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MET Metlife

Filed: 8 Nov 21, 7:00pm
0001099219us-gaap:EmbeddedDerivativeFinancialInstrumentsMembersrt:MinimumMembermet:MortalityRatesRangeThreeMember2020-12-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission file number: 001-15787
 _____________________________________
MetLife, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-4075851
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
200 Park Avenue,New York,NY 10166-0188
(Address of principal executive offices) (Zip Code)
(212) 578-9500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01METNew York Stock Exchange
Floating Rate Non-Cumulative Preferred Stock, Series A, par value $0.01MET PRANew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.625% Non-Cumulative Preferred Stock, Series EMET PRENew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in
a share of 4.75% Non-Cumulative Preferred Stock, Series F
MET PRFNew York Stock Exchange
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 No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 
At October 29, 2021, 841,160,193 shares of the registrant’s common stock were outstanding.



Table of Contents


As used in this Form 10Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates.
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10‑Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events and do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. They include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, future sales efforts, future expenses, the outcome of contingencies such as legal proceedings, and future trends in operations and financial results.
Many factors determine Company results, and they involve unpredictable risks and uncertainties. Our forward-looking statements depend on our assumptions, our expectations, and our understanding of the economic environment, but they may be inaccurate and may change. We do not guarantee any future performance. Our results could differ materially from those we express or imply in forward-looking statements. The risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission, and others, may cause such differences. These factors include:
(1) economic condition difficulties, including risks relating to public health, interest rates, credit spreads, equity, real estate, obligors and counterparties, currency exchange rates, derivatives, and terrorism and security;
(2) global capital and credit market adversity;
(3) credit facility inaccessibility;
(4) financial strength or credit ratings downgrades;
(5) unavailability, unaffordability, or inadequate reinsurance;
(6) statutory life insurance reserve financing costs or limited market capacity;
(7) legal, regulatory, and supervisory and enforcement policy changes;
(8) changes in tax rates, tax laws or interpretations;
(9) litigation and regulatory investigations;
(10) London Interbank Offered Rate termination and transition to alternative reference rates;
(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;
(12) MetLife, Inc.’s inability to pay dividends and repurchase common stock;
(13) MetLife, Inc.’s subsidiaries’ inability to pay it dividends;
(14) investment defaults, downgrades, or volatility;
(15) investment sales or lending difficulties;
(16) collateral or derivative-related payments;
(17) investment valuations, allowances, or impairments changes;
(18) claims or other results that differ from our estimates, assumptions, or models;
(19) global political, legal, or operational risks;
(20) business competition;
(21) technological change;
(22) catastrophes;
(23) climate changes or responses to it;
(24) deficiencies in our closed block;
(25) goodwill or other asset impairment, or deferred income tax asset allowance;
(26) acceleration of amortization of deferred policy acquisition costs, deferred sales inducements, value of business acquired, or value of customer relationships acquired;
(27) product guarantee volatility, costs, and counterparty risks;
(28) risk management failures;
(29) insufficient protection from operational risks;
(30) confidential information protection or other cybersecurity or disaster recovery failures;
(31) accounting standards changes;
(32) excessive risk-taking;
(33) marketing and distribution difficulties;
(34) pension and other postretirement benefit assumption changes;
(35) inability to protect our intellectual property or avoid infringement claims;
(36) acquisition, integration, growth, disposition, or reorganization difficulties;
(37) Brighthouse Financial, Inc. separation risks;
(38) MetLife, Inc.’s Board of Directors influence over the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; and
(39) legal- and corporate governance-related effects on business combinations.
The Company will not publicly correct or update any forward-looking statements if we believe we are not likely to achieve them or for any other reasons. Please consult any further disclosures MetLife, Inc. makes on related subjects in subsequent reports to the U.S. Securities and Exchange Commission.
2

Corporate Information
We announce financial and other information about MetLife to our investors on our website (www.metlife.com) through the MetLife Investor Relations web page (https://investor.metlife.com), as well as in U.S. Securities and Exchange Commission filings, news releases, public conference calls and webcasts. MetLife encourages investors to visit the Investor Relations web page from time to time, as information is updated and new information is posted. The information found on our website is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the U.S. Securities and Exchange Commission, and any references to our website are intended to be inactive textual references only.
Note Regarding Reliance on Statements in Our Contracts
See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.
3

Part I — Financial Information
Item 1. Financial Statements
MetLife, Inc.
Interim Condensed Consolidated Balance Sheets
September 30, 2021 and December 31, 2020 (Unaudited)
(In millions, except share and per share data)
September 30, 2021December 31, 2020
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $310,004 and $310,811, respectively; allowance for credit loss of $68 and $81, respectively)$341,038 $354,809 
Equity securities, at estimated fair value941 1,079 
Contractholder-directed equity securities and fair value option securities, at estimated fair value12,055 13,319 
Mortgage loans (net of allowance for credit loss of $563 and $590, respectively; includes $134 and $165, respectively, under the fair value option)80,964 83,919 
Policy loans9,186 9,493 
Real estate and real estate joint ventures (includes $225 and $169, respectively, under the fair value option and $0 and $128, respectively, of real estate held-for-sale)12,182 11,933 
Other limited partnership interests13,480 9,470 
Short-term investments, principally at estimated fair value7,150 3,904 
Other invested assets (includes $2,019 and $2,156, respectively, of leveraged and direct financing leases and $356 and $332, respectively, relating to variable interest entities)18,683 20,593 
Total investments495,679 508,519 
Cash and cash equivalents, principally at estimated fair value (includes $13 and $12, respectively, relating to variable interest entities)18,956 19,795 
Accrued investment income3,354 3,388 
Premiums, reinsurance and other receivables (includes $5 and $4, respectively, relating to variable interest entities)17,816 17,870 
Deferred policy acquisition costs and value of business acquired16,191 16,389 
Goodwill9,638 10,112 
Assets held-for-sale7,462 7,418 
Other assets (includes $1 and $1, respectively, relating to variable interest entities)11,614 11,685 
Separate account assets180,954 199,970 
Total assets$761,664 $795,146 
Liabilities and Equity
Liabilities
Future policy benefits$197,086 $206,656 
Policyholder account balances203,973 205,176 
Other policy-related balances17,735 17,101 
Policyholder dividends payable525 587 
Policyholder dividend obligation1,952 2,969 
Payables for collateral under securities loaned and other transactions31,382 29,475 
Short-term debt346 393 
Long-term debt (includes $0 and $5, respectively, relating to variable interest entities)14,010 14,603 
Collateral financing arrangement806 845 
Junior subordinated debt securities3,155 3,153 
Current income tax payable103 129 
Deferred income tax liability9,850 11,008 
Liabilities held-for-sale6,757 4,650 
Other liabilities (includes $1 and $1, respectively, relating to variable interest entities)23,697 23,614 
Separate account liabilities180,954 199,970 
Total liabilities692,331 720,329 
Contingencies, Commitments and Guarantees (Note 15)00
Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $3,905 and $4,405 aggregate liquidation preference— — 
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,186,092,767 and 1,181,614,288 shares issued, respectively; 844,531,818 and 892,910,600 shares outstanding, respectively12 12 
Additional paid-in capital33,457 33,812 
Retained earnings40,426 36,491 
Treasury stock, at cost; 341,560,949 and 288,703,688 shares, respectively(16,956)(13,829)
Accumulated other comprehensive income (loss) ("AOCI")12,111 18,072 
Total MetLife, Inc.’s stockholders’ equity69,050 74,558 
Noncontrolling interests283 259 
Total equity69,333 74,817 
Total liabilities and equity$761,664 $795,146 
See accompanying notes to the interim condensed consolidated financial statements.
4

MetLife, Inc.
Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Three Months and Nine Months Ended September 30, 2021 and 2020 (Unaudited)
(In millions, except per share data)
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
2021202020212020
Revenues
Premiums$9,455 $9,935 $28,914 $28,137 
Universal life and investment-type product policy fees1,521 1,497 4,334 4,227 
Net investment income5,568 4,729 16,162 11,877 
Other revenues663 455 1,958 1,350 
Net investment gains (losses)(84)(20)1,655 (77)
Net derivative gains (losses)(218)(581)(2,032)2,910 
Total revenues16,905 16,015 50,991 48,424 
Expenses
Policyholder benefits and claims10,103 10,000 30,031 27,689 
Interest credited to policyholder account balances1,287 1,416 4,153 3,458 
Policyholder dividends189 206 672 788 
Other expenses3,284 3,470 9,315 9,726 
Total expenses14,863 15,092 44,171 41,661 
Income (loss) before provision for income tax2,042 923 6,820 6,763 
Provision for income tax expense (benefit)453 214 1,456 1,503 
Net income (loss)1,589 709 5,364 5,260 
Less: Net income (loss) attributable to noncontrolling interests15 11 
Net income (loss) attributable to MetLife, Inc.1,584 706 5,349 5,249 
Less: Preferred stock dividends63 59 166 168 
Preferred stock redemption premium— 14 14 
Net income (loss) available to MetLife, Inc.’s common shareholders$1,521 $633 $5,177 $5,067 
Comprehensive income (loss)$1,392 $(1,818)$(595)$8,246 
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax17 13 
Comprehensive income (loss) attributable to MetLife, Inc.$1,386 $(1,821)$(612)$8,233 
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic$1.78 $0.70 $5.94 $5.57 
Diluted$1.77 $0.69 $5.90 $5.53 

See accompanying notes to the interim condensed consolidated financial statements.

5

MetLife, Inc.
Interim Condensed Consolidated Statements of Equity
For the Nine Months Ended September 30, 2021 and 2020 (Unaudited)
(In millions)
Preferred
Stock
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
at Cost
Accumulated
Other
Comprehensive
Income (Loss)
Total
MetLife, Inc.’s
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2020$— $12 $33,812 $36,491 $(13,829)$18,072 $74,558 $259 $74,817 
Redemption of preferred stock(494)(494)(494)
Preferred stock redemption premium(6)(6)(6)
Treasury stock acquired in connection with share repurchases(2,112)(2,112)(2,112)
Stock-based compensation122 122 122 
Dividends on preferred stock(103)(103)(103)
Dividends on common stock (declared per share of $0.940)(829)(829)(829)
Change in equity of noncontrolling interests— 15 15 
Net income (loss)3,765 3,765 10 3,775 
Other comprehensive income (loss), net of income tax(5,763)(5,763)(5,762)
Balance at June 30, 2021— 12 33,440 39,318 (15,941)12,309 69,138 285 69,423 
Treasury stock acquired in connection with share repurchases(1,015)(1,015)(1,015)
Stock-based compensation17 17 17 
Dividends on preferred stock(63)(63)(63)
Dividends on common stock (declared per share of $0.480)(413)(413)(413)
Change in equity of noncontrolling interests— (8)(8)
Net income (loss)1,584 1,584 1,589 
Other comprehensive income (loss), net of income tax(198)(198)(197)
Balance at September 30, 2021$— $12 $33,457 $40,426 $(16,956)$12,111 $69,050 $283 $69,333 
Preferred
Stock
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
at Cost
Accumulated
Other
Comprehensive
Income (Loss)
Total
MetLife, Inc.’s
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2019$— $12 $32,680 $33,078 $(12,678)$13,052 $66,144 $238 $66,382 
Cumulative effects of changes in accounting principles, net of income tax(121)(121)(121)
Preferred stock issuance972972 972 
Treasury stock acquired in connection with share repurchases(500)(500)(500)
Stock-based compensation76 76 76 
Dividends on preferred stock(109)(109)(109)
Dividends on common stock (declared per share of $0.900)(823)(823)(823)
Change in equity of noncontrolling interests— (1)(1)
Net income (loss)4,543 4,543 4,551 
Other comprehensive income (loss), net of income tax5,511 5,511 5,513 
Balance at June 30, 2020— 12 33,728 36,568 (13,178)18,563 75,693 247 75,940 
Redemption of preferred stock(989)(989)(989)
Preferred stock redemption premium(14)(14)(14)
Preferred stock issuance989 989 989 
Treasury stock acquired in connection with share
repurchases
(80)(80)(80)
Stock-based compensation16 16 16 
Dividends on preferred stock(59)(59)(59)
Dividends on common stock (declared per share of $0.460)(419)(419)(419)
Change in equity of noncontrolling interests— 
Net income (loss)706 706 709 
Other comprehensive income (loss), net of income tax(2,527)(2,527)— (2,527)
Balance at September 30, 2020$— $12 $33,744 $36,782 $(13,258)$16,036 $73,316 $253 $73,569 
See accompanying notes to the interim condensed consolidated financial statements.

