MetLife

ANNUAL REPORT

MetLife, Inc. 2010

Chairman’s Letter

To my fellow shareholders:

Most certainly, 2010 will be a year that people will look back upon as a time of significant
transformation and accomplishment for MetLife. This is no small statement given the
tremendous milestones of growth and innovation that define MetLife’s 143-year history.
But it is also fitting in that we truly demonstrated the power of this great company and our
focus on ensuring that we deliver on the promises we have made to our customers, who
now total 90 million around the globe.

Without a doubt, our acquisition of American Life Insurance Company (Alico) was a tremendous accomplishment in 2010 as
it transformed MetLife into a global life insurance and employee benefits powerhouse. At its core, this acquisition benefits us in
many ways, giving MetLife leadership positions in key markets, including Japan, Europe and the Middle East. Furthermore, it will
be accretive to both our earnings and return on equity in 2011 and provides opportunities to expand the strong relationships we
have built with FORTUNE 500» clients in the U.S. But even more noteworthy is that we were able to pursue and complete this
$16.4 billion acquisition because of the high priority we placed on our financial strength before and during the financial crisis. The
foresight, experience and risk management expertise that define the culture of MetLife have truly served us, our customers and
our shareholders very well.

Strong, Diverse Businesses
In 2010, we continued our focus on growth, even as we completed the largest acquisition in MetLife’s history. Total revenues
grew 28% over 2009 to $52.7 billion as premiums grew 4%, fees increased 16% and net investment income recovered
significantly, growing 19%. We have demonstrated industry-leading strength in growing our top line over the past two years — a
time during which there has clearly been considerable economic uncertainty. We are pleased to be a top provider in our chosen
markets, but we will only pursue revenue growth where we know we can generate bottom line growth as well.

To that end, bottom line improvements were very impressive in 2010, with earnings increasing significantly over
2009. Book value per common share rose 16% over year-end 2009 to $44.18 as our investment portfolio moved
from being in a net unrealized loss position to having net unrealized gains at year-end 2010.

Briefly, I would like to share some highlights of our businesses’ performance this year.

Our U.S. Business is an industry leader that meets consumers’ protection and savings needs wherever it is
convenient for them — at the workplace, through a MetLife or third-party representative and, more recently, by
offering term life insurance online as well. In 2010, U.S. Business premiums, fees and other revenues increased
slightly over 2009 to $28.9 billion while earnings grew considerably. Results within U.S. Business included:

(cid:129) Premiums, fees and other revenues in Insurance Products were $20.2 billion, which is consistent with
2009’s performance. Top line results in this business benefited from growth in our group life and dental
businesses — two product lines in which MetLife is a leader. We also made further progress on our efforts to
help consumers address their life insurance protection needs by making it easier for the underserved middle
market to purchase term life insurance through metlife.com. Also, in early 2011, we launched MetLife Promise
Whole Life, a new permanent insurance product that offers long-term protection and the advantages of
guaranteed cash value that grows each year, tax-deferred, along with dividend participation.

(cid:129) Retirement Products premiums, fees and other revenues were $3.3 billion, up 19% due to strong growth in
fee income as profits in the segment more than doubled. Annuity deposits also were strong at $20.1 billion
and assets grew 14% over 2009 to reach a record $162.7 billion. We continue to be a leader in the annuity
business, with clients valuing the guaranteed income these products generate in retirement.

(cid:129) In Corporate Benefit Funding — which specializes in structured risk solutions — premiums, fees and
other revenues were $2.4 billion. At the same time, the business experienced strong growth in profitability and
a higher return on equity over 2009. During the year, we had solid sales of both structured settlements and

pension closeouts. The high structured settlement sales we have generated over the past two years are an
ideal example of how MetLife has benefited from the flight to quality in the industry that I have spoken of
before. Recently, pension closeout sales have been smaller due to the low interest rate environment, but we
remain well positioned to assist businesses in need of expertise with managing their pension liabilities.

(cid:129) MetLife’s Auto & Home business, which is one of the largest providers of group auto and home insurance,
continued to deliver strong performance in 2010. Sales of new policies increased 11% for our homeowners
business and 4% for our auto business compared to 2009 — notable increases given the highly competitive
property and casualty insurance market. In addition, the combined ratio, excluding catastrophes, improved to
88.1% from 88.9% in 2009.

Our International business experienced a tremendous expansion this year, growing from operating in 16
countries to more than 60 with the completion of our Alico acquisition on November 1. Due to Alico having a fiscal
year end of November 30, only one month of its results are reflected in International’s year-end performance.
Nevertheless, premiums, fees and other revenues grew 36% to $5.8 billion in 2010 and we are well positioned to
expand this growth in 2011. Our International business now has expanded diversity in products, distribution and
geography, and is expected to contribute approximately 30% of MetLife’s total premiums, fees and other revenues
in 2011, up from 16% in 2010.

Finally, MetLife Bank, which has grown to become a leading originator and servicer of residential mortgages,
generated total operating revenues of $1.4 billion, down 9% from 2009 as mortgage refinancing activity returned to
more moderate levels compared to the unusually high activity experienced across the industry in 2009. At the same
time, total assets for MetLife Bank grew to $16.3 billion, up from $14.1 billion at December 31, 2009.

All together, these results truly demonstrated the value that our company can deliver for both customers and
shareholders. They also illustrate our ability to successfully complete a significant undertaking like the acquisition of
Alico while maintaining attention on our day-to-day business operations. I am proud of all that we accomplished in
2010 as our achievements will help drive further growth and value in the future. Looking ahead, we are focused on
leveraging the many strengths of our new, global organization to ensure we can build upon MetLife’s impressive
history with new milestones of success.

I thank you for your continued support.

Sincerely,

C. Robert Henrikson
Chairman of the Board, President and
Chief Executive Officer
MetLife, Inc.

March 1, 2011

TABLE OF CONTENTS

Page
Number

Note Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . .
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . .
Management’s Annual Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attestation Report of the Company’s Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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MetLife, Inc.

1

As used in this Annual Report, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in

1999 (the “Holding Company”), its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Annual Report, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or
incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be
identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or
financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance
or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings,
trends in operations and financial results.

investment

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown
risks and uncertainties. Many such factors will be important in determining the actual future results of MetLife, Inc., its subsidiaries and
affiliates. These statements are based on current expectations and the current economic environment. They involve a number of risks and
uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from
those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences
include the risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission (the
“SEC”). These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the capital and
credit markets, which may affect our ability to seek financing or access our credit facilities; (3) uncertainty about the effectiveness of the
U.S. government’s programs to stabilize the financial system, the imposition of fees relating thereto, or the promulgation of additional
regulations; (4)
impact of comprehensive financial services regulation reform on us; (5) exposure to financial and capital market risk;
(6) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect our ability to
raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge
collateral or make payments related to declines in value of specified assets; (7) potential
liquidity and other risks resulting from our
participation in a securities lending program and other transactions; (8)
losses and defaults, and changes to investment
valuations; (9) impairments of goodwill and realized losses or market value impairments to illiquid assets; (10) defaults on our mortgage
institutions that could adversely affect our investments or business; (12) our ability to address
loans; (11) the impairment of other financial
unforeseen liabilities, asset impairments, loss of key contractual relationships, or rating actions arising from acquisitions or dispositions,
including our acquisition of American Life Insurance Company (“American Life”), a subsidiary of ALICO Holdings LLC (“ALICO Holdings”), and
Delaware American Life Insurance Company (“DelAm,” together with American Life, collectively, “ALICO”)
(the “Acquisition”) and to
successfully integrate and manage the growth of acquired businesses with minimal disruption; (13) uncertainty with respect to the outcome
of the closing agreement entered into between American Life and the United States Internal Revenue Service in connection with the
Acquisition; (14) uncertainty with respect to any incremental tax benefits resulting from the planned elections for ALICO and certain of its
subsidiaries under Section 338 of the U.S. Internal Revenue Code of 1986, as amended; (15) the dilutive impact on our stockholders resulting
from the issuance of equity securities in connection with the acquisition of ALICO or otherwise; (16) economic, political, currency and other
risks relating to our international operations, including with respect to fluctuations of exchange rates; (17) our primary reliance, as a holding
company, on dividends from our subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the
subsidiaries to pay such dividends; (18) downgrades in our claims paying ability, financial strength or credit ratings; (19) ineffectiveness of risk
management policies and procedures; (20) availability and effectiveness of reinsurance or indemnification arrangements, as well as default or
failure of counterparties to perform; (21) discrepancies between actual claims experience and assumptions used in setting prices for our
products and establishing the liabilities for our obligations for future policy benefits and claims; (22) catastrophe losses; (23) heightened
competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by
new and existing competitors, distribution of amounts available under U.S. government programs, and for personnel; (24) unanticipated
changes in industry trends; (25) changes in accounting standards, practices and/or policies; (26) changes in assumptions related to deferred
policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (27) increased expenses relating to pension
and postretirement benefit plans, as well as health care and other employee benefits; (28) exposure to losses related to variable annuity
guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates,
unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (29) deterioration in the experience of
the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company (“MLIC”); (30) adverse results or
other consequences from litigation, arbitration or regulatory investigations; (31) inability to protect our intellectual property rights or claims of
infringement of the intellectual property rights of others, (32) discrepancies between actual experience and assumptions used in establishing
liabilities related to other contingencies or obligations; (33) regulatory, legislative or tax changes relating to our insurance, banking,
international, or other operations that may affect the cost of, or demand for, our products or services, impair our ability to attract and retain
talented and experienced management and other employees, or increase the cost or administrative burdens of providing benefits to
employees; (34) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes,
including any related impact on our disaster recovery systems and management continuity planning which could impair our ability to conduct
business effectively; (35) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks;
and (36) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the SEC.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if we later become aware that
such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the
SEC.

2

MetLife, Inc.

Selected Financial Data

The following selected financial data has been derived from the Company’s audited consolidated financial statements. The statement of
operations data for the years ended December 31, 2010, 2009 and 2008, and the balance sheet data at December 31, 2010 and 2009 have
been derived from the Company’s audited financial statements included elsewhere herein. The statement of operations data for the years
ended December 31, 2007 and 2006, and the balance sheet data at December 31, 2008, 2007 and 2006 have been derived from the
Company’s audited financial statements not included herein. The selected financial data set forth below should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and
related notes included elsewhere herein.

Years Ended December 31,

2010

2009

2008

2007

2006

(In millions)

Statement of Operations Data(1)

Revenues:

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,394 $26,460 $25,914 $22,970 $22,052
4,711
Universal

life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . .

5,238

6,037

5,381

5,203

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,615

14,837

16,289

18,055

16,239

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,328
(392)

(265)

2,329
(2,906)

(4,866)

1,586
(2,098)

3,910

1,465
(318)

(260)

1,301
(1,174)

(208)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,717

41,057

50,982

47,150

42,921

Expenses:

Policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,545

28,336

27,437

23,783

22,869

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . .
Policyholder dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,925
1,486

4,849
1,650

4,788
1,751

5,461
1,723

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,803

10,556

11,947

10,405

4,899
1,698

9,514

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,759

45,391

45,923

41,372

38,980

Income (loss) from continuing operations before provision for income tax . . . . . . . .

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

3,958

1,181

2,777
9

(4,334)

(2,015)

(2,319)
41

5,059

1,580

3,479
(201)

5,778

1,675

4,103
362

3,941

1,027

2,914
3,526

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,786

(2,278)

3,278

4,465

6,440

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

(4)

(32)

69

148

147

Net income (loss) attributable to MetLife, Inc.

. . . . . . . . . . . . . . . . . . . . . . . . .

2,790

(2,246)

3,209

4,317

6,293

Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122

122

125

137

134

Net income (loss) available to MetLife, Inc.’s common shareholders . . . . . . . . . . . $ 2,668 $ (2,368) $ 3,084 $ 4,180 $ 6,159

MetLife, Inc.

3

Balance Sheet Data(1)
Assets:

2010

2009

December 31,

2008
(In millions)

2007

2006

General account assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $547,569 $390,273 $380,839 $399,007 $383,758
144,349
Separate account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

160,142

183,337

149,041

120,839

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $730,906 $539,314 $501,678 $559,149 $528,107

Liabilities:

Policyholder liabilities and other policy-related balances(3)
Payables for collateral under securities loaned and other transactions . . . .
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separate account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . $401,905 $283,759 $282,261 $261,442 $252,099
45,846
4,638
1,449
8,822
—
3,381
32,277
144,349

27,272
10,316
306
27,586
5,297
3,191
22,583
183,337

24,196
10,211
912
13,220
5,297
3,191
15,989
149,041

44,136
4,534
667
9,100
4,882
4,075
33,186
160,142

31,059
6,884
2,659
9,667
5,192
3,758
15,374
120,839

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

681,793

505,816

477,693

522,164

492,861

Redeemable noncontrolling interests in partially owned consolidated

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

—

—

—

—

Equity:

MetLife, Inc.’s stockholders’ equity:
Preferred stock, at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible preferred stock, at par value . . . . . . . . . . . . . . . . . . . . . . .
Common stock, at par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost
. . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss)

Total MetLife, Inc.’s stockholders’ equity . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
—
10
26,423
21,363
(172)
1,000

48,625
371

1
—
8
16,859
19,501
(190)
(3,058)

33,121
377

1
—
8
15,811
22,403
(236)
(14,253)

23,734
251

1
—
8
17,098
19,884
(2,890)
1,078

35,179
1,806

1
—
8
17,454
16,574
(1,357)
1,118

33,798
1,448

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,996

33,498

23,985

36,985

35,246

Total

liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $730,906 $539,314 $501,678 $559,149 $528,107

Years Ended December 31,

2010

2009

2008
(In millions, except per share data)

2007

2006

Other Data(1), (4)

Net income (loss) available to MetLife, Inc.’s common shareholders . . . . . . . . . $2,668
Return on MetLife, Inc.’s common equity . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.9%
Return on MetLife, Inc.’s common equity, excluding accumulated other

$(2,368)
(9.0)%

$ 3,084
11.2%

$ 4,180
12.9%

$ 6,159
20.9%

comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.0%

(6.8)%

9.1%

13.3%

22.1%

EPS Data(1), (5)
Income (Loss) from Continuing Operations Available to MetLife, Inc.’s Common

Shareholders Per Common Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.01
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.99

Income (Loss) from Discontinued Operations Per Common Share:

$ (2.94)
$ (2.94)

$ 4.60
$ 4.54

$ 5.32
$ 5.19

$ 3.64
$ 3.59

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.01
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.01

$
$

0.05
0.05

$ (0.41)
$ (0.40)

$ 0.30
$ 0.29

$ 4.45
$ 4.40

Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders Per Common

Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.02
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.00
Cash Dividends Declared Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.74

$ (2.89)
$ (2.89)
0.74
$

$ 4.19
$ 4.14
$ 0.74

$ 5.62
$ 5.48
$ 0.74

$ 8.09
$ 7.99
$ 0.59

(1) On November 1, 2010, the Holding Company acquired ALICO. The results of the Acquisition are reflected in the 2010 selected financial

data. See Note 2 of the Notes to the Consolidated Financial Statements.

4

MetLife, Inc.

(2) At December 31, 2010, general account assets, long-term debt and other liabilities include amounts relating to variable interest entities of

$11,080 million, $6,902 million and $93 million, respectively.

(3) Policyholder liabilities and other policy-related balances include future policy benefits, policyholder account balances, other policy-

related balances, policyholder dividends payable and the policyholder dividend obligation.

(4) Return on MetLife, Inc.’s common equity is defined as net income (loss) available to MetLife, Inc.’s common shareholders divided by

MetLife, Inc.’s average common stockholders’ equity.

(5) For the year ended December 31, 2009, shares related to the assumed exercise or issuance of stock-based awards have been excluded

from the calculation of diluted earnings per common share as these assumed shares are anti-dilutive.

Business

With a more than 140-year history, we have grown to become a leading global provider of insurance, annuities and employee benefit
programs, serving 90 million customers in over 60 countries. Through our subsidiaries and affiliates, MetLife holds leading market positions in
the United States (“U.S.”), Japan, Latin America, Asia Pacific, Europe and the Middle East. Over the past several years, we have grown our
core businesses, as well as successfully executed on our growth strategy. This has included completing a number of transactions that have
resulted in the acquisition and, in some cases, divestiture of certain businesses while also further strengthening our balance sheet to position
MetLife for continued growth.

On November 1, 2010 (the “Acquisition Date”), MetLife, Inc. completed the acquisition of American Life Insurance Company (“American
Life”), from ALICO Holdings LLC (“ALICO Holdings”), a subsidiary of American International Group, Inc. (“AIG”), and Delaware American Life
Insurance Company (“DelAm,”) from AIG, (American Life, together with DelAm, collectively, “ALICO”) (the “Acquisition”) for a total purchase
price of $16.4 billion. The business acquired in the Acquisition provides consumers and businesses with products and services, life
insurance, accident and health insurance, retirement and wealth management solutions. This transaction delivers on our global growth
strategies, adding significant scale and reach to MetLife’s international footprint, furthering our diversification in geographic mix and product
offerings, as well as increasing our distribution strength. See Note 2 of the Notes to the Consolidated Financial Statements.

MetLife is organized into five segments: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home
(collectively, “U.S. Business”) and International. The assets and liabilities of ALICO as of November 30, 2010 and the operating results
of ALICO from the Acquisition Date through November 30, 2010 are included in the International segment. In addition, the Company reports
certain of its results of operations in Banking, Corporate & Other, which includes MetLife Bank, National Association (“MetLife Bank”) and
other business activities. For reporting periods beginning in 2011, our non-U.S. Business results will be presented within two separate
segments: Japan and Other International Regions. MetLife’s management continues to evaluate the Company’s segment performance and
allocated resources and may adjust such measurements in the future to better reflect segment profitability.

U.S. Business provides a variety of insurance and financial services products — including life, dental, disability, auto and homeowner
insurance, guaranteed interest and stable value products, and annuities — through both proprietary and independent retail distribution
channels, as well as at the workplace. This business serves over 60,000 group customers, including over 90 of the top one hundred
FORTUNE 500» companies, and provides protection and retirement solutions to millions of individuals.

International operates in Japan and 64 countries within Latin America, Asia Pacific, Europe and the Middle East. MetLife is the largest life
insurer in Mexico and also holds leading market positions in Japan, Poland, Chile and South Korea. This business provides life insurance,
accident and health insurance, credit insurance, annuities, endowment and retirement & savings products to both individuals and groups.
is the fastest-growing of MetLife’s businesses, and we believe it will be one of the largest future growth areas.
International

Within the U.S., we also provide a variety of mortgage and deposit products through MetLife Bank. Results of our banking operation are

reported in Banking, Corporate & Other.

U.S. Business markets our products and services through various distribution groups. Our life insurance and retirement products targeted
to individuals are sold via sales forces, comprised of MetLife employees, in addition to third-party organizations. Our group life, non-medical
health and corporate benefit funding products are sold via sales forces primarily comprised of MetLife employees. Personal lines property and
casualty insurance products are directly marketed to employees at their employer’s worksite. Auto & Home products are also marketed and
sold to individuals by independent agents and property and casualty specialists through a direct response channel and the individual
distribution sales group. MetLife sales employees work with all distribution groups to better reach and service customers, brokers,
consultants and other intermediaries.

International markets its products and services through a multi-distribution strategy which varies by geographic region. The various
distribution channels include: agency, bancassurance, direct marketing (“DM”), brokerage and e-commerce. In developing countries, agency
covers the needs of the emerging middle class with primarily traditional products (e.g., endowment and accident and health). In more
developed and mature markets, agents, while continuing to serve their existing customers to keep pace with their developing financial needs,
also target upper middle class and high net worth customer bases with a more sophisticated product set including more investment-sensitive
products, such as universal
life, mutual fund and single premium deposits. In the bancassurance channel, International leverages partner-
ships that span all regions. In addition, DM has extensive and far reaching capabilities in all regions. The DM operations deploy both broadcast
marketing approaches (e.g. direct response TV, web-based lead generation) and traditional DM techniques such as telemarketing. Japan
represents the largest DM market.

Operating revenues derived from any customer did not exceed 10% of consolidated operating revenues in any of the last three years.
Financial information, including revenues, expenses, operating earnings, and total assets by segment, is provided in Note 22 of the Notes to
the Consolidated Financial Statements. Operating revenues and operating earnings are performance measures that are not based on
accounting principles generally accepted in the United States of America (“GAAP”). See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” for definitions of such measures.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated
in 1999 (the “Holding Company”), its subsidiaries and affiliates. Following this summary is a discussion addressing the consolidated results of
operations and financial condition of the Company for the periods indicated. This discussion should be read in conjunction with “Note

MetLife, Inc.

5

Regarding Forward Looking Statements,” “Selected Financial Data” and the Company’s consolidated financial statements included else-
where herein and “Risk Factors” included in MetLife’s Annual Report on Form 10-K for the Year Ended December 31, 2010, as amended on
Form 10-K/A filed with the SEC on March 1, 2011, and as updated by MetLife’s report on Form 8-K filed with the SEC on March 1, 2011.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference
information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do
not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe”
and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these
include statements relating to future actions, prospective services or products, future performance or results of current and anticipated
services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial
results. Any or all forward-looking statements may turn out to be wrong. Actual results could differ materially from those expressed or implied
in the forward-looking statements. See “Note Regarding Forward-Looking Statements.”

The following discussion includes references to our performance measures operating earnings and operating earnings available to
common shareholders, that are not based on accounting principles generally accepted in the United States of America (“GAAP”). Operating
earnings is the measure of segment profit or loss we use to evaluate segment performance and allocate resources and, consistent with GAAP
accounting guidance for segment reporting, is our measure of segment performance. Operating earnings is also a measure by which our
senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under
applicable compensation plans. Operating earnings is defined as operating revenues less operating expenses, net of income tax. Operating
earnings available to common shareholders, which is used to evaluate the performance of Banking, Corporate & Other, as well as MetLife, is
defined as operating earnings less preferred stock dividends.
Operating revenues is defined as GAAP revenues (i)

less
amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses); (iii) plus scheduled periodic
settlement payments on derivatives that are hedges of investments but do not qualify for hedge accounting treatment; (iv) plus income from
discontinued real estate operations; (v) less net investment income related to contractholder-directed unit-linked investments; and (vi) plus,
for operating joint ventures reported under the equity method of accounting, the aforementioned adjustments, those identified in the definition
of operating expenses and changes in the fair value of hedges of operating joint venture liabilities, all net of income tax.

less net investment gains (losses) and net derivative gains (losses); (ii)

Operating expenses is defined as GAAP expenses (i) less changes in policyholder benefits associated with asset value fluctuations related
to experience-rated contractholder liabilities and certain inflation-indexed liabilities; (ii) less costs related to business combinations (since
January 1, 2009) and noncontrolling interests; (iii) less amortization of deferred policy acquisition costs (“DAC”) and value of business
acquired (“VOBA”) and changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains
(losses); (iv) less interest credited to policyholder account balances (“PABs”) related to contractholder-directed unit-linked investments; and
(v) plus scheduled periodic settlement payments on derivatives that are hedges of PABs but do not qualify for hedge accounting treatment.
In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization entities that are variable

interest entities (“VIEs”) as required under GAAP.

We believe the presentation of operating earnings and operating earnings available to common shareholders as we measure it for
management purposes enhances the understanding of our performance by highlighting the results of operations and the underlying
profitability drivers of our businesses. Operating earnings and operating earnings available to common shareholders should not be viewed as
substitutes for GAAP income (loss) from continuing operations, net of income tax. Reconciliations of operating earnings and operating
earnings available to common shareholders to GAAP income (loss)
income tax, the most directly
comparable GAAP measure, are included in “— Results of Operations.”

from continuing operations, net of

In this discussion, we sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under

GAAP, but are used as relevant measures of business activity.

Executive Summary

MetLife is a leading global provider of insurance, annuities and employee benefit programs throughout the United States (“U.S.”), Japan,
Latin America, Asia Pacific, Europe and the Middle East. Through its subsidiaries and affiliates, MetLife offers life insurance, annuities, auto
and homeowners insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings
products and services to corporations and other institutions. MetLife is organized into five segments: Insurance Products, Retirement
Products, Corporate Benefit Funding and Auto & Home (collectively, “U.S. Business”) and International. The assets and liabilities of American
Life Insurance Company (“American Life”) and Delaware American Life Insurance Company (“DelAm,” together with American Life, collectively,
“ALICO”) as of November 30, 2010 and the operating results of ALICO from November 1, 2010 (the “Acquisition Date”) through November 30,
2010 are included in the International segment. In addition, the Company reports certain of its results of operations in Banking, Corporate &
Other, which is comprised of MetLife Bank, National Association (“MetLife Bank”) and other business activities. For reporting periods
beginning in 2011, our non-U.S. Business results will be presented within two separate segments: Japan and Other International Regions.
On the Acquisition Date, the Holding Company completed the acquisition of American Life from ALICO Holdings LLC (“ALICO Holdings”), a
subsidiary of American International Group, Inc. (“AIG”), and DelAm from AIG, (the “Acquisition”) for a total purchase price of $16.4 billion. The
business acquired in the Acquisition provides consumers and businesses with life insurance, accident and health insurance, retirement and
wealth management solutions. This transaction delivers on our global growth strategies, adding significant scale and reach to MetLife’s
international footprint, furthering our diversification in geographic mix and product offerings, as well as increasing our distribution strength.
See Note 2 of the Notes to the Consolidated Financial Statements.

As the U.S. and global financial markets continue to recover, we have experienced a significant improvement in net investment income and
favorable changes in net investment and net derivative gains (losses). We also continue to experience an increase in market share and sales in
some of our businesses, in part, from a flight to quality in the industry. These positive factors were somewhat dampened by the negative
impact of general economic conditions, including high levels of unemployment, on the demand for certain of our products.

6

MetLife, Inc.

Years Ended December 31,

2010

2009
(In millions)

2008

Income (loss) from continuing operations, net of income tax . . . . . . . . . . . . . . . . $2,777

$(2,319)

$ 3,479

Less: Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Net derivative gains (losses)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Adjustments to continuing operations(1) . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Provision for income tax (expense) benefit

. . . . . . . . . . . . . . . . . . . . . . .

(392)

(265)
(981)

401

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,014
122

(2,906)

(4,866)
283

2,683

2,487
122

(2,098)

3,910
(664)

(488)

2,819
125

Operating earnings available to common shareholders . . . . . . . . . . . . . . . . . . . . $3,892

$ 2,365

$ 2,694

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

Year Ended December 31, 2010 compared with the Year Ended December 31, 2009
Unless otherwise stated, all amounts discussed below are net of income tax.
During the year ended December 31, 2010, MetLife’s income (loss) from continuing operations, net of income tax increased $5.1 billion to
a gain of $2.8 billion from a loss of $2.3 billion in 2009, of which $2 million in losses is from the inclusion of ALICO results for one month in 2010
and the impact of financing costs for the Acquisition. The change was predominantly due to a $4.6 billion favorable change in net derivative
gains (losses), before income tax, and a $2.5 billion favorable change in net investment gains (losses), before income tax. Offsetting these
favorable variances were unfavorable changes in adjustments related to continuing operations of $1.3 billion, before income tax, and
favorable variance of $3.6 billion. In addition, operating earnings available to common
$2.2 billion of
shareholders increased $1.5 billion to $3.9 billion in the current year from $2.4 billion in the prior year.

income tax, resulting in a total

The favorable change in net derivative gains (losses) of $3.0 billion was primarily driven by net gains on freestanding derivatives in the
current year compared to net losses in the prior year, partially offset by an unfavorable change in embedded derivatives from gains in the prior
year to losses in the current year. The favorable change in freestanding derivatives was primarily attributable to market factors, including falling
long-term and mid-term interest rates, a stronger recovery in equity markets in the prior year than the current year, equity volatility, which
decreased more in the prior year as compared to the current year, a strengthening U.S. dollar and widening corporate credit spreads in the
financial services sector. The favorable change in net investment gains (losses) of $1.6 billion was primarily driven by a decrease in
impairments and a decrease in the provision for credit losses on mortgage loans. These favorable changes in net derivative and net
investment gains (losses) were partially offset by an unfavorable change of $514 million in related adjustments.

The improvement in the financial markets, which began in the second quarter of 2009 and continued into 2010, was a key driver of the
$1.5 billion increase in operating earnings available to common shareholders. Such market improvement was most evident in higher net
investment income and policy fees, as well as a decrease in variable annuity guarantee benefit costs. These increases were partially offset by
an increase in amortization of DAC, VOBA and deferred sales inducements (“DSI”) as a result of an increase in average separate account
balances and higher current year gross margins in the closed block driven by increased investment yields and the impact of dividend scale
reductions. The 2010 period also includes one month of ALICO results, contributing $114 million to the increase in operating earnings. The
favorable impact of a reduction in discretionary spending associated with our enterprise-wide cost reduction and revenue enhancement
initiative was more than offset by an increase in other expenses related to our International business. This increase primarily stemmed from the
impact of a benefit recorded in the prior year related to the pesification in Argentina, as well as current year business growth in the segment.

