securities

Non-redeemable preferred stock

U.S. financial institutions

300

349

Fixed maturity securities

Foreign corporate securities

Non-U.S. financial institutions

2,630

2,626

Fixed maturity securities

U.S. corporate securities

U.S. financial institutions


(3)		Redeemable preferred stock with stated maturity dates are included in the U.S. corporate securities sector within fixed maturity securities. These securities, commonly referred to as “capital securities”, are primarily issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $2.7 billion and $2.5 billion at estimated fair value of such securities at March 31, 2010 and December 31, 2009, respectively.

(4)		Equity securities primarily consist of investments in common and preferred stocks, including certain perpetual hybrid securities and mutual fund interests. Privately-held equity securities were $1.0 billion and $1.0 billion at estimated fair value at March 31, 2010 and December 31, 2009, respectively.

All below investment grade, non-income producing and National Association of Insurance Commissioners (“NAIC”) amounts and percentages presented herein, are based on rating agency designations and equivalent ratings of the NAIC, with the exception of non-agency RMBS held by the Company’s domestic insurance subsidiaries. Non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported within ABS, held by the Company’s domestic insurance subsidiaries are presented based on final ratings from the revised NAIC rating methodology (i.e., NAIC 1 — 6) which became effective December 31, 2009 (which may not correspond to rating agency designations). All rating agency (i.e., Aaa/AAA) amounts or percentages presented herein are without adjustment for the revised NAIC methodology which became effective December 31, 2009.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents selected information about certain fixed maturity securities held by the Company at:


	March 31, 2010			December 31, 2009
	(In millions)

Below investment grade or non-rated fixed maturity securities:
Estimated fair value	$	20,475		$	20,201
Net unrealized loss	$	1,820		$	2,609
Non-income producing fixed maturity securities:
Estimated fair value	$	151		$	312
Net unrealized loss	$	30		$	31
Fixed maturity securities credit enhanced by financial guarantor insurers — by sector — at estimated fair value:
State and political subdivision securities	$	2,225		$	2,154
U.S. corporate securities		1,780			1,750
ABS		816			803
Other		97			43

Total fixed maturity securities credit enhanced by financial guarantor insurers	$	4,918		$	4,750

Ratings of the financial guarantor insurers providing the credit enhancement:
Portion rated Aa/AA		19	%		18	%

Portion rated A		2	%		2	%

Portion rated Baa/BBB		37	%		36	%

Concentrations of Credit Risk (Fixed Maturity Securities) — Summary. The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings.

The Company was not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company’s stockholders’ equity, other than the U.S. and Mexican government securities described below. The Company’s holdings in U.S. Treasury, agency and government guaranteed fixed maturity securities at estimated fair value were $30.7 billion and $25.4 billion at March 31, 2010 and December 31, 2009, respectively. The Company’s holdings in Mexican government and certain Mexican government agency fixed maturity securities at estimated fair value were $4.4 billion and $4.8 billion at March 31, 2010 and December 31, 2009, respectively.

Concentrations of Credit Risk (Fixed Maturity Securities) — U.S. and Foreign Corporate Securities. The Company maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have exposure to any single issuer in excess of 1% of total investments. The tables below present

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

the major industry types that comprise the corporate fixed maturity securities holdings, the largest exposure to a single issuer and the combined holdings in the ten issuers to which it had the largest exposure at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
			(In millions)

Corporate fixed maturity securities — by industry type:
Foreign (1)	$	40,105		35.1	%	$	38,030		34.5	%
Industrial		18,066		15.8			17,246		15.6
Consumer		17,625		15.4			16,924		15.4
Utility		15,530		13.6			14,785		13.4
Finance		13,302		11.6			13,756		12.5
Communications		6,592		5.8			6,580		6.0
Other		3,018		2.7			2,896		2.6

Total	$	114,238		100.0	%	$	110,217		100.0	%


(1)		Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity security investments.


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of Total			Fair		% of Total
	Value		Investments			Value		Investments
			(In millions)

Concentrations within corporate fixed maturity securities:
Largest exposure to a single issuer	$	938		0.3	%	$	1,038		0.3	%
Holdings in ten issuers with the largest exposures	$	6,888		2.0	%	$	7,506		2.3	%

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS. The table below presents the Company’s RMBS holdings and portion rated Aaa/AAA and portion rated NAIC 1 at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)

By security type:
Collateralized mortgage obligations	$	23,796		55.4	%	$	24,480		55.6	%
Pass-through securities		19,184		44.6			19,540		44.4

Total RMBS	$	42,980		100.0	%	$	44,020		100.0	%

By risk profile:
Agency	$	32,551		75.7	%	$	33,334		75.7	%
Prime		6,442		15.0			6,775		15.4
Alternative residential mortgage loans		3,987		9.3			3,911		8.9

Total RMBS	$	42,980		100.0	%	$	44,020		100.0	%

Portion rated Aaa/AAA	$	37,308		86.8	%	$	35,626		80.9	%

Portion rated NAIC 1	$	37,534		87.3	%	$	38,464		87.4	%

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Collateralized mortgage obligations are a type of mortgage-backed security structured by dividing the cash flows of mortgages into separate pools or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed securities are a type of asset-backed security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for a fee, remits or passes these payments through to the holders of the pass-through securities.