6

MetLife, Inc.
Interim Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2021 and 2020 (Unaudited)
(In millions)
Nine Months
Ended
September 30,
20212020
Net cash provided by (used in) operating activities$7,256 $6,486 
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities available-for-sale63,778 56,872 
Equity securities476 262 
Mortgage loans12,692 7,848 
Real estate and real estate joint ventures1,160 110 
Other limited partnership interests512 305 
Purchases and originations of:
Fixed maturity securities available-for-sale(69,525)(71,503)
Equity securities(57)(154)
Mortgage loans(9,909)(10,137)
Real estate and real estate joint ventures(1,174)(1,106)
Other limited partnership interests(2,092)(1,279)
Cash received in connection with freestanding derivatives2,574 5,123 
Cash paid in connection with freestanding derivatives(6,794)(2,900)
Sales of businesses, net of cash and cash equivalents disposed of $611 and $0, respectively3,329 — 
Net change in policy loans179 106 
Net change in short-term investments(3,165)(35)
Net change in other invested assets(267)(55)
Other, net(42)136 
Net cash provided by (used in) investing activities(8,325)(16,407)
Cash flows from financing activities
Policyholder account balances:
Deposits75,536 73,626 
Withdrawals(71,495)(64,856)
Payables for collateral under securities loaned and other transactions:
Net change in payables for collateral under securities loaned and other transactions1,279 8,025 
Cash received for other transactions with tenors greater than three months— 150 
Cash paid for other transactions with tenors greater than three months(100)(175)
Long-term debt issued29 1,124 
Long-term debt repaid(540)(95)
Collateral financing arrangement repaid(39)(69)
Financing element on certain derivative instruments and other derivative related transactions, net305 (108)
Treasury stock acquired in connection with share repurchases(3,127)(580)
Preferred stock issued, net of issuance costs— 1,961 
Redemption of preferred stock(494)— 
Preferred stock redemption premium(6)— 
Dividends on preferred stock(166)(168)
Dividends on common stock(1,242)(1,242)
Other, net20 129 
Net cash provided by (used in) financing activities(40)17,722 
Effect of change in foreign currency exchange rates on cash and cash equivalents balances(392)
Change in cash and cash equivalents(1,501)7,807 
Cash and cash equivalents, including subsidiary held-for-sale, beginning of period20,560 16,598 
Cash and cash equivalents, including subsidiary held-for-sale, end of period$19,059 $24,405 
Cash and cash equivalents, subsidiary held-for-sale, beginning of period$765 $— 
Cash and cash equivalents, subsidiary held-for-sale, end of period$103 $— 
Cash and cash equivalents, beginning of period$19,795 $16,598 
Cash and cash equivalents, end of period$18,956 $24,405 
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest$606 $579 
Income tax$861 $339 
Subsidiaries held-for-sale (Note 3):
Assets held-for-sale$7,462 $— 
Liabilities held-for-sale6,757 — 
Net assets held-for-sale$705 $— 
Non-cash transactions:
Real estate and real estate joint ventures acquired in satisfaction of debt$172 $
Increase in equity securities due to in-kind distributions received from other limited partnership interests$273 $66 
Reclassification of certain other invested assets to contractholder-directed equity securities and fair value option securities$309 $— 
Increase in other liabilities associated with the notice of redemption of preferred stock$— $1,003 

See accompanying notes to the interim condensed consolidated financial statements.
7

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLife is organized into 5 segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); and MetLife Holdings.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain, including uncertainties associated with the novel coronavirus COVID-19 pandemic (the “COVID-19 Pandemic”). Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.
The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2020 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2020 Annual Report.
Consolidation
The accompanying interim condensed consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.
The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.
Held-for-Sale
The Company classifies a business as held-for-sale when management has approved or received approval to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current estimated fair value and certain other specified criteria are met. The business classified as held-for-sale is recorded at the lower of the carrying value and estimated fair value, less cost to sell. If the carrying value of the business exceeds its estimated fair value, less cost to sell, a loss is recognized and reported in net investment gains (losses). Assets and liabilities related to the business classified as held-for-sale are separately reported in the Company's consolidated balance sheets in the period in which the business is classified as held-for-sale. See Note 3. If a component of the Company has either been disposed of or is classified as held-for-sale and represents a strategic shift that has or will have a major effect on the Company’s operations and financial results, the results of the component are reported in discontinued operations.
Reclassifications
Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform to the 2021 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.
8

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Recent Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of new ASUs issued by the FASB and the impact of the adoption on the Company’s interim condensed consolidated financial statements.
Adoption of New Accounting Pronouncements
The table below describes the impacts of the ASUs recently adopted by the Company.
StandardDescriptionEffective Date and
Method of Adoption
Impact on Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting; as clarified and amended by ASU 2021-01, Reference Rate Reform (Topic 848): Scope
The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions. ASU 2021-01 amends the scope of the recent reference rate reform guidance. New optional expedients allow derivative instruments impacted by changes in the interest rate used for margining, discounting, or contract price alignment to qualify for certain optional relief.
Effective for contract modifications made between March 12, 2020 and December 31, 2022.

The new guidance reduces the operational and financial impacts of contract modifications that replace a reference rate, such as London Interbank Offered Rate (“LIBOR”), affected by reference rate reform. The adoption of the new guidance provides relief from current GAAP and is not expected to have a material impact on the Company’s interim condensed consolidated financial statements. The Company will continue to evaluate the impacts of reference rate reform on contract modifications and hedging relationships through December 31, 2022.
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The new guidance simplifies the accounting for income taxes by removing certain exceptions to the tax accounting guidance and providing clarification to other specific tax accounting guidance to eliminate variations in practice. Specifically, it removes the exceptions related to the a) incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, b) recognition of a deferred tax liability when foreign investment ownership changes from equity method investment to consolidated subsidiary and vice versa and c) use of interim period tax accounting for year-to-date losses that exceed anticipated losses. The guidance also simplifies the application of the income tax guidance for franchise taxes that are partially based on income and the accounting for tax law changes during interim periods, clarifies the accounting for transactions that result in a step-up in tax basis of goodwill, provides for the option to elect allocation of consolidated income taxes to entities disregarded by taxing authorities for their stand-alone reporting, and requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.January 1, 2021. The Company adopted, using a prospective approach.The adoption of the new guidance did not have a material impact on the Company’s interim condensed consolidated financial statements.
9

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Future Adoption of New Accounting Pronouncements
ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company’s interim condensed consolidated financial statements or disclosures. ASUs issued but not yet adopted as of September 30, 2021 that are currently being assessed and may or may not have a material impact on the Company’s interim condensed consolidated financial statements or disclosures are summarized in the table below.
StandardDescriptionEffective Date and
Method of Adoption
Impact on Financial Statements
ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
The new guidance indicates how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination.January 1, 2023, to be applied prospectively (with early adoption permitted).The Company is currently evaluating the impact of the new guidance on its interim condensed consolidated financial statements.
ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date, as amended by ASU 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application
The new guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of deferred policy acquisition costs (“DAC”) for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The amendments in ASU 2019-09 defer the effective date of ASU 2018-12 to January 1, 2022 for all entities, and the amendments in ASU 2020-11 further defer the effective date of ASU 2018-12 for an additional year to January 1, 2023 for all entities.January 1, 2023, to be applied retrospectively to January 1, 2021 (with early adoption permitted).The Company’s implementation efforts and the evaluation of the impacts of the new guidance continue to progress. Given the nature and extent of the required changes to a significant portion of the Company’s operations, the adoption of this guidance is expected to have a material impact on its financial position, results of operations, and disclosures, as well as systems, processes, and controls.

The Company expects to adopt the new guidance effective January 1, 2023 using the modified retrospective approach, except for market risk benefits where the Company will use the full retrospective approach. The Company continues to evaluate the impact of the new guidance on its interim condensed consolidated financial statements.

The Company has created a governance framework and is managing a detailed implementation plan to support timely application of the new guidance. The Company has made progress and continues to refine key accounting policy decisions, technology solutions and updates to internal controls. These activities include, but are not limited to, modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes.

The most significant transition impacts are expected to be from: (i) the requirement to account for variable annuity guarantees as market risk benefits measured at fair value, (except for the changes in fair value already recognized under an existing accounting model) and (ii) adjustments to AOCI for the change in the current discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment contracts and the removal of shadow account balances.
10

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information
MetLife is organized into 5 segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other.
U.S.
The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions (“RIS”). Prior to its disposition, the Property & Casualty business was included in the U.S. segment. See Note 3.
The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and individual disability, vision and accident & health insurance.
The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, structured settlements, and capital markets investment products, as well as solutions for funding postretirement benefits and company-, bank- and trust-owned life insurance.
The Property & Casualty business offered personal lines of property and casualty insurance, including private passenger automobile and homeowners’ insurance.
Asia
The Asia segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, accident & health insurance and retirement and savings.
Latin America
The Latin America segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, retirement and savings, accident & health insurance and credit insurance.
EMEA
The EMEA segment offers products to individuals, corporations, other institutions, and their respective employees, which include life insurance, accident & health insurance, retirement and savings and credit insurance.
MetLife Holdings
The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets in the United States. These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance.
Corporate & Other
Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are: the excess capital, as well as certain charges and activities, not allocated to the segments (including external integration and disposition costs, internal resource costs for associates committed to acquisitions and dispositions and enterprise-wide strategic initiative restructuring charges), interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to affiliated reinsurance, investment expenses and intersegment loans, bearing interest rates commensurate with related borrowings), and the Company’s investment management business (through which the Company provides public fixed income, private capital and real estate investment solutions to institutional investors worldwide).
11

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
Financial Measures and Segment Accounting Policies
Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.
The financial measures of adjusted revenues and adjusted expenses focus on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses). Adjusted expenses also excludes goodwill impairments.
The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB fees”);
Net investment income: (i) includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed equity securities, (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP; and
Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in association with services provided under transition service agreements (“TSA fees”).
12

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:
Policyholder benefits and claims and policyholder dividends excludes: (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (iii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);
Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and excludes certain amounts related to net investment income earned on contractholder-directed equity securities;
Amortization of DAC and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;
Amortization of negative VOBA excludes amounts related to Market value adjustments;
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
Other expenses excludes: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements costs, and (iii) acquisition, integration and other costs. Other expenses includes TSA fees.
Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.
The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.
Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months and nine months ended September 30, 2021 and 2020. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.
Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company’s business.
The Company’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. The Company’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.
Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, net income (loss) or adjusted earnings.
Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.
13