Year Ended December 31, 2009 compared with the Year Ended December 31, 2008
Unless otherwise stated, all amounts discussed below are net of income tax.
During the year ended December 31, 2009, MetLife’s income (loss) from continuing operations, net of income tax, decreased $5.8 billion
to a loss of $2.3 billion from income of $3.5 billion in the comparable 2008 period. The year over year change is predominantly due to an
$8.8 billion unfavorable change in net derivative gains (losses), before income tax, to losses of $4.9 billion in 2009 from gains of $3.9 billion in
2008. In addition, there was an $808 million unfavorable change in net investment gains (losses), before income tax. Offsetting these
variances were favorable changes in adjustments related to continuing operations of $947 million, before income tax, and $3.2 billion of
income tax, resulting in a total unfavorable variance of $5.5 billion. In addition, operating earnings available to common shareholders
decreased by $329 million to $2.4 billion in 2009 from $2.7 billion in 2008.

The unfavorable change in net derivative gains (losses) of $8.8 billion was primarily driven by losses on freestanding derivatives, partially
offset by gains on embedded derivatives, most of which were associated with variable annuity minimum benefit guarantees, and lower losses
on fixed maturity securities. The unfavorable change in net investment gains (losses) of $808 million was primarily driven by an increase in
impairments. These unfavorable changes in gains (losses) were partially offset by a favorable change of $947 million in related adjustments.
The positive impact of business growth and favorable mortality in several of our businesses was more than offset by a decline in net
investment income, resulting in a decrease in operating earnings of $329 million. The decrease in net investment income caused significant
declines in the operating earnings of many of our businesses, especially the interest spread businesses. Also contributing to the decline in
operating earnings was an increase in net guaranteed annuity benefit costs and a charge related to our closed block of business, a specific
group of participating life policies that were segregated in connection with the demutualization of Metropolitan Life Insurance Company
(“MLIC”). The favorable impact of our enterprise-wide cost reduction and revenue enhancement initiative, was more than offset by higher
pension and postretirement benefit costs, driving the increase in other expenses. The declines in operating earnings were partially offset by a
change in amortization related to DAC, DSI and unearned revenue.

MetLife, Inc.

7

Consolidated Company Outlook
As a result of the Acquisition, operations outside the U.S. are expected to contribute approximately 30% of the premiums, fees and other

revenues and approximately 40% of MetLife’s operating earnings in 2011.

In 2010, general economic conditions improved and interest rates remained low throughout the year. In 2011, we expect a significant

improvement in the operating earnings of the Company, driven primarily by the following:

(cid:129) Premiums, fees and other revenues growth in 2011 of approximately 30%, of which 27% is directly attributable to the Acquisition. The

remaining 3% increase is driven by:
(cid:129) Increases in our non-U.S. businesses from continuing organic growth throughout our various geographic regions;
(cid:129) Higher fees earned on separate accounts, as the equity markets continue to improve, thereby increasing the value of those separate
accounts. In addition, net flows of variable annuities are expected to continue to be strong in 2011, which also increases the account
values upon which these fees are earned;

(cid:129) Increased sales in the pension closeout business, both in the U.S. and the United Kingdom (“U.K.”), as we expect the demand for

these products to return to a more normal

level

in 2011.

(cid:129) Focus on disciplined underwriting. We see no significant changes to the underlying trends that drive underwriting results and anticipate

solid results in 2011.

(cid:129) Focus on expense management. We continue to focus on expense control throughout the Company, specifically managing the costs

associated with the integration of ALICO. We also expect to begin realizing cost synergies later in 2011.

(cid:129) Returns on investment portfolio. Although the market environment remains challenging, we expect the returns on our investment

portfolio in 2011, with respect to both income and realized gains and losses, will be in line with the results achieved in 2010.

More difficult to predict is the impact of potential changes in fair value of freestanding and embedded derivatives as even relatively small
movements in market variables, including interest rates, equity levels and volatility, can have a large impact on the fair value of derivatives and
net derivative gains (losses). Additionally, changes in fair value of embedded derivatives within certain insurance liabilities may have a material
impact on net derivative gains (losses) related to the inclusion of an adjustment for nonperformance risk.

Industry Trends

Despite improvement in general economic conditions in 2010, we continue to be impacted by the unstable global financial and economic

environment that has been affecting the industry.

Financial and Economic Environment. Our business and results of operations are materially affected by conditions in the global capital
markets and the economy, generally, both in the U.S. and elsewhere around the world. The global economy and markets are now recovering
from a period of significant stress that began in the second half of 2007 and substantially increased through the first quarter of 2009. This
disruption adversely affected the financial services industry, in particular. The U.S. economy entered a recession in late 2007. This recession
ended in mid-2009, but the recovery from the recession has been below historic averages and the unemployment rate is expected to remain
high for some time. In addition, inflation has fallen over the last several years and is expected to remain at low levels for some time. Some
economists believe that some level of disinflation and deflation risk remains in the economy.

Throughout 2008 and continuing in 2009, Congress, the Federal Reserve Bank of New York, the Federal Deposit Insurance Corporation
(“FDIC”), the U.S. Treasury and other agencies of the Federal government took a number of increasingly aggressive actions (in addition to
continuing a series of interest rate reductions that began in the second half of 2007) intended to provide liquidity to financial institutions and
markets, to avert a loss of investor confidence in particular troubled institutions, to prevent or contain the spread of the financial crisis and to
spur economic growth. Most of these programs have run their course or have been discontinued. The monetary policy by the Federal Reserve
Board and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which was signed by President Obama in July
2010, are more likely to be relevant to MetLife, Inc. and will significantly change financial regulation in the U.S. See “— Regulatory Changes.”
In addition, the oversight body of the Basel Committee on Banking Supervision announced in December 2010 increased capital and liquidity
requirements (commonly referred to as “Basel
III”) for bank holding companies, such as MetLife, Inc. Assuming these requirements are
endorsed and adopted by the U.S., they are to be phased in beginning January 1, 2013. It is possible that even more stringent capital and
liquidity requirements could be imposed under Dodd-Frank and Basel

III.

It is not certain what effect the enactment of Dodd-Frank or Basel III will have on the financial markets, the availability of credit, asset prices
and MetLife’s operations. We cannot predict whether the funds made available by the U.S. Federal government and its agencies will be
enough to continue stabilizing or to further revive the financial markets or, if additional amounts are necessary, whether Congress will be willing
to make the necessary appropriations, what the public’s sentiment would be towards any such appropriations, or what additional require-
ments or conditions might be imposed on the use of any such additional funds.

The imposition of additional regulation on large financial

institutions may have, over time, the effect of supporting some aspects of the

financial services industry more than others. This could adversely affect our competitive position.

Although the disruption in the global financial markets has moderated, not all such markets are functioning normally, and some remain
reliant upon government intervention and liquidity. The global recession and disruption of the financial markets has also led to concerns over
capital markets access and the solvency of certain European Union member states, including Portugal, Ireland, Italy, Greece and Spain. In
response, on May 10, 2010, the European Union, the European Central Bank and the International Monetary Fund announced a rescue
package of up to a750 billion, or approximately $1 trillion, for European nations in the Eurozone. This rescue package is intended to stabilize
these economies. The Japanese economy, to which we face increased exposure as a result of the Acquisition, continues to experience low
nominal growth, a deflationary environment, and weak consumer spending.

Recent global economic conditions have had and could continue to have an adverse effect on the financial results of companies in the
financial services industry, including MetLife. Such global economic conditions, as well as the global financial markets, continue to impact our
net investment income, our net investment and net derivative gains (losses), and the demand for and the cost and profitability of certain of our
products, including variable annuities and guarantee benefits. See “— Results of Operations” and “— Liquidity and Capital Resources.”

Competitive Pressures.

The life insurance industry remains highly competitive. The product development and product life-cycles have
shortened in many product segments, leading to more intense competition with respect to product features. Larger companies have the
ability to invest in brand equity, product development, technology and risk management, which are among the fundamentals for sustained

8

MetLife, Inc.

profitable growth in the life insurance industry. In addition, several of the industry’s products can be quite homogeneous and subject to
intense price competition. Sufficient scale, financial strength and financial flexibility are becoming prerequisites for sustainable growth in the
life insurance industry. Larger market participants tend to have the capacity to invest in additional distribution capability and the information
technology needed to offer the superior customer service demanded by an increasingly sophisticated industry client base. We believe that
the turbulence in financial markets that began in the second half of 2007, its impact on the capital position of many competitors, and
subsequent actions by regulators and rating agencies have highlighted financial strength as a significant differentiator from the perspective of
customers and certain distributors. In addition, the financial market turbulence and the economic recession have led many companies in our
industry to re-examine the pricing and features of the products they offer and may lead to consolidation in the life insurance industry.

Regulatory Changes.

The U.S. life insurance industry is regulated at the state level, with some products and services also subject to
Federal regulation. As life insurers introduce new and often more complex products, regulators refine capital requirements and introduce new
reserving standards for the life insurance industry. Regulations recently adopted or currently under review can potentially impact the statutory
reserve and capital requirements of the industry. In addition, regulators have undertaken market and sales practices reviews of several
markets or products, including equity-indexed annuities, variable annuities and group products. The regulation of the financial services
industry in the U.S. and internationally has received renewed scrutiny as a result of the disruptions in the financial markets in 2008 and 2009.
Significant regulatory reforms have been proposed and these or other reforms could be implemented. See “Business — U.S. Regulation” and
“Business — International Regulation.” We cannot predict whether any such reforms will be adopted, the form they will take or their effect
upon us. We also cannot predict how the various government responses to the recent financial and economic difficulties will affect the
financial services and insurance industries or the standing of particular companies, including us, within those industries. See “Business —
Governmental Responses to Extraordinary Market Conditions,” “Risk Factors — Our Insurance, Brokerage and Banking Businesses Are
Heavily Regulated, and Changes in Regulation May Reduce Our Profitability and Limit Our Growth” and “Risk Factors — Changes in
U.S. Federal and State Securities Laws and Regulations, and State Insurance Regulations Regarding Suitability of Annuity Product Sales, May
Affect Our Operations and Our Profitability.” Until various studies are completed and final regulations are promulgated pursuant to Dodd-
Frank, the full impact of Dodd-Frank on the investments, investment activities and insurance and annuity products of the Company remain
unclear. See “Risk Factors — Various Aspects of Dodd-Frank Could Impact Our Business Operations, Capital Requirements and Profitability
and Limit Our Growth.” Under Dodd-Frank, as a large, interconnected bank holding company with assets of $50 billion or more, or possibly as
an otherwise systemically important
to enhanced prudential standards imposed on
systemically significant financial companies. Enhanced standards will be applied to Tier 1 and total risk-based capital (“RBC”), liquidity,
leverage (unless another, similar standard is appropriate for the Company), resolution plan and credit exposure reporting, concentration
limits, and risk management. The so-called “Volcker Rule” provisions of Dodd-Frank restrict the ability of affiliates of insured depository
institutions (such as MetLife Bank) to engage in proprietary trading or sponsor or invest in hedge funds or private equity funds. See “Risk
Factors — Various Aspects of Dodd-Frank Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our
Growth.”

financial company, MetLife,

Inc. will be subject

Mortgage and Foreclosure-Related Exposures.

In 2008 MetLife Bank acquired certain assets to enter the forward and reverse residential
mortgage origination and servicing business, including rights to service residential mortgage loans. At various times since then, including
most recently in the third quarter of 2010, MetLife Bank has acquired additional residential mortgage loan servicing rights. As an originator and
servicer of mortgage loans, which are usually sold to an investor shortly after origination, MetLife Bank has obligations to repurchase loans
upon demand by the investor due to (i) a determination that material representations made in connection with the sale of the loans (relating, for
example, to the underwriting and origination of the loans) are incorrect or (ii) defects in servicing of the loan. MetLife Bank is indemnified by the
sellers of the acquired assets, for various periods depending on the transaction and the nature of the claim, for origination and servicing
deficiencies that occurred prior to MetLife Bank’s acquisition, including indemnification for any repurchase claims made from investors who
purchased mortgage loans from the sellers. Substantially all mortgage servicing rights (“MSRs”) that were acquired by MetLife Bank relate to
loans sold to Federal National Mortgage Association (“FNMA”) or Federal Home Loan Mortgage Corporation (“FHLMC”). Since the 2008
acquisitions, MetLife Bank has originated and sold mortgages primarily to FNMA, FHLMC and Government National Mortgage Association
(“GNMA”) (collectively, the “Agency Investors”) and, to a limited extent, a small number of private investors. Currently 99% of MetLife Bank’s
$83 billion servicing portfolio is comprised of products sold to Agency Investors. Other than repurchase obligations which are subject to
indemnification by sellers of acquired assets as described above, MetLife Bank’s exposure to repurchase obligations and losses related to
origination deficiencies is limited to the approximately $52 billion of loans originated by MetLife Bank (all of which have been originated since
August 2008) and to servicing deficiencies after the date of acquisition, and management is satisfied that adequate provision has been made
in the Company’s consolidated financial statements for all probable and reasonably estimable repurchase obligations and losses.

In light of recent events concerning foreclosure proceedings within the industry, MetLife Bank has undertaken a close review of its
procedures. MetLife Bank verifies the accuracy of borrower information included in affidavits filed in foreclosure proceedings. We do not
believe that MetLife Bank has material exposure to potential losses arising from challenges to its foreclosure procedures. Like other mortgage
servicers, MetLife Bank has been the subject of recent inquiries and investigations from state attorneys general and banking regulators. See
Note 16 of the Notes to the Consolidated Financial Statements.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates
and assumptions that affect amounts reported in the consolidated financial statements. The most critical estimates include those used in
determining:

(i)
(ii)
(iii)
(iv)

(v)
(vi)
(vii)

the estimated fair value of investments in the absence of quoted market values;
investment impairments;
the recognition of income on certain investment entities and the application of the consolidation rules to certain investments;
the estimated fair value of and accounting for freestanding derivatives and the existence and estimated fair value of embedded
derivatives requiring bifurcation;
the capitalization and amortization of DAC and the establishment and amortization of VOBA;
the measurement of goodwill and related impairment, if any;
the liability for future policyholder benefits and the accounting for reinsurance contracts;

MetLife, Inc.

9

(viii) accounting for income taxes and the valuation of deferred tax assets;
(ix)
(x)

accounting for employee benefit plans; and
the liability for litigation and regulatory matters.

The application of purchase accounting requires the use of estimation techniques in determining the estimated fair values of assets
acquired and liabilities assumed — the most significant of which relate to aforementioned critical accounting estimates. In applying the
Company’s accounting policies, we make subjective and complex judgments that frequently require estimates about matters that are
inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries;
others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

Fair Value

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In many
cases, the exit price and the transaction (or entry) price will be the same at initial recognition. However, in certain cases, the transaction price
may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third party with the
same credit standing. It requires that fair value be a market-based measurement in which the fair value is determined based on a hypothetical
transaction at the measurement date, considered from the perspective of a market participant. When quoted prices are not used to determine
fair value of an asset, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the
cost approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability
of sufficient inputs. The Company prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent
that observable inputs are not available. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level
hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability’s
classification within the fair value hierarchy is based on the lowest level of input to its valuation. The input levels are as follows:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on
average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed
maturity securities.

Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 2 inputs include
quoted prices for similar assets or liabilities other than quoted prices in Level 1; quoted prices in markets that are not active; or
other significant inputs that are observable or can be derived principally from or corroborated by observable market data for
substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or
liabilities. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants
would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined
using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the
determination of estimated fair value requires significant management judgment or estimation.

Prior to January 1, 2009, the measurement and disclosures of fair value based on exit price excluded certain items such as nonfinancial
assets and nonfinancial liabilities initially measured at estimated fair value in a business combination, reporting units measured at estimated
fair value in the first step of a goodwill impairment test and indefinite-lived intangible assets measured at estimated fair value for impairment
assessment.

In addition, the Company elected the fair value option (“FVO”) for certain of its financial instruments to better match measurement of assets

and liabilities in the consolidated statements of operations.

Estimated Fair Value of Investments
The Company’s investments in fixed maturity and equity securities, investments in trading and other securities, certain short-term
investments, most mortgage loans held-for-sale, and MSRs are reported at their estimated fair value. In determining the estimated fair value of
these investments, various methodologies, assumptions and inputs are utilized, as described further below.

When available, the estimated fair value of securities is based on quoted prices in active markets that are readily and regularly obtainable.
Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management
judgment.

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation
methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other
similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing
of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated
duration and management’s assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are based
on available market information and management’s judgments about financial

instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price
transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such
observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and
observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain
types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated
fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These
unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market
activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent
with what other market participants would use when pricing such securities.

The estimated fair value of residential mortgage loans held-for-sale is determined based on observable pricing of residential mortgage
loans held-for-sale with similar characteristics, or observable pricing for securities backed by similar types of loans, adjusted to convert the
securities prices to loan prices. Generally, quoted market prices are not available. When observable pricing for similar loans or securities that

10

MetLife, Inc.

are backed by similar loans are not available, the estimated fair values of residential mortgage loans held-for-sale are determined using
independent broker quotations, which is intended to approximate the amounts that would be received from third parties. Certain other
mortgage loans have also been designated as held-for-sale which are recorded at the lower of amortized cost or estimated fair value less
expected disposition costs determined on an individual
loan basis. For these loans, estimated fair value is determined using independent
broker quotations or, when the loan is in foreclosure or otherwise determined to be collateral dependent, the estimated fair value of the
underlying collateral estimated using internal models.

MSRs, which are recorded in other invested assets, are measured at estimated fair value and are either acquired or are generated from the
sale of originated residential mortgage loans where the servicing rights are retained by the Company. The estimated fair value of MSRs is
principally determined through the use of internal discounted cash flow models which utilize various assumptions. Valuation inputs and
assumptions include generally observable items such as type and age of loan, loan interest rates, current market interest rates, and certain
unobservable inputs, including assumptions regarding estimates of discount rates, loan prepayments and servicing costs, all of which are
sensitive to changing markets conditions. The use of different valuation assumptions and inputs, as well as assumptions relating to the
collection of expected cash flows, may have a material effect on the estimated fair values of MSRs.

Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset
liquidity. The Company’s ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in
the market and increases the use of judgment in determining the estimated fair value of certain securities.

Investment Impairments
One of the significant estimates related to available-for-sale securities is the evaluation of investments for impairments. The assessment of
whether impairments have occurred is based on our case-by-case evaluation of the underlying reasons for the decline in estimated fair value.
The Company’s review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by
three categories of severity and/or age of the gross unrealized loss, as described more fully in Note 3 of the Notes to the Consolidated
Financial Statements. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of
the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows
or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be
collected. In contrast, for certain equity securities, greater weight and consideration are given by the Company to a decline in estimated fair
value and the likelihood such estimated fair value decline will recover.

Additionally, we consider a wide range of factors about the security issuer and use our 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 our evaluation of the security are
assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the
impairment evaluation process include, but are not limited to:

(i)
(ii)
(iii)
(iv)
(v)

the length of time and the extent to which the estimated fair value has been below cost or amortized cost;
the potential for impairments of securities when the issuer is experiencing significant financial difficulties;
the potential for impairments in an entire industry sector or sub-sector;
the potential for impairments in certain economically depressed geographic locations;
the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss
or has exhausted natural resources;

(vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell

a particular security before recovery of the decline in estimated fair value below cost or amortized cost;

(vii) with respect to equity securities, whether the Company’s ability and intent to hold the security for a period of time sufficient to

allow for the recovery of its value to an amount equal to or greater than cost;

(viii) unfavorable changes in projected cash flows on mortgage-backed and asset-backed securities (“ABS”); and
(ix)

other subjective factors, including concentrations and information obtained from regulators and rating agencies.
The cost of fixed maturity and equity securities is adjusted for the credit loss component of Other-Than-Temporary Impairment (“OTTI”) in
the period in which the determination is made. When an OTTI of a fixed maturity security has occurred, the amount of the OTTI recognized in
earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before
recovery of the decline in estimated fair value below amortized cost. If the fixed maturity security meets either of these two criteria, the OTTI
recognized in earnings is equal to the entire difference between the security’s amortized cost and its estimated fair value at the impairment
measurement date. For OTTI of fixed maturity securities that do not meet either of these two criteria, the net amount recognized in earnings is
equal to the difference between the amortized cost of the fixed maturity security and the present value of projected future cash flows expected
to be collected from this security (“credit loss”). If the estimated fair value is less than the present value of projected future cash flows expected
to be collected, this portion of OTTI related to other than credit factors (“noncredit loss”) is recorded as other comprehensive income (loss).
For equity securities, the carrying value of the equity security is impaired to its estimated fair value, with a corresponding charge to earnings.
The Company does not make any adjustments for subsequent recoveries in value.

The determination of the amount of allowances and impairments on other invested asset classes is highly subjective and is based upon the
Company’s periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and
assessments are revised as conditions change and new information becomes available.

Recognition of Income on Certain Investment Entities
The recognition of income on certain investments (e.g. loan-backed securities, including mortgage-backed and ABS, certain structured
investment transactions, trading and other securities) is dependent upon market conditions, which could result in prepayments and changes
in amounts to be earned.

Application of the Consolidation Rules to Certain Investments
The Company has invested in certain structured transactions that are VIEs. These structured transactions include reinsurance trusts,
asset-backed securitizations, hybrid securities, real estate joint ventures, other limited partnership interests and limited liability companies.
The Company is required to consolidate those VIEs for which it is deemed to be the primary beneficiary. The accounting rules for the
determination of when an entity is a VIE and when to consolidate a VIE are complex. The determination of the VIE’s primary beneficiary requires

MetLife, Inc.

11

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. The Company generally uses a qualitative approach to determine whether it is the primary beneficiary.

For most VIEs, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or
receive benefits that could be significant to the VIE is considered the primary beneficiary. However, for VIEs that are investment companies or
apply measurement principles consistent with those utilized by investment companies, the primary beneficiary is based on a risks and
rewards model and is defined as the entity that will absorb a majority of a VIE’s expected losses, receive a majority of a VIE’s expected residual
returns if no single entity absorbs a majority of expected losses, or both. The Company reassesses its involvement with VIEs on a quarterly
basis. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect
on the amounts presented within the consolidated financial statements.

Derivative Financial Instruments
The Company enters into freestanding derivative transactions including swaps, forwards, futures and option contracts to manage various
risks relating to its ongoing business operations. To a lesser extent, the Company uses credit derivatives, such as credit default swaps, to
synthetically replicate investment risks and returns which are not readily available in the cash market.

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives and interest
forwards to sell certain to-be-announced securities or through the use of pricing models for over-the-counter (“OTC”) derivatives. The
determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and
inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations
can be affected by changes in interest rates, foreign currency exchange rates, financial
indices, credit spreads, default risk (including the
counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models. See Note 5 of the
Notes to the Consolidated Financial Statements for additional details on significant inputs into the OTC derivative pricing models and credit
risk adjustment.

The accounting for derivatives is complex and interpretations of the primary accounting guidance continue to evolve in practice. Judgment
is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under
such accounting guidance. If it was determined that hedge accounting designations were not appropriately applied, reported net income
could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the
appropriate accounting treatment may result in a differing impact on the consolidated financial statements of the Company from that
previously reported. Assessments of hedge effectiveness and measurements of ineffectiveness of hedging relationships are also subject to
interpretations and estimations and different interpretations or estimates may have a material effect on the amount reported in net income.

Embedded Derivatives
The Company issues certain variable annuity products with guaranteed minimum benefits. These include guaranteed minimum withdrawal
benefits (“GMWB”), guaranteed minimum accumulation benefits (“GMAB”), and certain guaranteed minimum income benefits (“GMIB”).
GMWB, GMAB and certain GMIB are embedded derivatives, which are measured at estimated fair value separately from the host variable
annuity product, with changes in estimated fair value reported in net derivative gains (losses).

The estimated fair values of these embedded derivatives are determined based on the present value of projected future benefits minus the
present value of projected future fees. The projections of future benefits and future fees require capital market and actuarial assumptions
including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the
guarantees are projected under multiple capital market scenarios using observable risk free rates. The valuation of these embedded
inputs. The
derivatives also includes an adjustment
nonperformance risk adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary
market for the Holding Company’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to
reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to the Holding Company. Risk
margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market
participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency,
partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment.

for the Company’s nonperformance risk and risk margins for non-capital market

The accounting for embedded derivatives is complex and interpretations of the primary accounting standards continue to evolve in
practice. If interpretations change, there is a risk that features previously not bifurcated may require bifurcation and reporting at estimated fair
value in the consolidated financial statements and respective changes in estimated fair value could materially affect net income.

These guaranteed minimum benefits may be more costly than expected in volatile or declining equity markets. Market conditions
including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, changes in the
Company’s nonperformance risk, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to
non-capital market inputs may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net
income.

The Company ceded the risk associated with certain of the GMIB and GMAB described in the preceding paragraphs. The value of the
embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees
directly written by the Company.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk
in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data,
including historical recovery rates of insurance companies as well as policyholder behavior observed over the past two years as the recent
financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the manner in which its insurance
subsidiaries incorporate expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of
investment-type contracts and embedded derivatives within insurance contracts. The refinement impacted the Company’s income from
continuing operations, net of income tax, with no effect on operating earnings.

As described above, the valuation of variable annuity guarantees accounted for as embedded derivatives includes an adjustment for the
Company’s nonperformance risk, which is subject to variability. The table below illustrates the impact that a range of reasonably likely
variances in credit spreads would have on the Company’s consolidated balance sheet, excluding the effect of income tax. Changes in the

12

MetLife, Inc.

carrying values of PABs would be reported in net investment gains (losses) and changes in the carrying value of DAC and VOBA would be
reported in other expenses. However, these estimated effects do not take into account potential changes in other variables, such as equity
price levels and market volatility, that can also contribute significantly to changes in carrying values. Therefore, the table does not necessarily
reflect the ultimate impact on the consolidated financial statements under the credit spread variance scenarios presented below.

In determining the ranges, the Company has considered current market conditions as well as the market level of spreads that can
reasonably be anticipated over the near term. The ranges do not reflect extreme market conditions experienced during the 2008 and 2009
economic crisis as the Company does not consider those to be reasonably likely events in the near future.

Carrying Value
At December 31, 2010

PABs

DAC and
VOBA

(In millions)

100% increase in the Company’s credit spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,551

As reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,357
50% decrease in the Company’s credit spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,852

$ 79

$110
$130

The estimated fair value of the embedded equity and bond indexed derivatives contained in certain funding agreements is determined
using market standard swap valuation models and observable market inputs, including an adjustment for the Company’s nonperformance risk
that takes into consideration publicly available information relating to the Company’s debt, as well as its claims paying ability. Changes in
equity and bond indices, interest rates and the Company’s credit standing may result in significant fluctuations in estimated the fair value of
these embedded derivatives that could materially affect net income.

Deferred Policy Acquisition Costs and Value of Business Acquired
The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that vary with and relate to
the production of new business are deferred as DAC. Such costs consist principally of commissions and agency and policy issuance
expenses. VOBA is an intangible asset that represents the excess of book value over the estimated fair value of acquired insurance, annuity,
and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on actuarially
determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate
account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual
experience on the purchased business may vary from these projections. The recovery of DAC and VOBA is dependent upon the future
profitability of the related business. DAC and VOBA are aggregated in the consolidated financial statements for reporting purposes.

Note 1 of the Notes to the Consolidated Financial Statements describes the Company’s accounting policy relating to DAC and VOBA

amortization for various types of contracts.

Separate account rates of return on variable universal

life contracts and variable deferred annuity contracts affect in-force account
balances on such contracts each reporting period which can result in significant fluctuations in amortization of DAC and VOBA. The
Company’s practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appre-
ciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are
expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The effect of an
increase/(decrease) by 100 basis points in the assumed future rate of return is reasonably likely to result in a decrease/(increase) in the DAC
and VOBA amortization of approximately $128 million with an offset to the Company’s unearned revenue liability of approximately $19 million
for this factor.

The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits.
These include investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, and expenses to administer
business. We annually update assumptions used in the calculation of estimated gross margins and profits which may have significantly
changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will
decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future
gross margins and profits to decrease.

The Company’s most significant assumption updates resulting in a change to expected future gross margins and profits and the
amortization of DAC and VOBA were due to revisions to expected future investment returns, expenses, in-force or persistency assumptions
and policyholder dividends on contracts included within the Insurance Products and Retirement Products segments. The Company expects
these assumptions to be the ones most reasonably likely to cause significant changes in the future. Changes in these assumptions can be
offsetting and the Company is unable to predict their movement or offsetting impact over time.

Note 6 of the Notes to the Consolidated Financial Statements provides a rollforward of DAC and VOBA for the Company for each of the
years ended December 31, 2010, 2009 and 2008, as well as a breakdown of DAC and VOBA by segment and reporting unit at December 31,
2010 and 2009.

At December 31, 2010, 2009 and 2008, DAC and VOBA for the Company was $27.3 billion, $19.3 billion and $20.1 million, respectively.
The DAC and VOBA balance increased significantly as a result of
the Acquisition, which contributed $8.9 billion to the balance at
December 31, 2010. Approximately 55%, of the Company’s DAC and VOBA was associated with the Insurance Products and Retirement
Products segments at December 31, 2010. At December 31, 2010, 2009 and 2008, DAC and VOBA for these segments was $14.9 billion,
$16.1 billion and $17.4 billion, respectively. Amortization of DAC and VOBA associated with the variable and universal life and the annuities
contracts within the Insurance Products and Retirement Products segments is significantly impacted by movements in equity markets. The
following chart illustrates the effect on DAC and VOBA within the Company’s U.S. Business of changing each of the respective assumptions,
as well as updating estimated gross margins or profits with actual gross margins or profits during the years ended December 31, 2010, 2009
and 2008. Increases (decreases) in DAC and VOBA balances, as presented below, resulted in a corresponding decrease (increase) in
amortization.