Prime residential mortgage lending includes the origination of residential mortgage loans to the most creditworthy borrowers with high quality credit profiles. Alternative residential mortgage loans (“Alt-A”) are a classification of mortgage loans where the risk profile of the borrower falls between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.

The following tables present the Company’s investment in Alt-A RMBS by vintage year (vintage year refers to the year of origination and not to the year of purchase) and certain other selected data:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
			(In millions)

Vintage Year:
2004 & Prior	$	104		2.6	%	$	109		2.8	%
2005		1,350		33.9			1,395		35.7
2006		911		22.8			825		21.1
2007		830		20.8			814		20.8
2008		7		0.2			—		—
2009		750		18.8			768		19.6
2010		35		0.9			—		—

Total	$	3,987		100.0	%	$	3,911		100.0	%


	March 31, 2010					December 31, 2009
			% of					% of
	Amount		Total			Amount		Total
			(In millions)

Net unrealized loss	$	1,072				$	1,248
Rated Aa/AA or better				33.6	%				26.3	%
Rated NAIC 1				33.9	%				31.3	%
By collateral type:
Fixed rate mortgage loans collateral				89.6	%				89.3	%
Hybrid adjustable rate mortgage loans collateral				10.4					10.7

Total Alt-A RMBS				100.0	%				100.0	%

Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS. The Company’s holdings in CMBS were $16.5 billion and $15.6 billion at estimated fair value at March 31, 2010 and December 31, 2009, respectively. The Company had no exposure to CMBS index securities at March 31, 2010 and December 31, 2009. The Company held commercial real estate collateralized debt obligations securities of $116 million and $111 million at estimated fair value at March 31, 2010 and December 31, 2009, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following tables present the Company’s holdings of CMBS by rating agency designation and by vintage year at:


	March 31, 2010
																					Below
																					Investment
	Aaa					Aa					A					Baa					Grade					Total
	Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
													(In millions)

2003 & Prior	$	7,413	$	7,642		$	298	$	279		$	127	$	112		$	40	$	35		$	21	$	15		$	7,899	$	8,083
2004		2,333		2,441			115		92			80		54			83		64			58		46			2,669		2,697
2005		2,916		2,956			60		42			78		52			54		38			11		12			3,119		3,100
2006		1,690		1,648			45		40			50		31			40		19			87		33			1,912		1,771
2007		843		672			78		50			123		89			22		21			10		7			1,076		839
2008		5		5			—		—			—		—			—		—			—		—			5		5
2009		—		—			—		—			—		—			—		—			—		—			—		—

Total	$	15,200	$	15,364		$	596	$	503		$	458	$	338		$	239	$	177		$	187	$	113		$	16,680	$	16,495

Ratings Distribution				93.1	%				3.1	%				2.0	%				1.1	%				0.7	%				100.0	%


	December 31, 2009
																					Below
																					Investment
	Aaa					Aa					A					Baa					Grade					Total
	Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
	(In millions)

2003 & Prior	$	6,836	$	6,918		$	394	$	365		$	162	$	140		$	52	$	41		$	36	$	18		$	7,480	$	7,482
2004		2,240		2,255			200		166			114		71			133		87			88		58			2,775		2,637
2005		2,956		2,853			144		108			85		65			39		24			57		51			3,281		3,101
2006		1,087		1,009			162		139			380		323			187		129			123		48			1,939		1,648
2007		432		314			13		12			361		257			234		153			35		13			1,075		749
2008		5		5			—		—			—		—			—		—			—		—			5		5
2009		—		—			—		—			—		—			—		—			—		—			—		—

Total	$	13,556	$	13,354		$	913	$	790		$	1,102	$	856		$	645	$	434		$	339	$	188		$	16,555	$	15,622

Ratings Distribution				85.4	%				5.1	%				5.5	%				2.8	%				1.2	%				100.0	%

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS. The Company’s holdings in ABS were $13.9 billion and $13.2 billion at estimated fair value at March 31, 2010 and December 31, 2009, respectively. The Company’s ABS are diversified both by collateral type and by issuer.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the collateral type and certain other information about ABS held by the Company at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
			(In millions)

By collateral type:
Credit card loans	$	7,331		52.8	%	$	7,057		53.6	%
Student loans		2,140		15.4			1,855		14.1
RMBS backed by sub-prime mortgage loans		1,071		7.7			1,044		7.9
Automobile loans		861		6.2			963		7.3
Other loans		2,489		17.9			2,243		17.1

Total	$	13,892		100.0	%	$	13,162		100.0	%

Portion rated Aaa/AAA	$	10,526		75.8	%	$	9,354		71.1	%

Portion rated NAIC 1	$	12,340		88.8	%	$	11,573		87.9	%

RMBS backed by sub-prime mortgage loans — portion credit enhanced by financial guarantor insurers				38.9	%				37.6	%
Of the 38.9% and 37.6% credit enhanced, the financial guarantor insurers were rated as follows:
By financial guarantor insurers rated Aa/AA				21.8	%				17.2	%
By financial guarantor insurers rated A				7.5	%				7.9	%