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
Three Months Ended September 30, 2021U.S.AsiaLatin
America
EMEAMetLife
Holdings
Corporate
& Other
TotalAdjustmentsTotal
Consolidated
(In millions)
Revenues
Premiums$5,746 $1,594 $705 $532 $805 $16 $9,398 $57 $9,455 
Universal life and investment-type product policy fees279 477 274 128 279 — 1,437 84 1,521 
Net investment income2,098 1,354 306 46 1,771 93 5,668 (100)5,568 
Other revenues383 17 10 57 108 584 79 663 
Net investment gains (losses)— — — — — — — (84)(84)
Net derivative gains (losses)— — — — — — — (218)(218)
Total revenues8,506 3,442 1,294 716 2,912 217 17,087 (182)16,905 
Expenses
Policyholder benefits and claims and policyholder dividends6,118 1,220 885 268 1,611 10,111 181 10,292 
Interest credited to policyholder account balances362 513 63 17 212 — 1,167 120 1,287 
Capitalization of DAC(17)(373)(109)(110)(8)(3)(620)(15)(635)
Amortization of DAC and VOBA26 470 62 118 80 758 58 816 
Amortization of negative VOBA— (5)— (1)— — (6)— (6)
Interest expense on debt— — 236 240 — 240 
Other expenses886 811 363 308 255 137 2,760 109 2,869 
Total expenses7,376 2,636 1,266 600 2,151 381 14,410 453 14,863 
Provision for income tax expense (benefit)235 237 (1)22 155 (96)552 (99)453 
Adjusted earnings$895 $569 $29 $94 $606 $(68)2,125 
Adjustments to:
Total revenues(182)
Total expenses(453)
Provision for income tax (expense) benefit99 
Net income (loss)$1,589 $1,589 
14

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
Three Months Ended September 30, 2020U.S.AsiaLatin
America
EMEAMetLife
Holdings
Corporate
& Other
TotalAdjustmentsTotal
Consolidated
(In millions)
Revenues
Premiums$6,333 $1,654 $529 $551 $876 $(8)$9,935 $— $9,935 
Universal life and investment-type product policy fees263 595 225 116 269 1,469 28 1,497 
Net investment income1,827 1,088 221 67 1,427 58 4,688 41 4,729 
Other revenues237 16 13 61 82 416 39 455 
Net investment gains (losses)— — — — — — — (20)(20)
Net derivative gains (losses)— — — — — — — (581)(581)
Total revenues8,660 3,353 982 747 2,633 133 16,508 (493)16,015 
Expenses
Policyholder benefits and claims and policyholder dividends6,108 1,291 575 304 1,697 (6)9,969 237 10,206 
Interest credited to policyholder account balances381 470 52 29 217 — 1,149 267 1,416 
Capitalization of DAC(119)(431)(84)(122)(5)(3)(764)— (764)
Amortization of DAC and VOBA123 506 62 125 177 995 71 1,066 
Amortization of negative VOBA— (14)— (1)— — (15)— (15)
Interest expense on debt— — 224 229 — 229 
Other expenses1,026 869 313 340 231 120 2,899 55 2,954 
Total expenses7,521 2,691 919 675 2,319 337 14,462 630 15,092 
Provision for income tax expense (benefit)239 197 24 20 61 (132)409 (195)214 
Adjusted earnings$900 $465 $39 $52 $253 $(72)1,637 
Adjustments to:
Total revenues(493)
Total expenses(630)
Provision for income tax (expense) benefit195 
Net income (loss)$709 $709 

15

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
Nine Months Ended September 30, 2021U.S.AsiaLatin
America
EMEAMetLife
Holdings
Corporate
& Other
TotalAdjustmentsTotal
Consolidated
(In millions)
Revenues
Premiums$16,919 $4,861 $1,936 $1,751 $2,471 $54 $27,992 $922 $28,914 
Universal life and investment-type product policy fees858 1,371 831 302 826 4,189 145 4,334 
Net investment income6,106 3,776 913 171 4,960 153 16,079 83 16,162 
Other revenues1,159 54 30 39 188 303 1,773 185 1,958 
Net investment gains (losses)— — — — — — — 1,655 1,655 
Net derivative gains (losses)— — — — — — — (2,032)(2,032)
Total revenues25,042 10,062 3,710 2,263 8,445 511 50,033 958 50,991 
Expenses
Policyholder benefits and claims and policyholder dividends17,999 3,750 2,370 944 4,683 36 29,782 921 30,703 
Interest credited to policyholder account balances1,080 1,498 182 66 632 — 3,458 695 4,153 
Capitalization of DAC(48)(1,203)(304)(359)(25)(9)(1,948)(104)(2,052)
Amortization of DAC and VOBA50 1,080 205 274 190 1,806 137 1,943 
Amortization of negative VOBA— (20)— (5)— — (25)— (25)
Interest expense on debt— — 683 695 696 
Other expenses2,695 2,542 1,041 1,006 752 278 8,314 439 8,753 
Total expenses21,780 7,647 3,498 1,926 6,236 995 42,082 2,089 44,171 
Provision for income tax expense (benefit)681 703 46 78 449 (288)1,669 (213)1,456 
Adjusted earnings$2,581 $1,712 $166 $259 $1,760 $(196)6,282 
Adjustments to:
Total revenues958 
Total expenses(2,089)
Provision for income tax (expense) benefit213 
Net income (loss)$5,364 $5,364 
16

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
Nine Months Ended September 30, 2020U.S.AsiaLatin
America
EMEAMetLife
Holdings
Corporate
& Other
TotalAdjustments
Total
Consolidated
(In millions)
Revenues
Premiums$17,191 $4,874 $1,658 $1,676 $2,669 $17 $28,085 $52 $28,137 
Universal life and investment-type product policy fees806 1,445 733 324 812 4,122 105 4,227 
Net investment income5,018 2,792 699 199 3,723 22 12,453 (576)11,877 
Other revenues717 44 28 37 166 238 1,230 120 1,350 
Net investment gains (losses)— — — — — — — (77)(77)
Net derivative gains (losses)— — — — — — — 2,910 2,910 
Total revenues23,732 9,155 3,118 2,236 7,370 279 45,890 2,534 48,424 
Expenses
Policyholder benefits and claims and policyholder dividends16,581 3,867 1,634 877 5,063 23 28,045 432 28,477 
Interest credited to policyholder account balances1,251 1,362 178 83 654 — 3,528 (70)3,458 
Capitalization of DAC(353)(1,203)(258)(367)(15)(8)(2,204)(5)(2,209)
Amortization of DAC and VOBA357 1,105 206 340 288 2,302 112 2,414 
Amortization of negative VOBA— (30)— (5)— — (35)— (35)
Interest expense on debt— — 669 683 — 683 
Other expenses3,104 2,540 965 1,000 698 390 8,697 176 8,873 
Total expenses20,946 7,641 2,728 1,928 6,693 1,080 41,016 645 41,661 
Provision for income tax expense (benefit)583 443 124 62 127 (418)921 582 1,503 
Adjusted earnings$2,203 $1,071 $266 $246 $550 $(383)3,953 
Adjustments to:
Total revenues2,534 
Total expenses(645)
Provision for income tax (expense) benefit(582)
Net income (loss)$5,260 $5,260 
17

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
2. Segment Information (continued)
The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:
September 30, 2021December 31, 2020
(In millions)
U.S.$282,606 $291,483 
Asia169,699 173,884 
Latin America60,592 75,047 
EMEA27,523 28,372 
MetLife Holdings180,239 184,566 
Corporate & Other41,005 41,794 
Total$761,664 $795,146 
3. Dispositions
Disposition of MetLife Seguros S.A.
In September 2021, the Company sold its wholly-owned Argentinian subsidiary, MetLife Seguros S.A. (“MetLife Seguros”). In connection with the sale, a loss of $205 million, net of income tax, was recorded for the three months and nine months ended September 30, 2021, which is reflected in net investment gains (losses). See Note 10 for the changes in AOCI related to the sale. At December 31, 2020, MetLife Seguros represented $201 million of total assets in the Latin America segment. MetLife Seguros results of operations are reported in the Latin America segment adjusted earnings through the date of sale.
Pending Disposition of MetLife Poland and Greece
In July 2021, the Company entered into definitive agreements to sell its wholly-owned subsidiaries in Poland and Greece (collectively, “MetLife Poland and Greece”) to NN Group N.V. for $738 million in total consideration, including a pre-closing dividend of $43 million. In connection with the pending sale, an expected loss of $202 million, net of income tax, was recorded for the nine months ended September 30, 2021, which is reflected in net investment gains (losses). MetLife Poland and Greece results of operations are reported in the EMEA segment adjusted earnings through June 30, 2021. See Note 2 for information on accounting for divested business. The transaction is expected to close in the first half of 2022 and is subject to regulatory approvals and satisfaction of other customary closing conditions.
The pending disposition meets the criteria for held-for-sale accounting but does not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities are included in the separate held-for-sale line items of the asset and liability sections of the interim condensed consolidated balance sheet.
18

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
3. Dispositions (continued)

The following table summarizes the assets and liabilities held-for-sale:
September 30, 2021
(In millions)
Assets:
Fixed maturity securities available-for-sale$2,143 
Contractholder-directed equity securities1,098 
Other investments136 
Total investments3,377 
Cash and cash equivalents103 
Deferred policy acquisition costs and value of business acquired139 
Other275 
Separate accounts assets3,568 
Total assets held-for-sale$7,462 
Liabilities:
Future policy benefits$940 
Policyholder account balances2,013 
Other policy-related balances103 
Other133 
Separate account liabilities3,568 
Total liabilities held-for-sale$6,757 
MetLife Poland and Greece income (loss) before provision for income tax as reflected in the interim condensed consolidated statements of operations was $12 million and $40 million for the three months and nine months ended September 30, 2021, respectively, and ($5) million and $29 million for the three months and nine months ended September 30, 2020, respectively.
Disposition of Metropolitan Property and Casualty Insurance Company
In December 2020, the Company entered into a definitive agreement to sell its wholly-owned subsidiary, Metropolitan Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”) to Farmers Group, Inc. for $3.9 billion in cash. In addition, the Company and the Farmers Exchanges agreed to establish a 10-year strategic partnership through which the Farmers Insurance Group will offer its personal line products on MetLife’s U.S. Group Benefits platform which commenced when the transaction closed. MetLife P&C results of operations are reported in the U.S. segment adjusted earnings through December 31, 2020. See Note 2 for more information on divested businesses. In April 2021, the Company completed the sale of MetLife P&C. As a result of the sale, the Company recognized a gain of $1.4 billion ($1.1 billion, net of income tax) in net investment gains (losses) for the nine months ended September 30, 2021.
The disposition met the criteria for held-for-sale accounting but did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities were included in the separate held-for-sale line items of the asset and liability sections of the interim condensed consolidated balance sheets at December 31, 2020.
19

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
3. Dispositions (continued)

The following table summarizes the assets and liabilities held-for-sale:
December 31, 2020
(In millions)
Assets:
Fixed maturity securities available-for-sale$4,096 
Equity securities57 
Mortgage loans355 
Other invested assets29 
Total investments4,537 
Cash and cash equivalents765 
Accrued investment income38 
Premiums, reinsurance and other receivables1,411 
Deferred policy acquisition costs196 
Goodwill328 
Other assets143 
Total assets held-for-sale$7,418 
Liabilities:
Future policy benefits$3,506 
Other policy-related balances33 
Payables for collateral under securities loaned and other transactions862 
Other liabilities249 
Total liabilities held-for-sale$4,650 
MetLife P&C income (loss) before provision for income tax as reflected in the interim condensed consolidated statements of operations was $121 million for the nine months ended September 30, 2021, and $20 million and $254 million for the three months and nine months ended September 30, 2020, respectively.
Disposition of Joint-stock Company MetLife Insurance Company
In January 2021, the Company completed the sale of its wholly-owned Russian subsidiary, the Joint-stock Company MetLife Insurance Company. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for further information.
4. Insurance
Guarantees
As discussed in Notes 1 and 4 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report, the Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. Guaranteed minimum accumulation benefits (“GMABs”), the non-life contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”) and certain non-life contingent portions of GMIBs are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 7.
The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.
20