MetLife, Inc.

13

Investment return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Separate account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

21

Net investment gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(124)

Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In-force/Persistency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89
17

Policyholder dividends and other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(192)

(In millions)

$141

$

70

(32)

712

60
(87)

174

(708)

(521)

61
(159)

(30)

Years Ended December 31,

2010

2009

2008

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(186)

$968

$(1,287)

The following represents significant items contributing to the changes to DAC and VOBA amortization in 2010:
(cid:129) Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization:

– Actual gross profits increased as a result of a decrease in liabilities associated with guarantee obligations on variable annuities,
resulting in an increase of DAC and VOBA amortization of $197 million, excluding the impact from the Company’s nonperformance
risk and risk margins, which are described below. This increase in actual gross profits was partially offset by freestanding derivative
losses associated with the hedging of such guarantee obligations, which resulted in a decrease in DAC and VOBA amortization of
$88 million.

– The narrowing of the Company’s nonperformance risk adjustment increased the valuation of guarantee liabilities, decreased actual
gross profits and decreased DAC and VOBA amortization by $96 million. In addition, higher risk margins which increased the
guarantee liability valuations, decreased actual gross profits and decreased DAC and VOBA amortization by $18 million.

– The remainder of the impact of net investment gains (losses), which increased DAC amortization by $129 million, was primarily

attributable to current period investment activities.

(cid:129) Included in policyholder dividends and other was an increase in DAC and VOBA amortization of $42 million as a result of changes to
long-term assumptions. In addition, amortization increased by $39 million as a result of favorable gross margin variances. The remainder
of the increase was due to various immaterial

items.

The following represents significant items contributing to the changes to DAC and VOBA amortization in 2009:
(cid:129) Actual gross profits decreased as a result of increased investment losses from the portfolios associated with the hedging of guaranteed

insurance obligations on variable annuities, resulting in a decrease of DAC and VOBA amortization of $141 million.

(cid:129) Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization:

– Actual gross profits increased as a result of a decrease in liabilities associated with guarantee obligations on variable annuities,
resulting in an increase of DAC and VOBA amortization of $995 million, excluding the impact from the Company’s nonperformance
risk and risk margins, which are described below. This increase in actual gross profits was partially offset by freestanding derivative
losses associated with the hedging of such guarantee obligations, which resulted in a decrease in DAC and VOBA amortization of
$636 million.

– The narrowing of the Company’s nonperformance risk adjustment increased the valuation of guarantee liabilities, decreased actual
gross profits and decreased DAC and VOBA amortization by $607 million. This was partially offset by lower risk margins which
decreased the guarantee liability valuations, increased actual gross profits and increased DAC and VOBA amortization by $20 million.
– The remainder of the impact of net investment gains (losses), which decreased DAC amortization by $484 million, was primarily

attributable to current period investment activities.

(cid:129) Included in policyholder dividends and other was a decrease in DAC and VOBA amortization of $90 million as a result of changes to long-

term assumptions. The remainder of the decrease was due to various immaterial

items.

The following represents significant items contributing to the changes in DAC and VOBA amortization in 2008:
(cid:129) The decrease in equity markets during the year significantly lowered separate account balances which led to a significant reduction in
life contracts and variable deferred annuity contracts resulting in an increase of

expected future gross profits on variable universal
$708 million in DAC and VOBA amortization.

(cid:129) Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization:

– Actual gross profits decreased as a result of an increase in liabilities associated with guarantee obligations on variable annuities
resulting in a reduction of DAC and VOBA amortization of $1,047 million. This decrease in actual gross profits was mitigated by
freestanding derivative gains associated with the hedging of such guarantee obligations which resulted in an increase in actual gross
profits and an increase in DAC and VOBA amortization of $625 million.

– The widening of the Company’s nonperformance risk adjustment decreased the valuation of guarantee liabilities, increased actual
gross profits and increased DAC and VOBA amortization by $739 million. This was partially offset by higher risk margins which
increased the guarantee liability valuations, decreased actual gross profits and decreased DAC and VOBA amortization by
$100 million.

– Reductions in both actual and expected cumulative earnings of the closed block resulting from recent experience in the closed block
combined with changes in expected dividend scales resulted in an increase in closed block DAC amortization of $195 million,
$175 million of which was related to net investment gains (losses).

– The remainder of the impact of net investment gains (losses) on DAC amortization of $129 million was attributable to numerous

immaterial

items.

(cid:129) Increases in DAC and VOBA amortization in 2008 resulting from changes in assumptions related to in-force/persistency of $159 million

were driven by higher than anticipated mortality and lower than anticipated premium persistency during 2008.

The Company’s DAC and VOBA balance is also impacted by unrealized investment gains (losses) and the amount of amortization which
would have been recognized if such gains and losses had been recognized. The increase in unrealized investment gains decreased the DAC
and VOBA balance by $1.4 billion in 2010. The decrease in unrealized investment losses decreased the DAC and VOBA balance by

14

MetLife, Inc.

$2.8 billion in 2009, whereas the increase in unrealized investment losses increased the DAC and VOBA balance by $3.4 billion in 2008.
Notes 3 and 6 of the Notes to the Consolidated Financial Statements include the DAC and VOBA offset to unrealized investment losses.

Goodwill
Goodwill is the excess of cost over the estimated fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at
least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be
justification for conducting an interim test.

Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the “reporting unit”
information is

level. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial
prepared and regularly reviewed by management at that level.

For purposes of goodwill

impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there might be an
indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill
that would be determined in a business acquisition. The excess of the carrying value of goodwill over the implied fair value of goodwill would
be recognized as an impairment and recorded as a charge against net income.

The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected
operating earnings, current book value (with and without accumulated other comprehensive income), the level of economic capital required to
support the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new
and renewal business, as well as margins on such business, the level of interest rates, credit spreads, equity market levels, and the discount
rate that we believe is appropriate for the respective reporting unit. The estimated fair values of the retirement products and individual
life
reporting units are particularly sensitive to the equity market levels.

We apply significant judgment when determining the estimated fair value of our reporting units and when assessing the relationship of
market capitalization to the aggregate estimated fair value of our reporting units. The valuation methodologies utilized are subject to key
judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s
reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are
based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair value of our reporting units could
result in goodwill

impairments in future periods which could materially adversely affect our results of operations or financial position.

On an ongoing basis, we evaluate potential triggering events that may affect the estimated fair value of our reporting units to assess
whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact
on the estimated fair value of these reporting units and could result in future impairments of goodwill.

Liability for Future Policy Benefits
The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, traditional annuities,
certain accident and health, and non-medical health insurance. Generally, amounts are payable over an extended period of time and related
liabilities are calculated as the present value of future expected benefits to be paid reduced by the present value of future expected premiums.
Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards.
liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal,
Principal assumptions used in the establishment of
retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to
the respective product type and geographical area. These assumptions are established at the time the policy is issued and are intended to
estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of
business basis. If experience is less favorable than assumptions, additional liabilities may be required, resulting in a charge to policyholder
benefits and claims.

Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as

to claim terminations, expenses and interest.

Liabilities for unpaid claims and claim expenses for property and casualty insurance are included in future policyholder benefits and
represent the amount estimated for claims that have been reported but not settled and claims incurred but not reported. Other policy-related
balances include claims that have been reported but not settled and claims incurred but not reported on life and non-medical health
insurance. Liabilities for unpaid claims are estimated based upon the Company’s historical experience and other actuarial assumptions that
consider the effects of current developments, anticipated trends and risk management programs, reduced for anticipated salvage and
subrogation.

Future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts and secondary and
paid-up guarantees relating to certain life policies are based on estimates of the expected value of benefits in excess of the projected account
balance and recognizing the excess ratably over the accumulation period based on total expected assessments. Liabilities for universal and
variable life secondary guarantees and paid-up guarantees are determined by estimating the expected value of death benefits payable when
the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected
assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing DAC, and are thus subject to
the same variability and risk. The assumptions of investment performance and volatility for variable products are consistent with historical
experience of the appropriate underlying equity index, such as the Standard & Poor’s Ratings Services (“S&P”) 500 Index.

The Company periodically reviews its estimates of actuarial

liabilities for future policy benefits and compares them with its actual
experience. Differences between actual experience and the assumptions used in pricing of these policies and guarantees and in the
establishment of the related liabilities result in variances in profit and could result in losses.

reinsurance for some insurance products issued by third parties. Accounting for

Reinsurance
The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a
provider of
reinsurance requires extensive use of
assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty
credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to
establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its
reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed previously. Additionally, for each

MetLife, Inc.

15

of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to
insurance risk, in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that
may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If the
Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from
insurance risk, the Company records the agreement using the deposit method of accounting.

Income Taxes
Income taxes represent the net amount of income taxes that the Company expects to pay to or receive from various taxing jurisdictions in
connection with its operations. The Company provides for federal, state and foreign income taxes currently payable, as well as those deferred
due to temporary differences between the financial reporting and tax bases of assets and liabilities. The Company’s accounting for income
taxes represents management’s best estimate of various events and transactions.

Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and
liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary
differences are expected to reverse.

For U.S. federal income tax purposes, the Company anticipates making an election under the Internal Revenue Code Section 338 as it
relates to the Acquisition. As such, the tax basis in the acquired assets and liabilities is adjusted as of the Acquisition Date resulting in a
change to the related deferred income taxes.

The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods
under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available
information, that it is more likely than not that deferred income tax assets will not be realized. Factors in management’s determination consider
the performance of the business including the ability to generate capital gains. Significant judgment is required in determining whether
valuation allowances should be established, as well as the amount of such allowances. When making such determination, consideration is
given to, among other things, the following:

(i)
(ii)
(iii)
(iv)

future taxable income exclusive of reversing temporary differences and carryforwards;
future reversals of existing taxable temporary differences;
taxable income in prior carryback years; and
tax planning strategies.

The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing
authorities before any part of the benefit is recorded in the financial statements. A tax position is measured at the largest amount of benefit that
is greater than 50 percent likely of being realized upon settlement. The Company may be required to change its provision for income taxes
when the ultimate deductibility of certain items is challenged by taxing authorities or when estimates used in determining valuation allowances
on deferred tax assets significantly change, or when receipt of new information indicates the need for adjustment in valuation allowances.
Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations, could have an impact
on the provision for income tax and the effective tax rate. Any such changes could significantly affect
the amounts reported in the
consolidated financial statements in the year these changes occur.

Employee Benefit Plans
Certain subsidiaries of the Holding Company sponsor and/or administer pension and other postretirement benefit plans covering
employees who meet specified eligibility requirements. The obligations and expenses associated with these plans require an extensive
use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases, healthcare cost
trend rates, as well as assumptions regarding participant demographics such as rate and age of retirements, withdrawal rates and mortality. In
consultation with our external consulting actuarial firms, we determine these assumptions based upon a variety of factors such as historical
performance of the plan and its assets, currently available market and industry data, and expected benefit payout streams. The assumptions
used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in
participant demographics. These differences may have a significant effect on the Company’s consolidated financial statements and liquidity.

Litigation Contingencies
The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent
unpredictability of these matters, it is difficult to estimate the impact on the Company’s financial position. Liabilities are established when it is
probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities related to certain lawsuits, including
the Company’s asbestos-related liability, are especially difficult to estimate due to the limitation of available data and uncertainty regarding
numerous variables that can affect liability estimates. The data and variables that impact the assumptions used to estimate the Company’s
asbestos-related liability include the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending
and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which
claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against the Company
when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future
adverse verdicts and their amounts. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for
litigation, regulatory investigations and litigation-related contingencies to be reflected in the Company’s consolidated financial statements. It
is possible that an adverse outcome in certain of the Company’s litigation and regulatory investigations, including asbestos-related cases, or
the use of different assumptions in the determination of amounts recorded could have a material effect upon the Company’s consolidated net
income or cash flows in particular quarterly or annual periods.

Economic Capital

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 our
businesses. As a part of the economic capital process, a portion of net investment income is credited to the segments based on the level of
allocated equity. This is in contrast to the standardized regulatory RBC formula, which is not as refined in its risk calculations with respect to
the nuances of our businesses.

16

MetLife, Inc.

Acquisitions and Dispositions

See Note 2 of the Notes to the Consolidated Financial Statements.

Risks Related to International Operations

International operations such as ours face various political, legal, operational, economic, foreign exchange and other risks. We face the
risk of discriminatory regulation, nationalization or expropriation of assets, price controls and exchange controls or other restrictions that
prevent us from transferring funds among countries in which we operate or converting funds from one currency to another, and fluctuating
exchange rates. We may also encounter labor problems resulting from workers’ associations and trade unions. In several countries, including
Japan, China and India, we must manage our relationship with local business partners in order to achieve our business objectives. Because of
our considerable presence in Japan, we face the risks (as well as benefits) from events and conditions, such as economic, demographic,
political, or environmental factors, that may uniquely affect that country.

Recent Developments

On March 8, 2011, MetLife, Inc. issued and sold 68,570,000 shares of its common stock in a public offering and ALICO Holdings, a
subsidiary of AIG, sold in a public offering 78,239,712 shares of MetLife, Inc.’s common stock, which it received as consideration from
MetLife in connection with the Acquisition. The gross proceeds for the sale of 146,809,712 common shares at $43.25 per share was
$6.4 billion, of which MetLife received $3.0 billion. Concurrent with the common stock offerings, ALICO Holdings sold 40,000,000 common
equity units of MetLife, Inc., which it received from MetLife in connection with the Acquisition. The Company used all of the proceeds from the
issuance of its 68,570,000 shares of common stock to repurchase and cancel 6,857,000 shares of MetLife convertible preferred stock
received by ALICO Holdings from MetLife in connection with the Acquisition. The Company did not receive any of the proceeds from the sale
of the 78,239,712 shares of common stock or 40,000,000 common equity units owned by ALICO Holdings.

The transactions allowed for an orderly disposition of the MetLife, Inc. securities owned by AIG. As a result of the transactions, AIG has sold
all of its holdings of MetLife, Inc. securities it received in the Acquisition. In connection with these transactions, the Company waived certain
provisions of the Investor Rights Agreement that the Company and ALICO Holdings entered into at the time of the Acquisition. Among other
things, the Investor Rights Agreement required ALICO Holdings to hold specified amounts of MetLife, Inc. securities for certain designated
periods of time.

As the scope and scale of the disaster in Japan continue to unfold after the March 11, 2011 earthquake off the coast of Honshu, MetLife
maintains a focus on the safety of its associates and their families and helping its business in Japan deliver on its promises to its customers
and business partners. Our business in Japan is open, operating and meeting the needs of our customers there. Although it is premature to
draw any conclusions about the effect of the earthquake and ensuing events on MetLife’s business in Japan, if any, MetLife continues to
monitor the situation in the region for its employees, customers and operations.

MetLife, Inc.

17

Results of Operations

Year Ended December 31, 2010 compared with the Year Ended December 31, 2009
We have experienced growth and an increase in market share in several of our businesses, which, together with improved overall market
conditions compared to conditions a year ago, positively impacted our results most significantly through increased net cash flows, improved
yields on our investment portfolio and increased policy fee income. Sales of our domestic annuity products were up 14%, driven by an
increase in variable annuity sales compared with the prior year. We benefited in 2010 from strong sales of structured settlement products.
Market penetration continues in our pension closeout business in the U.K.; however, although improving, our domestic pension closeout
business has been adversely impacted by a combination of poor equity returns and lower interest rates. High levels of unemployment
continue to depress growth across our group insurance businesses due to lower covered payrolls. While we experienced growth in our group
life business, sales of non-medical health and individual life products declined. Sales of new homeowner and auto policies increased 11% and
4%, respectively, as the housing and automobile markets have improved. We experienced a 30% increase in sales of retirement and savings
products abroad. During 2010, mortgage refinancing activity continued to return to more moderate levels compared to the unusually high
levels experienced in 2009.

Years Ended
December 31,

2010

2009

Change

% Change

(In millions)

Revenues

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,394
6,037
life and investment-type product policy fees . . . . . . . . . . . . . .
Universal

$26,460
5,203

$

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,615

14,837

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,328
(392)

(265)

2,329
(2,906)

(4,866)

934
834

2,778

(1)
2,514

4,601

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,717

41,057

11,660

Expenses

Policyholder benefits and claims and policyholder dividends . . . . . . . . . .

31,031

29,986

1,045

Interest credited to policyholder account balances . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,925
137

4,849
163

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,343)

(3,019)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,801
1,550

1,307
1,044

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,658

11,061

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,759

45,391

Income (loss) from continuing operations before provision for income tax . .

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . .

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

3,958

1,181

2,777
9

(4,334)

(2,015)

(2,319)
41

76
(26)

(324)

1,494
506

597

3,368

8,292

3,196

5,096
(32)

3.5%
16.0%

18.7%

—%
86.5%

94.6%

28.4%

3.5%

1.6%
(16.0)%

(10.7)%

114.3%
48.5%

5.4%

7.4%

191.3%

158.6%

219.7%
(78.0)%

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,786

(2,278)

5,064

222.3%

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

(4)

(32)

28

87.5%

Net income (loss) attributable to MetLife, Inc.

. . . . . . . . . . . . . . . . . . .

2,790

(2,246)

5,036

224.2%

Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122

122

—

—%

Net income (loss) available to MetLife, Inc.’s common shareholders . . . . . $ 2,668

$ (2,368)

$ 5,036

212.7%

Unless otherwise stated, all amounts discussed below are net of income tax.
During the year ended December 31, 2010, income (loss) from continuing operations, net of income tax increased $5.1 billion to a gain of
$2.8 billion from a loss of $2.3 billion in 2009, of which $2 million in losses was from the inclusion of one month of ALICO results in 2010. The
change was predominantly due to a $3.0 billion favorable change in net derivative gains (losses) and a $1.6 billion favorable change in net
investment gains (losses). Offsetting these favorable variances totaling $4.6 billion were unfavorable changes in adjustments related to net
derivative and net investment gains (losses) of $514 million, net of income tax, principally associated with DAC and VOBA amortization,
resulting in a total favorable variance related to net derivative and net investment gains (losses), net of related adjustments and income tax, of
$4.1 billion.

We manage our investment portfolio using disciplined Asset/Liability Management (“ALM”) principles, focusing on cash flow and duration
to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have
cash inflows of comparable timing and amount, while optimizing, net of income tax, risk-adjusted net investment income and risk-adjusted
total return. Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed
maturity securities and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be
generally well suited for matching the cash flow and duration of insurance liabilities. Other invested asset classes including, but not limited to,
equity securities, other limited partnership interests and real estate and real estate joint ventures, provide additional diversification and

18

MetLife, Inc.

opportunity for long-term yield enhancement in addition to supporting the cash flow and duration objectives of our investment portfolio. We
also use derivatives as an integral part of our management of the investment portfolio to hedge certain risks, including changes in interest
rates, foreign currencies, credit spreads and equity market levels. Additional considerations for our investment portfolio include current and
expected market conditions and expectations for changes within our specific mix of products and business segments. In addition, the general
account investment portfolio includes within trading and other securities, contractholder-directed investments supporting unit-linked variable
annuity type liabilities, which do not qualify for reporting and presentation as separate account assets. The returns on these investments,
which can vary significantly period to period include changes in estimated fair value subsequent to purchase, inure to contractholders and are
offset in earnings by a corresponding change in policyholder account balances through interest credited to policyholder account balances.
The composition of the investment portfolio of each business segment is tailored to the specific characteristics of its insurance liabilities,
causing certain portfolios to be shorter in duration and others to be longer in duration. Accordingly, certain portfolios are more heavily
weighted in longer duration, higher yielding fixed maturity securities, or certain sub-sectors of fixed maturity securities, than other portfolios.
Investments are purchased to support our insurance liabilities and not to generate net investment gains and losses. However, net
investment gains and losses are generated and can change significantly from period to period, due to changes in external
influences,
including movements in interest rates, foreign currencies, credit spreads and equity markets, counterparty specific factors such as financial
performance, credit rating and collateral valuation, and internal factors such as portfolio rebalancing, that can generate gains and losses. As
an investor in the fixed income, equity security, mortgage loan and certain other invested asset classes, we are exposed to the above stated
risks, which can lead to both impairments and credit-related losses.

Freestanding derivatives are used to hedge certain investments and liabilities. For those hedges not designated as accounting hedges,
changes in these market risks can lead to the recognition of fair value changes in net derivative gains (losses) without an offsetting gain or loss
recognized in earnings for the item being hedged even though these are effective economic hedges. Additionally, we issue liabilities and
purchase assets that contain embedded derivatives whose changes in estimated fair value are sensitive to changes in market risks and are
also recognized in net derivative gains (losses).

The favorable variance in net derivative gains (losses) of $3.0 billion, from losses of $3.2 billion in 2009 to losses of $172 million in 2010
was primarily driven by a favorable change in freestanding derivatives of $4.4 billion, comprised of a $4.5 billion favorable change from losses
in the prior year of $4.3 billion to gains in the current year of $203 million and $123 million in ALICO freestanding derivative losses. This
favorable variance was partially offset by an unfavorable change in embedded derivatives primarily associated with variable annuity minimum
benefit guarantees of $1.4 billion from gains in the prior year of $1.1 billion to losses in the current year of $257 million, net of $5 million in
ALICO embedded derivative gains.

We use freestanding interest rate, currency, credit and equity derivatives to provide economic hedges of certain invested assets and
insurance liabilities, including embedded derivatives, within certain of our variable annuity minimum benefit guarantees. The $4.5 billion
favorable variance in freestanding derivatives was primarily attributable to market factors, including falling long-term and mid-term interest
rates, a stronger recovery in equity markets in the prior year than the current year, a greater decrease in equity volatility in the prior year as
compared to the current year, a strengthening U.S. dollar and widening corporate credit spreads in the financial services sector. Falling long-
term and mid-term interest rates in the current year compared to rising long-term and mid-term interest rates in the prior year had a positive
impact of $2.6 billion on our interest rate derivatives, $931 million of which is attributable to hedges of variable annuity minimum benefit
guarantee liabilities, which are accounted for as embedded derivatives. In addition, stronger equity market recovery and lower equity market
volatility in the prior year as compared to the current year had a positive impact of $1.1 billion on our equity derivatives, which we use to hedge
variable annuity minimum benefit guarantees. U.S. dollar strengthening had a positive impact of $554 million on certain of our foreign currency
derivatives, which are used to hedge foreign-denominated asset and liability exposures. Finally, widening corporate credit spreads in the
financial services sector had a positive impact of $221 million on our purchased protection credit derivatives.

Certain variable annuity products with minimum benefit guarantees contain embedded derivatives that are measured at estimated fair
value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These
embedded derivatives also include an adjustment for nonperformance risk of the related liabilities carried at estimated fair value. The
$1.4 billion unfavorable change in embedded derivatives was primarily attributable to the impact of market factors, including falling long-term
and mid-term interest rates, changes in foreign currency exchange rates, equity volatility and equity market movements. Falling long-term and
mid-term interest rates in the current year compared to rising long-term and mid-term interest rates in the prior year had a negative impact of
$1.4 billion. Changes in foreign currency exchange rates had a negative impact of $468 million. Equity volatility decreased more in the prior
year than in the current year causing a negative impact of $284 million, and a stronger recovery in the equity markets in the prior year than in
the current year had a negative impact of $228 million. The unfavorable impact from these hedged risks was partially offset by a favorable
change related to the adjustment for nonperformance risk of $1.2 billion, from losses of $1.3 billion in 2009 to losses of $62 million in 2010.
This $62 million loss was net of a $621 million loss related to a refinement
for
nonperformance risk made in the second quarter of 2010. Gains on the freestanding derivatives that hedged these embedded derivative
risks largely offset the change in liabilities attributable to market factors, excluding the adjustment for nonperformance risk, which does not
have an economic impact on the Company.

in estimating the spreads used in the adjustment

Improved or stabilizing market conditions across several

invested asset classes and sectors as compared to the prior year resulted in
decreases in impairments and in net realized losses from sales and disposals of investments in most components of our investment portfolio.
These decreases, coupled with a decrease in the provision for credit losses on mortgage loans due to improved market conditions, resulted in
a $1.6 billion improvement in net investment gains (losses).

Income from continuing operations, net of income tax for 2010 includes $138 million of expenses related to the acquisition and integration
of ALICO. These expenses, which primarily consisted of investment banking and legal fees, are recorded in Banking, Corporate & Other and
are not a component of operating earnings.

As more fully described in the discussion of performance measures above, we use operating earnings, which does not equate to income
(loss) from continuing operations as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and
allocate resources. Operating earnings is also a measure by which senior management’s and many other employees’ performance is
evaluated for the purpose of determining their compensation under applicable compensation plans. We believe that the presentation of
operating earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results
of operations and the underlying profitability drivers of the business. Operating earnings should not be viewed as a substitute for GAAP

MetLife, Inc.

19

income (loss) from continuing operations, net of income tax. Operating earnings available to common shareholders increased by $1.5 billion
to $3.9 billion in 2010 from $2.4 billion in 2009.

Reconciliation of income (loss) from continuing operations, net of income tax, to operating earnings available to com-
mon shareholders

Year Ended December 31, 2010

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home
(In millions)

International

Banking,
Corporate
& Other

Total

Income (loss) from continuing operations, net of

income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,371

$ 813

$1,002

$295

$(131)

$(573)

$2,777

Less: Net investment gains (losses) . . . . . . . . . . . . .
Less: Net derivative gains (losses) . . . . . . . . . . . . . .

Less: Adjustments to continuing operations(1)

. . . . . .

Less: Provision for income tax (expense) benefit . . . . .

103
215

(237)

(31)

139
266

(282)

(49)

176
(193)

143

(44)

(7)
(1)

—

3

(273)
(491)

(427)

268

(530)
(61)

(178)

254

(392)
(265)

(981)

401

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . .

$1,321

$ 739

$ 920

$300

$ 792

(58)

4,014

Less: Preferred stock dividends . . . . . . . . . . . . . . .

Operating earnings available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31, 2009

122

122

$(180)

$3,892

Income (loss) from continuing operations, net of

income tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (418)

$ (628)

$ (581)

$321

$(280)

$(733)

$(2,319)

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Less: Net investment gains (losses) . . . . . . . . . . . . .

Less: Net derivative gains (losses)
. . . . . . . . . . . . .
Less: Adjustments to continuing operations(1) . . . . . .

(472)

(1,786)
(139)

Less: Provision for income tax (expense) benefit

. . . .

837

(533)

(1,486)

(41)

(1,426)
519

504

(421)
125

621

39
—

1

(105)

(798)
(206)

366

Operating earnings . . . . . . . . . . . . . . . . . . . . . . .

$ 1,142

$

308

$

580

$322

$ 463

Less: Preferred stock dividends . . . . . . . . . . . . . . .

Operating earnings available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .

(269)

(474)
(16)

354

(328)

122

(2,906)

(4,866)
283

2,683

2,487

122

$(450)

$ 2,365

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses

Year Ended December 31, 2010

Insurance
Products

Retirement
Products

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . $26,451
103
Less: Net investment gains (losses)

. . . . . . . . . . .

Less: Net derivative gains (losses)

. . . . . . . . . . . .

215

$6,881
139

266

Corporate
Benefit
Funding

$7,540
176

(193)

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .

1

Less: Other adjustments to revenues(1) . . . . . . . . .

(144)

—

(248)

—

193

Auto &
Home

(In millions)

$3,146
(7)

(1)

—

—

International

Banking,
Corporate
& Other

Total

$6,794
(273)

(491)

$1,905
(530)

$52,717
(392)

(61)

(265)

—

44

—

449

1

294

Total operating revenues . . . . . . . . . . . . . . . . . . $26,276

$6,724

$7,364

$3,154

$7,514

$2,047

$53,079

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . $24,338
Less: Adjustments related to net investment gains

$5,622

$5,999

$2,781

$6,987

$3,032

$48,759

(losses) and net derivative gains (losses) . . . . . . .

Less: Other adjustments to expenses(1)

. . . . . . . .

90

4

35

(1)

—

50

—

—

(7)

478

—

627

118

1,158

Total operating expenses . . . . . . . . . . . . . . . . . . $24,244

$5,588

$5,949

$2,781

$6,516

$2,405

$47,483

20

MetLife, Inc.

Year Ended December 31, 2009

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . $23,483

$ 3,725

$ 5,486

$3,113

$4,383

$ 867

$41,057

Less: Net investment gains (losses)
Less: Net derivative gains (losses)

. . . . . . . . . . .
. . . . . . . . . . . .

(472)
(1,786)

(533)
(1,426)

(1,486)
(421)

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .
Less: Other adjustments to revenues(1) . . . . . . . . .

(27)
(74)

—
(219)

—
188

(41)
39

—
—

(105)
(798)

—
(169)

(269)
(474)

(2,906)
(4,866)

—
22

(27)
(252)

Total operating revenues . . . . . . . . . . . . . . . . . . $25,842

$ 5,903

$ 7,205

$3,115

$5,455

$1,588

$49,108

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . $24,165

$ 4,690

$ 6,400

$2,697

$4,868

$2,571

$45,391

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .

Less: Other adjustments to expenses(1)

. . . . . . . .

39

(1)

(739)

1

—

63

—

—

—

37

—

38

(700)

138

Total operating expenses . . . . . . . . . . . . . . . . . . $24,127

$ 5,428

$ 6,337

$2,697

$4,831

$2,533

$45,953

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

Unless otherwise stated, all amounts discussed below are net of income tax and are on a constant currency basis. The constant currency

basis amounts for both periods are calculated using the average foreign currency exchange rates of 2010.