The following tables present the Company’s holdings of ABS supported by sub-prime mortgage loans by rating agency designation and by vintage year at:


	March 31, 2010
																					Below
																					Investment
	Aaa					Aa					A					Baa					Grade					Total
	Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
	(In millions)

2003 & Prior	$	56	$	48		$	65	$	53		$	14	$	11		$	7	$	6		$	95	$	57		$	237	$	175
2004		88		66			321		232			34		25			3		2			46		30			492		355
2005		60		49			195		137			37		28			54		34			201		136			547		384
2006		—		1			65		32			—		—			23		7			103		66			191		106
2007		—		—			78		36			—		—			—		—			33		15			111		51
2008		—		—			—		—			—		—			—		—			—		—			—		—
2009		—		—			—		—			—		—			—		—			—		—			—		—

Total	$	204	$	164		$	724	$	490		$	85	$	64		$	87	$	49		$	478	$	304		$	1,578	$	1,071

Ratings Distribution				15.3	%				45.8	%				6.0	%				4.6	%				28.3	%				100.0	%

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
																					Below
																					Investment
	Aaa					Aa					A					Baa					Grade					Total
	Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated			Cost or		Estimated
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
	(In millions)

2003 & Prior	$	57	$	48		$	73	$	58		$	11	$	8		$	7	$	6		$	98	$	56		$	246	$	176
2004		99		68			316		222			39		27			24		15			31		15			509		347
2005		64		45			226		144			40		26			24		18			209		139			563		372
2006		6		6			62		22			—		—			22		5			115		72			205		105
2007		—		—			78		28			—		—			—		—			36		16			114		44
2008		—		—			—		—			—		—			—		—			—		—			—		—
2009		—		—			—		—			—		—			—		—			—		—			—		—

Total	$	226	$	167		$	755	$	474		$	90	$	61		$	77	$	44		$	489	$	298		$	1,637	$	1,044

Ratings Distribution				16.0	%				45.4	%				5.8	%				4.2	%				28.6	%				100.0	%

The rating distribution of the Company’s ABS supported by sub-prime mortgage loans were as follows at:


	March 31, 2010			December 31, 2009

NAIC 1		69.3	%		69.1	%
NAIC 2		5.1	%		4.2	%
NAIC 3		12.4	%		12.2	%
NAIC 4		9.2	%		6.2	%
NAIC 5		3.9	%		8.3	%
NAIC 6		0.1	%		—	%

Concentrations of Credit Risk (Equity Securities). The Company was not exposed to any concentrations of credit risk in its equity securities holdings of any single issuer greater than 10% of the Company’s stockholders’ equity at March 31, 2010 and December 31, 2009.

Maturities of Fixed Maturity Securities. The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), are as follows:


	March 31, 2010				December 31, 2009
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
			(In millions)

Due in one year or less	$	7,542	$	7,659	$	6,845	$	6,924
Due after one year through five years		41,331		42,594		38,408		39,399
Due after five years through ten years		43,474		45,280		40,448		41,568
Due after ten years		70,562		70,666		67,838		66,947

Subtotal		162,909		166,199		153,539		154,838
RMBS, CMBS and ABS		75,152		73,367		76,170		72,804

Total fixed maturity securities	$	238,061	$	239,566	$	229,709	$	227,642

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 included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately in the table, as they are not due at a single maturity.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired. As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new OTTI guidance that amends the methodology for determining for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how the amount of the OTTI loss that is charged to earnings is determined. There was no change in the OTTI methodology for equity securities.

With respect to fixed maturity securities, the Company considers, among other impairment criteria, whether it has the intent to sell a particular impaired fixed maturity security. The Company’s intent to sell a particular impaired fixed maturity security considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company’s need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. In certain circumstances, the Company may determine that it does not intend to sell a particular security but that it is more likely than not that it will be required to sell that security before recovery of the decline in estimated fair value below amortized cost. In such instances, the fixed maturity security will be deemed other-than-temporarily impaired in the period during which it was determined more likely than not that the security will be required to be sold and an OTTI loss will be recorded in earnings. If the Company does not have the intent to sell (i.e., has not made the decision to sell) and it does not believe that it is more likely than not that it will be required to sell the security before recovery of its amortized cost, an impairment assessment is made, as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report. Prior to April 1, 2009, the Company’s assessment of OTTI for fixed maturity securities was performed in the same manner as described below for equity securities.

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 value to an amount equal to or greater than cost. Decisions to sell equity securities are based on current conditions in relation to the same broad portfolio management considerations in a manner consistent with that described above for fixed maturity securities.