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
4. Insurance (continued)
Information regarding the Company’s guarantee exposure, which includes direct and assumed business, but excludes offsets from hedging or ceded reinsurance, if any, was as follows at:
September 30, 2021December 31, 2020
In the
Event of Death
At
Annuitization
In the
Event of Death
At
Annuitization
(Dollars in millions)
Annuity Contracts:
Variable Annuity Guarantees:
Total account value (1), (2), (3)$62,462 $23,049 $65,044 $24,170 
Separate account value (1)$41,617 $21,380 $42,585 $22,370 
Net amount at risk (2)$1,631 (4)$519 (5)$1,579 (4)$614 (5)
Average attained age of contractholders69 years67 years68 years66 years
Other Annuity Guarantees:
Total account value (1), (3)N/A$5,009 N/A$6,030 
Net amount at riskN/A$193 (6)N/A$459 (6)
Average attained age of contractholdersN/A56 yearsN/A50 years
September 30, 2021December 31, 2020
Secondary
Guarantees
Paid-Up
Guarantees
Secondary
Guarantees
Paid-Up
Guarantees
(Dollars in millions)
Universal and Variable Life Contracts:
Total account value (1), (3)$13,532 $2,718 $13,426 $2,808 
Net amount at risk (7)$78,416 $12,878 $82,940 $13,557 
Average attained age of policyholders55 years66 years54 years65 years
__________________
(1)The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.
(2)Includes amounts, which are not reported on the interim condensed consolidated balance sheets, from assumed variable annuity guarantees from the Company’s former operating joint venture in Japan.
(3)Includes the contractholder’s investments in the general account and separate account, if applicable.
(4)Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.
(5)Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.
(6)Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.
(7)Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
21

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
4. Insurance (continued)
Liabilities for Unpaid Claims and Claim Expenses
Rollforward of Claims and Claim Adjustment Expenses
Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:
Nine Months
Ended
September 30,
20212020
(In millions)
Balance, beginning of period$18,591 $19,216 
Less: Reinsurance recoverables2,417 2,377 
Net balance, beginning of period16,174 16,839 
Incurred related to:
Current period20,667 19,664 
Prior periods (1)960 234 
Total incurred21,627 19,898 
Paid related to:
Current period(14,426)(13,803)
Prior periods(6,416)(5,378)
Total paid(20,842)(19,181)
Reclassified to liabilities held-for-sale (2)(55)— 
Dispositions (3)(64)— 
Net balance, end of period16,840 17,556 
Add: Reinsurance recoverables2,910 2,521 
Balance, end of period (included in future policy benefits and other policy-related balances)$19,750 $20,077 
__________________
(1)For both the nine months ended September 30, 2021 and 2020, incurred claim activity and claim adjustment expenses associated with prior periods increased due to events incurred in prior periods but reported in the current period.
(2)See Note 3 for information on the pending disposition of MetLife Poland and Greece.
(3)See Note 3 for information on the Company’s business dispositions.
5. Closed Block
On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain individual life insurance policies of MLIC.
Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of the closed block.
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.
22

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
5. Closed Block (continued)
Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
September 30, 2021December 31, 2020
(In millions)
Closed Block Liabilities
Future policy benefits$38,191 $38,758 
Other policy-related balances289 321 
Policyholder dividends payable299 337 
Policyholder dividend obligation1,952 2,969 
Deferred income tax liability175 130 
Other liabilities269 172 
Total closed block liabilities41,175 42,687 
Assets Designated to the Closed Block
Investments:
Fixed maturity securities available-for-sale, at estimated fair value25,977 27,186 
Equity securities, at estimated fair value21 24 
Mortgage loans6,441 6,807 
Policy loans4,235 4,355 
Real estate and real estate joint ventures575 559 
Other invested assets540 468 
Total investments37,789 39,399 
Cash and cash equivalents173 — 
Accrued investment income391 402 
Premiums, reinsurance and other receivables40 50 
Current income tax recoverable52 28 
Total assets designated to the closed block38,445 39,879 
Excess of closed block liabilities over assets designated to the closed block2,730 2,808 
AOCI:
Unrealized investment gains (losses), net of income tax2,730 3,524 
Unrealized gains (losses) on derivatives, net of income tax100 23 
Allocated to policyholder dividend obligation, net of income tax(1,542)(2,346)
Total amounts included in AOCI1,288 1,201 
Maximum future earnings to be recognized from closed block assets and liabilities$4,018 $4,009 
Information regarding the closed block policyholder dividend obligation was as follows:
Nine Months
Ended
September 30, 2021
Year
Ended
December 31, 2020
(In millions)
Balance, beginning of period$2,969 $2,020 
Change in unrealized investment and derivative gains (losses)(1,017)949 
Balance, end of period$1,952 $2,969 
23

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
5. Closed Block (continued)
Information regarding the closed block revenues and expenses was as follows:
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
2021202020212020
(In millions)
Revenues
Premiums$310 $359 $955 $1,097 
Net investment income390 420 1,165 1,198 
Net investment gains (losses)(7)(12)(8)
Net derivative gains (losses)12 (16)19 
Total revenues705 764 2,127 2,294 
Expenses
Policyholder benefits and claims522 575 1,588 1,714 
Policyholder dividends127 136 478 572 
Other expenses24 27 73 79 
Total expenses673 738 2,139 2,365 
Revenues, net of expenses before provision for income tax expense (benefit)32 26 (12)(71)
Provision for income tax expense (benefit)(3)(15)
Revenues, net of expenses and provision for income tax expense (benefit)$26 $21 $(9)$(56)
MLIC charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. MLIC also charges the closed block for expenses of maintaining the policies included in the closed block.
24

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments
Fixed Maturity Securities Available-for-Sale
Fixed Maturity Securities Available-for-Sale by Sector
The following table presents the fixed maturity securities available-for-sale (“AFS”) by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities (“ABS”) includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS and CMBS are, collectively, “Structured Products.”
September 30, 2021December 31, 2020
Amortized
Cost
Gross Unrealized (1)Estimated
Fair
Value
Amortized
Cost
Gross Unrealized (1)Estimated
Fair
Value
SectorAllowance for
Credit Loss
GainsLossesAllowance for
Credit Loss
Gains
Losses
(In millions)
U.S. corporate$81,187 $(18)$11,110 $267 $92,012 $79,788 $(44)$13,924 $252 $93,416 
Foreign government57,889 (19)6,273 763 63,380 63,243 (21)8,883 406 71,699 
Foreign corporate58,918 (24)5,674 646 63,922 60,995 (16)8,897 468 69,408 
U.S. government and agency43,072 — 5,396 368 48,100 39,094 — 8,095 89 47,100 
RMBS28,716 — 1,669 118 30,267 28,415 — 2,062 42 30,435 
ABS17,203 — 227 27 17,403 16,963 — 231 75 17,119 
Municipals11,636 — 2,419 15 14,040 10,982 — 2,746 13,722 
CMBS11,383 (7)581 43 11,914 11,331 — 681 102 11,910 
Total fixed maturity securities AFS$310,004 $(68)$33,349 $2,247 $341,038 $310,811 $(81)$45,519 $1,440 $354,809 
_________________
(1)Excludes gross unrealized gains (losses) related to assets held-for-sale; these unrealized gains (losses) are included in AOCI as no component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.
Maturities of Fixed Maturity Securities AFS
The amortized cost, net of allowance for credit loss (“ACL”), and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at September 30, 2021:
Due in One
Year or Less
Due After
One Year
Through
Five Years
Due After
Five Years
Through
Ten Years
Due After
Ten Years
Structured
Products
Total Fixed
Maturity
Securities AFS
(In millions)
Amortized cost, net of ACL$8,543 $56,031 $57,297 $130,770 $57,295 $309,936 
Estimated fair value$8,702 $58,669 $63,388 $150,695 $59,584 $341,038 

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Products are shown separately, as they are not due at a single maturity.
25

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector
The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position without an ACL by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position.
September 30, 2021December 31, 2020
Less than 12 MonthsEqual to or Greater
than 12 Months
Less than 12 MonthsEqual to or Greater
than 12 Months
Sector & Credit QualityEstimated
Fair
Value
Gross
Unrealized
Losses (1)
Estimated
Fair
Value
Gross
Unrealized
Losses (1)
Estimated
Fair
Value
Gross
Unrealized
Losses (1)
Estimated
Fair
Value
Gross
Unrealized
Losses (1)
(Dollars in millions)
U.S. corporate$6,055 $167 $1,390 $99 $4,338 $196 $506 $50 
Foreign government8,654 399 3,501 364 6,795 305 836 100 
Foreign corporate9,318 448 1,885 198 4,856 321 1,255 147 
U.S. government and agency15,354 297 504 71 4,619 87 33 
RMBS6,466 99 521 19 1,531 27 152 14 
ABS2,897 13 840 14 3,428 26 2,842 49 
Municipals667 12 49 273 — — 
CMBS1,300 14 659 21 1,887 63 612 39 
Total fixed maturity securities AFS$50,711 $1,449 $9,349 $789 $27,727 $1,031 $6,236 $401 
Investment grade$47,639 $1,329 $8,046 $665 $24,572 $829 $5,841 $350 
Below investment grade3,072 120 1,303 124 3,155 202 395 51 
Total fixed maturity securities AFS$50,711 $1,449 $9,349 $789 $27,727 $1,031 $6,236 $401 
Total number of securities in an unrealized loss position3,545 793 2,177 690 
________________
(1)Excludes gross unrealized losses related to assets held-for-sale; these unrealized losses are included in AOCI as no component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.
Evaluation of Fixed Maturity Securities AFS for Credit Loss
Evaluation and Measurement Methodologies
Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.
26

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
The methodology and significant inputs used to determine the amount of credit loss are as follows:
The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.
When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall credit loss evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; any private and public sector programs to restructure foreign government securities and municipals; and changes to the rating of the security or the issuer by rating agencies.
Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.
With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.
In periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are recorded within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion thereof, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.
Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position
Gross unrealized losses on securities without an ACL increased $806 million for the nine months ended September 30, 2021 to $2.2 billion primarily due to increases in interest rates, partially offset by narrowing credit spreads.
Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater were $789 million at September 30, 2021, or 35% of the total gross unrealized losses on securities without an ACL.
Investment Grade Fixed Maturity Securities AFS
Of the $789 million of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $665 million, or 84%, were related to 628 investment grade securities. Unrealized losses on investment grade securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate securities, rising interest rates since purchase.
27

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Below Investment Grade Fixed Maturity Securities AFS
Of the $789 million of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, $124 million, or 16%, were related to 165 below investment grade securities. Unrealized losses on below investment grade securities are principally related to U.S. and foreign corporate securities (primarily industrial and consumer), foreign government securities and CMBS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty, as well as, with respect to fixed-rate securities, rising interest rates since purchase. Management evaluates U.S. corporate and foreign corporate securities based on factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, credit enhancements, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition of the issuers and any country specific economic conditions or public sector programs to restructure foreign government securities.
Current Period Evaluation
At September 30, 2021, with respect to securities in an unrealized loss position without an ACL, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not incurred a credit loss and should not have an ACL at September 30, 2021.
Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings and collateral valuation.
28