The improvement in the financial markets was the primary driver of the increase in operating earnings as evidenced by higher net
investment income and an increase in average separate account balances, which resulted in an increase in policy fee income. Interest rate
and equity market changes resulted in a decrease in variable annuity guarantee benefit costs. Partially offsetting this improvement was an
increase in amortization of DAC, VOBA and DSI. The increase in operating earnings also includes the positive impact of changes in foreign
currency exchange rates in 2010. This improved reported operating earnings by $38 million for 2010 compared to 2009. Excluding the impact
of changes in foreign currency exchange rates, operating earnings increased $1.5 billion from the prior period. Furthermore, the 2010 period
also includes one month of ALICO results, contributing $114 million to the increase in operating earnings. The current period also benefited
from the dividend scale reduction in the fourth quarter of 2009. The improvement in 2010 results compared to 2009 was partially offset by a
decline in residential mortgage loan production and the prior period impact of pesification in Argentina.

In addition to a $133 million increase due to the inclusion of ALICO results, net investment income increased by $792 million from higher
yields and $515 million from growth in average invested assets. Yields were positively impacted by the effects of stabilizing real estate markets
and recovering private equity markets year over year on real estate joint ventures and other limited partnership interests, and by the effects of
continued repositioning of the accumulated liquidity in our portfolio to longer duration and higher yielding investments, including investment
grade corporate fixed maturity securities. Growth in our investment portfolio was primarily due to positive net cash flows from growth in our
domestic individual and group life businesses, as well as certain international businesses; increased bank deposits, higher cash collateral
balances received from our derivative counterparties, as well as the temporary investment of proceeds from the debt and common stock
issuances in anticipation of the Acquisition. With the exception of the cash flows from such securities issuances, which were temporarily
invested in lower yielding liquid investments, we continued to reposition the accumulated liquidity in our portfolio to longer duration and higher
yielding investments.

Since many of our products are interest spread-based, higher net investment income is typically offset by higher interest credited
expense. However, interest credited expense, including amounts reflected in policyholder benefits and claims, decreased $147 million,
primarily in our domestic funding agreement business, which experienced lower average crediting rates combined with lower average
account balances. Our fixed annuities business also experienced lower crediting rates. Certain crediting rates can move consistently with the
underlying market indices, primarily the London Inter-Bank Offer Rate (“LIBOR”), which were lower than the prior year. The impact from the
growth in our structured settlement, long-term care and disability businesses partially offset those decreases in interest credited expense.
A significant increase in average separate account balances is largely attributable to favorable market performance resulting from
improved market conditions since the second quarter of 2009 and positive net cash flows from the annuity business. This resulted in higher
policy fees and other revenues of $471 million, most notably in our Retirement Products segment. The improvement in fees is partially offset
by greater DAC, VOBA and DSI amortization of $377 million. Policy fees are typically calculated as a percentage of the average assets in the
separate accounts. DAC, VOBA and DSI amortization is based on the earnings of the business, which in the retirement business are derived,
in part, from fees earned on separate account balances. A portion of the increase in amortization was due to the impact of higher current year
gross margins, a primary component in the determination of the amount of amortization for our Insurance Products segment, mostly in the
closed block resulting from increased investment yields and the impact of dividend scale reductions.

There was a $59 million decrease in variable annuity guaranteed benefit costs. Costs associated with our annuity guaranteed benefit
liabilities, hedge programs and reinsurance programs are impacted by equity markets and interest rate levels to varying degrees. While 2010
and 2009 both experienced equity market improvements, the improvement in 2009 was greater. Interest rate levels declined in the current
year and increased in the prior year. Annuity guaranteed benefit liabilities, net of a decrease in paid claims, increased benefits by $93 million
primarily from our annual unlocking of assumptions related to these liabilities. The hedge and reinsurance programs which are used to mitigate
the risk associated with these guarantees produced losses in both periods, but the losses in the prior period were more significant due to the
2009 equity market recovery. The change in hedge and reinsurance program costs decreased by $152 million. These hedge and reinsurance
programs, which are a key part of our risk management strategy, performed as anticipated.

The reduction in the dividend scale in the fourth quarter of 2009 resulted in a $109 million decrease in policyholder dividends in the

traditional

life business in the current period.

MetLife, Inc.

21

Claims experience varied amongst our businesses with a net unfavorable impact of $153 million to operating earnings compared to the
prior year. We had unfavorable claims experience in our Auto & Home segment, primarily due to increased catastrophes. Our Insurance
Products segment experienced mixed claims experience with a net unfavorable impact. We experienced less favorable mortality experience
in our Corporate Benefit Funding segment despite favorable experience in our structured settlements business.

A $15.2 billion decline in residential mortgage loan production resulted in a $131 million decrease in operating earnings, $32 million of
which is reflected in net investment income from lower investment levels with the remainder largely attributable to a reduction in fee income.
The increase in the serviced residential mortgage loan portfolio improved operating earnings by $41 million, including $23 million of costs
associated with investment and growth in our banking business as discussed below.

Interest expense increased $64 million primarily as a result of the full year impact of debt issuances in 2009 and of senior notes and debt
securities issued in anticipation of the Acquisition, partially offset by the impact of lower interest rates on variable rate collateral financing
arrangements.

In addition to a $269 million increase associated with the Acquisition, operating expenses increased due to the impact of a $95 million
benefit recorded in the prior period related to the pesification in Argentina, as well as an $83 million increase related to the investment and
growth in our international and banking businesses. In addition, the current period includes a $14 million increase in charitable contributions
and $13 million of costs associated with the integration of ALICO. Offsetting these increases was a $76 million reduction in discretionary
spending, such as consulting, rent and postemployment related costs. In addition, we experienced a $47 million decline in market driven
expenses, primarily pension and post retirement benefit costs. Also contributing to the decrease was a $35 million reduction in real estate-
related charges and $15 million of lower legal costs.

Income tax expense for the year ended December 31, 2010 was $1,181 million, or 30% of income from continuing operations before
provision for income tax, compared with income tax benefit of $2,015 million, or 47% of the loss from continuing operations before benefit for
income tax, for the comparable 2009 period. The Company’s 2010 and 2009 effective tax rates differ from the U.S. statutory rate of 35%
primarily due to the impact of certain permanent tax differences, including non-taxable investment income and tax credits for investments in
low income housing, in relation to income (loss) from continuing operations before income tax, as well as certain foreign permanent tax
differences.

The 2010 period includes $75 million of charges related to the Patient Protection and Affordable Care Act and the Health Care and
Education Reconciliation Act of 2010 (together, the “Health Care Act”). The Federal government currently provides a Medicare Part D subsidy.
The Health Care Act reduced the tax deductibility of retiree health care costs to the extent of any Medicare Part D subsidy received beginning
in 2013. Because the deductibility of future retiree health care costs is reflected in our financial statements, the entire future impact of this
change in law was required to be recorded as a charge in the period in which the legislation was enacted. Changes to the provision for income
taxes in both periods contributed to an increase in operating earnings of $86 million for our International segment, resulting from a $34 million
unfavorable impact in 2009 due to a change in assumption regarding the repatriation of earnings and a benefit of $52 million in the current year
from additional permanent reinvestment of earnings, the reversal of tax provisions and favorable changes in liabilities for tax uncertainties. In
addition, in 2009 we had a larger benefit of $71 million as compared to 2010 related to the utilization of tax preferenced investments which
provide tax credits and deductions.

Insurance Products

Operating Revenues

Years Ended December 31,

2010

2009

Change

% Change

(In millions)

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,200
2,247
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . .
Universal

$17,168
2,281

$ 32
(34)

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,068

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

761

5,614

779

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,276

25,842

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . .

19,075
963

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt

(841)

966
1

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,080

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,244

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

711

19,111
952

(873)

725
6

4,206

24,127

573

454

(18)

434

(36)
11

32

241
(5)

(126)

117

138

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,321

$ 1,142

$ 179

0.2%
(1.5)%

8.1%

(2.3)%

1.7%

(0.2)%
1.2%

3.7%

33.2%
(83.3)%

(3.0)%

0.5%

24.1%

15.7%

Unless otherwise stated, all amounts discussed below are net of income tax.
The improvement in the global financial markets had a positive impact on net investment income, which contributed to the increase in
Insurance Products’ operating earnings. In addition, we experienced overall modest revenue growth in several of our businesses despite this
challenging environment. High levels of unemployment continue to depress growth across most of our group insurance businesses due to
lower covered payrolls. Growth in our group life business was dampened by a decline in our non-medical health and individual life businesses.
However, our dental business benefited from higher enrollment and pricing actions, partially offset by lower persistency and the loss of
existing subscribers, driven by high unemployment. This business also experienced more stable utilization and benefits costs in the current

22

MetLife, Inc.

year. The revenue growth from our dental business was more than offset by a decline in revenues from our disability business, mainly due to
net customer cancellations, changes in benefit levels and lower covered lives. Our long-term care revenues were flat year over year,
concurrent with the discontinuance of the sale of this coverage at the end of 2010. In our individual life business, the change in revenues was
suppressed by the impact of a benefit recorded in the prior year related to the positive resolution of certain legal matters. Excluding this
impact, the traditional life business experienced 8% growth in our open block of business. The expected run-off of our closed block more than
offset this growth.

The significant components of the $179 million increase in operating earnings were an improvement in net investment income and the
impact of a reduction in dividends to certain policyholders, coupled with lower expenses. These improvements were partially offset by an
increase in DAC amortization, as well as net unfavorable claims experience across several of our businesses.

Higher net investment income of $295 million was due to a $202 million increase from growth in average invested assets and a $93 million
increase from higher yields. Growth in the investment portfolio was attributed to an increase in net cash flows from the majority of our
businesses. The increase in yields was largely due to the positive effects of recovering private equity markets and stabilizing real estate
markets on other limited partnership interests and real estate joint ventures. To manage the needs of our intermediate to longer-term liabilities,
investment grade corporate fixed maturity securities, mortgage loans, structured finance securities
our portfolio consists primarily of
(comprised of mortgage and asset-backed securities) and U.S. Treasury, agency and government guaranteed fixed maturity securities and, to
a lesser extent, certain other invested asset classes, including other limited partnership interests, real estate joint ventures and other invested
assets which provide additional diversification and opportunity for long-term yield enhancement.

The increase in net investment income was partially offset by a $36 million increase in interest credited on long duration contracts, which is
reflected in the change in policyholder benefits and dividends, primarily due to growth in future policyholder benefits in our long-term care and
disability businesses.

Other expenses decreased by $82 million, largely due to a decrease of $40 million from the impact of market conditions on certain
expenses, such as pension and post-retirement benefit costs. In addition, a decrease in information technology expenses of $29 million
contributed to the improvement in operating earnings. A decrease in variable expenses, such as commissions and premium taxes, further
reduced expenses by $11 million, a portion of which is offset by DAC capitalization.

The reduction in the dividend scale in the fourth quarter of 2009 resulted in a $109 million decrease in policyholder dividends in the

traditional

life business in the current year.

Claims experience varied amongst Insurance Products’ businesses with a net unfavorable impact of $42 million to operating earnings. We
experienced excellent mortality results in our group life business due to a decrease in severity, as well as favorable reserve refinements in the
current year. In addition, an improvement in our long-term care results was driven by favorable claim experience mainly due to higher
terminations and less claimants in the current year, coupled with the impact of unfavorable reserve refinements in the prior year. Our improved
dental results were driven by higher enrollment and pricing actions, as well as improved claim experience in the current year. The impact of this
positive experience was surpassed by solid, but less favorable mortality, in our individual life business combined with higher incidence and
severity of group disability claims in the current year, and the impact of a gain from the recapture of a reinsurance arrangement in the prior year.
Higher DAC amortization of $157 million was primarily driven by the impact of higher gross margins, a primary component in the
determination of the amount of amortization, mostly in the closed block resulting from increased investment yields and the impact of dividend
scale reductions. In addition, the net impact of various model refinements in both the prior and current year increased DAC amortization.
Certain events reduced operating earnings, including the impact of a benefit being recorded in the prior year of $17 million related to the
positive resolution of certain legal matters and an increase in current income tax expense of $27 million, resulting from an increase in our
effective tax rate.

Retirement Products

Operating Revenues

Years Ended December 31,

2010

2009

Change

% Change

(In millions)

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

875

$

920

$ (45)

(4.9)%

Universal
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,234
3,395

220

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,724

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,879

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,612
(1,067)

724

3
2,437

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,588

Provision for income tax expense (benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

397

1,712
3,098

173

5,903

1,950

1,688
(1,067)

424

—
2,433

5,428

167

522
297

47

821

(71)

(76)
—

300

3
4

160

230

30.5%
9.6%

27.2%

13.9%

(3.6)%

(4.5)%
—%

70.8%

—
0.2%

2.9%

137.7%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

739

$

308

$431

139.9%

Unless otherwise stated, all amounts discussed below are net of income tax.

MetLife, Inc.

23

During 2010, overall annuity sales decreased 5% compared to 2009 as declines in fixed annuity sales were partially offset by increased
sales of our variable annuity products. The financial market turmoil in early 2009 resulted in extraordinarily high sales of fixed annuity products
in 2009. The high sales level was not expected to continue after the financial markets returned to more stable levels. Variable annuity product
sales increased primarily due to the expansion of alternative distribution channels and fewer competitors in the market place. Surrender rates
for both our variable and fixed annuities remained low during the current period as we believe our customers continue to value our products
compared to other alternatives in the marketplace.

Interest rate and equity market changes were the primary driver of the $431 million increase in operating earnings, with the largest impact
resulting from a $370 million increase in policy fees and other revenues, a $193 million increase in net investment income, and a $59 million
decrease in variable annuity guarantee benefit costs, offset by a $204 million increase in DAC, VOBA and DSI amortization and a $39 million
increase in commission expense resulting from growth in annuity contract balances.

A significant increase in average separate account balances was largely attributable to favorable market performance resulting from
improved market conditions since the second quarter of 2009 and positive net cash flows from the annuity business. This resulted in higher
policy fees and other revenues of $370 million, partially offset by greater DAC, VOBA and DSI amortization. Policy fees are typically calculated
as a percentage of the average assets in the separate account. DAC, VOBA and DSI amortization is based on the earnings of the business,
which in the retirement business are derived, in part, from fees earned on separate account balances.

Financial market improvements also resulted in the increase in net investment income of $193 million as a $291 million increase from
higher yields was partially offset by a $98 million decrease from a decline in average invested assets. Yields were positively impacted by the
effects of the continued repositioning of the accumulated liquidity in our investment portfolio to longer duration and higher yielding assets,
including investment grade corporate fixed maturity securities. Yields were also positively impacted by the effects of recovering private equity
markets and stabilizing real estate markets on other limited partnership interests and real estate joint ventures. Despite positive net cash
flows, a reduction in the general account investment portfolio was due to the impact of more customers gaining confidence in the equity
markets and, as a result, electing to transfer funds into our separate account investment options as market conditions improved. To manage
the needs of our intermediate to longer-term liabilities, our investment portfolio consists primarily of investment grade corporate fixed maturity
securities, structured finance securities, mortgage loans and U.S. Treasury, agency and government guaranteed fixed maturity securities
and, to a lesser extent, certain other invested asset classes, including other limited partnership interests, real estate joint ventures and other
invested assets, in order to provide additional diversification and opportunity for long-term yield enhancement.

There was a $59 million decrease in variable annuity guaranteed benefit costs in 2010 compared to 2009. Costs associated with our
annuity guaranteed benefit liabilities, hedge programs and reinsurance programs are impacted by equity markets and interest rate levels to
varying degrees. While the equity market improved in both 2010 and 2009, the improvement in 2009 was greater. Interest rate levels declined
in the current year and increased in the prior year. Annuity guaranteed benefit liabilities, net of a decrease in paid claims, increased benefits by
$93 million primarily from our annual unlocking of assumptions related to these liabilities. The hedge and reinsurance programs which are
used to mitigate the risk associated with these guarantees produced losses in both periods, but the losses in the prior period were more
significant due to the 2009 equity market recovery. The costs related to our hedge and reinsurance programs decreased by $152 million in
2010 compared to 2009. These hedge and reinsurance programs, which are a key part of our risk management strategy, performed as
anticipated.

Interest credited expense decreased $49 million driven by lower average crediting rates on fixed annuities and higher amortization of
excess interest reserve due to one large case surrender in 2010, partially offset by growth in our fixed annuity policyholder account balances.

Corporate Benefit Funding

Years Ended December 31,

2010

2009

Change

% Change

(In millions)

Operating Revenues

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . .
Universal
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

1,938

226
4,954

246

7,364

4,041

1,445
(19)

16

6
460

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,949

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

495

2,264

176
4,527

238

7,205

4,245

1,632
(14)

15

3
456

6,337

288

$

(326)

(14.4)%

50
427

8

159

(204)

(187)
(5)

1

3
4

28.4%
9.4%

3.4%

2.2%

(4.8)%

(11.5)%
(35.7)%

6.7%

100.0%
0.9%

(388)

(6.1)%

207

340

71.9%

58.6%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

920

$

580

$

Unless otherwise stated, all amounts discussed below are net of income tax.
Corporate Benefit Funding benefited in 2010 from strong sales of structured settlement products and continued market penetration of our
pension closeout business in the United Kingdom (“U.K.”) However, structured settlement premiums have declined $174 million, before
income tax, from 2009 reflecting extraordinary sales in the fourth quarter of 2009. While market penetration continued in our pension closeout

24

MetLife, Inc.

business in the U.K. as the number of sold cases increased, the average premium has declined, resulting in a decrease in premiums of
$216 million, before income tax. Although improving, a combination of poor equity returns and lower interest rates have contributed to
pension plans remaining underfunded, both in the U.S. and in the U.K., which reduces our customers’ flexibility to engage in transactions
such as pension closeouts. For each of these businesses, the movement in premiums is almost entirely offset by the related change in
policyholder benefits. The insurance liability that is established at the time we assume the risk under these contracts is typically equivalent to
the premium recognized.

The $340 million increase in operating earnings was primarily driven by an improvement in net investment income and the impact of lower

crediting rates, partially offset by the impact of prior period favorable liability refinements and less favorable mortality.

The primary driver of the $340 million increase in operating earnings was higher net investment income of $278 million, reflecting a
$187 million increase from higher yields and a $91 million increase in average invested assets. Yields were positively impacted by the effects
of stabilizing real estate markets and recovering private equity markets on real estate joint ventures and other limited partnership interests.
These improvements in yields were partially offset by decreased yields on fixed maturity securities due to the reinvestment of proceeds from
maturities and sales during this lower interest rate environment. Growth in the investment portfolio is due to an increase in average
policyholder account balances and growth in the securities lending program. To manage the needs of our longer-term liabilities, our portfolio
consists primarily of investment grade corporate fixed maturity securities, structured finance securities, mortgage loans and U.S. Treasury,
agency and government guaranteed securities, and, to a lesser extent, certain other invested asset classes including other limited
partnership interests, real estate joint ventures and other invested assets in order to provide additional diversification and opportunity for
long-term yield enhancement. For our short-term obligations, we invest primarily in structured finance securities, mortgage loans and
investment grade corporate fixed maturity securities. The yields on these short-term investments have moved consistently with the underlying
market indices, primarily LIBOR and U.S. Treasury, on which they are based.

As many of our products are interest spread-based, changes in net investment income are typically offset by a corresponding change in
interest credited expense. However, interest credited expense decreased $122 million, primarily related to our funding agreement business
as a result of lower average crediting rates combined with lower average account balances. Certain crediting rates can move consistently with
the underlying market indices, primarily LIBOR, which were lower than the prior year. Interest credited expense related to the structured
settlement businesses increased $40 million as a result of the increase in the average policyholder liabilities.

Mortality experience was mixed and reduced operating earnings in 2010 by $26 million. Less favorable mortality in our pension closeouts
and corporate owned life insurance businesses compared to 2009 was only slightly offset by favorable mortality experience in our structured
settlements business.

Liability refinements in both the current and prior year resulted in a $28 million decrease to operating earnings. These were largely offset by
the impact of a charge in the 2009 period related to a refinement of a reinsurance recoverable in the small business recordkeeping business
which increased operating earnings by $20 million.

Auto & Home

Operating Revenues

Years Ended December 31,

2010

2009

Change

% Change

(In millions)

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,923

$2,902

$ 21

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209
22

180
33

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,154

3,115

Operating Expenses
Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,021

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(448)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

439
769

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,781

Provision for income tax expense (benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73

1,932

(435)

436
764

2,697

96

29
(11)

39

89

(13)

3
5

84

(23)

0.7%

16.1%
(33.3)%

1.3%

4.6%

(3.0)%

0.7%
0.7%

3.1%

(24.0)%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300

$ 322

$(22)

(6.8)%

Unless otherwise stated, all amounts discussed below are net of income tax.
The improving housing and automobile markets have provided opportunities that

led to increased new business sales for both
homeowners and auto policies in 2010. Sales of new policies increased 11% for our homeowners business and 4% for our auto business
in 2010 compared to 2009. Average premium per policy also improved in 2010 over 2009 in our homeowners businesses but remained flat in
our auto business.

The primary driver of the $22 million decrease in operating earnings was unfavorable claims experience, partially offset by higher net

investment income and increased premiums.

Catastrophe-related losses increased by $58 million compared to 2009 due to increases in both the number and severity of storms.
Current period claim costs decreased $19 million as a result of lower frequencies in both our auto and homeowners businesses; however, this
was partially offset by a $13 million increase in claims due to higher severity in our homeowners business. Also contributing to the decline in
operating earnings was an increase of $7 million in loss adjusting expenses, primarily related to a decrease in our unallocated loss adjusting
expense liabilities at the end of 2009.

MetLife, Inc.

25

The impact of the items discussed above can be seen in the unfavorable change in the combined ratio, including catastrophes, increasing
to 94.6% in 2010 from 92.3% in 2009 and the favorable change in the combined ratio, excluding catastrophes, decreasing to 88.1% in 2010
from 88.9% in 2009.

A $19 million increase in net investment income partially offset the declines in operating earnings discussed above. Net investment income
was higher primarily as a result of an increase in average invested assets, including changes in allocated equity, partially offset by a decrease
in yields. This portfolio is comprised primarily of high quality municipal bonds.

The increase in average premium per policy in our homeowners businesses improved operating earnings by $10 million as did an increase
in exposures which improved operating earnings by $1 million. Exposures are primarily each automobile for the auto line of business and each
residence for the property line of business. Also improving operating earnings, through an increase in premiums, was a $5 million reduction in
reinsurance costs.

The slight increase in other expenses was more than offset by an $8 million increase in DAC capitalization, resulting primarily from

increased premiums written.

In addition, a first quarter 2010 write-off of an equity interest in a mandatory state underwriting pool required by a change in legislation and
a decrease in income from a retroactive reinsurance contract in run-off, both of which were recorded in other revenues, drove a $7 million
decrease in operating earnings. Auto & Home also benefited from a lower effective tax rate which improved operating earnings by $8 million
primarily as a result of tax free interest income representing a larger portion of pre-tax income.

International

Operating Revenues

Years Ended December 31,

2010

2009
(In millions)

Change

% Change

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,447
1,329
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . .
Universal

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,703

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

$3,187
1,061

1,193

14

$1,260
268

510

21

39.5%
25.3%

42.7%

150.0%

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,514

5,455

2,059

37.7%

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . .

3,723
683

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(968)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

537
3

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,538

2,660
581

(630)

415
8

1,797

1,063
102

(338)

122
(5)

741

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,516

4,831

1,685

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206

161

45

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 792

$ 463

$ 329

40.0%
17.6%

(53.7)%

29.4%
(62.5)%

41.2%

34.9%

28.0%

71.1%

Unless otherwise stated, all amounts discussed below are net of income tax and are on a constant currency basis. The constant currency

basis amounts for both periods are calculated using the average foreign currency exchange rates for 2010.

The improvement in the global financial markets has resulted in continued growth, with a 24% increase in sales in the current period
compared to the prior period excluding the results of our Japan joint venture. Retirement and savings sales increased 30% driven by strong
annuity, universal life and pension sales in Europe, Mexico, Chile, South Korea and China. In our Europe and the Middle East operations, sales
of annuities and universal life products remained strong, more than doubling from the prior year, partially offset by lower pension and variable
universal life sales in India due to the loss of a major distributor, as well as lower credit life sales. Our Latin America operation experienced an
overall increase in sales resulting from solid growth in pension and universal life sales in Mexico and an increase in fixed annuity sales in Chile
due to market recovery, slightly offset by lower bank sales in Brazil resulting from incentives offered in the prior year. Sales in our Asia Pacific
operation, excluding the results of our Japan joint venture, increased primarily due to higher variable universal life sales in South Korea, slightly
offset by the decline in annuity sales and strong bank channel sales in China. We have experienced lower sales in Taiwan following the
announcement of the planned sale of this business. While the third party’s application for approval of the sale of our Taiwan affiliate was
rejected by the Taiwan Financial Supervising Commission, the Company continues to explore strategic options with respect to this affiliate.
Reported operating earnings increased by $329 million over the prior year. The positive impact of changes in foreign currency exchange
rates improved reported earnings by $38 million for 2010 compared to 2009. Excluding the impact of changes in foreign currency exchange
rates, operating earnings increased $291 million, or 58%. Reported operating earnings reflect the operating results of ALICO from the
Acquisition Date through November 30, 2010, which contributed $114 million to our 2010 operating earnings. As previously noted, ALICO’s
accounting year-end is November 30; therefore, International’s results for the year include one month of ALICO results.

Changes in assumptions for measuring the impact of inflation on certain inflation-indexed fixed maturity securities increased operating
earnings by $124 million. Changes to the provision for income taxes in both periods contributed to an increase in operating earnings of
$86 million, resulting from a $34 million unfavorable impact in 2009 from a change in assumption regarding the repatriation of earnings and a
benefit $52 million in the current year from additional permanent reinvestment of earnings, the reversal of tax provisions and favorable
changes in liabilities for tax uncertainties. Business growth in our Latin America operation contributed to an increase in operating earnings.
Operating earnings in Mexico increased $56 million from growth in our institutional and individual businesses, partially offset by the impact of
unfavorable claims experience of $26 million. Higher investment yields resulting from portfolio restructuring was the primary driver in Argentina

26

MetLife, Inc.

contributing $23 million to the improvement in operating earnings. India’s results benefited by $10 million primarily due to lower expenses
resulting from the loss of a major distributor and slower growth resulting from market conditions.

Partially offsetting these increases is the impact of pesification in Argentina, which favorably impacted 2009 reported earnings by
$95 million. This prior period benefit was due to a liability release resulting from a reassessment of our approach in managing existing and
potential future claims related to certain social security pension annuity contractholders in Argentina. In addition, operating earnings in
Australia were lower by $9 million, which was primarily due to a write-off of DAC attributable to a change in a product feature in the current
period.

In addition to a $133 million increase due to the inclusion of ALICO results, net investment income increased $102 million from growth in
average invested assets and $88 million from improved yields. Growth in average invested assets reflects growth in our businesses. Improved
yields reflects the impact of increased inflation, primarily in Chile, as well as the impact of changes in assumptions for measuring the effects of
inflation on certain inflation-indexed fixed maturity securities. The increase in net investment income from higher inflation was offset by an
increase in the related insurance liabilities due to higher inflation. Although diversification into higher yielding investments had a positive
impact on yields, this was partially offset by decreased trading and other securities results driven by a stronger recovery in equity markets in
2009 compared to 2010, primarily in Hong Kong, and by a decrease in the results of our operating joint ventures. The reduction in net
trading portfolio is entirely offset by a corresponding decrease in the interest credited on the related
investment
contractholder account balances and therefore had no impact on operating earnings.

income from our

In addition to a $269 million increase associated with the Acquisition, operating expenses increased due to the impact of the pesification in
Argentina noted above, as well as current period business growth in South Korea, Brazil and Mexico, which resulted in $93 million of
increased commissions and compensation. These increases were partially offset by $33 million of
lower commissions and business
expenses in India.

Banking, Corporate & Other

Years Ended December 31,

2010

2009

Change

% Change

(In millions)

Operating Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
992
1,044

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,047

Operating Expenses
Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14)
137
1
1,126
1,155

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,405

Provision for income tax expense (benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(300)

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(58)
122

$

19
477
1,092

1,588

$

(8)
515
(48)

459

4
163
3
1,027
1,336

2,533

(617)

(328)
122

(18)
(26)
(2)
99
(181)

(128)

317

270
—

Operating earnings available to common shareholders . . . . . . . . . . . . . . . . . . . . . . . $ (180)

$ (450)

$ 270

(42.1)%
108.0%
(4.4)%

28.9%

(450.0)%
(16.0)%
(66.7)%
9.6%
(13.5)%

(5.1)%

51.4%

82.3%
—%

60.0%

Unless otherwise stated, all amounts discussed below are net of income tax.
During 2010, mortgage refinancing activity continued to return to more moderate levels compared to the unusually high levels experienced
in 2009. Consistent with these market conditions, we experienced a $15.2 billion decline in residential mortgage production during 2010,
while our serviced residential mortgage loans increased $20.1 billion, which includes a $16.5 billion purchase from a FDIC receivership bank
in the third quarter of 2010 and a net sale of $4.8 billion to FNMA in the second quarter of 2010. Servicing run-off of existing business slowed
to 18.2% in 2010 compared with 19.6% in 2009.