With respect to perpetual hybrid securities, some of which are classified as fixed maturity securities and some of which are classified as equity securities, within non-redeemable preferred stock, the Company considers in its OTTI analysis whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. The Company also considers whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in accumulated other comprehensive loss, are as follows at:


	March 31, 2010			December 31, 2009
	(In millions)

Fixed maturity securities that were temporarily impaired	$	2,296		$	(1,208	)
Fixed maturity securities with noncredit OTTI losses in other comprehensive loss		(791	)		(859	)

Total fixed maturity securities		1,505			(2,067	)
Equity securities		(40	)		(103	)
Derivatives		(17	)		(144	)
Other		71			71

Subtotal		1,519			(2,243	)

Amounts allocated from:
Insurance liability loss recognition		(355	)		(118	)
DAC and VOBA related to noncredit OTTI losses recognized in other comprehensive loss		(11	)		71
DAC and VOBA		(549	)		145

Subtotal		(915	)		98
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in other comprehensive loss		271			275
Deferred income tax benefit (expense)		(420	)		539

Net unrealized investment gains (losses)		455			(1,331	)
Net unrealized investment gains (losses) attributable to noncontrolling interests		2			1

Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	457		$	(1,330	)

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive loss, as presented above, of $791 million at March 31, 2010, includes $859 million recognized prior to January 1, 2010, $59 million ($17 million, net of DAC) of noncredit losses recognized in the three months ended March 31, 2010, $16 million transferred to retained earnings in connection with the adoption of new guidance related to the consolidation of VIEs (see Note 1), and $111 million of subsequent increases in estimated fair value during the three months ended March 31, 2010 on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive loss.

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive loss, as presented above, of $859 million at December 31, 2009, includes $126 million related to the transition adjustment recorded in 2009 upon the adoption of new guidance on the recognition and presentation of OTTI, $939 million ($857 million, net of DAC) of noncredit losses recognized in the year ended December 31, 2009 (as more fully described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report) and $206 million of subsequent increases in estimated fair value during the year ended December 31, 2009 on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive loss.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

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


	Three Months
	Ended
	March 31, 2010
	(In millions)

Balance, beginning of period	$	(1,330	)
Cumulative effect of change in accounting principle, net of income tax		42
Fixed maturity securities on which noncredit OTTI losses have been recognized		52
Unrealized investment gains (losses) during the period		3,646
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		(237	)
DAC and VOBA related to noncredit OTTI losses recognized in other comprehensive loss		(82	)
DAC and VOBA		(694	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in other comprehensive loss		1
Deferred income tax benefit (expense)		(942	)

Net unrealized investment gains (losses)		456
Net unrealized investment gains (losses) attributable to noncontrolling interests		1

Balance, end of period	$	457

Change in net unrealized investment gains (losses)	$	1,786
Change in net unrealized investment gains (losses) attributable to noncontrolling interests		1

Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	1,787

Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale by Sector

The following tables present the estimated fair value and gross unrealized loss of the Company’s fixed maturity and equity securities in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. The unrealized loss amounts presented below include the noncredit component of OTTI loss. Fixed maturity securities on which a noncredit OTTI loss has been recognized in accumulated other comprehensive loss are categorized by length of time as being “less than 12 months” or “equal to or greater than 12 months” in a continuous unrealized loss position based on the point in

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

time that the estimated fair value initially declined to below the amortized cost basis and not the period of time since the unrealized loss was deemed a noncredit OTTI loss.


	March 31, 2010
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
			(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities	$	8,057	$	253	$	15,649	$	1,727	$	23,706	$	1,980
RMBS		4,284		103		9,102		2,054		13,386		2,157
Foreign corporate securities		4,587		161		6,144		783		10,731		944
U.S. Treasury, agency and government guaranteed securities		14,077		890		890		128		14,967		1,018
CMBS		566		12		2,862		680		3,428		692
ABS		1,413		91		4,510		957		5,923		1,048
Foreign government securities		575		24		518		53		1,093		77
State and political subdivision securities		2,123		61		1,737		273		3,860		334
Other fixed maturity securities		16		2		—		—		16		2

Total fixed maturity securities	$	35,698	$	1,597	$	41,412	$	6,655	$	77,110	$	8,252

Equity Securities:
Common stock		67		7		7		1		74		8
Non-redeemable preferred stock		41		7		986		232		1,027		239

Total equity securities	$	108	$	14	$	993	$	233	$	1,101	$	247

Total number of securities in an unrealized loss position		2,288				3,049

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities	$	8,641	$	395	$	18,004	$	2,314	$	26,645	$	2,709
RMBS		5,623		119		10,268		2,438		15,891		2,557
Foreign corporate securities		3,786		139		7,282		1,096		11,068		1,235
U.S. Treasury, agency and government guaranteed securities		15,051		990		51		20		15,102		1,010
CMBS		2,052		29		5,435		1,095		7,487		1,124
ABS		1,259		143		5,875		1,156		7,134		1,299
Foreign government securities		2,318		55		507		84		2,825		139
State and political subdivision securities		2,086		94		1,843		317		3,929		411
Other fixed maturity securities		6		2		—		—		6		2

Total fixed maturity securities	$	40,822	$	1,966	$	49,265	$	8,520	$	90,087	$	10,486