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector
The rollforward of ACL for fixed maturity securities AFS by sector is as follows:
U.S.
 Corporate
Foreign
Government
Foreign
Corporate
RMBSCMBSTotal
Three Months Ended September 30, 2021(In millions)
Balance, at beginning of period$39 $21 $32 $— $$99 
Additions:
ACL not previously recorded18 — — — — 18 
Reductions:
Changes for securities with previously recorded ACL— — (2)— — (2)
Securities sold or exchanged(26)— (6)— — (32)
Securities intended/required to be sold prior to recovery of amortized cost basis— — — — — — 
Disposition (1)— (2)— — — (2)
Write-offs(13)— — — — (13)
Balance, at end of period$18 $19 $24 $— $$68 
Three Months Ended September 30, 2020
Balance, at beginning of period$30 $129 $16 $$— $177 
Additions:
ACL not previously recorded— — — — — — 
Reductions:
Changes for securities with previously recorded ACL(4)— (2)— (2)
Securities sold or exchanged(4)(96)— — — (100)
Securities intended/required to be sold prior to recovery of amortized cost basis— — — — — — 
Disposition— — — — — — 
Write-offs— — — — — — 
Balance, at end of period$30 $29 $16 $— $— $75 
_________________
(1)In connection with the disposition of MetLife Seguros, ACL was reduced by $2 million. See Note 3 for additional information on the Company’s business dispositions.
29

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
U.S.
 Corporate
Foreign
Government
Foreign
Corporate
RMBSCMBSTotal
Nine Months Ended September 30, 2021(In millions)
Balance, at beginning of period$44 $21 $16 $— $— $81 
Additions:
ACL not previously recorded18 — 25 — 11 54 
Reductions:
Changes for securities with previously recorded ACL— (7)— (4)(8)
Securities sold or exchanged(34)— (10)— — (44)
Securities intended/required to be sold prior to recovery of amortized cost basis— — — — — — 
Disposition (1)— (2)— — — (2)
Write-offs(13)— — — — (13)
Balance, at end of period$18 $19 $24 $— $$68 
Nine Months Ended September 30, 2020
Balance, at beginning of period$— $— $— $— $— $— 
Additions:
ACL not previously recorded58 139 16 — 215 
Reductions:
Changes for securities with previously recorded ACL(3)(8)— (2)— (13)
Securities sold or exchanged(24)(102)— — — (126)
Securities intended/required to be sold prior to recovery of amortized cost basis(1)— — — — (1)
Disposition— — — — — — 
Write-offs— — — — — — 
Balance, at end of period$30 $29 $16 $— $— $75 
_________________
(1)In connection with the disposition of MetLife Seguros, ACL was reduced by $2 million. See Note 3 for additional information on the Company’s business dispositions.
Equity Securities
Equity securities include common and preferred stock which are reported at estimated fair value, with changes in estimated fair value included in net investment gains (losses). See Note 8 for further information.
Contractholder-Directed Equity Securities and Fair Value Option Securities
Contractholder-directed equity securities and FVO securities (“FVO Securities”) (collectively, “Unit-linked and FVO Securities”) include three categories of investments for which the FVO has been elected, or are otherwise required to be carried at estimated fair value, with changes in estimated fair value included in net income. See Note 8 for further information.
30

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Mortgage Loans
Mortgage Loans by Portfolio Segment
Mortgage loans are summarized as follows at:
 September 30, 2021December 31, 2020
Portfolio SegmentCarrying
Value
% of
Total
Carrying
Value
% of
Total
(Dollars in millions)
Commercial$51,336 63.4 %$52,434 62.5 %
Agricultural18,353 22.7 18,128 21.6 
Residential11,704 14.4 13,782 16.4 
Total amortized cost81,393 100.5 84,344 100.5 
Allowance for credit loss(563)(0.7)(590)(0.7)
Subtotal mortgage loans, net80,830 99.8 83,754 99.8 
Residential — FVO134 0.2 165 0.2 
Total mortgage loans, net$80,964 100.0 %$83,919 100.0 %
The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. See Note 8 for further information.
The amount of net discounts, included within total amortized cost, primarily attributable to residential mortgage loans was $792 million and $944 million at September 30, 2021 and December 31, 2020, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at September 30, 2021 and December 31, 2020 was $191 million and $209 million; $146 million and $174 million; and $93 million and $108 million, respectively.
Purchases of mortgage loans, consisting primarily of residential mortgage loans, were $499 million and $1.5 billion for the three months and nine months ended September 30, 2021, respectively, and $204 million and $1.9 billion for the three months and nine months ended September 30, 2020, respectively.
Allowance for Credit Loss Rollforward by Portfolio Segment
The changes in the ACL, by portfolio segment, were as follows:
Nine Months
Ended
September 30,
20212020
CommercialAgriculturalResidentialTotalCommercialAgriculturalResidentialTotal
(In millions)
Balance, beginning of period$252 $106 $232 $590 $246 $52 $55 $353 
Provision (release)22 — (37)(15)83 13 102 
Adoption of credit loss guidance— — — — (118)35 161 78 
Initial credit losses on PCD loans (1)— — — — 16 16 
Charge-offs, net of recoveries— (13)(2)(15)— (2)(27)(29)
Balance, end of period$274 $93 $196 $563 $211 $91 $218 $520 
_________________
(1)Represents the initial credit losses on purchased mortgage loans accounted for as purchased financial assets with credit deterioration (“PCD”).
31

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Allowance for Credit Loss Methodology
The Company records an allowance for expected lifetime credit loss in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, management: (i) pools mortgage loans that share similar risk characteristics, (ii) considers expected lifetime credit loss over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considers past events and current and forecasted economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonably possible or probable) and reasonably expected troubled debt restructurings (“TDRs”) (i.e., the Company grants concessions to borrower that is experiencing financial difficulties) are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).
Commercial and Agricultural Mortgage Loan Portfolio Segments
Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural, loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value (“LTV”) ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios (“DSCR”). In estimating expected lifetime credit loss over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating expected lifetime credit loss over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly, historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.
32

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower DSCR. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.
For commercial mortgage loans, the primary credit quality indicator is the DSCR, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. The Company also reviews the LTV ratio of its commercial mortgage loan portfolio. LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.
For agricultural mortgage loans, the Company’s primary credit quality indicator is the LTV ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.
Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for credit loss for unfunded commercial and agricultural mortgage loan commitments is recorded within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.
Residential Mortgage Loan Portfolio Segment
The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and LTV ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, LTV ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company immediately reverts to industry historical loss experience.
For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.
Mortgage Loan Concessions
In response to the adverse economic impact of the COVID-19 Pandemic, in 2021 and 2020, the Company granted concessions to certain of its commercial, agricultural and residential mortgage loan borrowers, including payment deferrals and other loan modifications. The Company has elected the option under the Coronavirus Aid, Relief, and Economic Security Act, the Consolidated Appropriations Act, 2021 and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by bank regulatory agencies, not to account for or report qualifying concessions as TDRs and not to classify such loans as either
33

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
past due or nonaccrual during the payment deferral period. Additionally, in accordance with the FASB’s published response to a COVID-19 Pandemic technical inquiry, the Company continues to accrue interest income on such loans that have deferred payment. The Company records an ACL on this accrued interest income.
Commercial
For some commercial mortgage loan borrowers (principally in the retail and hotel sectors), the Company granted concessions which were primarily interest and principal payment deferrals generally ranging from three to four months and, to a much lesser extent, maturity date extensions. Deferred commercial mortgage loan interest and principal payments were $42 million at September 30, 2021.
Agricultural
For some agricultural mortgage loan borrowers (principally in the annual crops and agribusiness sectors), the Company granted concessions which were primarily principal payment deferrals generally ranging from three to 12 months, and covenant changes and, to a much lesser extent, maturity date extensions. Deferred agricultural mortgage loan interest and principal payments were $4 million at September 30, 2021.
Residential
For some residential mortgage loan borrowers, the Company granted concessions which were primarily three-month interest and principal payment deferrals. Deferred residential mortgage loan interest and principal payments were $26 million at September 30, 2021.
Credit Quality of Mortgage Loans by Portfolio Segment
The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at September 30, 2021:
Credit Quality Indicator20212020201920182017PriorRevolving
Loans
Total% of
Total
(Dollars in millions)
LTV ratios:
Less than 65%$3,682 $4,536 $4,828 $5,511 $4,303 $11,927 $2,332 $37,119 72.3 %
65% to 75%1,086 1,507 3,375 2,065 1,108 2,220 — 11,361 22.1 
76% to 80%66 36 335 — 180 454 — 1,071 2.1 
Greater than 80%— 79 460 1,235 — 1,785 3.5 
Total$4,841 $6,079 $8,542 $7,655 $6,051 $15,836 $2,332 $51,336 100.0 %
DSCR:
> 1.20x$4,308 $5,540 $8,034 $7,492 $5,578 $13,817 $2,064 $46,833 91.2 %
1.00x - 1.20x87 144 76 83 152 926 — 1,468 2.9 
<1.00x446 395 432 80 321 1,093 268 3,035 5.9 
Total$4,841 $6,079 $8,542 $7,655 $6,051 $15,836 $2,332 $51,336 100.0 %
The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at September 30, 2021:
Credit Quality Indicator20212020201920182017PriorRevolving
Loans
Total% of
Total
(Dollars in millions)
LTV ratios:
Less than 65%$1,460 $3,092 $1,972 $2,749 $967 $5,345 $890 $16,475 89.8 %
65% to 75%335 393 172 117 40 580 108 1,745 9.5 
76% to 80%— — — — — 11 — 11 — 
Greater than 80%— — 76 — — 46 — 122 0.7 
Total$1,795 $3,485 $2,220 $2,866 $1,007 $5,982 $998 $18,353 100.0 %
The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at September 30, 2021:
34

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Credit Quality Indicator20212020201920182017PriorRevolving
Loans
Total% of
Total
(Dollars in millions)
Performance indicators:
Performing$344 $512 $1,501 $689 $319 $7,898 $— $11,263 96.2 %
Nonperforming (1)55 15 363 — 441 3.8 
Total$346 $514 $1,556 $704 $323 $8,261 $— $11,704 100.0 %
__________________
(1)Includes residential mortgage loans in process of foreclosure of $74 million and $103 million at September 30, 2021 and December 31, 2020, respectively.
LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. At September 30, 2021, the amortized cost of commercial and agricultural mortgage loans with an LTV ratio in excess of 100% was $814 million, or 1% of total commercial and agricultural mortgage loans.
Past Due and Nonaccrual Mortgage Loans
The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both September 30, 2021 and December 31, 2020. The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows:
Past DueGreater than 90 Days Past Due
 and Still Accruing Interest
Nonaccrual
Portfolio SegmentSeptember 30, 2021December 31, 2020September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(In millions)
Commercial$15 $10 $15 $$159 $317 
Agricultural156 252 20 251 266 
Residential441 556 64 438 534 
Total$612 $818 $26 $91 $848 $1,117 
The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year 2020 was $176 million, $137 million and $418 million, respectively. The amortized cost for nonaccrual commercial mortgage loans with no ACL was $0 and $168 million at September 30, 2021 and December 31, 2020, respectively. The amortized cost for nonaccrual agricultural mortgage loans with no ACL was $168 million and $178 million at September 30, 2021 and December 31, 2020, respectively. There were no nonaccrual residential mortgage loans without an ACL at either September 30, 2021 or December 31, 2020.
Real Estate and Real Estate Joint Ventures
The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, were as follows at and for the periods indicated:
 September 30, 2021December 31, 2020Three Months
Ended
September 30,
Nine Months
Ended
September 30,
 2021202020212020
Income TypeCarrying ValueIncome
(In millions)
Leased real estate investments$5,216 $5,450 $108 $115 $327 $322 
Other real estate investments455 419 58 34 144 93 
Real estate joint ventures6,511 6,064 113 (45)189 (44)
Total real estate and real estate joint ventures$12,182 $11,933 $279 $104 $660 $371 
35