The Holding Company completed four debt financings in August 2010 in anticipation of the Acquisition, issuing $1.0 billion of 2.375% senior notes,
$1.0 billion of 4.75% senior notes, $750 million of 5.875% senior notes, and $250 million of floating rate senior notes. The Holding Company also issued debt
securities, which are part of the $3.0 billion stated value of common equity units. The proceeds from these debt issuances were used to finance the Acquisition.
The Holding Company completed three debt issuances in 2009 in response to the economic crisis, issuing $397 million of floating rate senior notes in March
2009, $1.3 billion of senior notes in May 2009, and $500 million of junior subordinated debt securities in July 2009. The proceeds from these debt issuances
were used for general corporate purposes.

Operating earnings available to common shareholders and operating earnings, which excludes preferred stock dividends, each increased
$270 million, primarily due to an increase in net investment income and a reduction in operating expenses, partially offset by a decline in
mortgage banking revenues, a decrease in tax benefit and an increase in interest expense resulting from the debt issuances noted above.
Net investment income increased $335 million reflecting an increase of $189 million due to higher yields and an increase of $146 million
from growth in average invested assets. Yields were positively impacted by the effects of recovering private equity markets and stabilizing real
estate markets on other limited partnership interests and real estate joint ventures. This was partially offset by lower fixed maturities yields
which were adversely impacted by the reinvestment of proceeds from maturities and sales during this lower interest rate environment and from
decreased trading and other securities results due to a stronger recovery in equity markets in 2009 as compared to 2010. In addition, due to
the lower interest rate environment in the current year, less net investment income was credited to the segments in 2010 compared to 2009.
Growth in average invested assets was primarily due to an increase in bank deposits, higher cash collateral balances received from our

MetLife, Inc.

27

derivative counterparties and the temporary investment of the proceeds from the debt and common stock issuances in anticipation of the
Acquisition. Our investments primarily include structured finance securities, investment grade corporate fixed maturities, mortgage loans and
U.S. Treasury, agency and government guaranteed fixed maturity securities. In addition, our investment portfolio includes the excess capital
not allocated to the segments. Accordingly, it includes a higher allocation of certain other invested asset classes to provide additional
diversification and opportunity for long-term yield enhancement, including leveraged leases, other limited partnership interests, real estate,
real estate joint ventures, trading securities and equity securities.

Banking, Corporate & Other benefited in 2010 from a $76 million reduction in discretionary spending, such as consulting and postemployment
related costs, a $35 million decrease in real estate-related charges and $15 million of lower legal costs. Other expenses also include a $48 million
decrease in commissions as a result of the decline in residential mortgage loan production discussed below. These savings were partially offset by a
$14 million increase in charitable contributions. The current year also included $44 million of internal resource costs for associates committed to the
Acquisition and a $23 million increase in expenses associated with expanding the infrastructure of our banking business. Additionally, the positive
resolution of certain legal matters increased operating earnings by $27 million.

The $15.2 billion decline in residential mortgage loan production resulted in a $131 million decrease in operating earnings, $32 million of
which is reflected in net investment income with the remainder largely attributable to a reduction in fee income. The increase in the serviced
residential mortgage loan portfolio improved operating earnings by $41 million despite the increased infrastructure expenses discussed
above.

Maturing time deposits and the need for liquidity in the lower interest rate environment of 2010 resulted in a $17 million decrease in interest

credited to bank deposits, despite growth of $1.7 billion in deposits.

Interest expense increased $64 million primarily as a result of the debt issuances in 2009 and the senior notes and debt securities issued in

anticipation of the Acquisition, partially offset by the impact of lower interest rates on variable rate collateral financing arrangements.

The 2010 period includes $75 million of charges related to the Health Care Act. The Federal government currently provides a Medicare
Part D subsidy. The Health Care Act reduced the tax deductibility of retiree health care costs to the extent of any Medicare Part D subsidy
received beginning in 2013. Because the deductibility of future retiree health care costs is reflected in our financial statements, the entire
future impact of this change in law was required to be recorded as a charge in the period in which the legislation was enacted. As a result, we
incurred a $75 million charge in the first quarter of 2010. The Health Care Act also amended Internal Revenue Code Section 162(m) as a result
of which MetLife was initially considered a healthcare provider, as defined, and would be subject to limits on tax deductibility of certain types of
compensation. In December 2010, the Internal Revenue Service issued Notice 2011-2 which clarified that the executive compensation
deduction limitation included in the Health Care Act did not apply to insurers like MetLife selling de minimis amounts of health care coverage.
As a result, in the fourth quarter of 2010, we reversed $18 million of previously recorded taxes for 2010. In 2009, Banking, Corporate & Other
received a larger benefit of $36 million as compared to 2010 related to the utilization of tax preferenced investments which provide tax credits
and deductions.

Results of Operations

Year Ended December 31, 2009 compared with the Year Ended December 31, 2008
Unfavorable market conditions continued through 2009, providing a challenging business environment. The largest and most significant
impact continued to be on our investment portfolio as declining yields resulted in lower net investment income. Market sensitive expenses
were also negatively impacted by the market conditions as evidenced by an increase in pension and postretirement benefit costs. Higher
levels of unemployment continued to impact certain group businesses as a decrease in covered payrolls reduced growth. Our auto and
homeowners business was impacted by a declining housing market, the deterioration of the new auto sales market and the continuation of
credit availability issues, all of which contributed to a decrease in insured exposures. Despite the challenging business environment, revenue
growth remained solid in the majority of our businesses. A flight to quality during the year contributed to an improvement in sales in both our
domestic fixed and variable annuity products. We also saw an increase in market share, especially in the structured settlement business,
where we experienced an increase of 53% in premiums. An improvement in the global financial markets contributed to a recovery of sales in
most of our international regions and resulted in improved investment performance in some regions during the second half of 2009. We also
benefited domestically from a strong residential mortgage refinance market and healthy growth in the reverse mortgage arena.

Years Ended December 31,

2009

2008

Change

% Change

(In millions)

Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,460
5,203
Universal
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . .
14,837
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,329
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,906)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment gains (losses)
(4,866)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivative gains (losses)

$25,914
5,381
16,289
1,586
(2,098)
3,910

$

546
(178)
(1,452)
743
(808)
(8,776)

2.1%
(3.3)%
(8.9)%
46.8%
(38.5)%
(224.5)%

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41,057

50,982

(9,925)

(19.5)%

Expenses
Policyholder benefits and claims and policyholder dividends . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,986
4,849
163
(3,019)
1,307
1,044
11,061

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45,391

29,188
4,788
166
(3,092)
3,489
1,051
10,333

45,923

798
61
(3)
73
(2,182)
(7)
728

(532)

2.7%
1.3%
(1.8)%
2.4%
(62.5)%
(0.7)%
7.0%

(1.2)%

28

MetLife, Inc.

Income (loss) from continuing operations before provision for income tax . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income tax expense (benefit)

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

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

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

Years Ended December 31,

2009

2008

Change

% Change

(4,334)
(2,015)

(2,319)
41

(2,278)
(32)

(2,246)
122

(In millions)
5,059
1,580

3,479
(201)

3,278
69

3,209
125

(9,393)
(3,595)

(5,798)
242

(5,556)
(101)

(5,455)
(3)

(185.7)%
(227.5)%

(166.7)%
120.4%

(169.5)%
(146.4)%

(170.0)%
(2.4)%

Net income (loss) available to MetLife, Inc.’s common shareholders . . . . . . . . . . . . . . $ (2,368)

$ 3,084

$(5,452)

(176.8)%

Unless otherwise stated, all amounts are net of income tax.
During the year ended December 31, 2009, MetLife’s income (loss) from continuing operations, net of income tax decreased $5.8 billion to
a loss of $2.3 billion from income of $3.5 billion in the comparable 2008 period. The year over year change was predominantly due to a
$5.7 billion unfavorable change in net derivative gains (losses) to losses of $3.2 billion in 2009 from gains of $2.5 billion in 2008, and a
$525 million unfavorable change in net investment gains (losses). Offsetting these unfavorable variances totaling $6.2 billion were favorable
changes in adjustments related to net derivative and net investment gains (losses) of $972 million, net of income tax, principally associated
with DAC and VOBA amortization, resulting in a total unfavorable variance related to net derivative and net investment gains (losses), net of
related adjustments and income tax, of $5.2 billion.

We manage our investment portfolio using disciplined ALM principles, focusing on cash flow and duration to support our current and future
liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable
timing and amount, while optimizing, net of income tax, risk-adjusted net investment income and risk-adjusted total return. Our investment
portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities and mortgage
loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching
the cash flow and duration of insurance liabilities. Other invested asset classes including, but not limited to equity securities, other limited
partnership interests and real estate and real estate joint ventures provide additional diversification and opportunity for long-term yield
enhancement in addition to supporting the cash flow and duration objectives of our investment portfolio. We also use derivatives as an integral
part of our management of the investment portfolio to hedge certain risks, including changes in interest rates, foreign currencies, credit
spreads and equity market levels. Additional considerations for our investment portfolio include current and expected market conditions and
expectations for changes within our unique mix of products and business segments.

The composition of the investment portfolio of each business segment is tailored to the unique characteristics of its insurance liabilities,
causing certain portfolios to be shorter in duration and others to be longer in duration. Accordingly, certain portfolios are more heavily
weighted in fixed maturity securities, or certain sub-sectors of fixed maturity securities, than other portfolios.

Investments are purchased to support our insurance liabilities and not to generate net investment gains and losses. However, net
investment gains and losses are generated and can change significantly from period to period, due to changes in external influences including
movements in interest rates, foreign currencies and credit spreads, counterparty specific factors such as financial performance, credit rating
and collateral valuation, and internal factors such as portfolio rebalancing that can generate gains and losses. As an investor in the fixed
income, equity security, mortgage loan and certain other invested asset classes, we are exposed to the above stated risks, which can lead to
both impairments and credit-related losses.

In addition to the above risk management strategies, as an integral part of our management of the investment portfolio, we use
freestanding derivatives to hedge market risks including changes in interest rates, foreign currencies, credit spreads and the equity market.
We also use freestanding derivatives to hedge these same risks in certain of our liabilities, including variable annuity minimum benefit
guarantees. For those hedges not designated as an accounting hedge, changes in these market risks can lead to the recognition of fair value
changes in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the item being hedged even though these
are effective economic hedges. Additionally, we issue liabilities and purchase assets that contain embedded derivatives whose changes in
estimated fair value are sensitive to changes in market risks and are also recognized in net derivative gains (losses).

The unfavorable variance in net derivative gains (losses) of $5.7 billion, from gains of $2.5 billion in 2008 to losses of $3.2 billion in 2009
was primarily driven by an unfavorable change in freestanding derivatives of $8.6 billion from gains in the prior period of $4.3 billion to losses in
the current period of $4.3 billion. This unfavorable variance was partially offset by a favorable change in embedded derivatives primarily
associated with variable annuity minimum benefit guarantees of $2.9 billion from losses in the prior period of $1.7 billion to gains in the current
period of $1.2 billion.

The $8.6 billion unfavorable variance in freestanding derivatives was primarily attributable to market factors, including rising interest rates,
improving equity markets on equity options and futures, decreased equity volatility, weakening U.S. dollar, and narrowing credit spreads.
Long-term and mid-term interest rates increased in the current period which caused a negative impact of $4.4 billion on our interest rate
derivatives, $1.2 billion of which is attributable to hedges of variable annuity minimum benefit guarantees. Equity markets improved while
equity volatility decreased in the current period, which had a net negative impact of $3.1 billion on our equity derivatives, which we use to
hedge variable annuity minimum benefit guarantees. Weakening of the U.S. dollar in the current period had a negative impact of $646 million
on certain foreign currency derivatives that are used to hedge foreign-denominated asset and liability exposures. Narrowing corporate credit
spreads had a negative impact of $453 million on our purchased protection credit derivatives.

The variable annuity products with minimum benefit guarantees containing embedded derivatives are measured at fair value separately
from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). The estimated fair value
of these embedded derivatives also includes an adjustment for nonperformance risk of the related liabilities carried at estimated fair value. The
$2.9 billion favorable change in embedded derivatives was primarily attributable to rising interest rates, improving equity market performance,
for
a decrease in equity volatility, and weakening of

the U.S. dollar, which was offset by the unfavorable change in the adjustment

MetLife, Inc.

29

nonperformance risk. Both long-term and mid-term interest rates increased in the current period which had a positive impact of $2.2 billion.
Improving equity markets in the current period had a positive impact of $1.5 billion. Lower equity market volatility in the current period
compared to the prior period had a positive impact of $817 million, and the weakening U.S. dollar had a positive impact of $456 million. The
favorable results from these hedged risks was partially offset by an unfavorable change related to the adjustment for nonperformance risk of
$3.2 billion, from gains of $1.9 billion in 2008 to losses of $1.3 billion in 2009. Gains on the freestanding derivatives that hedged these
embedded derivative risks more than offset the change in liabilities attributable to market factors, excluding the adjustment for nonperfor-
mance risk. Finally, there was a favorable change of $1.1 billion for all other unhedged risks on the variable annuity minimum benefit guarantee
liabilities.

The $525 million unfavorable change in net investment gains (losses) was primarily attributable to higher net losses on mortgage loans and
other limited partnership interests. The increase in losses on mortgage loans was principally due to increases in mortgage valuation
allowances resulting from weakening of the real estate market and other economic fundamentals. The increase in losses on other limited
partnership interests was principally due to higher impairments on certain cost method investments which experienced a reduction in net
asset values of the underlying portfolio companies. The underlying valuations of the portfolio companies have decreased due to the current
economic environment.

As more fully described in the discussion of performance measures above, operating earnings is the measure of segment profit or loss we
use to evaluate performance and allocate resources. Consistent with GAAP accounting guidance for segment reporting, it is our measure of
performance, as reported below. Operating earnings is not determined in accordance with GAAP and should not be viewed as a substitute for
GAAP income (loss) from continuing operations, net of income tax. We believe that the presentation of operating earnings enhances the
understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating
earnings available to common shareholders decreased by $329 million to $2.4 billion in 2009 from $2.7 billion in 2008.

Reconciliation of income (loss) from continuing operations, net of income tax, to operating earnings available to com-
mon shareholders

Year Ended December 31, 2009

Income (loss) from continuing operations, net of

income tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (418)

$ (628)

$ (581)

$321

$(280)

$(733)

$(2,319)

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Less: Net investment gains (losses) . . . . . . . . . . . . .
. . . . . . . . . . . . .
Less: Net derivative gains (losses)

Less: Adjustments to continuing operations(1) . . . . . .

Less: Provision for income tax (expense) benefit

. . . .

(472)
(1,786)

(139)

837

(533)
(1,426)

519

504

(1,486)
(421)

125

621

(41)
39

—

1

(105)
(798)

(206)

366

Operating earnings . . . . . . . . . . . . . . . . . . . . . . .

$ 1,142

$

308

$

580

$322

$ 463

Less: Preferred stock dividends . . . . . . . . . . . . . . .

Operating earnings available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31, 2008

(269)
(474)

(16)

354

(328)

122

(2,906)
(4,866)

283

2,683

2,487

122

$(450)

$ 2,365

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Income (loss) from continuing operations, net of

income tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net investment gains (losses) . . . . . . . . . . . . .

$ 2,195
(1,219)

Less: Net derivative gains (losses)

. . . . . . . . . . . . .

2,777

Less: Adjustments to continuing operations(1) . . . . . .
. . . .
Less: Provision for income tax (expense) benefit

(193)
(480)

$ 539
(669)

1,842

(622)
(192)

$ (256)
(1,682)

(219)

82
637

$275
(89)

(45)

—
46

$ 553
(91)

260

52
(147)

Operating earnings . . . . . . . . . . . . . . . . . . . . . . .

$ 1,310

$ 180

$

926

$363

$ 479

Less: Preferred stock dividends . . . . . . . . . . . . . . .

Operating earnings available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 173
1,652

(705)

17
(352)

(439)

125

$ 3,479
(2,098)

3,910

(664)
(488)

2,819

125

$ (564)

$ 2,694

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

30

MetLife, Inc.

Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses

Year Ended December 31, 2009

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . $23,483

$ 3,725

$ 5,486

$3,113

$4,383

$ 867

$41,057

Less: Net investment gains (losses)
Less: Net derivative gains (losses)

. . . . . . . . . . .
. . . . . . . . . . . .

(472)
(1,786)

(533)
(1,426)

(1,486)
(421)

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .
Less: Other adjustments to revenues(1) . . . . . . . . .

(27)
(74)

—
(219)

—
188

(41)
39

—
—

(105)
(798)

—
(169)

(269)
(474)

(2,906)
(4,866)

—
22

(27)
(252)

Total operating revenues . . . . . . . . . . . . . . . . . . $25,842

$ 5,903

$ 7,205

$3,115

$5,455

$1,588

$49,108

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . $24,165

$ 4,690

$ 6,400

$2,697

$4,868

$2,571

$45,391

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .

Less: Other adjustments to expenses(1)

. . . . . . . .

39

(1)

(739)

1

—

63

—

—

—

37

—

38

(700)

138

Total operating expenses . . . . . . . . . . . . . . . . . . $24,127

$ 5,428

$ 6,337

$2,697

$4,831

$2,533

$45,953

Year Ended December 31, 2008

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto &
Home

(In millions)

International

Banking,
Corporate
& Other

Total

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . $26,754
(1,219)
Less: Net investment gains (losses)

. . . . . . . . . . .

Less: Net derivative gains (losses)

. . . . . . . . . . . .

2,777

$6,487
(669)

1,842

$ 6,700
(1,682)

$3,061
(89)

(219)

(45)

$6,001
(91)

260

$1,979
1,652

$50,982
(2,098)

(705)

3,910

Less: Adjustments related to net investment gains

(losses) and net derivative gains (losses) . . . . . . .
Less: Other adjustments to revenues(1) . . . . . . . . .

18
(1)

—
(45)

—
53

—
—

—
69

—
13

18
89

Total operating revenues . . . . . . . . . . . . . . . . . . $25,179

$5,359

$ 8,548

$3,195

$5,763

$1,019

$49,063

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . $23,418
Less: Adjustments related to net investment gains

$5,665

$ 7,119

$2,728

$5,044

$1,949

$45,923

(losses) and net derivative gains (losses) . . . . . . .

Less: Other adjustments to expenses(1)

. . . . . . . .

262

(52)

577

—

—

(29)

—

—

—

17

—

(4)

839

(68)

Total operating expenses . . . . . . . . . . . . . . . . . . $23,208

$5,088

$ 7,148

$2,728

$5,027

$1,953

$45,152

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

The volatile market conditions that began in 2008 and continued into 2009 impacted several key components of our operating earnings
available to common shareholders including net investment income, hedging costs, and certain market sensitive expenses. The markets also
positively impacted our operating earnings available to common shareholders as conditions began to improve during 2009, resulting in lower
DAC and DSI amortization.

A $722 million decline in net investment income was the result of decreasing yields, including the effects of our higher quality, more liquid,
but lower yielding investment position in response to the extraordinary market conditions. The impact of declining yields caused a $1.6 billion
decrease in net investment income, which was partially offset by an increase of $846 million due to growth in average invested assets
calculated excluding unrealized gains and losses. The decrease in yields resulted from the disruption and dislocation in the global financial
markets experienced in 2008, which continued, but moderated, in 2009. The adverse yield impact was concentrated in the following four
invested asset classes:

(cid:129) Fixed maturity securities — primarily due to lower yields on floating rate securities from declines in short-term interest rates and an
increased allocation to lower yielding, higher quality, U.S. Treasury, agency and government guaranteed securities, to increase liquidity
in response to the extraordinary market conditions, as well as decreased income on our securities lending program, primarily due to the
smaller size of the program in the current year. These adverse impacts were offset slightly as conditions improved late in 2009 and we
began to reallocate our portfolio to higher-yielding assets;

(cid:129) Real estate joint ventures — primarily due to declining property valuations on certain investment funds that carry their real estate at

estimated fair value and operating losses incurred on properties that were developed for sale by development joint ventures;

(cid:129) Cash, cash equivalents and short-term investments — primarily due to declines in short-term interest rates; and
(cid:129) Mortgage loans — primarily due to lower prepayments on commercial mortgage loans and lower yields on variable rate loans reflecting

declines in short-term interest rates.

Equity markets experienced some recovery in 2009, which led to improved yields on other limited partnership interests. As many of our
products are interest spread-based, the lower net investment income was significantly offset by lower interest credited expense on our
investment and insurance products.

MetLife, Inc.

31

The financial market conditions also resulted in a $348 million increase in net guaranteed annuity benefit costs in our Retirement Products

segment, as increased hedging losses were only partially offset by lower guaranteed benefit costs.

The key driver of the increase in other expenses stemmed from the impact of market conditions on certain expenses, primarily pension and
postretirement benefit costs, reinsurance expenses and letter of credit fees. These increases coupled with higher variable costs, such as
lower information
commissions and premium taxes, some of which have been capitalized, more than offset
technology, travel, professional services and advertising expenses, which include the impact of our enterprise-wide cost reduction and
revenue enhancement initiative.

the favorable impact of

The market improvement which began in the second quarter of 2009 was a key factor in the determination of our expected future gross
profits, the increase of which triggered a decrease in DAC and DSI amortization, most significantly in the Retirement Products segment. The
increase in our expected future gross profits stemmed primarily from an increase in the market value of our separate account balances, which
is attributable, in part, to the improving financial markets. Our Insurance Products segment benefited, in the current year, from an increase in
amortization of unearned revenue, primarily as a result of our annual review of assumptions that are used in the determination of the amount of
amortization recognized. These collective changes in amortization resulted in a $720 million benefit, partially offsetting the declines in
operating earnings available to common shareholders discussed above.

A portion of the decline in operating earnings available to common shareholders was caused by a $200 million reduction in the results of
our closed block of business, a specific group of participating life policies that were segregated in connection with the demutualization of
MLIC. Until early 2009, the operating earnings of the closed block did not have a full impact on operating earnings as the operating earnings or
loss was partially offset by a change in the policyholder dividend obligation, a liability established at the time of demutualization. However, in
early 2009 the policyholder dividend obligation was depleted and, as a result, the total operating earnings or loss related to the closed block
for the year ended December 31, 2009 was, and in the future may be a component of operating earnings.

Business growth, from the majority of our businesses, along with net favorable mortality experience, had a positive impact on operating
earnings available to common shareholders. These impacts were somewhat dampened by higher benefit utilization in our dental business and
mixed claim activity in our Auto & Home segment. In addition, our forward and reverse residential mortgage platform acquisitions in late 2008
benefited Banking, Corporate & Other’s 2009 results.

Insurance Products

Operating Revenues

Years Ended December 31,

2009

2008
(In millions)

Change

% Change

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,168
2,281
Universal

life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . .

$ 16,402
2,171

$ 766
110

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,614

779

5,787

819

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,842

25,179

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . .

19,111
952

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(873)

725
6

18,183
930

(849)

743
5

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,206

4,196

(173)

(40)

663

928
22

(24)

(18)
1

10

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,127

23,208

919

4.7%
5.1%

(3.0)%

(4.9)%

2.6%

5.1%
2.4%

(2.8)%

(2.4)%
20.0%

0.2%

4.0%

Provision for income tax expense (benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

573

661

(88)

(13.3)%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,142

$

1,310

$ (168)

(12.8)%

Unfavorable market conditions, which continued through 2009, provided a challenging business environment for our Insurance Products
segment. This resulted in lower net investment income and an increase in market sensitive expenses, primarily pension and postretirement
benefit costs. We also experienced higher utilization of dental benefits along with a lower number of recoveries in our disability business.
Higher levels of unemployment continued to impact certain group businesses as a decrease in covered payrolls reduced growth. However,
revenue growth remained solid in all of our businesses. Revenue growth in our dental and individual life businesses reflected strong sales and
renewals.

The significant components of the $168 million decline in operating earnings were the aforementioned decline in net investment income,
especially in the closed block business, partially offset by an increase in the amortization of unearned revenue, the impact of a reduction in
dividends to certain policyholders and favorable mortality in the individual

life business.

Until early 2009, the earnings of the closed block did not have a full impact on operating earnings as the earnings or loss was partially offset
by a change in the policyholder dividend obligation. However, in early 2009 the policyholder dividend obligation was depleted and, as a result,
the total operating earnings or loss related to the closed block for the year ended December 31, 2009 was, and in the future may be, a
component of operating earnings. This resulted in a $200 million decline in operating earnings in 2009.

The decrease in net investment income of $112 million was primarily due to a $317 million decrease from lower yields, partially offset by a
$205 million increase from growth in average invested assets. Yields were adversely impacted by the severe downturn in the global financial
markets, which primarily impacted other invested assets, real estate joint ventures and fixed maturity securities. In addition, income from our
securities lending program decreased primarily due to the smaller size of the program in 2009. The growth in the average invested asset base
was primarily from an increase in net flows from our individual life, non-medical health, and group life businesses. The moderate recovery in

32

MetLife, Inc.

equity markets in 2009 led to improved yields on other limited partnership interests, which partially offset the overall reduction in yields. To
manage the needs of our intermediate to longer-term liabilities, our portfolio consists primarily of investment grade corporate fixed maturity
securities, structured finance securities (comprised of mortgage and asset-backed securities), mortgage loans, and U.S. Treasury, agency
and government guaranteed fixed maturity securities and, to a lesser extent, certain other invested asset classes including real estate joint
ventures and other invested assets to provide additional diversification and opportunity for long-term yield enhancement.

Other expenses were essentially flat despite an increase of $137 million from the impact of market conditions on certain expenses,
primarily pension and postretirement benefit costs. This increase was partially offset by a decrease of $85 million, predominantly from
declines in information technology, travel, and professional services, including the positive impact of our enterprise-wide cost reduction and
revenue enhancement initiative. A further reduction of expenses was achieved through a decrease in variable expenses, such as com-
missions and premium taxes of $46 million, a portion of which is offset by DAC capitalization.

The aforementioned declines in operating earnings were partially offset by the favorable impact of a $63 million decrease in policyholder
dividends in the traditional life business, the result of a dividend scale reduction in the fourth quarter of 2009. In addition, favorable mortality in
the individual
life business was partially offset by higher benefit utilization in the dental business during 2009, reflecting the negative
employment trends in the marketplace. The net impact of these two items benefited operating earnings by $36 million. The 2009 results were
also favorably impacted by our review of assumptions used to determine estimated gross profits and margins, which in turn are factors in
determining the amortization for DAC and unearned revenue. This review resulted in an unlocking event related to unearned revenue and,
coupled with the impact from the prior year’s review, generated an increase in operating earnings of $82 million. This increase was recorded in
universal life and investment-type product policy fees. Partially offsetting these increases was the impact of lower separate account balances,
which resulted in lower fee income of $25 million.

DAC amortization reflects lower current year amortization of $108 million, stemming from the impact of the improvement in the financial
markets in 2009, which increased our expected future gross profits, as well as lower current year gross margins in the closed block. This
decrease was partially offset by the net impact of refinements in both the prior and current years of $98 million, the majority of which was
recorded in the prior year as a result of the 2008 review of certain DAC related assumptions.

Retirement Products

Operating Revenues

Years Ended December 31,

2009

2008
(In millions)

Change

% Change

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

920

$

696

$

life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . .
Universal
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,712
3,098

173

5,903

1,950

1,688
(1,067)

424

—
2,433

5,428

167

308

1,870
2,624

169

5,359

1,271

1,338
(980)

1,356

2
2,101

5,088

91

224

(158)
474

4

544

679

350
(87)

(932)

(2)
332

340

76

32.2%

(8.4)%
18.1%

2.4%

10.2%

53.4%

26.2%
(8.9)%

(68.7)%

(100.0)%
15.8%

6.7%

83.5%

71.1%

$

180

$

128

In 2009, Retirement Products benefited from a flight to quality, which contributed to a 10% improvement in combined sales of our fixed and
variable products and a 28% reduction in surrenders and withdrawals. Our variable annuity sales have outpaced the industry, increasing our
market share. Fixed annuity sales benefited from enhanced marketing on our income annuity with life contingency products, which increased
our premium revenues by $224 million, or 32%, before income taxes. In the annuity business, the movement in premiums is almost entirely
offset by the related change in policyholder benefits, as the insurance liability that we establish at the time we assume the risk under these
contracts is typically equivalent to the premium earned less the amount of acquisition expenses. Our average PAB grew by $7.2 billion in
2009, primarily due to an increase in sales of fixed annuity products and more customers electing the fixed option on variable annuity sales.
This has a favorable impact on earnings by increasing net investment income, which is somewhat offset by higher interest credited expense.
Unfavorable market conditions resulted in poor investment performance, which outweighed the impact of higher variable annuity sales on our
separate account balances causing the average separate account balance to remain lower than the previous year. This resulted in lower
policy fees and other revenues which are based on daily asset balances in the policyholder separate accounts.

The improvement in the financial markets was the primary driver of the $128 million increase in operating earnings, with the largest impact
resulting in a decrease in DAC, VOBA and DSI amortization of $655 million. The 2008 results reflected increased, or accelerated, amortization
primarily stemming from a decline in the market value of our separate account balances. A factor that determines the amount of amortization is
expected future earnings, which in the annuity business are derived, in part, from fees earned on separate account balances. The market
value of our separate account balances declined significantly in 2008, resulting in a decrease in the expected future gross profits, triggering
an acceleration of amortization in 2008. Beginning in the second quarter of 2009, the market conditions began to improve and the market
value of our separate account balances began to increase, resulting in an increase in the expected future gross profits and a corresponding
lower level of amortization in 2009.

MetLife, Inc.