Equity Securities:
Common stock		56		7		14		1		70		8
Non-redeemable preferred stock		66		41		930		226		996		267

Total equity securities	$	122	$	48	$	944	$	227	$	1,066	$	275

Total number of securities in an unrealized loss position		2,210				3,333

Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized loss, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive loss, gross unrealized loss as a

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

percentage of cost or amortized cost and number of securities for fixed maturity and equity securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:


	March 31, 2010
	Cost or Amortized Cost				Gross Unrealized Loss						Number of Securities
	Less than		20% or		Less than			20% or			Less than		20% or
	20%		more		20%			more			20%		more
			(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months	$	31,552	$	1,823	$	849		$	480			1,686		127
Six months or greater but less than nine months		1,271		317		92			90			116		26
Nine months or greater but less than twelve months		3,961		290		468			92			101		26
Twelve months or greater		35,978		10,170		2,835			3,346			2,308		584

Total	$	72,762	$	12,600	$	4,244		$	4,008

Percentage of amortized cost						6	%		32	%

Equity Securities:
Less than six months	$	77	$	130	$	6		$	35			361		16
Six months or greater but less than nine months		24		—		2			—			12		2
Nine months or greater but less than twelve months		6		—		1			—			9		—
Twelve months or greater		665		446		75			128			48		25

Total	$	772	$	576	$	84		$	163

Percentage of cost						11	%		28	%

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
	Cost or Amortized Cost				Gross Unrealized Loss						Number of Securities
	Less than		20% or		Less than			20% or			Less than		20% or
	20%		more		20%			more			20%		more
			(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months	$	35,163	$	2,658	$	933		$	713			1,725		186
Six months or greater but less than nine months		4,908		674		508			194			124		49
Nine months or greater but less than twelve months		1,723		1,659		167			517			106		79
Twelve months or greater		41,721		12,067		3,207			4,247			2,369		724

Total	$	83,515	$	17,058	$	4,815		$	5,671

Percentage of amortized cost						6	%		33	%

Equity Securities:
Less than six months	$	66	$	63	$	7		$	14			199		8
Six months or greater but less than nine months		6		1		1			1			15		2
Nine months or greater but less than twelve months		13		94		2			39			8		6
Twelve months or greater		610		488		73			138			50		24

Total	$	695	$	646	$	83		$	192

Percentage of cost						12	%		30	%

Equity securities with a gross unrealized loss of 20% or more for twelve months or greater decreased from $138 million at December 31, 2009 to $128 million at March 31, 2010. As shown in the section “Evaluating Temporarily Impaired Available-for-Sale Securities” below, the $128 million of equity securities with a gross unrealized loss of 20% or more for twelve months or greater at March 31, 2010 were investment grade non-redeemable preferred stock, of which $124 million were financial services industry investment grade non-redeemable preferred stock, of which 90% were rated A or better.

Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale

The Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive loss of $8.5 billion and

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

$10.8 billion at March 31, 2010 and December 31, 2009, respectively, were concentrated, calculated as a percentage of gross unrealized loss and OTTI loss, by sector and industry as follows:


	March 31, 2010			December 31, 2009

Sector:
RMBS		25	%		24	%
U.S. corporate securities		23			25
ABS		12			12
U.S. Treasury, agency and government guaranteed securities		12			9
Foreign corporate securities		11			11
CMBS		8			10
State and political subdivision securities		4			4
Other		5			5

Total		100	%		100	%

Industry:
Mortgage-backed		33	%		34	%
Finance		20			22
Asset-backed		12			12
U.S. Treasury, agency and government guaranteed securities		12			9
Consumer		4			4
Utility		4			4
State and political subdivision securities		4			4
Communications		2			2
Industrial		2			1
Other		7			8

Total		100	%		100	%

Evaluating Temporarily Impaired Available-for-Sale Securities

The following table presents the Company’s fixed maturity and equity securities, each with a gross unrealized loss of greater than $10 million, the number of securities, total gross unrealized loss and percentage of total gross unrealized loss at:


	March 31, 2010						December 31, 2009
	Fixed Maturity			Equity			Fixed Maturity			Equity
	Securities			Securities			Securities			Securities
	(In millions, except number of securities)

Number of securities		165			7			223			9
Total gross unrealized loss	$	3,310		$	101		$	4,465		$	132
Percentage of total gross unrealized loss		40	%		41	%		43	%		48	%

Fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million, decreased $1.2 billion during the three months ended March 31, 2010. The cause of the decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2010 was primarily attributable to improving market conditions, including narrowing of credit spreads reflecting an improvement in liquidity. These securities were included in the Company’s OTTI review process. Based upon the Company’s current evaluation of these securities and other available-for-sale securities in an unrealized loss position in accordance with its impairment policy, and

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

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 has concluded that these securities are not other-than-temporarily impaired.

In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities is given greater weight and consideration than for fixed maturity securities. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for an equity security, greater weight and consideration is given by the Company to a decline in market value and the likelihood such market value decline will recover.