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
The carrying value of real estate investments acquired through foreclosure was $182 million and $20 million at September 30, 2021 and December 31, 2020, respectively. Depreciation expense on real estate investments was $31 million and $92 million for the three months and nine months ended September 30, 2021, respectively, and $33 million and $92 million for the three months and nine months ended September 30, 2020, respectively. Real estate investments were net of accumulated depreciation of $861 million and $1.1 billion at September 30, 2021 and December 31, 2020, respectively.
Leases
Leased Real Estate Investments - Operating Leases
The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification.
See Note 8 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a summary of leased real estate investments and income earned, by property type.
Leveraged and Direct Financing Leases
The Company has diversified leveraged lease and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a third-party.
Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 11 years, but in certain circumstances can be over 11 years, while the payment periods for direct financing leases generally range from one to 25 years but in certain circumstances can be over 25 years.
The Company records an allowance for expected lifetime credit loss in an amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the investment in leases being presented at the net amount expected to be collected. In determining the ACL, management: (i) pools leases that share similar risk characteristics, (ii) considers expected lifetime credit loss over the contractual term of the lease, and (iii) considers past events and current and forecasted economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Expected lifetime credit loss on leveraged lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates third-party credit ratings of the lessee and the related historical default data. Direct financing leases principally relate to leases of commercial real estate; accordingly, expected lifetime credit loss is estimated on such lease receivables consistent with the methodology for commercial mortgage loans (see “— Mortgage Loans — Allowance for Credit Loss Methodology”). The Company also assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the leased asset and considers other relevant market information such as independent third-party forecasts, consulting, asset brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax policy, potential environmental liabilities and litigation.
The investment in leveraged and direct financing leases, net of ACL, was $803 million and $1.2 billion, respectively, at September 30, 2021 and $816 million and $1.3 billion, respectively, at December 31, 2020. The ACL for leveraged and direct financing leases was $43 million and $44 million at September 30, 2021 and December 31, 2020, respectively.
36

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Cash Equivalents
The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $8.4 billion and $9.7 billion at September 30, 2021 and December 31, 2020, respectively.
Net Unrealized Investment Gains (Losses)
Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on policyholder liabilities, DAC, VOBA and deferred sales inducements (“DSI”) that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.
The components of net unrealized investment gains (losses), included in AOCI, were as follows:
September 30, 2021December 31, 2020
(In millions)
Fixed maturity securities AFS$31,195 $44,415 
Derivatives2,031 1,924 
Other354 267 
Subtotal33,580 46,606 
Amounts allocated from:
Policyholder liabilities(5,245)(10,797)
DAC, VOBA and DSI(3,274)(4,050)
Subtotal(8,519)(14,847)
Deferred income tax benefit (expense)(6,380)(8,009)
Net unrealized investment gains (losses)18,681 23,750 
Net unrealized investment gains (losses) attributable to noncontrolling interests(23)(20)
Net unrealized investment gains (losses) attributable to MetLife, Inc.$18,658 $23,730 
The changes in net unrealized investment gains (losses) were as follows:
Nine Months
Ended
September 30, 2021
(In millions)
Balance, beginning of period$23,730 
Unrealized investment gains (losses) during the period(13,026)
Unrealized investment gains (losses) relating to:
Policyholder liabilities5,552 
DAC, VOBA and DSI776 
Deferred income tax benefit (expense)1,629 
Net unrealized investment gains (losses)18,661 
Net unrealized investment gains (losses) attributable to noncontrolling interests(3)
Balance, end of period$18,658 
Change in net unrealized investment gains (losses)$(5,069)
Change in net unrealized investment gains (losses) attributable to noncontrolling interests(3)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.$(5,072)
37

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Concentrations of Credit Risk
Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at estimated fair value at September 30, 2021 and December 31, 2020, were in fixed income securities of the Japanese government and its agencies of $33.8 billion and $35.8 billion, respectively, and in fixed income securities of the South Korean government and its agencies of $7.1 billion and $8.0 billion, respectively.
Securities Lending and Repurchase Agreements
Securities, Collateral and Reinvestment Portfolio
A summary of the outstanding securities lending and repurchase agreements is as follows:
September 30, 2021December 31, 2020
Securities (1)Securities (1)
Agreement TypeEstimated
Fair Value
Cash Collateral
Received from
Counterparties
(2)
Reinvestment
Portfolio at
Estimated Fair
Value
Estimated
Fair Value
Cash Collateral
Received from
Counterparties
(2)
Reinvestment
Portfolio at
Estimated Fair
Value
(In millions)
Securities lending$20,557 $20,989 $21,110 $18,262 $18,628 $18,884 
Repurchase agreements$3,518 $3,460 $3,470 $3,276 $3,210 $3,251 
__________________
(1)Securities on loan in connection with these programs are included within fixed maturity securities AFS and short-term investments.
(2)The liability for cash collateral for these programs is included within payables for collateral under securities loaned and other transactions and other liabilities.
Contractual Maturities
A summary of the remaining contractual maturities of securities lending and repurchase agreements is as follows:
September 30, 2021December 31, 2020
Remaining MaturitiesRemaining Maturities
Security TypeOpen (1)1 Month
or Less
Over 1 Month
 to 6
Months
Over 6
Months
to 1 Year
TotalOpen (1)1 Month
or Less
Over 1 Month
 to 6
Months
Over 6
Months
to 1 Year
Total
(In millions)
Cash collateral liability by loaned security type:
Securities lending:
U.S. government and agency$6,195 $7,955 $5,695 $— $19,845 $2,946 $10,553 $4,009 $— $17,508 
Foreign government— 322 702 — 1,024 — 291 826 — 1,117 
Agency RMBS— — 119 — 119 — — — — — 
U.S. corporate— — — — — — 
Total$6,196 $8,277 $6,516 $— $20,989 $2,949 $10,844 $4,835 $— $18,628 
Repurchase agreements:
U.S. government and agency$— $3,460 $— $— $3,460 $— $3,210 $— $— $3,210 
__________________
(1)The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.
38

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both.
The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities on loan or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities on loan are put back by the counterparty.
Invested Assets on Deposit, Held in Trust and Pledged as Collateral
Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:
September 30, 2021December 31, 2020
(In millions)
Invested assets on deposit (regulatory deposits)$1,827 $1,933 
Invested assets held in trust (external reinsurance agreements) (1)1,100 1,124 
Invested assets pledged as collateral (2)24,829 25,884 
Total invested assets on deposit, held in trust and pledged as collateral$27,756 $28,941 
__________________
(1)    Represents assets held in trust related to third-party reinsurance agreements. Excludes assets held in trust of $2.1 billion and $2.4 billion related to reinsurance agreements between wholly-owned subsidiaries as of September 30, 2021 and December 31, 2020, respectively.
(2)     The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt, a collateral financing arrangement (see Notes 4, 13 and 14 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report) and derivative transactions (see Note 7).
See “— Securities Lending and Repurchase Agreements” for information regarding securities supporting securities lending and repurchase agreement transactions and Note 5 for information regarding investments designated to the closed block. In addition, the Company’s investment in Federal Home Loan Bank common stock, which is considered restricted until redeemed by the issuers, was $791 million and $814 million, at redemption value, at September 30, 2021 and December 31, 2020, respectively.
Variable Interest Entities
The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Consolidated VIEs
Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.
39

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
The following table presents the total assets and total liabilities relating to investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:
September 30, 2021December 31, 2020
Asset TypeTotal
Assets
Total
Liabilities
Total
Assets
Total
Liabilities
(In millions)
Investment funds (1)$288 $$258 $
Renewable energy partnership (1)85 — 87 — 
Other investments (2)— 
Total$375 $$349 $
__________________
(1)Assets of the investment funds and renewable energy partnership primarily consisted of other invested assets.
(2)Assets of other investments primarily consisted of other assets at September 30, 2021, and cash and cash equivalents at December 31, 2020.
Unconsolidated VIEs
The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
September 30, 2021December 31, 2020
Asset TypeCarrying
Amount
Maximum
Exposure
to Loss (1)
Carrying
Amount
Maximum
Exposure
to Loss (1)
(In millions)
Fixed maturity securities AFS (2)$61,304 $61,304 $60,115 $60,115 
Other limited partnership interests12,218 18,507 8,355 14,911 
Other invested assets1,181 1,254 1,320 1,404 
Other investments671 673 619 639 
Total$75,374 $81,738 $70,409 $77,069 
__________________
(1)The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third-parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $3 million at both September 30, 2021 and December 31, 2020. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.
(2)For variable interests in Structured Products included within fixed maturity securities AFS, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.
As described in Note 15, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for either the nine months ended September 30, 2021 or 2020.
40

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Net Investment Income
The components of net investment income were as follows:
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
Asset Type2021202020212020
(In millions)
Fixed maturity securities AFS$2,759 $2,820 $8,251 $8,482 
Equity securities15 28 40 
FVO Securities (1)36 92 72 
Mortgage loans838 885 2,586 2,631 
Policy loans118 124 359 374 
Real estate and real estate joint ventures279 104 660 371 
Other limited partnership interests1,541 578 3,870 291 
Cash, cash equivalents and short-term investments25 40 74 184 
Operating joint ventures17 25 55 81 
Other95 78 189 209 
Subtotal investment income5,686 4,705 16,164 12,735 
Less: Investment expenses232 238 701 798 
Subtotal, net5,454 4,467 15,463 11,937 
Unit-linked investments (1)114 262 699 (60)
Net investment income$5,568 $4,729 $16,162 $11,877 
__________________
(1)Changes in estimated fair value subsequent to purchase of FVO Securities and contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“Unit-linked investments”) still held as of the end of the respective periods and included in net investment income were $55 million and $577 million for the three months and nine months ended September 30, 2021, respectively, and $240 million and ($83) million for the three months and nine months ended September 30, 2020, respectively.
Net investment income from equity method investments, comprised of real estate joint ventures, other limited partnership interests, tax credit and renewable energy partnerships and operating joint ventures, totaled $1.7 billion and $4.0 billion for the three months and nine months ended September 30, 2021, respectively, and $510 million and $145 million for the three months and nine months ended September 30, 2020, respectively.
41

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Net Investment Gains (Losses)
Components of Net Investment Gains (Losses)
The components of net investment gains (losses) were as follows:
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
Asset Type2021202020212020
(In millions)
Fixed maturity securities AFS$129 $113 $67 $267 
Equity securities (1)(33)97 (210)
FVO Securities(2)
Mortgage loans43 (5)101 (148)
Real estate and real estate joint ventures66 482 
Other limited partnership interests(4)(4)(17)
Other (2), (3)19 34 61 159 
Subtotal221 142 796 71 
Change in estimated fair value of other limited partnership interests and real estate joint ventures23 (9)
Non-investment portfolio gains (losses) (4)(314)(165)836 (139)
Subtotal(305)(162)859 (148)
Total net investment gains (losses)$(84)$(20)$1,655 $(77)
__________________
(1)Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the periods included in net investment gains (losses) were ($16) million and $86 million for the three months and nine months ended September 30, 2021, respectively, and ($2) million and ($198) million for the three months and nine months ended September 30, 2020, respectively.
(2)Other gains (losses) included de-designated cash flow hedge gains of $6 million and $54 million for the three months and nine months ended September 30, 2021, respectively, and $10 million and $65 million for the three months and nine months ended September 30, 2020, respectively.
(3)Other gains (losses) included leveraged lease gains of $81 million for the nine months ended September 30, 2020.
(4)See Note 3 for information on the Company’s business dispositions.
Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($23) million and ($4) million for the three months and nine months ended September 30, 2021, respectively, and ($17) million and $53 million for the three months and nine months ended September 30, 2020, respectively.
42