33

Also contributing to the increase in operating earnings was an increase in net investment income of $308 million, which was primarily due
to a $286 million increase from growth in average invested assets and a $22 million increase in yields. The increase in average invested assets
was due to increased cash flows from the sales of fixed annuity products and more customers electing the fixed option on variable annuity
sales, which were reinvested primarily in fixed maturity securities, other invested assets and mortgage loans. The increase in yields was due to
moderate improvement in the equity markets in 2009 which led to an increase in yields principally for other limited partnership interests and
certain other invested assets, which was partially offset by a decrease in yields on real estate joint ventures, reflecting the severe downturn in
the global financial markets. To manage the needs of our intermediate to longer-term liabilities, our portfolio consists primarily of investment
grade corporate fixed maturity securities, structured finance securities, mortgage loans and U.S. Treasury, agency and government
guaranteed fixed maturity securities and, to a lesser extent, certain other invested asset classes, including real estate joint ventures in
order to provide additional diversification and opportunity for long-term yield enhancement. As is typically the case with fixed annuity
products, higher net investment income was somewhat offset by higher interest credited expense. Growth in our fixed annuity policyholder
account balances increased interest credited expense by $186 million in 2009 and higher average crediting rates on fixed annuities increased
interest credited expense by $27 million.

Operating earnings were negatively impacted by $348 million of operating losses related to the hedging programs for variable annuity
minimum death and income benefit guarantees, which are not embedded derivatives, partially offset by a decrease in the liability established
for these variable annuity guarantees. The various hedging strategies in place to offset the risk associated with these variable annuity
guarantee benefits were more sensitive to market movements than the liability for the guaranteed benefit. Market volatility, improvements in
the equity markets, and higher interest rates produced operating losses on these hedging strategies in the current year. Our hedging
strategies, which are a key part of our risk management, performed as anticipated. The decrease in annuity guarantee benefit liabilities was
due to the improvement in the equity markets, higher interest rates and the annual unlocking of future market expectations.

Other expenses increased by $216 million primarily due to an increase of $123 million from the impact of market conditions on certain
expenses. These expenses are largely comprised of reinsurance costs, pension and postretirement benefit expenses, and letter of credit
fees. In addition, variable expenses, such as commissions and premium taxes, increased $77 million, the majority of which have been offset
by DAC capitalization. The positive impact of our enterprise-wide cost reduction and revenue enhancement initiative was reflected in lower
travel, professional services and advertising expenses, but was more than offset by increases largely due to business growth.

Finally, policy fees and other revenues decreased by $100 million, mainly due to lower average separate account balances in the current

year versus prior year.

Corporate Benefit Funding

Years Ended December 31,

2009

2008

Change

% Change

Operating Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,264

(In millions)

$2,348

$

Universal

life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . .

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176

4,527
238

227

5,615
358

(84)

(51)

(1,088)
(120)

(3.6)%

(22.5)%

(19.4)%
(33.5)%

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,205

8,548

(1,343)

(15.7)%

Operating Expenses
Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . .

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,245

1,632

(14)
15

3

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

456

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,337

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288

4,398

2,297

(18)
29

2

440

7,148

474

(153)

(665)

4
(14)

1

16

(811)

(186)

(3.5)%

(29.0)%

22.2%
(48.3)%

50.0%

3.6%

(11.3)%

(39.2)%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 580

$ 926

$ (346)

(37.4)%

Corporate Benefit Funding benefited in certain markets in 2009 as a flight to quality helped drive our increase in market share, especially in
the structured settlement business, where we experienced a 53% increase in premiums. Our pension closeout business in the U.K .continues
to expand and experienced premium growth during 2009 of almost $400 million, or 105% before income taxes. However, this growth was
more than offset by a decline in our domestic pension closeout business driven by unfavorable market conditions and regulatory changes. A
combination of poor equity returns and lower interest rates have contributed to pension plans being under funded, which reduces our
customers’ flexibility to engage in transactions such as pension closeouts. Our customers’ plans funded status may be affected by a variety of
factors, including the ongoing phased implementation of the Pension Protection Act of 2006, a comprehensive reform of defined benefit and
defined contribution plan rules. For each of these businesses, the movement in premiums is almost entirely offset by the related change in
policyholder benefits. The insurance liability that is established at the time we assume the risk under these contracts is typically equivalent to
the premium earned.

Market conditions also contributed to a lower demand for several of our investment-type products. The decrease in sales of these
investment-type products is not necessarily evident in our results of operations as the transactions related to these products are recorded
through the balance sheet. Our funding agreement products, primarily the LIBOR based contracts, experienced the most significant impact
from the volatile market conditions. As companies seek greater liquidity, investment managers are refraining from repurchasing the contracts

34

MetLife, Inc.

when they mature and are opting for more liquid investments. In addition, unfavorable market conditions continued to impact the demand for
global guaranteed interest contracts, a type of funding agreement.

Policyholder account balances for our investment-type products were down by approximately $10 billion during 2009, as issuances were
more than offset by scheduled maturities. However, due to the timing of issuances and maturities, the average policyholder account balances
and liabilities increased from 2008 to 2009. The impact of the decrease in policyholder account balances resulted in lower net investment
income, which was somewhat offset by lower interest credited expense.

The primary driver of the $346 million decrease in operating earnings was lower net investment income of $707 million reflecting a
$682 million decrease from lower yields and a $25 million increase due to growth in average invested assets. Yields were adversely impacted
by the severe downturn in the global financial markets which impacted real estate joint ventures, fixed maturity securities, other invested
assets and mortgage loans. In addition, income from our securities lending program decreased, primarily due to the smaller size of the
program during the year. To manage the needs of our longer-term liabilities, our portfolio consists primarily of investment grade corporate fixed
maturity securities, mortgage loans, U.S. Treasury, agency and government guaranteed securities and, to a lesser extent, certain other
invested asset classes including real estate joint ventures in order to provide additional diversification and opportunity for long-term yield
enhancement. For our shorter-term obligations, we invest primarily in structured finance securities, mortgage loans and investment grade
corporate fixed maturity securities. The yields on these investments have moved consistent with the underlying market indices, primarily
LIBOR and Treasury, on which they are based. The growth in the average invested asset base is consistent with the increase in the average
policyholder account balances and liabilities.

As many of our products are interest spread-based, the lower net investment income was somewhat offset by lower net interest credited
expense of $380 million. The decrease in interest credited expense is attributed to $431 million from lower crediting rates. Crediting rates
have moved consistent with the underlying market indices, primarily LIBOR, on which they are based. The increase in the average policyholder
account balances resulted in a $51 million increase in interest credited expense.

The year over year decline in operating earnings was also due in part to lower other revenues as the prior year benefited by $44 million in
fees for the cancellation of a bank owned life insurance stable value wrap policy combined with the surrender of a global guaranteed interest
contract. In addition, a refinement to a reinsurance recoverable in the small business record keeping line of business in the latter part of 2009
also contributed $20 million to the decrease in operating earnings.

Current year results benefited from favorable liability refinements as compared to unfavorable liability refinements in 2008, as well as
improved mortality experience in the current year, all in the pension closeouts business. These items improved 2009 operating earnings by
approximately $90 million. Other products generated mortality gains or losses; however, the net change did not have a material impact on our
year over year results.

Although our other expenses only increased marginally and are not a significant driver of the decrease in operating earnings, the general
themes associated with the increase are consistent with those factors discussed above in the discussion of our consolidated results of
operations. Market conditions triggered an increase in our pension and postretirement benefit expenses of $26 million. In addition, variable
expenses, such as commissions and premium taxes, have increased $20 million. These increases were partially offset by a decrease of
$36 million, primarily in information technology, travel and professional services expenses, all of which were largely due to our enterprise-wide
cost reduction and revenue enhancement initiative.

Auto & Home

Years Ended December 31,

2009

2008

Change

% Change

(In millions)

Operating Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,902

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

180

33

$2,971

$(69)

186

38

(6)

(5)

(2.3)%

(3.2)%

(13.2)%

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,115

3,195

(80)

(2.5)%

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,932
(435)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

436

764

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,697

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96

1,924
(444)

454

794

2,728

104

8
9

(18)

(30)

(31)

(8)

0.4%
2.0%

(4.0)%

(3.8)%

(1.1)%

(7.7)%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 322

$ 363

$(41)

(11.3)%

Auto & Home was negatively impacted in 2009 by a declining housing market, the deterioration of the new auto sales market and the
continuation of credit availability issues, all of which contributed to a decrease in insured exposures in 2009. Average premiums per policy
increased slightly for our homeowners’ policies but decreased for auto policies, primarily as a result of a business shift in insured exposures by
state. In particular, we experienced a large decrease in earned exposures in Massachusetts, whose market was impacted by a regulatory
change, which resulted in a marked increase in competition.

A return to more normal weather conditions in 2009 resulted in fewer, and less severe, catastrophe events than in 2008. This was more

than offset by an increase in both non-catastrophe claim frequencies and non-catastrophe claim severities in 2009.

Mixed claim experience and the impact of lower exposures were the primary drivers of the $41 million decrease in operating earnings.
While we had a $90 million decrease in catastrophe-related losses compared to the prior year, we also recorded $68 million less of a benefit in
2009 from favorable development of prior year non-catastrophe losses. Current year claim costs rose primarily as a result of a $29 million

MetLife, Inc.

35

increase in claim frequency from both our auto and homeowners products. In addition, we had a $15 million net increase in claim severity,
stemming from higher severity in our auto line of business that was partially offset by lower severity in our homeowners line of business. In
2009, we experienced a decline in insured exposures, which contributed approximately $16 million to the decrease in operating earnings.
While this decrease in exposures had a positive impact on the amount of claims, it was more than offset by the negative impact on premiums.
The decrease in exposures is largely attributable to slightly higher non-renewal rates, partially offset by greater sales of new policies. Also
contributing to the decline in earnings was a decrease of $9 million in the average premium per policy, which is primarily due to a shift in earned
exposures to lower average premium states and an increase of $10 million in loss adjustment expenses, primarily related to a decrease in
unallocated loss adjusting expense liabilities at the end of 2008.

The impact of the items discussed above can be seen in the unfavorable change in the combined ratio, excluding catastrophes, to 88.9%
in 2009 from 83.1% in 2008 and the unfavorable change in the combined ratio, including catastrophes, to 92.3% in 2009 from 91.2% in 2008.
A $25 million decrease in other expenses, including the net change in DAC, partially offset the declines in operating earnings discussed
above. This improvement resulted from decreases in sales-related expenses and from minor fluctuations in a number of expense categories,
a portion of which is due to our enterprise-wide cost reduction and revenue enhancement initiative.

Also contributing to the decrease in operating earnings was a decline in net investment income of $4 million which was primarily due to a

$9 million decrease from a decline in average invested assets, partially offset by an increase of $5 million due to improved yields.

International

Operating Revenues

Years Ended December 31,

2009

2008

Change

% Change

(In millions)

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,187
1,061
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . .
Universal

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,193

Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

$3,470
1,095

1,180

18

$(283)
(34)

13

(4)

(8.2)%
(3.1)%

1.1%

(22.2)%

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,455

5,763

(308)

(5.3)%

Operating Expenses

Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . .

2,660
581

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(630)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

415
8

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,797

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,831

3,185
171

(798)

381
9

2,079

5,027

(525)
410

168

34
(1)

(282)

(196)

(16.5)%
239.8%

21.1%

8.9%
(11.1)%

(13.6)%

(3.9)%

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161

257

(96)

(37.4)%

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 463

$ 479

$ (16)

(3.3)%

An improvement in the global financial markets contributed to a recovery of sales in the majority of our International regions and resulted in
improved investment performance in some regions during the second half of 2009. Sales in Asia Pacific were down primarily from a decrease
in variable annuity sales in Japan, primarily as a result of pricing actions we took during the latter half of 2009. This decline was somewhat
offset by growth in South Korea’s fixed annuities product and an increase of variable universal life sales, which are indications that markets are
beginning to recover. We experienced growth in the pension, group life, and medical businesses of our Latin America region, specifically in
Mexico. Our operations in Europe and the Middle East continue to have strong growth in the European variable annuity business.

The reduction in operating earnings includes the adverse impact of changes in foreign currency exchange rates in 2009 as the U.S. dollar
strengthened against the various foreign currencies. This decreased operating earnings by $99 million in 2009 relative to 2008. Excluding the
impact of changes in foreign currency exchange rates, operating earnings increased $83 million, or 22%, from the prior year. This increase
was primarily driven by higher operating earnings of $184 million in our Asia Pacific region, while operating earnings from our Latin America
and Europe and Middle East decreased by $83 million and $18 million, respectively.

Asia Pacific.

Improving financial market conditions was the primary driver of the increase in operating earnings. net investment income in
the region increased by $422 million due to an increase of $278 million from improved yields on our investment portfolio, $111 million from the
change in results of operating joint ventures, and $33 million from an increase in average invested assets. The increase in yields was primarily
due to higher income of $277 million on the trading and other securities portfolio, stemming from equity markets experiencing some recovery
in 2009. As our trading and other securities portfolio backs unit-linked policyholder liabilities, this increase in income was entirely offset by a
corresponding increase in interest credited expense. The income of the Japan joint venture improved by $103 million due to favorable
investment results and lower amortization of DAC and VOBA. The decrease in DAC and VOBA amortization was primarily due to an increase in
the market value of the joint venture’s separate account balances, which is directly tied to the improving financial markets. A factor that
determines the amount of DAC and VOBA amortization is expected future fees earned on separate account balances. Since the market value
of separate account balances have increased, it is expected that future earnings on this block of business will be higher than previously
anticipated. As a result, the amortization of DAC and VOBA was less in the current year.

Operating earnings in this region also benefited from higher surrender charges of $16 million. Difficult economic conditions in South Korea
during the first half of the year resulted in a higher level of surrenders. Growth in our Japan reinsurance business and an increase in
reinsurance rates contributed $21 million to the increase in operating earnings. In addition, the favorable impact of a reduction in the liability for
our variable annuity guarantees contributed $22 million to operating earnings. The change in the liability was primarily due to an increase in
separate account balances in the Japan joint venture. These liabilities are accrued over the life of the contract in proportion to actual and

36

MetLife, Inc.

future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate
account returns. The scenarios use best estimate assumptions consistent with those used to amortize DAC. Because separate account
balances have had positive returns relative to the prior year, current estimates of future benefits are lower than that previously projected which
resulted in a decrease in this liability in the current period. Partially offsetting these increases, higher DAC amortization of $49 million resulted
from business growth and favorable investment results.

Latin America.

The decrease in operating earnings was primarily driven by lower net investment income. Net investment income
decreased by $297 million due to a decrease of $383 million from lower yields, partially offset by an increase of $86 million due to an increase
in average invested assets. The decrease in yields was due, in part, to the impact of changes in assumptions for measuring the effects of
inflation on certain inflation-indexed fixed maturity securities. This decrease was partially offset by a reduction of $221 million in the related
insurance liability primarily due to lower inflation. The increase in net investment income attributable to an increase in average invested assets
was primarily due to business growth and, as such, was largely offset by increases in policyholder benefits and interest credited expense.
Higher claims experience in Mexico resulted in a $45 million decline in operating earnings. The nationalization and reform of the pension
business in Argentina impacted both years earnings, resulting in a net $36 million decline in operating earnings. In addition, operating
earnings decreased due to a net income tax increase of $8 million in Mexico, resulting from a change in assumption regarding the repatriation
of earnings, partially offset by the favorable impact of a lower effective tax rate in 2009.

Partially offsetting these decreases in operating earnings was the combination of growth in Mexico’s individual and institutional businesses
and higher premium rates in its institutional business, which increased operating earnings by $51 million. Pesification in Argentina impacted
both the current year and prior year earnings, resulting in a net $73 million increase in operating earnings. This benefit was largely due to a
reassessment of our approach in managing existing and potential future claims related to certain social security pension annuity contract
holders in Argentina resulting in a liability release. Lower expenses of $8 million resulted primarily from the impact of operational efficiencies
achieved through our enterprise-wide cost reduction and revenue enhancement initiative.

Europe and Middle East.

The impact of foreign currency transaction gains and a tax benefit, both of which occurred in the prior year,
contributed $12 million to the decline in operating earnings. Our investment of $9 million in our distribution capability and growth initiatives in
2009 also reduced operating earnings. There was an increase in net investment income of $76 million, which was due to an increase of
$65 million from an improvement in yields and $11 million from an increase in average invested assets. The increase in yields was primarily due
to favorable results on the trading and other securities portfolio, stemming from the equity markets experiencing some recovery in 2009. As
our trading and other securities portfolio backs unit-linked policyholder liabilities, the trading and other securities portfolio results were entirely
offset by a corresponding increase in interest credited expense. The increase in net investment income attributable to an increase in average
invested assets was primarily due to business growth and was largely offset by increases in policyholder benefits and interest credited
expense, also due to business growth.

Banking, Corporate & Other

Years Ended December 31,

2009

2008

Change

% Change

(In millions)

Operating Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19
477
1,092

$

27
808
184

$

(8)
(331)
908

(29.6)%
(41.0)%
493.5%

Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,588

1,019

569

55.8%

Operating Expenses
Policyholder benefits and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
—
163
—
3
1,027
1,336

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,533

Provision for income tax expense (benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(617)

(328)
122

46
7
166
(3)
5
1,033
699

1,953

(495)

(439)
125

(42)
(7)
(3)
3
(2)
(6)
637

580

(122)

111
(3)

Operating earnings available to common shareholders . . . . . . . . . . . . . . . . . . . . . . . $ (450)

$ (564)

$ 114

(91.3)%
(100.0)%
(1.8)%
100.0%
(40.0)%
(0.6)%
91.1%

29.7%

(24.6)%

25.3%
(2.4)%

20.2%

Banking, Corporate & Other recognized the full year impact of our forward and reverse residential mortgage platform acquisitions, a strong
residential mortgage refinance market, healthy growth in the reverse mortgage arena, and a favorable interest spread environment. Our
forward and reverse residential mortgage production of $37.4 billion in 2009 was up 484% compared to 2008 production. The increase in
mortgage production drove higher investments in residential mortgage loans held-for-sale and MSRs. At December 31, 2009, our residential
mortgage loans servicing portfolio was $64.1 billion comprised of agency (FNMA, FHLMC, and GNMA) portfolios. Transaction and time
deposits, which provide a relatively stable source of funding and liquidity and are used to fund loans and fixed income securities purchases,
grew 48% in 2009 to $10.2 billion. Borrowings decreased 10% in 2009 to $2.4 billion. During 2009, we participated in the Federal Reserve
Bank of New York Term Auction Facility, which provided short term liquidity with low funding costs.

In response to the economic crisis and unusual financial market events that occurred in 2008 and continued into 2009, we decided to utilize excess
debt capacity. The Holding Company completed three debt issuances in 2009. The Holding Company issued $397 million of floating rate senior notes
in March 2009, $1.3 billion of senior notes in May 2009, and $500 million of junior subordinated debt securities in July 2009. In February 2009, in
connection with the initial settlement of the stock purchase contracts issued as part of the common equity units sold in June 2005, the Holding

MetLife, Inc.

37

Company issued common stock for $1.0 billion. The proceeds from these equity and debt issuances were used for general corporate purposes and
have resulted in increased investments and cash and cash equivalents held within Banking, Corporate & Other.

Operating earnings available to common shareholders improved by $114 million, of which $254 million was due to MetLife Bank and its
acquisitions of a residential mortgage origination and servicing business and a reverse mortgage business, both during 2008. Excluding the
impact of MetLife Bank, our operating earnings available to common shareholders decreased $140 million, primarily due to lower net
investment income, partially offset by the impact of a lower effective tax rate. The lower effective tax rate provided an increased benefit of
$139 million from the prior year. This benefit was the result of a partial settlement of certain prior year tax audit issues and increased utilization
of tax preferenced investments, which provide tax credits and deductions.

Excluding a $68 million increase from MetLife Bank, net investment income decreased $283 million, which was primarily due a decrease of
$287 million due to lower yields, partially offset by an increase of $4 million due to an increase in average invested assets. Consistent with the
consolidated results of operations discussion above, yields were adversely impacted by the severe downturn in the global financial markets,
which primarily impacted fixed maturity securities and real estate joint ventures. The increased average invested asset base was due to cash
flows from debt issuances during 2009. Our investments primarily include structured finance securities, investment grade corporate fixed
maturity securities, U.S. Treasury, agency and government guaranteed fixed maturity securities and mortgage loans. In addition, our
investment portfolio includes the excess capital not allocated to the segments. Accordingly, it includes a higher allocation of certain other
invested asset classes to provide additional diversification and opportunity for long-term yield enhancement including leveraged leases, other
limited partnership interests, real estate, real estate joint ventures and equity securities.

After excluding the impact of a $394 million increase from MetLife Bank, other expenses increased by $20 million. Deferred compensation
costs, which are tied to equity market performance, were higher due to a significant market rebound. We also had an increase in costs
associated with the implementation of our enterprise-wide cost reduction and revenue enhancement initiative. These increases were partially
offset by lower postemployment related costs and corporate-related expenses, specifically legal costs. Legal costs were lower largely due to
the prior year commutation of asbestos policies. In addition, interest expense declined slightly as a result of rate reductions on variable rate
collateral financing arrangements offset by debt issuances in 2009 and 2008.

Effects of Inflation

The Company does not believe that inflation has had a material effect on its consolidated results of operations, except insofar as inflation

may affect interest rates.

Inflation in the U.S. has remained contained and been in a general downward trend for an extended period. However, in light of recent and ongoing
aggressive fiscal and monetary stimulus measures by the U.S. federal government and foreign governments, it is possible that inflation could increase
in the future. Globally, inflation trends can vary by region and between developed and emerging markets. The Japanese economy, to which we face
increased exposure as a result of the Acquisition, continues to experience low nominal growth and a deflationary environment. As the global economy
improves, inflation trends are increasing in other regions, particularly in emerging markets like China and India. In the more developed Eurozone
countries, inflation rates, while not as high, have trended upward at a greater pace than in the U.S.

An increase in inflation could affect our business in several ways. During inflationary periods, the value of fixed income investments falls
which could increase realized and unrealized losses. Inflation also increases expenses for labor and other materials, potentially putting
pressure on profitability if such costs can not be passed through in our product prices. Inflation could also lead to increased costs for losses
and loss adjustment expenses in certain of our businesses, which could require us to adjust our pricing to reflect our expectations for future
inflation. Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require
governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and
reduce the number of attractive investment opportunities.

Investments

Investment Risks.

The Company’s primary investment objective is to optimize, net of income tax, risk-adjusted investment income and
risk-adjusted total return while ensuring that assets and liabilities are managed on a cash flow and duration basis. The Company is exposed to
four primary sources of investment risk:

(cid:129) credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and

interest;

(cid:129) interest rate risk, relating to the market price and cash flow variability associated with changes in market interest rates;
(cid:129) liquidity risk, relating to the diminished ability to sell certain investments in times of strained market conditions; and
(cid:129) market valuation risk, relating to the variability in the estimated fair value of investments associated with changes in market factors such

as credit spreads.

The Company manages risk through in-house fundamental analysis of the underlying obligors, issuers, transaction structures and real
estate properties. The Company also manages credit risk, market valuation risk and liquidity risk through industry and issuer diversification
and asset allocation. For real estate and agricultural assets, the Company manages credit risk and market valuation risk through geographic,
property type and product type diversification and asset allocation. The Company manages interest rate risk as part of its asset and liability
management strategies; product design, such as the use of market value adjustment features and surrender charges; and proactive
monitoring and management of certain non-guaranteed elements of its products, such as the resetting of credited interest and dividend rates
for policies that permit such adjustments. The Company also uses certain derivative instruments in the management of credit, interest rate,
currency and equity market risks.

Current Environment.

The global economy and markets are now recovering from a period of significant stress that began in the second
half of 2007 and substantially increased through the first quarter of 2009. This disruption adversely affected the financial services industry, in
particular. The U.S. economy entered a recession in late 2007. This recession ended in mid-2009, but the recovery from the recession has
been below historic averages and the unemployment rate is expected to remain high for some time. In addition, inflation has fallen over the last
several years and is expected to remain at low levels for some time. Some economists believe that some level of disinflation and deflation risk
remains in the U.S. economy.

Although the disruption in the global financial markets has moderated, not all such markets are functioning normally, and some remain
reliant upon government intervention and liquidity. The global recession and disruption of the financial markets has also led to concerns over
capital markets access and the solvency of certain European Union member states, including Portugal, Ireland, Italy, Greece and Spain. The

38

MetLife, Inc.

Japanese economy, to which we face increased exposure to as a result of the Acquisition, continues to experience low nominal growth, a
deflationary environment, and weak consumer spending. See “— Industry Trends.” See also “Investments — Fixed Maturity and Equity
Securities Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity Securities) — Summary” in Note 3 of the Notes to Consolidated
Financial Statements for information about exposure to sovereign fixed maturity securities of Portugal, Ireland, Italy, Greece and Spain.

During the year ended December 31, 2010, the net unrealized loss position on fixed maturity and equity securities improved from a net
unrealized loss of $2.2 billion at December 31, 2009 to a net unrealized gain of $7.3 billion at December 31, 2010, as a result of a decrease in
interest rates, and to a lesser extent, a decrease in credit spreads.

Investment Outlook. Recovering private equity markets and stabilizing credit and real estate markets during 2010 had a positive impact
on returns and net investment income on private equity funds, hedge funds and real estate funds, which are included within other limited
partnership interests and real estate and real estate joint venture portfolios. Although the disruption in the global financial markets has
moderated, if there is a resumption of significant disruption, it could adversely impact returns and net investment income on these alternative
investment classes. Net cash flows arising from our business and our investment portfolio will be reinvested in a prudent manner and
according to our ALM discipline in appropriate assets over time. We will maintain a sufficient level of liquidity to meet business needs. Net
investment income may be adversely affected if excess liquidity is required over an extended period of time to meet changing business needs.

Composition of Investment Portfolio and Investment Portfolio Results

The following yield table presents the investment income, investment portfolio gains (losses), annualized yields on average ending assets
and ending carrying value for each of the asset classes within the Company’s investment portfolio, as well as investment income and
investment portfolio gains (losses)
for the investment portfolio as a whole. The yield table also presents gains (losses) on derivative
instruments which are used to manage risk for certain invested assets and certain insurance liabilities:

At and for the Years Ended December 31,

2010

2009

2008

(In millions)

5.51%

5.53%

1.10%
77
(40)
8,030

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,650
(255)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $327,878

Fixed Maturity Securities:
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income(2), (3), (4)
Investment gains (losses) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value(2), (3)
Mortgage Loans:
Yield (1)
2,823
Investment income(3), (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses)(3)
22
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,536
Real Estate and Real Estate Joint Ventures:
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Policy Loans:
6.37%
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
657
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,914
Equity Securities:
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other Limited Partnership Interests:
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cash and Short-Term Investments:
0.46%
Yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2
Ending carrying value(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,394
Other Invested Assets:(5)
491
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(8)
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,430

14.99%
879
(18)
6,416

4.39%
128
104
3,606

5.77%

6.40%

$ 11,899
$ (1,663)
$230,026

$ 12,403
$ (1,953)
$189,197

5.38%

6.08%

2,735
$
$
(442)
$ 50,909

2,774
$
$
(136)
$ 51,364

(7.47)%
(541)
(156)
6,896

$
$
$

6.54%
648
$
$ 10,061

5.12%
175
(399)
3,084

3.22%
173
(356)
5,508

$
$
$

$
$
$

$
$
$

$
$

$
$
$

$
$
$

2.98%
217
(9)
7,586

6.22%
601
9,802

5.25%
249
(253)
3,197

(2.77)%
(170)
(140)
6,039

0.44%
94
$
$
6
$ 18,486

1.62%
307
$
$
3
$ 38,085

339
$
$
(32)
$ 12,709

279
$
$
313
$ 17,248

MetLife, Inc.

39

At and for the Years Ended December 31,

2010

2009

2008

(In millions)

Total Investments:
Gross investment income yield(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment fees and expenses yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment Income Yield(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.29%
(0.14)

5.15%

4.90%
(0.14)

4.76%

5.68%
(0.16)

5.52%

Gross investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,786
(465)
Investment fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 15,522
(433)

$ 16,660
(460)

Investment Income(3), (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,321

$ 15,089

$ 16,200

Ending Carrying Value(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $451,204

$337,679

$322,518

Gross investment gains(3)
Gross investment losses(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Writedowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,200
(848)
(545)

$

1,232
(1,429)
(2,845)

$

1,802
(1,935)
(2,042)

Investment Portfolio Gains (Losses)(3), (6)
Investment portfolio gains (losses) income tax (expense) benefit . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . $

(193)
53

$ (3,042)
1,121

$ (2,175)
795

Investment Portfolio Gains (Losses), Net of Income Tax . . . . . . . . . . . . . . $

(140)

$ (1,921)

$ (1,380)

Derivative Gains (Losses)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
. . . . . . . . . . . . . . . . . . . $
Derivative gains (losses) income tax (expense) benefit

(614)
160

$ (5,106)
1,803
$

3,782
$
$ (1,438)

Derivative Gains (Losses), Net of Income Tax . . . . . . . . . . . . . . . . . . . . . $

(454)

$ (3,303)

$

2,344

As described in the footnotes below, the yield table reflects certain differences from the presentation of invested assets, net investment
income, net investment gains (losses) and net derivative gains (losses) as presented in the consolidated balance sheets and consolidated
statements of operations, including the exclusion of contractholder-directed unit-linked investments classified within trading and other
securities, as the contractholder, not the Company, directs the investment of the funds; and the exclusion of the effects of consolidating
under GAAP certain VIEs that are consolidated securitization entities (“CSEs”). We believe this yield table presentation is consistent with
how we measure our investment performance for management purposes enhances understanding.