The following table presents certain information about the Company’s equity securities available-for-sale with a gross unrealized loss of 20% or more at March 31, 2010:


			Non-Redeemable Preferred Stock
			All Types of
	All Equity		Non-Redeemable					Investment Grade
	Securities		Preferred Stock					All Industries					Financial Services Industry
	Gross		Gross		% of All			Gross		% of All			Gross					% A
	Unrealized		Unrealized		Equity			Unrealized		Non-Redeemable			Unrealized		% of All			Rated or
	Loss		Loss		Securities			Loss		Preferred Stock			Loss		Industries			Better
								(In millions)

Less than six months	$	35	$	33		94	%	$	16		48	%	$	16		100	%		100	%
Six months or greater but less than twelve months		—		—		—	%		—		—	%		—		—	%		—	%
Twelve months or greater		128		128		100	%		128		100	%		124		97	%		90	%

All equity securities with a gross unrealized loss of 20% or more	$	163	$	161		99	%	$	144		89	%	$	140		97	%		91	%

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those of financial services companies. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred stock with a severe or an extended unrealized loss. The Company also considered whether any issuers of non-redeemable preferred stock with an unrealized loss held by the Company, regardless of credit rating, have deferred any dividend payments. No such dividend payments were deferred.

With respect to common stock holdings, the Company considered the duration and severity of the unrealized losses for securities in an unrealized loss position of 20% or more; and the duration of unrealized losses for securities in an unrealized loss position of less than 20% in an extended unrealized loss position (i.e., 12 months or greater).

Future other-than-temporary impairments 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 rating, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional other-than-temporary impairments may be incurred in upcoming quarters.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Investment Gains (Losses)

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new guidance on the recognition and presentation of OTTI that amends the methodology to determine for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how OTTI losses that are charged to earnings are measured. There was no change in the methodology for identification and measurement of OTTI losses charged to earnings for impaired equity securities.

The components of net investment gains (losses) are as follows:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Total losses on fixed maturity securities:
Total OTTI losses recognized	$	(151	)	$	(553	)
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive loss		59			—

Net OTTI losses on fixed maturity securities recognized in earnings		(92	)		(553	)
Fixed maturity securities — net gains (losses) on sales and disposals		25			(56	)

Total losses on fixed maturity securities		(67	)		(609	)

Other net investment gains (losses):
Equity securities		27			(269	)
Mortgage loans		(28	)		(148	)
Commercial mortgage loans held by consolidated securitization entities — fair value option		481			—
Real estate and real estate joint ventures		(22	)		(25	)
Other limited partnership interests		(1	)		(97	)
Freestanding derivatives		(481	)		(1,050	)
Embedded derivatives		522			1,217
Trading securities held by consolidated securitization entities — fair value option		(4	)		—
Long-term debt of consolidated securitization entities — related to trading securities — fair value option		12			—
Long-term debt of consolidated securitization entities — related to mortgage loans — fair value option		(479	)		—
Other		112			75

Total net investment gains (losses)	$	72		$	(906	)

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) are as shown below. Investment gains and losses on sales of securities are determined on a specific identification basis.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Fixed Maturity Securities						Equity Securities						Total
	Three Months Ended March 31,
	2010			2009			2010			2009			2010			2009
	(In millions)

Proceeds	$	8,378		$	11,778		$	145		$	58		$	8,523		$	11,836

Gross investment gains		164			356			31			7			195			363

Gross investment losses		(139	)		(412	)		(3	)		(18	)		(142	)		(430	)

Total OTTI losses recognized in earnings:
Credit-related		(86	)		(483	)		—			—			(86	)		(483	)
Other (1)		(6	)		(70	)		(1	)		(258	)		(7	)		(328	)

Total OTTI losses recognized in earnings		(92	)		(553	)		(1	)		(258	)		(93	)		(811	)

Net investment gains (losses)	$	(67	)	$	(609	)	$	27		$	(269	)	$	(40	)	$	(878	)


(1)		Other OTTI losses recognized in earnings include impairments on equity securities, impairments on perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.

Fixed maturity security OTTI losses recognized in earnings relate to the following sectors and industries:


	Three Months
	Ended
	March 31,
	2010		2009
	(In millions)

Sector:
U.S. and foreign corporate securities — by industry:
Consumer	$	22	$	90
Finance		8		121
Communications		3		142
Industrial		—		17
Utility		—		33
Other		—		24

Total U.S. and foreign corporate securities		33		427
RMBS		30		58
ABS		19		66
CMBS		10		2

Total	$	92	$	553

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Equity security OTTI losses recognized in earnings relate to the following sectors and industries:


	Three Months
	Ended March 31,
	2010		2009
	(In millions)

Sector:
Common stock	$	1	$	39
Non-redeemable preferred stock		—		219

Total	$	1	$	258

Industry:
Financial services industry:
Perpetual hybrid securities	$	—	$	200
Common and remaining non-redeemable preferred stock		—		30

Total financial services industry		—		230
Other		1		28

Total	$	1	$	258

Credit Loss Rollforward — 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 Other Comprehensive Loss

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held by the Company at March 31, 2010 for which a portion of the OTTI loss was recognized in other comprehensive loss:


	Three Months
	Ended
	March 31, 2010
	(In millions)

Balance, beginning of period	$	581
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		19
Additional impairments — credit loss OTTI recognized on securities previously impaired		31
Reductions:
Due to sales (maturities, pay downs or prepayments) during the period of securities previously credit loss OTTI impaired		(104	)
Due to securities de-recognized in connection with the adoption of new guidance related to the consolidation of VIEs		(100	)
Due to increases in cash flows — accretion of previous credit loss OTTI		(3	)

Balance, end of period	$	424

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Investment Income

The components of net investment income are as follows:


	Three Months
	Ended
	March 31,
	2010		2009
	(In millions)

Fixed maturity securities	$	3,073	$	2,818
Equity securities		25		38
Trading securities		79		17
Trading securities held by consolidated securitization entities		4		—
Mortgage loans		673		682
Commercial mortgage loans held by consolidated securitization entities		105		—
Policy loans		178		157
Real estate and real estate joint ventures		48		(87	)
Other limited partnership interests		265		(253	)
Cash, cash equivalents and short-term investments		18		48
International joint ventures (1)		17		7
Other		86		75

Total investment income		4,571		3,502
Less: Investment expenses		227		241

Net investment income	$	4,344	$	3,261


(1)		Amounts are presented net of changes in estimated fair value of derivatives related to economic hedges of the Company’s investment in these equity method international joint investments that do not qualify for hedge accounting of ($32) million and ($24) million for the three months ended March 31, 2010 and 2009, respectively. The current period losses were primarily attributable to losses on equity derivatives and equity option derivatives (both of which are used to hedge embedded derivative risk) due to improving equity markets in the current period. In addition, included in the equity in earnings of the joint ventures were gains attributable to the widening of the Company’s own credit spread, which is included in the valuation of certain liabilities, including embedded derivatives, that are carried at estimated fair value.

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Securities Lending

The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. Securities loaned under such transactions may be sold or repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control, the amounts of which by aging category are presented below.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Elements of the securities lending programs are presented below at:


	March 31, 2010		December 31, 2009
	(In millions)

Securities on loan:
Cost or amortized cost	$	22,805	$	21,012
Estimated fair value	$	22,805	$	20,949
Aging of cash collateral liability:
Open (1)	$	3,905	$	3,290
Less than thirty days		13,636		13,605
Thirty days or greater but less than sixty days		1,922		3,534
Sixty days or greater but less than ninety days		659		92
Ninety days or greater		3,156		995

Total cash collateral liability	$	23,278	$	21,516

Security collateral on deposit from counterparties	$	5	$	6

Reinvestment portfolio — estimated fair value	$	22,300	$	20,339


(1)		Open — meaning that the related loaned security could be returned to the Company on the next business day requiring the Company to immediately return the cash collateral.

The estimated fair value of the securities on loan related to the cash collateral on open at March 31, 2010 was $3,816 million, of which $3,612 million were U.S. Treasury, agency and government guaranteed securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan were primarily U.S. Treasury, agency and government guaranteed securities, and very liquid RMBS. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including U.S. corporate, U.S. Treasury, agency and government guaranteed, RMBS, ABS and CMBS securities).

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements. Separately, the Company has $47 million and $46 million, at estimated fair value, of cash and security collateral on deposit from a counterparty to secure its interest in a pooled investment that is held by a third party trustee, as custodian, at March 31, 2010 and December 31, 2009, respectively. This pooled investment is included within fixed maturity securities and had an estimated fair value of $53 million and $51 million at March 31, 2010 and December 31, 2009, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

The invested assets on deposit, invested assets held in trust and invested assets pledged as collateral are presented in the table below. The amounts presented in the table below are at estimated fair value for cash and cash equivalents, short-term investments, fixed maturity, trading and equity securities and at carrying value for mortgage loans.


	March 31, 2010		December 31, 2009
	(In millions)

Invested assets on deposit:
Regulatory agencies (1)	$	1,427	$	1,383
Invested assets held in trust:
Collateral financing arrangements (2)		5,818		5,653
Reinsurance arrangements (3)		2,730		2,719
Invested assets pledged as collateral:
Debt and funding agreements — FHLB of N Y(4)		20,583		20,612
Funding agreements — FHLB of Boston (4)		405		419
Funding agreements — Farmer Mac (5)		2,871		2,871
Federal Reserve Bank of New York (6)		1,581		1,537
Collateral financing arrangements (7)		76		80
Derivative transactions (8)		1,690		1,671
Short sale agreements (9)		553		496

Total invested assets on deposit, held in trust and pledged as collateral	$	37,734	$	37,441


(1)		The Company had investment assets on deposit with regulatory agencies consisting primarily of cash and cash equivalents, fixed maturity and equity securities and short-term investments.

(2)		The Company held in trust cash and securities, primarily fixed maturity and equity securities, to satisfy collateral requirements.

(3)		The Company has pledged certain investments, primarily fixed maturity securities, in connection with certain reinsurance transactions.