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
6. Investments (continued)
Fixed Maturity Securities AFS - Sales and Disposals and Credit Loss
Sales of securities are determined on a specific identification basis. Proceeds from sales or disposals and the components of net investment gains (losses) were as shown in the table below:
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
2021202020212020
(In millions)
Proceeds$10,743 $5,934 $37,306 $28,004 
Gross investment gains$217 $196 $580 $957 
Gross investment (losses)(106)(170)(497)(554)
Net credit loss (provision) release18 87 (16)(136)
Net investment gains (losses)$129 $113 $67 $267 
7. Derivatives
Accounting for Derivatives
See Note 1 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for a description of the Company’s accounting policies for derivatives and Note 8 for information about the fair value hierarchy for derivatives.
Derivative Strategies
Types of Derivative Instruments and Derivative Strategies
The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Commonly used derivative instruments include, but are not limited to:    
Interest rate derivatives: swaps, total return swaps, caps, floors, futures, swaptions, forwards and synthetic guaranteed interest contracts (“GICs”);
Foreign currency exchange rate derivatives: swaps, forwards, options and exchange-traded futures;
Credit derivatives: purchased or written single name or index credit default swaps, and forwards; and
Equity derivatives: index options, variance swaps, exchange-traded futures and total return swaps.        
For detailed information on these contracts and the related strategies, see Note 9 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report.
43

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Primary Risks Managed by Derivatives
The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:
September 30, 2021December 31, 2020
Primary Underlying Risk ExposureGross
Notional
Amount
Estimated Fair ValueGross
Notional
Amount
Estimated Fair Value
AssetsLiabilitiesAssetsLiabilities
(In millions)
Derivatives Designated as Hedging Instruments:
Fair value hedges:
Interest rate swapsInterest rate$3,549 $2,154 $$3,186 $3,224 $
Foreign currency swapsForeign currency exchange rate908 32 1,106 78 
Foreign currency forwardsForeign currency exchange rate1,545 — 52 1,936 24 — 
Subtotal6,002 2,162 86 6,228 3,256 82 
Cash flow hedges:
Interest rate swapsInterest rate4,429 35 4,750 44 — 
Interest rate forwardsInterest rate6,874 60 155 7,377 513 120 
Foreign currency swapsForeign currency exchange rate41,201 1,602 1,456 38,604 1,549 2,017 
Subtotal52,504 1,697 1,612 50,731 2,106 2,137 
Net investment in a foreign operation (“NIFO”) hedges:
Foreign currency forwardsForeign currency exchange rate341 18 — 164 — 
Currency optionsForeign currency exchange rate3,000 114 — 3,600 70 — 
Subtotal3,341 132 — 3,764 70 
Total qualifying hedges61,847 3,991 1,698 60,723 5,432 2,222 
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swapsInterest rate41,430 3,793 144 49,561 3,683 38 
Interest rate floorsInterest rate8,201 202 — 12,701 350 — 
Interest rate capsInterest rate77,814 69 — 40,730 13 — 
Interest rate futuresInterest rate2,239 1,498 — 
Interest rate optionsInterest rate12,508 485 17 17,746 502 
Interest rate forwardsInterest rate367 — 37 351 — 10 
Interest rate total return swapsInterest rate1,048 31 1,048 — 59 
Synthetic GICsInterest rate39,365 — — 38,646 — — 
Foreign currency swapsForeign currency exchange rate12,635 690 664 13,265 603 693 
Foreign currency forwardsForeign currency exchange rate15,911 99 563 15,643 209 310 
Currency futuresForeign currency exchange rate867 — 914 — 
Currency optionsForeign currency exchange rate900 — — 1,350 — — 
Credit default swaps — purchasedCredit3,042 14 110 2,978 121 
Credit default swaps — writtenCredit8,739 180 9,609 196 — 
Equity futuresEquity market4,417 48 14 5,427 14 38 
Equity index optionsEquity market31,016 898 441 22,954 834 437 
Equity variance swapsEquity market733 17 15 716 15 12 
Equity total return swapsEquity market3,482 23 11 3,294 282 
Total non-designated or nonqualifying derivatives264,714 6,528 2,053 238,431 6,434 2,007 
Total$326,561 $10,519 $3,751 $299,154 $11,866 $4,229 
44

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both September 30, 2021 and December 31, 2020. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.
45

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
The following table presents the interim condensed consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, NIFO, nonqualifying hedging relationships and embedded derivatives:
Three Months Ended September 30, 2021
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Policyholder
Benefits and
Claims
Interest
Credited to
Policyholder
Account
Balances
Other
Expenses
Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)$$— $— $(53)$— $— N/A
Hedged items(2)— — 48 — — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)28 (9)— — — — N/A
Hedged items(22)— — — — N/A
Amount excluded from the assessment of hedge effectiveness— (2)— — — — N/A
Subtotal(2)— (5)— — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A$24 
Amount of gains (losses) reclassified from AOCI into income14 — — — (21)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A398 
Amount of gains (losses) reclassified from AOCI into income(259)— — — — 257 
Foreign currency transaction gains (losses) on hedged items— 256 — — — — — 
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A20 
Amount of gains (losses) reclassified from AOCI into income— — — — — — — 
Subtotal16 — — — 678 
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)N/AN/AN/AN/AN/AN/A12 
Non-derivative hedging instrumentsN/AN/AN/AN/AN/AN/A
SubtotalN/AN/AN/AN/AN/AN/A14 
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)(1)— (379)(12)— — N/A
Foreign currency exchange rate derivatives (1)— — (128)(2)— — N/A
Credit derivatives — purchased (1)— — — — — N/A
Credit derivatives — written (1)— — (2)— — — N/A
Equity derivatives (1)(1)— 47 — — N/A
Foreign currency transaction gains (losses) on hedged items— — (65)— — — N/A
Subtotal(2)— (523)(9)— — N/A
Earned income on derivatives62 — 258 55 (43)— — 
Embedded derivatives (2)N/AN/A47 — N/AN/AN/A
Total$81 $$(218)$41 $(43)$$692 
46

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Three Months Ended September 30, 2020
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Policyholder
Benefits and
Claims
Interest
Credited to
Policyholder
Account
Balances
Other
Expenses
Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)$$— $— $(154)$— $— N/A
Hedged items— — — 139 — — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)(50)44 — — — — N/A
Hedged items46 (41)— — — — N/A
Amount excluded from the assessment of hedge effectiveness— (4)— — — — N/A
Subtotal(3)(1)— (15)— — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A$(203)
Amount of gains (losses) reclassified from AOCI into income10 — — — (20)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A(615)
Amount of gains (losses) reclassified from AOCI into income435 — — — — (437)
Foreign currency transaction gains (losses) on hedged items— (393)— — — — — 
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A(28)
Amount of gains (losses) reclassified from AOCI into income— — — — — — — 
Subtotal11 52 — — — (1,303)
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)N/AN/AN/AN/AN/AN/A(29)
Non-derivative hedging instrumentsN/AN/AN/AN/AN/AN/A(8)
SubtotalN/AN/AN/AN/AN/AN/A(37)
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)— — (601)(9)— — N/A
Foreign currency exchange rate derivatives (1)— — (190)— — N/A
Credit derivatives — purchased (1)— — (8)— — — N/A
Credit derivatives — written (1)— — (9)— — — N/A
Equity derivatives (1)(6)— (499)(90)— — N/A
Foreign currency transaction gains (losses) on hedged items— — 56 — — — N/A
Subtotal(6)— (1,251)(97)— — N/A
Earned income on derivatives50 — 262 52 (36)— — 
Embedded derivatives (2)N/AN/A408 — N/AN/AN/A
Total$52 $51 $(581)$(60)$(36)$$(1,340)
47

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Nine Months Ended September 30, 2021
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Policyholder
Benefits and
Claims
Interest
Credited to
Policyholder
Account
Balances
Other
Expenses
Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)$$— $— $(418)$— $— N/A
Hedged items(4)— — 379 — — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)40 (144)— — — — N/A
Hedged items(33)139 — — — — N/A
Amount excluded from the assessment of hedge effectiveness— (6)— — — — N/A
Subtotal(11)— (39)— — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A$(687)
Amount of gains (losses) reclassified from AOCI into income41 54 — — — (97)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A567 
Amount of gains (losses) reclassified from AOCI into income(383)— — — 376 
Foreign currency transaction gains (losses) on hedged items— 372 — — — — — 
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A(52)
Amount of gains (losses) reclassified from AOCI into income— — — — — — — 
Subtotal47 43 — — — 107 
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)N/AN/AN/AN/AN/AN/A58 
Non-derivative hedging instrumentsN/AN/AN/AN/AN/AN/A31 
SubtotalN/AN/AN/AN/AN/AN/A89 
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)— (1,993)(51)— — N/A
Foreign currency exchange rate derivatives (1)— — (734)— — N/A
Credit derivatives — purchased (1)— — 16 — — — N/A
Credit derivatives — written (1)— — 33 — — — N/A
Equity derivatives (1)(33)— (992)(202)— — N/A
Foreign currency transaction gains (losses) on hedged items— — 167 — — — N/A
Subtotal(32)— (3,503)(252)— — N/A
Earned income on derivatives128 — 755 160 (120)— — 
Embedded derivatives (2)N/AN/A716 — N/AN/AN/A
Total$150 $32 $(2,032)$(131)$(120)$$196 
48

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Nine Months Ended September 30, 2020
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Policyholder
Benefits and
Claims
Interest
Credited to
Policyholder
Account
Balances
Other
Expenses
Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)$(11)$— $— $589 $— $— N/A
Hedged items— — (613)— — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)17 58 — — — — N/A
Hedged items(14)(54)— — — — N/A
Amount excluded from the assessment of hedge effectiveness— (38)— — — — N/A
Subtotal(34)— (24)— — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A$1,700 
Amount of gains (losses) reclassified from AOCI into income24 58 — — — (84)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A554 
Amount of gains (losses) reclassified from AOCI into income271 — — — (275)
Foreign currency transaction gains (losses) on hedged items— (190)— — — — — 
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCIN/AN/AN/AN/AN/AN/A(52)
Amount of gains (losses) reclassified from AOCI into income— — — — — — — 
Subtotal27 139 — — — 1,843 
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)N/AN/AN/AN/AN/AN/A70 
Non-derivative hedging instrumentsN/AN/AN/AN/AN/AN/A(11)
SubtotalN/AN/AN/AN/AN/AN/A59 
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)(6)— 3,364 58 — — N/A
Foreign currency exchange rate derivatives (1)— — (187)(7)— — N/A
Credit derivatives — purchased (1)— — — — — N/A
Credit derivatives — written (1)— — (158)— — — N/A
Equity derivatives (1)(6)— 17 19 — — N/A
Foreign currency transaction gains (losses) on hedged items— — (104)— — — N/A
Subtotal(12)— 2,936 70 — — N/A
Earned income on derivatives196 — 617 135 (118)— — 
Embedded derivatives (2)N/AN/A(643)— N/AN/AN/A
Total$212 $105 $2,910 $181 $(118)$$1,902 
__________________
(1)Excludes earned income on derivatives.
(2)The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $3 million and ($48) million for the three months and nine months ended September 30, 2021, respectively, and ($12) million and $63 million for the three months and nine months ended September 30, 2020, respectively.
49