(1) Yields are based on average of quarterly average asset carrying values, excluding recognized and unrealized investment gains (losses),
collateral received from counterparties associated with our securities lending program, the effects of consolidating under GAAP certain
VIEs that are treated as CSEs and, effective October 1, 2010, contractholder-directed unit-linked investments. Yields also exclude
investment income recognized on mortgage loans and securities held by CSEs and, effective October 1, 2010, contractholder-directed
unit-linked investments.

(2) Fixed maturity securities include $594 million, $2,384 million and $946 million at estimated fair value of trading and other securities at
December 31, 2010, 2009 and 2008, respectively. Fixed maturity securities include $234 million, $400 million and ($193) million of
investment income related to trading and other securities for the years ended December 31, 2010, 2009 and 2008, respectively.

(3)

(a) Fixed maturity securities ending carrying values as presented herein, exclude (i) contractholder-directed unit-linked investments —
reported within trading and other securities of $17,794 million, and (ii) securities held by CSEs that are consolidated under GAAP —
reported within trading and other securities of $201 million at December 31, 2010. Net investment income as presented herein, excludes
investment income on contractholder-directed unit-linked investments — reported within trading and other securities effective October 1,
2010 as shown in footnote (6) to this yield table.

(b) Ending carrying values, investment income and investment gains (losses) as presented herein, exclude the effects of consolidating
under GAAP certain VIEs that are treated as CSEs. The adjustment to investment income and investment gains (losses) in the aggregate
are as shown in footnote (6) to this yield table. The adjustments to ending carrying value, investment income and investment gains (losses)
by invested asset class are presented below. Both the invested assets and long-term debt of the CSEs are accounted for under the FVO.
The adjustment to investment gains (losses) presented below and in footnote (6) to this yield table includes the effects of remeasuring both
the invested assets and long-term debt in accordance with the FVO.

40

MetLife, Inc.

At or for the Year Ended December 31, 2010

As Reported in the
Yield Table

Impact of Excluding
Trading and Other
Securities and CSEs
(In millions)

Total — With all
Trading and Other
Securities and CSEs

Trading and Other Securities (included within Fixed

Maturity Securities):

Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage Loans:

$

$

$

594

234

—

$17,995

$

$

226

(30)

Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 55,536

$ 6,840

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and Short-Term Investments:

$

$

2,823

22

Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 22,394

$

$

$

396

36

39

$ 18,589

$

$

460

(30)

$ 62,376

$

$

3,219

58

$ 22,433

Total Investments:
Ending carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . .

$451,204

$24,874

$476,078

(4)

Investment income from fixed maturity securities and mortgage loans includes prepayment fees.

(5) Other invested assets are principally comprised of freestanding derivatives with positive estimated fair values and leveraged leases.
Freestanding derivatives with negative estimated fair values are included within other liabilities. However, the accruals of settlement
payments in other liabilities are included in net investment income as shown in Note 4 of the Notes to the Consolidated Financial
Statements. As yield is not considered a meaningful measure of performance for other invested assets, it has been excluded from the yield
table.

(6)

Investment income, investment portfolio gains (losses) and derivative gains (losses) presented in this yield table vary from the most directly
comparable measures presented in the GAAP consolidated statements of operations due to certain reclassifications affecting net
investment income, net investment gains (losses), net derivative gains (losses), and interest credited to PABs and to exclude the effects of
consolidating under GAAP certain VIEs that are treated as CSEs. Such reclassifications are presented in the tables below.

Years Ended December 31,
2009

2010

2008

(In millions)

Investment income — in the above yield table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,321 $15,089 $16,200

Real estate discontinued operations — deduct from net investment income . . . . . . . .
Scheduled periodic settlement payments on derivatives not qualifying for hedge
accounting — deduct from net investment income, add to net derivative gains
(losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity method operating joint ventures — add to net investment income, deduct from

10

(8)

(11)

(208)

(88)

(5)

net derivative gains (losses)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(130)

(156)

105

Net investment income on contractholder-directed unit-linked investments — reported

within trading and other securities — add to net investment income . . . . . . . . . . . .
Incremental net investment income from CSEs— add to net investment income . . . . .

211
411

—
—

—
—

Net investment income — GAAP consolidated statements of operations . . . . . . . . . . . . $17,615 $14,837 $16,289

MetLife, Inc.

41

Investment portfolio gains (losses) — in the above yield table . . . . . . . . . . . . . . . . . . . $

(193) $ (3,042) $ (2,175)

Real estate discontinued operations — deduct from net investment gains (losses) . . . .

Investment gains (losses) related to CSEs — add to net investment gains (losses) . . . .

Purchased credit default swaps that offset losses incurred on certain fixed maturity

securities — deduct from net investment gains (losses) . . . . . . . . . . . . . . . . . . . .

Other gains (losses) — add to net investment gains (losses) . . . . . . . . . . . . . . . . . .

(14)

6

—

(191)

(8)

—

—

144

(8)

—

(183)

268

Net investment gains (losses) — GAAP consolidated statements of operations . . . . . . . $

(392) $ (2,906) $ (2,098)

Years Ended December 31,

2010

2009

2008

(In millions)

Derivative gains (losses) — in the above yield table . . . . . . . . . . . . . . . . . . . . . . . . . $

(614) $ (5,106) $ 3,782

Scheduled periodic settlement payments on derivatives not qualifying for hedge
accounting — add to net derivative gains (losses), deduct from net investment
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scheduled periodic settlement payments on derivatives not qualifying for hedge

accounting — add to net derivative gains (losses), deduct from interest credited to
PABs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchased credit default swaps that offset losses incurred on certain fixed maturity

securities — add to net derivative gains (losses)

. . . . . . . . . . . . . . . . . . . . . . . .

Equity method operating joint ventures — add to net investment income, deduct from

208

88

5

11

—

(4)

—

45

183

net derivative gains (losses)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130

156

(105)

Net derivative gains (losses) — GAAP consolidated statements of operations . . . . . . . . $

(265) $ (4,866) $ 3,910

See “— Results of Operations — Year Ended December 31, 2010 compared with the Year Ended December 31, 2009 and Year Ended
December 31, 2009 compared with the Year Ended December 31, 2008,” for an analysis of the year over year changes in net investment
income and net investment gains (losses) and net derivative gains (losses).

Fixed Maturity and Equity Securities Available-for-Sale
Fixed maturity securities, which consisted principally of publicly-traded and privately placed fixed maturity securities, were $327.3 billion
and $227.6 billion, or 69% and 67% of total cash and invested assets at estimated fair value, at December 31, 2010 and 2009, respectively.
Publicly-traded fixed maturity securities represented $286.5 billion and $191.4 billion, or 88% and 84% of total fixed maturity securities at
estimated fair value, at December 31, 2010 and 2009, respectively. Privately placed fixed maturity securities represented $40.8 billion and
$36.2 billion, or 12% and 16% of total fixed maturity securities at estimated fair value, at December 31, 2010 and 2009, respectively.

Equity securities, which consisted principally of publicly-traded and privately-held common and preferred stocks, including certain
perpetual hybrid securities and mutual fund interests, were $3.6 billion and $3.1 billion, or 0.8% and 0.9% of total cash and invested assets at
estimated fair value, at December 31, 2010 and 2009, respectively. Publicly-traded equity securities represented $2.3 billion and $2.1 billion,
or 64% and 68% of total equity securities at estimated fair value, at December 31, 2010 and 2009, respectively. Privately-held equity
securities represented $1.3 billion and $1.0 billion, or 36% and 32% of total equity securities at estimated fair value, at December 31, 2010
and 2009, respectively.

Valuation of Securities. We are responsible for the determination of estimated fair value. The estimated fair value of publicly-traded fixed
maturity, equity and trading and other securities, as well as short-term securities is determined by management after considering one of three
primary sources of information: quoted market prices in active markets, independent pricing services, or independent broker quotations. The
number of quotes obtained varies by instrument and depends on the liquidity of the particular instrument. Generally, we obtain prices from
multiple pricing services to cover all asset classes and obtain multiple prices for certain securities, but ultimately utilize the price with the
highest placement in the fair value hierarchy. Independent pricing services that value these instruments use market standard valuation
methodologies based on inputs that are market observable or can be derived principally from or corroborated by observable market data.
Such observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active
and observable yields and spreads in the market. The market standard valuation methodologies utilized include: discounted cash flow
methodologies, matrix pricing or similar techniques. The assumptions and inputs in applying these market standard valuation methodologies
include, but are not limited to, interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call
provisions, sinking fund requirements, maturity, estimated duration, and management’s assumptions regarding liquidity and estimated future
cash flows. When a price is not available in the active market or through an independent pricing service, management will value the security
primarily using independent non-binding broker quotations. Independent non-binding broker quotations utilize inputs that are not market
observable or cannot be derived principally from or corroborated by observable market data.

Senior management, independent of the trading and investing functions, is responsible for the oversight of control systems and valuation
policies, including reviewing and approving new transaction types and markets, for ensuring that observable market prices and market-based
parameters are used for valuation, wherever possible, and for determining that judgmental valuation adjustments, if any, are based upon
established policies and are applied consistently over time. We review our valuation methodologies on an ongoing basis and ensure that any
changes to valuation methodologies are justified. We gain assurance on the overall reasonableness and consistent application of input
assumptions, valuation methodologies and compliance with accounting standards for fair value determination through various controls
designed to ensure that the financial assets and financial liabilities are appropriately valued and represent an exit price. The control systems
and procedures include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of
executed prices of securities sold to the fair value estimates, comparing fair value estimates to management’s knowledge of the current
market, reviewing the bid/ask spreads to assess activity and ongoing confirmation that independent pricing services use, wherever possible,

42

MetLife, Inc.

market-based parameters for valuation. We determine the observability of inputs used in estimated fair values received from independent
pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company also follows a
formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair
value. If we conclude that prices received from independent pricing services are not reflective of market activity or representative of estimated
fair value, we will seek independent non-binding broker quotes or use an internally developed valuation to override these prices. Such
overrides are classified as Level 3. Despite the credit events prevalent since the second half of 2007 described above, including market
dislocation, volatility in valuation of certain investments, and reduced levels of liquidity, which has since moderated but is still present in certain
portions of the global financial markets and in certain asset sectors, our internally developed valuations of current estimated fair value, which
reflect our estimates of liquidity and non-performance risks, compared with pricing received from the independent pricing services, did not
produce material differences for the vast majority of our fixed maturity securities portfolio. Our estimates of liquidity and non-performance risks
are generally based on available market evidence and on what other market participants would use. In the absence of such evidence,
management’s best estimate is used. As a result, we generally continued to use the price provided by the independent pricing service under
our normal pricing protocol and pricing overrides were not material. The Company uses the results of this analysis for classifying the estimated
fair value of these instruments in Level 1, 2 or 3. For example, we will review the estimated fair values received to determine whether
corroborating evidence (i.e., similar observable positions and actual trades) will support a Level 2 classification in the fair value hierarchy.
Security prices which cannot be corroborated due to relatively less pricing transparency and diminished liquidity will be classified as Level 3.
Even some of our very high quality invested assets have been more illiquid for periods of time as a result of the market conditions described
above.

For privately placed fixed maturity securities, the Company determines the estimated fair value generally through matrix pricing,
inputs used can be
discounted cash flow techniques or from independent pricing services after assessing that
corroborated with observable market data. The discounted cash flow valuations rely upon the estimated future cash flows of the security,
credit spreads of comparable public securities and secondary transactions, as well as taking into account, among other factors, the credit
quality of the issuer and the reduced liquidity associated with privately placed debt securities.

the observability of

The Company has reviewed the significance and observability of inputs used in the valuation methodologies to determine the appropriate
fair value hierarchy level for each of its securities. Based on the results of this review and investment class analyses, each instrument is
categorized as Level 1, 2 or 3 based on the priority of the inputs to the respective valuation methodologies. Certain U.S. Treasury, agency and
government guaranteed fixed maturity securities, certain foreign government fixed maturity securities, residential mortgage-backed secu-
rities (“RMBS”), principally to-be-announced securities, exchange-traded common stock and mutual fund interests, registered mutual fund
interests priced using daily net asset value provided by fund managers included within trading and other securities, certain other securities
classified as trading and other securities which are similar to the above described fixed maturity and equity securities and certain short-term
money market securities, including U.S. Treasury bills, have been classified into Level 1 because of high volumes of trading activity and
narrow bid/ask spreads. Most securities valued by independent pricing services have been classified into Level 2 because the significant
inputs used in pricing these securities are market observable or can be corroborated using market observable information. Most investment
grade privately placed fixed maturity securities and certain below investment grade privately placed fixed maturity securities priced by
independent pricing services that use observable inputs have been classified within Level 2. Distressed privately placed fixed maturity
securities have been classified within Level 3. Below investment grade privately placed fixed maturity securities and less liquid securities with
very limited trading activity where estimated fair values are determined by independent pricing services or by independent non-binding broker
quotations that use unobservable inputs or cannot be derived principally from or corroborated by observable market data, are classified as
Level 3. Use of independent non-binding broker quotations generally indicates there is a lack of liquidity or the general lack of transparency in
the process to develop these price estimates causing them to be considered Level 3.

Effective April 1, 2009, the Company adopted accounting guidance that clarified existing guidance regarding (1) estimating the estimated
fair value of an asset or liability if there was a significant decrease in the volume and level of trading activity for these assets or liabilities and
identifying transactions that are not orderly. The Company’s valuation policies as described above and in “— Summary of Critical
(2)
Accounting Estimates — Estimated Fair Values of
Investments” already incorporated the key concepts from this additional guidance,
accordingly, this guidance results in no material changes in our valuation policies. At April 1, 2009 and at each subsequent quarterly period in
2009 and 2010, we evaluated the markets that our fixed maturity and equity securities trade in and in our judgment, despite the increased
illiquidity discussed above, believe none of these fixed maturity and equity securities trading markets should be characterized as distressed
and disorderly. We will continue to re-evaluate and monitor such fixed maturity and equity securities trading markets on an ongoing basis.

MetLife, Inc.

43

Fair Value Hierarchy.

Fixed maturity securities and equity securities available-for-sale measured at estimated fair value on a recurring

basis and their corresponding fair value pricing sources and fair value hierarchy are as follows:

December 31, 2010

Fixed Maturity
Securities

Equity
Securities

(In millions)

Level 1:

Quoted prices in active markets for identical assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,025

4.6% $ 832

23.1%

Level 2:

Independent pricing source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internal matrix pricing or discounted cash flow techniques . . . . . . . . . . . . . . . . . . . . . . . .

257,625
31,839

Significant other observable inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

289,464

Level 3:

Independent pricing source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,481

Internal matrix pricing or discounted cash flow techniques . . . . . . . . . . . . . . . . . . . . . . . .

Independent broker quotations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,872

2,442

Significant unobservable inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,795

78.7
9.8

88.5

3.2

3.0

0.7

6.9

616
985

1,601

17.1
27.3

44.4

1,011

28.0

149

13

4.1

0.4

1,173

32.5

Total estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $327,284

100.0% $3,606

100.0%

December 31, 2010

Fair Value Measurements Using

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair Value

(In millions)

Fixed Maturity Securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury, agency and government guaranteed securities . . . . . . . . . . . . . . .
Commercial mortgage-backed securities (“CMBS”) . . . . . . . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

— $ 85,419
62,401
—
43,037
274
40,092
149
18,623
14,602
19,664
—
10,142
—
10,083
—
3
—

$ 7,149
5,777
1,422
3,159
79
1,011
4,148
46
4

$ 92,568
68,178
44,733
43,400
33,304
20,675
14,290
10,129
7

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,025

$289,464

$22,795

$327,284

Equity Securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

832
—

832

$

$

$

1,094
507

268
905

1,601

$ 1,173

$

$

2,194
1,412

3,606

The composition of fair value pricing sources for and significant changes in Level 3 securities at December 31, 2010 are as follows:
(cid:129) The majority of the Level 3 fixed maturity and equity securities (84%, as presented above) were concentrated in four sectors: U.S. and

foreign corporate securities, ABS and foreign government securities.

(cid:129) Level 3 fixed maturity securities are priced principally through market standard valuation methodologies, independent pricing services
and independent non-binding broker quotations using inputs that are not market observable or cannot be derived principally from or
corroborated by observable market data. Level 3 fixed maturity securities consists of less liquid fixed maturity securities with very limited
trading activity or where less price transparency exists around the inputs to the valuation methodologies including alternative residential
mortgage loan RMBS and less liquid prime RMBS, certain below investment grade private placements and less liquid investment grade
corporate securities (included in U.S. and foreign corporate securities) and less liquid ABS including securities supported by sub-prime
mortgage loans (included in ABS).

(cid:129) During the year ended December 31, 2010, Level 3 fixed maturity securities increased by $371 million, or 2%, excluding the impact of
the Acquisition, and $5,605 million, or 33%, including the impact of the Acquisition. The Level 3 fixed maturity securities acquired from
ALICO of $5,435 million have been included in purchases, sales, issuances and settlements in the table below. The increase was driven
by net purchases in excess of sales and increases in estimated fair value recognized in other comprehensive income (loss). Net
purchases in excess of sales of fixed maturity securities were concentrated in foreign government and ABS. The increase in estimated
fair value in fixed maturity securities was concentrated in U.S. and foreign corporate securities and ABS (including RMBS backed by
sub-prime mortgage loans) due to improving or stabilizing market conditions including an improvement in liquidity coupled with the
effect of decreased interest rates on such securities.

44

MetLife, Inc.

A rollforward of the fair value measurements for fixed maturity securities and equity securities available-for-sale measured at estimated fair

value on a recurring basis using significant unobservable (Level 3) inputs is as follows:

Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total realized/unrealized gains (losses) included in:

Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases, sales, issuances and settlements(1)

Transfers into and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended
December 31, 2010

Fixed Maturity
Securities

Equity
Securities

(In millions)

$17,190

$1,240

(39)

1,072
4,519

53

51

19
(122)

(15)

Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,795

$1,173

(1)

Includes securities acquired from ALICO of $5,435 million for fixed maturity securities and $68 million for equity securities.
An analysis of transfers into and/or out of Level 3 for the year ended December 31, 2010 is as follows:
(cid:129) Total gains and losses in earnings and other comprehensive income (loss) are calculated assuming transfers in or out of Level 3

occurred at the beginning of the period. Items transferred in and out for the same period are excluded from the rollforward.

(cid:129) Total gains and losses for fixed maturity securities included in earnings of ($2) million and other comprehensive income (loss) of
$19 million respectively, were incurred for transfers subsequent to their transfer to Level 3, for the year ended December 31, 2010.
(cid:129) Net transfers into and/or out of Level 3 for fixed maturity securities were $53 million for the year ended December 31, 2010, and were

comprised of transfers in of $1,736 million and transfers out of ($1,683) million, respectively.

Overall, transfers into and/or out of Level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred
into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases
significantly and underlying inputs cannot be observed, current prices are not available, and when there are significant variances in quoted
prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant
input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or
more significant input(s) becoming observable. Transfers into and/or out of any level are assumed to occur at the beginning of the period.
Significant transfers in and/or out of Level 3 assets and liabilities for the year ended December 31, 2010 are summarized below.

(cid:129) During the year ended December 31, 2010, fixed maturity securities transfers into Level 3 of $1,736 million resulted primarily from
current market conditions characterized by a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from
investment grade to below investment grade). These current market conditions have resulted in decreased transparency of valuations
and an increased use of broker quotations and unobservable inputs to determine estimated fair value principally for certain private
placements included in U.S. and foreign corporate securities and certain CMBS.

(cid:129) During the year ended December 31, 2010, fixed maturity securities transfers out of Level 3 of ($1,683) million resulted primarily from
increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by
independent pricing services and existing issuances that, over time, the Company was able to corroborate pricing received from
independent pricing services with observable inputs, or there were increases in market activity and upgraded credit ratings primarily for
certain U.S. and foreign corporate securities, RMBS and ABS.

See “— Summary of Critical Accounting Estimates — Estimated Fair Value of Investments” for further information on the estimates and

assumptions that affect the amounts reported above.

See “— Fair Value — Assets and Liabilities Measured at Fair Value — Recurring Fair Value Measurements — Valuation Techniques and
Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” in Note 5 for further information about
the valuation techniques and inputs by level by major classes of invested assets that affect the amounts reported above.

Fixed Maturity Securities Credit Quality — Ratings.

The Securities Valuation Office of the National Association of Insurance Commis-
sioners (“NAIC”) evaluates the fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and
assigns securities to one of six credit quality categories called “NAIC designations.” If no rating is available from the NAIC, then as permitted by
the NAIC, an internally developed rating is used. The NAIC ratings are generally similar to the credit quality designations of the Nationally
Recognized Statistical Ratings Organizations (“NRSROs”) for marketable fixed maturity securities, called “rating agency designations,” except
for certain structured securities as described below. NAIC ratings 1 and 2 include fixed maturity securities generally considered investment
grade (i.e., rated “Baa3” or better by Moody’s Investors Service (“Moody’s”) or rated “BBB” or better by S&P and Fitch Ratings (“Fitch”)) by such
rating organizations. NAIC ratings 3 through 6 include fixed maturity securities generally considered below investment grade (i.e., rated “Ba1”
or lower by Moody’s or rated “BB+” or lower by S&P and Fitch) by such rating organizations.

The NAIC adopted revised rating methodologies for non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported
within ABS, that became effective December 31, 2009 and for CMBS and all other ABS that became effective December 31, 2010. The
NAIC’s objective with the revised rating methodologies for these structured securities was to increase the accuracy in assessing expected
losses, and to use the improved assessment to determine a more appropriate capital requirement for such structured securities. The revised
methodologies reduce regulatory reliance on rating agencies and allow for greater regulatory input into the assumptions used to estimate
expected losses from such structured securities.

The three tables below present fixed maturity securities based on rating agency designations and equivalent designations of the NAIC,
with the exception of certain structured securities held by the Company’s insurance subsidiaries that file NAIC statutory financial statements.
Non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported within ABS, CMBS and all other ABS held by the
Company’s insurance subsidiaries that file NAIC statutory financial statements are presented based on final ratings from the revised NAIC
rating methodologies described above (which may not correspond to rating agency designations). All NAIC designation (e.g., NAIC
1) amounts and percentages presented herein are based on the revised NAIC methodologies described above. All rating agency designation

MetLife, Inc.

45

(e.g., Aaa/AAA) amounts and percentages presented herein are based on rating agency designations without adjustment for the revised NAIC
methodologies described above.

The following three tables present information about the Company’s fixed maturity securities holdings by NAIC credit quality ratings.
Comparisons between NAIC ratings and rating agency designations are published by the NAIC. Rating agency designations are based on
availability of applicable ratings from rating agencies on the NAIC acceptable rating organizations list, including Moody’s, S&P, Fitch and
Realpoint, LLC. If no rating is available from a rating agency, then an internally developed rating is used.

The following table presents the Company’s total fixed maturity securities by NRSRO designation and the equivalent designations of the
NAIC, except for certain structured securities, which are presented using final ratings from the revised NAIC rating methodologies as
described above, as well as the percentage, based on estimated fair value, that each designation is comprised of at:

NAIC
Rating

Rating Agency Designation:

Amortized
Cost

2010

Estimated
Fair
Value

December 31,

% of
Total

Amortized
Cost

(In millions)

2009

Estimated
Fair
Value

% of
Total

1

2

3

4

5

6

Aaa/Aa/A . . . . . . . . . . . . . . . . . . . . . .

$228,875

$233,540

71.4% $151,391

$151,136

66.4%

Baa . . . . . . . . . . . . . . . . . . . . . . . . . .

Ba . . . . . . . . . . . . . . . . . . . . . . . . . . .

B . . . . . . . . . . . . . . . . . . . . . . . . . . .

Caa and lower . . . . . . . . . . . . . . . . . . .

In or near default

. . . . . . . . . . . . . . . . .

65,550

15,335

8,752

1,343

153

68,858

15,294

8,316

1,146

130

21.0

4.7

2.5

0.4

—

55,508

13,184

7,474

1,809

343

56,305

12,003

6,461

1,425

312

24.7

5.3

2.9

0.6

0.1

Total fixed maturity securities . . . . . . . . .

$320,008

$327,284

100.0% $229,709

$227,642

100.0%

The following tables present the Company’s total fixed maturity securities, based on estimated fair value, by sector classification and by
NRSRO designation and the equivalent designations of the NAIC, except for certain structured securities, which are presented as described
above, that each designation is comprised of at December 31, 2010 and 2009:

Fixed Maturity Securities — by Sector & Credit Quality Rating at December 31, 2010

NAIC Rating

1

2

Rating Agency Designation:

Aaa/Aa/A

Baa

3

Ba

4

B

5

6

Caa and
Lower

In or Near
Default

Total
Estimated
Fair Value

(In millions)

U.S. corporate securities . . . . . . . . . . . . . . $ 46,754 $34,326 $ 7,635 $3,460 $ 353

$ 40

$ 92,568

Foreign corporate securities . . . . . . . . . . . .

39,652

24,414

RMBS(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . .

38,984
32,957

1,109
7,184

2,476

2,271
2,179

1,454

1,993
1,080

U.S. Treasury, agency and government

guaranteed securities . . . . . . . . . . . . . . .
CMBS(1) . . . . . . . . . . . . . . . . . . . . . . . . .

ABS(1)

. . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . .

Other fixed maturity securities . . . . . . . . . . .

33,304
19,385

13,136

9,368

—

—
665

435

722

3

—
363

338

32

—

—
205

120

—

4

173

331
—

—
56

226

7

—

9

45
—

—
1

35

—

—

68,178

44,733
43,400

33,304
20,675

14,290

10,129

7

Total fixed maturity securities . . . . . . . . . . $233,540 $68,858 $15,294 $8,316 $1,146

$130

$327,284

Percentage of total . . . . . . . . . . . . . . . . .

71.4%

21.0%

4.7%

2.5%

0.4%

—%

100.0%

NAIC Rating

Fixed Maturity Securities — by Sector & Credit Quality Rating at December 31, 2009
4

2

5

6

1

3

Rating Agency Designation:

Aaa/Aa/A

Baa

Ba

B

Caa and
Lower

In or Near
Default

(In millions)

Total
Estimated
Fair Value

U.S. corporate securities . . . . . . . . . . . . . . $ 31,848 $30,266 $ 6,319 $2,965 $ 616

$173

$ 72,187

Foreign corporate securities . . . . . . . . . . . .

16,678

17,393

RMBS(1) . . . . . . . . . . . . . . . . . . . . . . . . .

38,464

Foreign government securities . . . . . . . . . . .
U.S. Treasury, agency and government

guaranteed securities . . . . . . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . .

Other fixed maturity securities . . . . . . . . . . .

5,786

25,447

15,000
11,573

6,337

3

1,563

4,841

—

434
1,033

765

10

2,067

2,260

890

1,530

1,391

415

—

152
275

40

—

—

22
124

8

6

281

339

—

—

14
117

58

—

81

3

15

—

—
40

—

—

38,030

44,020

11,947

25,447

15,622
13,162

7,208

19

Total fixed maturity securities . . . . . . . . . . $151,136 $56,305 $12,003 $6,461 $1,425

$312

$227,642

Percentage of total . . . . . . . . . . . . . . . . .

66.4%

24.7%

5.3%

2.9%

0.6%

0.1%

100.0%

46

MetLife, Inc.

(1) Presented using the final rating from revised NAIC rating methodologies.

Fixed Maturity and Equity Securities Available-for-Sale. See “Investments — Fixed Maturity and Equity Securities Available-for-Sale” in
Note 3 of the Notes to the Consolidated Financial Statements for tables summarizing the cost or amortized cost, gross unrealized gains and
losses, including noncredit loss component of OTTI loss, and estimated fair value of fixed maturity and equity securities on a sector basis, and
selected information about certain fixed maturity securities held by the Company that were below investment grade or non-rated, non-income
producing, credit enhanced by financial guarantor insurers — by sector, and the ratings of the financial guarantor insurers providing the credit
enhancement at December 31, 2010 and 2009.

Concentrations of Credit Risk (Equity Securities).

The Company was not exposed to any significant concentrations of credit risk in its
equity securities portfolio of any single issuer greater than 10% of the Company’s equity, or 1% of total investments, at December 31, 2010
and 2009.

Concentrations of Credit Risk (Fixed Maturity Securities) — Summary. See “Investments— Fixed Maturity Securities Available-for-Sale
Concentrations” in Note 3 of the Notes to the Consolidated Financial Statements for a summary of the concentrations of credit risk related to
fixed maturity securities holdings.

Corporate Fixed Maturity Securities.

The Company maintains a diversified portfolio of corporate fixed maturity securities across
industries and issuers. This portfolio does not have exposure to any single issuer in excess of 1% of the total
investments. See “Invest-
ments — Fixed Maturity and Equity Securities Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity Securities) — U.S. and
Foreign Corporate Securities” in Note 3 of the Notes to the Consolidated Financial Statements for the tables that present the major industry
types that comprise the corporate fixed maturity securities holdings, the largest exposure to a single issuer and the combined holdings in the
ten issuers to which it had the largest exposure at December 31, 2010 and 2009.

Structured Securities.