(4)		The Company has pledged fixed maturity securities and mortgage loans in support of its debt and funding agreements with the Federal Home Loan Bank of New York (“FHLB of NY”) and has pledged fixed maturity securities to the Federal Home Loan Bank of Boston (“FHLB of Boston”). The nature of these Federal Home Loan Bank arrangements is described in Note 8 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.

(5)		The Company has pledged certain agricultural real estate mortgage loans in connection with funding agreements with the Federal Agricultural Mortgage Corporation (“Farmer Mac”). The nature of the Farmer Mac arrangements is described in Note 8 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.

(6)		The Company has pledged qualifying mortgage loans and fixed maturity securities in connection with collateralized borrowings from the Federal Reserve Bank of New York’s Term Auction Facility. The nature of the Federal Reserve Bank of New York arrangements is described in Note 11 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.

(7)		The Holding Company has pledged certain collateral in support of the collateral financing arrangements described in Note 12 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(8)		Certain of the Company’s invested assets are pledged as collateral for various derivative transactions as described in Note 4.

(9)		Certain of the Company’s trading securities and cash and cash equivalents are pledged to secure liabilities associated with short sale agreements in the trading securities portfolio as described in the following section.

See also the immediately preceding section “Securities Lending” for the amount of the Company’s cash and invested assets received from and due back to counterparties pursuant to the securities lending program.

Trading Securities

The Company has trading securities portfolios to support investment strategies that involve the active and frequent purchase and sale of securities, the execution of short sale agreements and asset and liability matching strategies for certain insurance products. In addition, the Company classifies securities held within consolidated securitization entities as trading securities, with changes in estimated fair value recorded as net investment gains (losses).

The table below presents certain information about the Company’s trading securities portfolios:


	March 31, 2010		December 31, 2009
	(In millions)

Trading securities — at estimated fair value	$	2,765	$	2,384
Securities held by consolidated securitization entities — at estimated fair value		274		—

Total trading securities — at estimated fair value	$	3,039	$	2,384

Short sale agreement liabilities — at estimated fair value (included in other liabilities)	$	97	$	106
Investments pledged to secure short sale agreement liabilities	$	553	$	496


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Trading securities:
Net investment income (1)	$	79		$	17
Changes in estimated fair value included in net investment income	$	64		$	13
Securities held by consolidated securitization entities:
Net investment income (2)	$	4		$	—
Changes in estimated fair value included in net investment gains (losses) (3)	$	(4	)	$	—


(1)		Includes interest and dividends earned on trading securities, in addition to the net realized gains (losses) and changes in estimated fair value subsequent to purchase, recognized on the trading securities and the related short sale agreement liabilities.

(2)		Includes interest and dividends earned on securities held by consolidated securitization entities.

(3)		Includes net realized gains (losses) and changes in estimated fair value subsequent to consolidation recognized on securities held by consolidated securitization entities — accounted for under the fair value option.

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Mortgage Loans

Mortgage loans, net of valuation allowances, are categorized as follows:


	March 31, 2010					December 31, 2009
	Carrying		% of			Carrying		% of
	Value		Total			Value		Total
	(In millions)

Mortgage loans held-for-investment, net:
Commercial mortgage loans	$	34,727		60.4	%	$	34,587		67.9	%
Agricultural mortgage loans		12,093		21.1			12,140		23.8
Residential and consumer loans		1,548		2.7			1,454		2.9

Subtotal mortgage loans held-for-investment, net		48,368		84.2	%		48,181		94.6	%

Commercial mortgage loans held by consolidated securitization entities — fair value option		7,065		12.3			—		—

Total mortgage loans held-for-investment, net		55,433		96.5	%		48,181		94.6	%

Mortgage loans held-for-sale:
Residential — fair value option		1,647		2.9			2,470		4.9
Commercial and residential — lower of amortized cost or estimated fair value		356		0.6			258		0.5

Total mortgage loans held-for-sale		2,003		3.5			2,728		5.4

Total mortgage loans, net	$	57,436		100.0	%	$	50,909		100.0	%

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Additions to the mortgage valuation allowance were $43 million and $131 million for the three months ended March 31, 2010 and 2009, respectively.

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Commercial Mortgage Loans by Geographic Region and Property Type — The Company diversifies its mortgage loans by both geographic region and property type to reduce the risk of concentration. The following table presents the distribution across geographic regions and property types for commercial mortgage loans at:


	March 31, 2010					December 31, 2009
	Carrying		% of			Carrying		% of
	Value		Total			Value		Total
	(In millions)

Region:
Pacific	$	8,497		24.5	%	$	8,684		25.1	%
South Atlantic		7,426		21.4			7,342		21.2
Middle Atlantic		6,075		17.4			5,948		17.2
International		3,676		10.6			3,564		10.3
West South Central		2,868		8.3			2,870		8.3
East North Central		2,513		7.2			2,487		7.2
New England		1,394		4.0			1,414		4.1
Mountain		928		2.7			944		2.7
West North Central		632		1.8			641		1.9
East South Central		441		1.3			443		1.3
Other		277		0.8			250		0.7

Total	$	34,727		100.0	%	$	34,587		100.0	%