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
Fair Value Hedges
The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities, and (iii) foreign currency forwards to hedge the foreign currency fair value exposure of foreign currency denominated investments.
The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:
Balance Sheet Line ItemCarrying Amount
 of the Hedged
Assets/(Liabilities)
Cumulative Amount
of Fair Value Hedging Adjustments
Included in the Carrying Amount of Hedged
Assets/(Liabilities) (1)
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(In millions)
Fixed maturity securities AFS$2,117 $2,699 $(1)$(1)
Mortgage loans$749 $952 $(3)$20 
Future policy benefits$(4,713)$(5,512)$(911)$(1,307)
__________________
(1)Includes ($169) million and ($1) million of hedging adjustments on discontinued hedging relationships at September 30, 2021 and December 31, 2020, respectively.
For the Company’s foreign currency forwards, the change in the estimated fair value of the derivative related to the changes in the difference between the spot price and the forward price is excluded from the assessment of hedge effectiveness. The Company has elected to record changes in estimated fair value of excluded components in earnings. For all other derivatives, all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Cash Flow Hedges
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments, and (v) interest rate swaps and interest rate forwards to hedge forecasted fixed-rate borrowings.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $6 million and $5 million for the three months and nine months ended September 30, 2021, respectively, and ($8) million and $19 million for the three months and nine months ended September 30, 2020, respectively.
At both September 30, 2021 and December 31, 2020, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed eight years.
At September 30, 2021 and December 31, 2020, the balance in AOCI associated with cash flow hedges was $2.0 billion and $1.9 billion, respectively.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
At September 30, 2021, the Company expected to reclassify ($137) million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months.
50

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
NIFO Hedges
The Company uses foreign currency exchange rate derivatives, which may include foreign currency forwards and currency options, to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company also designates a portion of its foreign-denominated debt as a non-derivative hedging instrument of its net investments in foreign operations. The Company assesses hedge effectiveness of its derivatives based upon the change in forward rates and assesses its non-derivative hedging instruments based upon the change in spot rates. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
When net investments in foreign operations are sold or substantially liquidated, the amounts in AOCI are reclassified to the statement of operations.
At September 30, 2021 and December 31, 2020, the cumulative foreign currency translation gain (loss) recorded in AOCI related to NIFO hedges was $253 million and $164 million, respectively. At September 30, 2021 and December 31, 2020, the carrying amount of debt designated as a non-derivative hedging instrument was $376 million and $407 million, respectively.
Credit Derivatives
In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the effects of derivatives on the interim condensed consolidated statements of operations and comprehensive income (loss) table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $8.7 billion and $9.6 billion at September 30, 2021 and December 31, 2020, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At September 30, 2021 and December 31, 2020, the Company would have received $175 million and $196 million, respectively, to terminate all of these contracts.
51

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
September 30, 2021December 31, 2020
Rating Agency Designation of Referenced
Credit Obligations (1)
Estimated
Fair Value
of Credit
Default
Swaps
Maximum
Amount of Future
Payments under
Credit Default
Swaps
Weighted
Average
Years to
Maturity (2)
Estimated
Fair Value
of Credit
Default
Swaps
Maximum
Amount of Future
Payments under
Credit Default
Swaps
Weighted
Average
Years to
Maturity (2)
(Dollars in millions)
Aaa/Aa/A
Single name credit default swaps (3)$$169 3.2$$208 2.7
Credit default swaps referencing indices21 1,778 1.727 1,779 2.5
Subtotal26 1,947 1.932 1,987 2.5
Baa
Single name credit default swaps (3)152 2.5249 2.5
Credit default swaps referencing indices145 6,468 5.7156 7,318 5.5
Subtotal147 6,620 5.6159 7,567 5.4
Ba
Single name credit default swaps (3)82 1.5— — 
Credit default swaps referencing indices(1)20 4.2— — 
Subtotal102 2.0— — 
B
Credit default swaps referencing indices55 4.255 5.0
Subtotal55 4.255 5.0
Caa3
Credit default swaps referencing indices(4)15 4.2— — 
Subtotal(4)15 4.2— — 
Total$175 $8,739 4.7$196 $9,609 4.8
_________________
(1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
(2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
(3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.
Credit Risk on Freestanding Derivatives
The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.
Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearinghouses (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”).
The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company enters into contracts with counterparties in jurisdictions in which it understands that close-out netting should be enforceable. The Company’s OTC-bilateral derivative transactions are
52

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
governed by the International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, close-out netting permits the Company (subject to financial regulations such as the Orderly Liquidation Authority under Title II of Dodd-Frank) to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions and to apply collateral to the obligations, without application of the automatic stay, upon the counterparty’s bankruptcy. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives as required by applicable law. Additionally, effective September 1, 2021, the Company is required to pledge initial margin for certain new OTC-bilateral derivative transactions to third party custodians.
The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by brokers and central clearinghouses to such derivatives.
See Note 8 for a description of the impact of credit risk on the valuation of derivatives.
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
September 30, 2021December 31, 2020
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement AssetsLiabilitiesAssetsLiabilities
(In millions)
Gross estimated fair value of derivatives:
OTC-bilateral (1)$10,034 $3,675 $11,348 $4,111 
OTC-cleared (1)516 39 593 20 
Exchange-traded52 15 17 40 
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)10,602 3,729 11,958 4,171 
Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
OTC-bilateral(2,206)(2,206)(2,926)(2,926)
OTC-cleared(13)(13)(7)(7)
Exchange-traded(2)(2)— — 
Cash collateral: (3), (4)
OTC-bilateral(6,396)— (6,842)— 
OTC-cleared(434)(16)(530)(5)
Exchange-traded— (9)— (23)
Securities collateral: (5)
OTC-bilateral(1,249)(1,367)(1,453)(1,100)
OTC-cleared— (9)— (1)
Exchange-traded— (3)— (1)
Net amount after application of master netting agreements and collateral$302 $104 $200 $108 
__________________
(1)At September 30, 2021 and December 31, 2020, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of $83 million and $92 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of ($22) million and ($58) million, respectively.
(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
53

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
(3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. For certain collateral agreements, cash collateral is pledged to the Company as initial margin on its OTC-bilateral derivatives.
(4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At September 30, 2021 and December 31, 2020, the Company received excess cash collateral of $103 million and $265 million, respectively, and provided excess cash collateral of $158 million and $238 million, respectively, which is not included in the table above due to the foregoing limitation.
(5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at September 30, 2021, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At September 30, 2021 and December 31, 2020, the Company received excess securities collateral with an estimated fair value of $98 million and $231 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At September 30, 2021 and December 31, 2020, the Company provided excess securities collateral with an estimated fair value of $194 million and $269 million, respectively, for its OTC-bilateral derivatives, $1.2 billion and $2.1 billion, respectively, for its OTC-cleared derivatives, and $214 million and $318 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. Substantially all of the Company’s netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody’s and S&P. If a party’s credit or financial strength rating, as applicable, were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives. A small number of these arrangements also include credit-contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of MetLife, Inc. and/or the counterparty. At September 30, 2021, the amount of collateral not provided by the Company due to the existence of these thresholds was $15 million.
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.
54

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
7. Derivatives (continued)
September 30, 2021December 31, 2020
Derivatives
Subject to
Credit-
Contingent
Provisions
Derivatives
Not Subject
to Credit-
Contingent
Provisions
TotalDerivatives
Subject to
Credit-
Contingent
Provisions
Derivatives
Not Subject
to Credit-
Contingent
Provisions
Total
(In millions)
Estimated fair value of derivatives in a net liability position (1)$1,242 $227 $1,469 $1,182 $$1,185 
Estimated fair value of collateral provided:
Fixed maturity securities AFS$1,300 $188 $1,488 $1,222 $$1,224 
__________________
(1)After taking into consideration the existence of netting agreements.
Embedded Derivatives
The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:
Balance Sheet LocationSeptember 30, 2021December 31, 2020
(In millions)
Embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefitsPremiums, reinsurance and other receivables$39 $55 
Embedded derivatives within liability host contracts:
Direct guaranteed minimum benefitsPolicyholder account balances$296 $651 
Assumed guaranteed minimum benefitsPolicyholder account balances131 283 
Funds withheld on ceded reinsuranceOther liabilities41 100 
Fixed annuities with equity indexed returnsPolicyholder account balances157 138 
Other guaranteesPolicyholder account balances24 
Embedded derivatives within liability host contracts$626 $1,196 
8. Fair Value
Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.
55

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
8. Fair Value (continued)
Recurring Fair Value Measurements
The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:
September 30, 2021 (1)
Fair Value Hierarchy
Level 1Level 2Level 3
Total
Estimated
Fair Value
(In millions)
Assets
Fixed maturity securities AFS:
U.S. corporate$— $80,783 $11,229 $92,012 
Foreign government— 63,274 106 63,380 
Foreign corporate— 50,415 13,507 63,922 
U.S. government and agency27,492 20,608 — 48,100 
RMBS27,023 3,236 30,267 
ABS— 15,878 1,525 17,403 
Municipals— 14,006 34 14,040 
CMBS— 11,095 819 11,914 
Total fixed maturity securities AFS27,500 283,082 30,456 341,038 
Equity securities594 196 151 941 
Unit-linked and FVO Securities (2)9,171 2,051 833 12,055 
Short-term investments (3)5,287 1,201 57 6,545 
Residential mortgage loans — FVO— — 134 134 
Other investments— 49 845 894 
Derivative assets: (4)
Interest rate6,744 60 6,807 
Foreign currency exchange rate2,527 2,532 
Credit— 174 20 194 
Equity market48 931 986 
Total derivative assets52 10,376 91 10,519 
Embedded derivatives within asset host contracts (5)— — 39 39 
Separate account assets (6)78,361 101,190 1,403 180,954 
Total assets (7)$120,965 $398,145 $34,009 $553,119 
Liabilities
Derivative liabilities: (4)
Interest rate$$349 $38 $388 
Foreign currency exchange rate— 2,509 258 2,767 
Credit— 110 115 
Equity market14 467 — 481 
Total derivative liabilities15 3,435 301 3,751 
Embedded derivatives within liability host contracts (5)— — 626 626 
Separate account liabilities (6)13 21 
Total liabilities$19 $3,448 $931 $4,398 
56

MetLife, Inc.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)
8. Fair Value (continued)
December 31, 2020 (1)
Fair Value Hierarchy
Level 1Level 2Level 3
Total
Estimated
Fair Value
(In millions)
Assets
Fixed maturity securities AFS:
U.S. corporate$— $83,214 $10,202 $93,416 
Foreign government— 71,582 117 71,699 
Foreign corporate— 55,509 13,899 69,408 
U.S. government and agency23,180 23,920 — 47,100 
RMBS— 27,133 3,302 30,435 
ABS— 15,734 1,385 17,119 
Municipals— 13,722 — 13,722 
CMBS— 11,308 602 11,910 
Total fixed maturity securities AFS23,180 302,122 29,507 354,809 
Equity securities636 293 150 1,079 
Unit-linked and FVO Securities (2)10,559 2,059 701 13,319 
Short-term investments (3)2,762 568 43 3,373 
Residential mortgage loans — FVO— — 165 165 
Other investments83 229 573 885 
Derivative assets: (4)
Interest rate— 7,840 489 8,329 
Foreign currency exchange rate2,287 176 2,466 
Credit— 180 25 205 
Equity market14 830 22 866 
Total derivative assets17 11,137 712 11,866 
Embedded derivatives within asset host contracts (5)— — 55 55 
Separate account assets (6)91,850 107,035 1,085 199,970 
Total assets (7)