The following table presents the types of structured securities and portion rated Aaa/AAA and portion rated NAIC

1 at:

December 31,

2010

2009

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

(In millions)

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,733

56.1% $44,020

60.5%

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,675
14,290

26.0
17.9

15,622
13,162

21.4
18.1

Total structured securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79,698

100.0% $72,804

100.0%

Ratings profile:

RMBS rated Aaa/AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36,085
RMBS rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,984

80.7% $35,626
87.1% $38,464

CMBS rated Aaa/AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,901

81.7% $13,355

CMBS rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,385
ABS rated Aaa/AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,411

93.7% $15,000
72.9% $ 9,354

ABS rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,136

91.9% $11,573

80.9%
87.4%

85.5%

96.0%
71.1%

87.9%

RMBS. See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity
Securities) — RMBS” in Note 3 of the Notes to the Consolidated Financial Statements for the tables that present the Company’s RMBS
holdings by security type and risk profile at December 31, 2010 and 2009.

The majority of RMBS held by the Company was rated Aaa/AAA by Moody’s, S&P or Fitch; and the majority was rated NAIC 1 by the NAIC at
December 31, 2010 and 2009, as presented above. The majority of the agency RMBS held by the Company was guaranteed or otherwise
supported by FNMA, FHLMC or GNMA. Non-agency RMBS includes prime and alternative residential mortgage loans (“Alt-A”) RMBS. Prime
residential mortgage lending includes the origination of residential mortgage loans to the most creditworthy borrowers with high quality credit
profiles. Alt-A is a classification of mortgage loans where the risk profile of the borrower falls between prime and sub-prime. Sub-prime
mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles. Included within Alt-A RMBS are
resecuritization of real estate mortgage investment conduit (“Re-REMIC”) securities. Re-REMIC Alt-A RMBS involve the pooling of previous
issues of Alt-A RMBS and restructuring the combined pools to create new senior and subordinated securities. The credit enhancement on the
senior tranches is improved through the resecuritization. The Company’s holdings are in senior tranches with significant credit enhancement.
The Company’s Alt-A securities portfolio has superior structure to the overall Alt-A market. At December 31, 2010 and 2009, the
Company’s Alt-A securities portfolio has no exposure to option adjustable rate mortgages (“ARMs”) and a minimal exposure to hybrid ARMs.
The Company’s Alt-A securities portfolio is comprised primarily of fixed rate mortgages which have performed better than both option ARMs
and hybrid ARMs in the overall Alt-A market. Additionally, 85% and 90% at December 31, 2010 and 2009, respectively, of the Company’s Alt-A
securities portfolio has super senior credit enhancement, which typically provides double the credit enhancement of a standard Aaa/AAA
rated fixed maturity security. See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Concentrations of Credit Risk
(Fixed Maturity Securities) — RMBS” in Note 3 of the Notes to Consolidated Financial Statements for a table that presents the estimated fair
value of Alt-A securities held by the Company by vintage year, net unrealized loss, portion of holdings rated Aa/AA or better by Moody’s, S&P
or Fitch, portion rated NAIC 1 by the NAIC, and portion of holdings that are backed by fixed rate collateral or hybrid ARM collateral at
December 31, 2010 and 2009. The Company’s holdings of Re-REMIC Alt-A RMBS reported within Alt-A RMBS were all rated NAIC 1 and were
$703 million and $782 million at estimated fair value at December 31, 2010 and 2009, respectively.

RMBS in which the present value of projected future cash flows expected to be collected is less than amortized cost are reviewed for
impairment in accordance with our impairment policy. Based upon the analysis of the Company’s exposure to RMBS, including Alt-A RMBS,

MetLife, Inc.

47

the Company expects to receive payments in accordance with the contractual terms of the securities that are considered temporarily
impaired.

CMBS.

There have been disruptions in the CMBS market due to market perceptions that default rates will increase in part as a result of
weakness in commercial real estate market fundamentals and in part to relaxed underwriting standards by some originators of commercial
mortgage loans within the more recent vintage years (i.e., 2006 and later). These factors caused a pull-back in market liquidity, increased
credit spreads and repricing of risk, which has led to higher levels of unrealized losses as compared to historical levels through the first quarter
of 2010. However, in the second quarter of 2010, market conditions continued to improve and interest rates continue to decrease, causing
our portfolio to be in a net unrealized gain position of 2% of amortized cost at December 31, 2010.

CMBS in which the present value of projected future cash flows expected to be collected is less than amortized cost are reviewed for
impairment in accordance with our impairment policy. Based upon the analysis of the Company’s exposure to CMBS, the Company expects to
receive payments in accordance with the contractual terms of the securities that are considered temporarily impaired.

The Company’s holdings in CMBS were $20.7 billion and $15.6 billion, at estimated fair value at December 31, 2010 and 2009,
respectively. See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity
Securities) — CMBS” in Note 3 of the Notes to the Consolidated Financial Statements for tables that present the amortized cost and
estimated fair value, rating agency designation by Moody’s, S&P, Fitch or Realpoint, LLC and holdings by vintage year of such securities held
by the Company at December 31, 2010 and 2009. The Company had no exposure to CMBS index securities at December 31, 2010 or 2009.
The Company’s holdings of commercial real estate collateralized debt obligations securities were $138 million and $111 million at estimated
fair value at December 31, 2010 and 2009, respectively. The weighted average credit enhancement of the Company’s CMBS holdings was
26% and 28% at December 31, 2010 and 2009, respectively. This credit enhancement percentage represents the current weighted average
estimated percentage of outstanding capital structure subordinated to the Company’s investment holding that is available to absorb losses
before the security incurs the first dollar of loss of principal. The credit protection does not include any equity interest or property value in
excess of outstanding debt.

ABS.

The Company’s ABS are diversified both by collateral type and by issuer. See “Investments — Fixed Maturity and Equity Securities
Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity Securities) — ABS” in Note 3 of the Notes to the Consolidated Financial
Statements for a table that presents the Company’s ABS by collateral type, portion rated Aaa/AAA, portion rated NAIC 1, and portion credit
enhanced held by the Company at December 31, 2010 and 2009.

The slowing U.S. housing market, greater use of affordable mortgage products and relaxed underwriting standards for some originators of
sub-prime mortgage loans have recently led to higher delinquency and loss rates, especially within the 2006 and 2007 vintage years. These
factors have caused a pull-back in market liquidity and repricing of risk, which has led to higher levels of unrealized losses on securities
levels. However, in 2010, market conditions improved, credit spreads
backed by sub-prime mortgage loans as compared to historical
narrowed on mortgage-backed and asset-backed securities and net unrealized losses on ABS backed by sub-prime mortgage loans
decreased from 36% to 22% of amortized cost from December 31, 2009 to December 31, 2010.

ABS in which the present value of projected future cash flows expected to be collected is less than amortized cost are reviewed for
impairment in accordance with our impairment policy. Based upon the analysis of the Company’s ABS, including sub-prime mortgage loans
through its exposure to ABS, the Company expects to receive payments in accordance with the contractual terms of the securities that are
considered temporarily impaired.

See “Investments— Fixed Maturity and Equity Securities Available-for-Sale — Concentrations of Credit Risk (Fixed Maturity Securities) —
ABS” in Note 3 of the Notes to the Consolidated Financial Statements for tables that present the Company’s holdings of ABS supported by
sub-prime mortgage loans by rating agency designation and by vintage year and by NAIC rating at December 31, 2010 and 2009.

The Company had ABS supported by sub-prime mortgage loans with estimated fair values of $1,119 million and $1,044 million and
unrealized losses of $317 million and $593 million at December 31, 2010 and 2009, respectively. Approximately 54% of this portfolio was
rated Aa or better, of which 88% was in vintage year 2005 and prior at December 31, 2010. Approximately 61% of this portfolio was rated Aa or
better, of which 91% was in vintage year 2005 and prior at December 31, 2009. These older vintages from 2005 and prior benefit from better
underwriting, improved enhancement levels and higher residential property price appreciation. All of the $1,119 million and $1,044 million of
ABS supported by sub-prime mortgage loans were classified as Level 3 fixed maturity securities in the fair value hierarchy at December 31,
2010 and 2009, respectively.

ABS also include collateralized debt obligations backed by sub-prime mortgage loans at an aggregate cost of $18 million with an
estimated fair value of $17 million at December 31, 2010 and an aggregate cost of $22 million with an estimated fair value of $8 million at
December 31, 2009.

Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment
See “Investments — Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment” in Note 3 of

the Notes to the
Consolidated Financial Statements for a discussion of the regular evaluation of available-for-sale securities holdings in accordance with
our impairment policy, whereby we evaluate whether such investments are other-than-temporarily impaired, new OTTI guidance adopted in
2009 and factors considered by security classification in the regular OTTI evaluation.

See “— Summary of Critical Accounting Estimates.”

Net Unrealized Investment Gains (Losses)
See “Investments — Net Unrealized Investment Gains (Losses)” in Note 3 of the Notes to the Consolidated Financial Statements for the
components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss) and the changes in net
unrealized investment gains (losses) at December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008,
respectively.

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss) of ($601) million at December 31,
2010, includes ($859) million recognized prior to January 1, 2010, ($212) million (($202) million, net of DAC) of noncredit OTTI
losses
recognized in the year ended December 31, 2010, $16 million transferred to retained earnings in connection with the adoption of guidance
related to the consolidation of VIEs (see Note 1 of the Notes to the Consolidated Financial Statements) for the year ended December 31, 2010,
$137 million related to securities sold for the year ended December 31, 2010, for which a noncredit OTTI loss was previously recognized in
accumulated other comprehensive income (loss) and $317 million of subsequent increases in estimated fair value during the year ended

48

MetLife, Inc.

December 31, 2010, on such securities for which a noncredit OTTI
income (loss).

loss was previously recognized in accumulated other comprehensive

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss) of ($859) million at December 31,
2009, includes ($126) million related to the transition adjustment recorded in 2009 upon the adoption of guidance on the recognition and
presentation of OTTI, ($939) million (($857) million, net of DAC) of noncredit OTTI losses recognized in the year ended December 31, 2009 (as
more fully described in Note 1 of the Notes to the Consolidated Financial Statements), $20 million related to securities sold during the year
ended December 31, 2009 for which a noncredit loss was previously recognized in accumulated other comprehensive income (loss) and
$186 million of subsequent increases in estimated fair value during the year ended December 31, 2009 on such securities for which a
noncredit OTTI

loss was previously recognized in accumulated other comprehensive income (loss).

Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale
See “Investments— Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale” in Note 3 of
the Notes to the Consolidated Financial Statements for the tables that present the cost or amortized cost, gross unrealized loss, including the
portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss) at December 31, 2010, gross
unrealized loss as a percentage of cost or amortized cost and number of securities for fixed maturity and equity securities where the estimated
fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at December 31, 2010 and 2009.

Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale
See “Investments — Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale” in
Note 3 of the Notes to the Consolidated Financial Statements for the tables that present the concentration by sector and industry of the
loss on fixed maturity
Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI
securities recognized in accumulated other comprehensive loss of $6.9 billion and $10.8 billion at December 31, 2010 and 2009,
respectively.

Evaluating Temporarily Impaired Available-for-Sale Securities
See “Investments— Fixed Maturity and Equity Securities Available-for-Sale — Evaluating Temporarily Impaired Available-for-Sale Secu-
rities” in Note 3 of the Notes to the Consolidated Financial Statements for a table that presents the Company’s fixed maturity and equity
securities each with a gross unrealized loss of greater than $10 million, the number of securities, total gross unrealized loss and percentage of
total gross unrealized loss at December 31, 2010 and 2009.

Fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million, decreased $2.5 billion during the year
ended December 31, 2010. The cause of the decline in, or improvement in, gross unrealized losses for the year ended December 31, 2010
was primarily attributable to a decrease in interest rates and narrowing of credit spreads. These securities were included in the Company’s
OTTI review process. Based upon the Company’s current evaluation of these securities in accordance with its impairment policy and the
Company’s current intentions and assessments (as applicable to the type of security) about holding, selling, and any requirements to sell
these securities, the Company has concluded that these securities are not other-than-temporarily impaired.

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

See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Evaluating Temporarily Impaired Available-for-Sale Secu-
rities” in Note 3 of the Notes to the Consolidated Financial Statements for a table that presents certain information about the Company’s equity
securities available-for-sale with a gross unrealized loss of 20% or more at December 31, 2010.

In connection with the equity securities impairment review process at December 31, 2010, the Company evaluated its holdings in non-
redeemable preferred stock, particularly those of financial services companies. The Company considered several factors including whether
there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred stock with a severe
or an extended unrealized loss. The Company also considered whether any non-redeemable preferred stock with an unrealized loss held by
the Company, regardless of credit rating, have deferred any dividend payments. No such dividend payments had been deferred.

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

Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash
flows expected to be collected), changes in credit rating, changes in collateral valuation, changes in interest rates and changes in credit
spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTI may be incurred in upcoming quarters.

Net Investment Gains (Losses) Including OTTI Losses Recognized in Earnings
Effective April 1, 2009, the Company adopted guidance on the recognition and presentation of OTTI that amends the methodology to
determine for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how OTTI
losses that are
charged to earnings are measured. There was no change in the methodology for identification and measurement of OTTI losses charged to
earnings for impaired equity securities.

See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Net Investment Gains (Losses)” in Note 3 of the Notes to
the Consolidated Financial Statements for a table that presents proceeds from sales or disposals of fixed maturity and equity securities and
the components of fixed maturity and equity securities net investment gains (losses) for the years ended December 31, 2010, 2009 and 2008,
respectively.

Overview of Fixed Maturity and Equity Security OTTI Losses Recognized in Earnings.

Impairments of fixed maturity and equity securities
were $484 million, $1.9 billion and $1.7 billion for the years ended December 31, 2010, 2009 and 2008, respectively. Impairments of fixed
maturity securities were $470 million, $1.5 billion and $1.3 billion for the years ended December 31, 2010, 2009 and 2008, respectively.

MetLife, Inc.

49

Impairments of equity securities were $14 million, $400 million and $430 million for the years ended December 31, 2010, 2009 and 2008,
respectively.

The Company’s credit-related impairments of fixed maturity securities were $423 million, $1.1 billion and $1.1 billion for the years ended

December 31, 2010, 2009 and 2008, respectively.

The Company’s three largest impairments totaled $105 million, $508 million and $528 million for the years ended December 31, 2010,

2009 and 2008, respectively.

The Company records OTTI losses charged to earnings within net investment gains (losses) and adjusts the cost basis of the fixed maturity

and equity securities accordingly. The Company does not change the revised cost basis for subsequent recoveries in value.

The Company sold or disposed of fixed maturity and equity securities at a loss that had an estimated fair value of $18.2 billion, $10.2 billion
and $29.9 billion for the years ended December 31, 2010, 2009 and 2008, respectively. Gross losses excluding impairments for fixed
maturity and equity securities were $628 million, $1.2 billion and $1.8 billion for the years ended December 31, 2010, 2009 and 2008,
respectively.

Explanations of changes in fixed maturity and equity securities impairments are as follows:
(cid:129) Year Ended December 31, 2010 compared to the Year Ended December 31, 2009 — Overall OTTI losses recognized in earnings on
fixed maturity and equity securities were $484 million for the current year as compared to $1.9 billion in the prior year. Improving or
stabilizing market conditions across all sectors and industries, particularly the financial services industry, as compared to the prior year
when there was significant stress in the global financial markets, resulted in a higher level of impairments in fixed maturity and equity
securities in the prior year. The most significant decrease in the current year, as compared to the prior year, was in the Company’s
financial services industry holdings which comprised $799 million in fixed maturity and equity security impairments in the prior year, as
compared to $129 million in impairments in the current year. Of the $799 million in financial services industry impairments in the year,
$340 million were in equity securities, of which $310 million were in financial services industry perpetual hybrid securities which were
impaired as a result of deterioration in the credit rating of the issuer to below investment grade and due to a severe and extended
unrealized loss position on these securities. Impairments in the current year were concentrated in the RMBS, ABS and CMBS sectors
reflecting current economic conditions including higher unemployment levels and continued weakness within the real estate markets.
Of the fixed maturity and equity securities impairments of $484 million and $1,900 million in the years ended December 31, 2010 and
2009, respectively, $287 million and $449 million, or 59% and 24% respectively, were in the Company’s RMBS, ABS and CMBS
holdings.

(cid:129) Year Ended December 31, 2009 compared to the Year Ended December 31, 2008 — Overall OTTI losses recognized in earnings on
fixed maturity and equity securities were $1.9 billion for the year ended December 31, 2009 as compared to $1.7 billion in the prior year.
The stress in the global financial markets that caused a significant increase in impairments in 2008 as compared to 2007, continued into
2009. Significant impairments were incurred in several industry sectors in 2009, including the financial services industry, but to a lesser
degree in the financial services industry sector than in 2008. In 2008 certain financial
institutions entered bankruptcy, entered FDIC
receivership or received significant government capital infusions causing 2008 financial services industry impairments to be higher than
in 2009. Of the fixed maturity and equity securities impairments of $1,900 million in 2009, $799 million were concentrated in the
Company’s financial services industry holdings and were comprised of $459 million in impairments on fixed maturity securities and
$340 million in impairments on equity securities, and the $799 million included $623 million of perpetual hybrid securities, which were
comprised of $313 million on securities classified as fixed maturity securities and $310 million on securities classified as non-
redeemable preferred stock. Overall
impairments in 2009 were higher due to increased fixed maturity security impairments across
several industry sectors, which more than offset a reduction in impairments in the financial services industry sector. Impairments across
industry sectors increased in 2009 due to increased financial restructurings, bankruptcy filings, ratings downgrades,
these several
collateral deterioration or difficult operating environments of
the challenging economic environment.
Impairments on perpetual hybrid securities in 2009 were a result of deterioration in the credit rating of the issuer to below investment
grade and due to a severe and extended unrealized loss position.

the issuers as a result of

See “Investments — Fixed Maturity and Equity Securities Available-for-Sale — Net Investment Gains (Losses)” in Note 3 of the Notes to
the Consolidated Financial Statements for tables that present fixed maturity security OTTI
losses recognized in earnings by sector and by
industry within the U.S. and foreign corporate securities sector for the years ended December 31, 2010, 2009 and 2008, respectively; and
equity security OTTI
losses recognized in earnings by sector and industry for the years ended December 31, 2010, 2009 and 2008,
respectively.

Future Impairments.

Future OTTI will depend primarily on economic fundamentals, issuer performance, changes in credit ratings,
changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and other of the above
factors deteriorate, additional OTTI may be incurred in upcoming periods. See also “— Investments — Fixed Maturity and Equity Securities
Available-for-Sale — Net Unrealized Investment Gains (Losses).”

Credit Loss Rollforward — Rollforward of the Cumulative Credit Loss Component of OTTI Loss Recognized in Earn-
ings on Fixed Maturity Securities Still Held for Which a Portion of the OTTI Loss was Recognized in Other Compre-
hensive Income (Loss)
See “Investments — Credit Loss Rollforward — Rollforward of the Cumulative Credit Loss Component of OTTI Loss Recognized in
Earnings on Fixed Maturity Securities Still Held for Which a Portion of the OTTI Loss was Recognized in Other Comprehensive Income (Loss)”
in Note 3 of the Notes to the Consolidated Financial Statements for the table that presents a rollforward of the cumulative credit loss
component of OTTI loss recognized in earnings on fixed maturity securities still held by the Company at December 31, 2010 and 2009 for
which a portion of the OTTI loss was recognized in other comprehensive income (loss) for the years ended December 31, 2010 and 2009.

Securities Lending
The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and
short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. The Company generally obtains
collateral, generally cash, in an amount equal to 102% of the estimated fair value of the loaned securities, which is obtained at the inception of
a loan and maintained at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be

50

MetLife, Inc.

sold or repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control. These
transactions are treated as financing arrangements and the associated liability recorded at the amount of the cash received.

See “Investments — Securities Lending” in Note 3 of the Notes to the Consolidated Financial Statements for information regarding the

Company’s securities lending program.

The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2010 was $2,699 million, of which
$2,317 million were U.S. Treasury, agency and government guaranteed securities which, if put to the Company, can be immediately sold to
satisfy the cash requirements. The remainder of the securities on loan were primarily U.S. Treasury, agency and government guaranteed
securities, and very liquid RMBS. The U.S. Treasury securities on loan are primarily holdings of on-the-run U.S. Treasury securities, the most
liquid U.S. Treasury securities available. If these high quality securities that are on loan are put back to the Company, the proceeds from
immediately selling these securities can be used to satisfy the related cash requirements. The reinvestment portfolio acquired with the cash
collateral consisted principally of
fixed maturity securities (including RMBS, U.S. corporate, U.S. Treasury, agency and government
guaranteed, and ABS). If the on loan securities or the reinvestment portfolio become less liquid, the Company has the liquidity resources
of most of its general account available to meet any potential cash demands when securities are put back to the Company.

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged,
unless the counterparty is in default, and is not reflected in the consolidated financial statements. Separately, the Company had $49 million
and $46 million, at estimated fair value, of cash and security collateral on deposit from a counterparty to secure its interest in a pooled
investment that is held by a third-party trustee, as custodian, at December 31, 2010 and 2009, respectively. This pooled investment is
included within fixed maturity securities and had an estimated fair value of $49 million and $51 million at December 31, 2010 and 2009,
respectively.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral
See “Investments — Invested Assets on Deposit, Held in Trust and Pledged as Collateral” in Note 3 of the Notes to the Consolidated
Financial Statements for a table of the invested assets on deposit, invested assets held in trust and invested assets pledged as collateral at
December 31, 2010 and 2009.

See also “— Investments — Securities Lending” for the amount of the Company’s cash and invested assets received from and due back

to counterparties pursuant to its securities lending program.

Trading and Other Securities
The Company has a trading securities portfolio, principally invested in fixed maturity securities, to support investment strategies that
involve the active and frequent purchase and sale of securities (“Actively Traded Securities”) and the execution of short sale agreements.
Trading and other securities also include securities for which the FVO has been elected (“FVO Securities”). FVO Securities include certain
fixed maturity and equity securities held for investment by the general account to support asset and liability matching strategies for certain
insurance products. FVO Securities also include contractholder-directed investments supporting unit-linked variable annuity type liabilities
which do not qualify for presentation as separate account summary total assets and liabilities. These investments are primarily mutual funds,
and to a lesser extent, fixed maturity and equity securities, short-term investments and cash and cash equivalents. The investment returns on
these investments inure to contractholders and are offset by a corresponding change in PABs through interest credited to PABs. Changes in
estimated fair value of such trading and other securities subsequent to purchase are included in net investment income. FVO Securities also
include securities held by CSEs (former qualifying special purpose entities) with changes in estimated fair value subsequent to consolidation
included in net investment gains (losses). Trading and other securities were $18.6 billion and $2.4 billion, or 3.9% and 0.7% of total cash and
invested assets at estimated fair value, at December 31, 2010 and 2009, respectively. The significant increase in trading and other securities
in 2010 was driven primarily by inclusion of ALICO’s contractholder-directed unit-linked investments, and to a lesser extent, growth in this
book of business that occurred during the ten month period ended October 31, 2010 prior to the Acquisition. See “Investments — Trading
and Other Securities” in Note 3 of the Notes to the Consolidated Financial Statements for tables which present information about the Actively
Traded Securities and FVO Securities, related short sale agreement liabilities, investments pledged to secure short sale agreement liabilities,
net investment income, changes in estimated fair value included in net investment income for trading and other securities and changes in
estimated fair value included in net investment gains (losses) for FVO Securities held by CSEs at December 31, 2010 and 2009 and for the
years ended December 31, 2010, 2009 and 2008.

Trading and other securities and trading (short sale agreement) liabilities, measured at estimated fair value on a recurring basis and their

corresponding fair value hierarchy, are presented as follows:

Quoted prices in active markets for identical assets and liabilities (Level 1)

. . . . . . . $ 6,270

33.7% $46

100.0%

Significant other observable inputs (Level 2)(1)
Significant unobservable inputs (Level 3)

. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,497
822

61.9
4.4

—
—

—
—

Total estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,589

100.0% $46

100.0%

(1) All FVO Securities held by CSEs are classified as Level 2.

December 31, 2010

Trading and Other
Securities

Trading
Liabilities

(In millions)

MetLife, Inc.

51

A rollforward of the fair value measurements for trading and other securities measured at estimated fair value on a recurring basis using

significant unobservable (Level 3) inputs for the year ended December 31, 2010, is as follows:

Balance, at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 83

Total realized/unrealized gains (losses) included in:

Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases, sales, issuances and settlements(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)

727

19

Balance, at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$822

Year Ended
December 31, 2010

(In millions)

(1)

Includes securities acquired from ALICO of $582 million.
See “— Summary of Critical Accounting Estimates” for further information on the estimates and assumptions that affect the amounts

reported above.

Mortgage Loans
The Company’s mortgage loans are principally collateralized by commercial real estate, agricultural real estate and residential properties.
The carrying value of mortgage loans was $62.4 billion and $50.9 billion, or 13.1% and 15.1% of total cash and invested assets at
December 31, 2010 and 2009, respectively. See “Investments — Mortgage Loans” in Note 3 of the Notes to the Consolidated Financial
Statements for a table that presents the Company’s mortgage loans held-for-investment of $59.1 billion and $48.2 billion by portfolio segment
at December 31, 2010 and 2009, respectively, as well as the components of the mortgage loans held-for-sale of $3.3 billion and $2.7 billion at
December 31, 2010 and 2009, respectively. The information presented on Mortgage Loans herein excludes the effects of consolidating
under GAAP certain VIEs that are treated as CSEs. Such amounts are presented in the aforementioned table. See “Investments — Mortgage
Loans” in Note 3 of the Notes to the Consolidated Financial Statements.

Commercial Mortgage Loans by Geographic Region and Property Type. Commercial mortgage loans are the most significant component
of the mortgage loan invested asset class as it represents 72% of total mortgage loans held-for-investment (excluding the effects of
consolidating under GAAP certain VIEs that are treated as CSEs) at both December 31, 2010 and 2009. The Company diversifies its
commercial mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. Additionally, the
Company manages risk, when originating commercial and agricultural mortgage loans, by generally lending only up to 75% of the estimated
fair value of the underlying real estate. The tables below present the diversification across geographic regions and property types for
commercial mortgage loans at:

December 31,

2010

2009

Amount

% of
Total

Amount

% of
Total

(In millions)

Region:

Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,974

23.7% $ 8,822

25.1%

South Atlantic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle Atlantic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

West South Central . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
East North Central . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

New England . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mountain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West North Central

East South Central

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,016
6,484

4,216

3,266
3,066

1,531

884
666

461

256

21.2
17.1

11.2

8.6
8.1

4.1

2.3
1.8

1.2

0.7

7,460
6,042

3,620

2,916
2,531

1,448

959
675

449

254

21.2
17.2

10.3

8.3
7.2

4.1

2.7
1.9

1.3

0.7

Total recorded investment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,820

100.0% 35,176

100.0%

Less valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

562

Carrying value, net of valuation allowances . . . . . . . . . . . . . . . . . . . . . . $37,258

589

$34,587

52

MetLife, Inc.

December 31,

2010

2009

Amount

% of
Total

Amount

% of
Total

(In millions)

Property Type:

Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,857
9,215
Retail

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44.6% $15,205
7,964
24.3

Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hotel

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,630

3,089

2,910
2,119

9.6

8.2

7.7
5.6

3,731

3,117

2,797
2,362

43.2%
22.6

10.6

8.9

8.0
6.7

Total recorded investment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,820

100.0% 35,176

100.0%

Less valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

562

Carrying value, net of valuation allowances . . . . . . . . . . . . . . . . . . . . . . $37,258

589

$34,587

Mortgage Loan Credit Quality — Restructured, Potentially Delinquent, Delinquent or Under Foreclosure.

The Company monitors its
mortgage loan investments on an ongoing basis, including reviewing loans that are restructured, potentially delinquent, and delinquent or
under foreclosure. These loan classifications are consistent with those used in industry practice.

The Company defines restructured mortgage loans as loans in which the Company, for economic or legal reasons related to the debtor’s
financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company defines potentially delinquent loans
as loans that, in management’s opinion, have a high probability of becoming delinquent in the near term. The Company defines delinquent
mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial mortgage
loans — 60 days past due; agricultural mortgage loans — 90 days past due; and residential mortgage loans — 60 days past due. The
Company defines mortgage loans under foreclosure as loans in which foreclosure proceedings have formally commenced.

The following table presents the recorded investment and valuation allowance for all mortgage loans held-for-investment distributed by the

above stated loan classifications at:

2010

2009

December 31,

Recorded
Investment

% of
Total

Valuation
Allowance

% of
Recorded
Investment

Recorded
Investment

% of
Total

Valuation
Allowance

% of
Recorded
Investment

(In millions)

Commercial:
Performing . . . . . . . . . . . . . . . . . . . . .

Restructured . . . . . . . . . . . . . . . . . . . .

Potentially delinquent

. . . . . . . . . . . . . .

Delinquent or under foreclosure . . . . . . . .

$37,489

99.1% $528

1.4% $35,066

99.7% $548

93

180

58

0.2

0.5

0.2

6

28

—

6.5%

15.6%

—%

—

102

8

—

0.3

—

—

41

—

Total . . . . . . . . . . . . . . . . . . . . . . . .

$37,820 100.0% $562

1.5% $35,176 100.0% $589

Agricultural(1):

Performing . . . . . . . . . . . . . . . . . . . . .
Restructured . . . . . . . . . . . . . . . . . . . .

$12,486
33

97.9% $ 35
8

0.3

0.3% $11,950
36

24.2%

97.5% $ 33
10

0.3

Potentially delinquent

. . . . . . . . . . . . . .

Delinquent or under foreclosure . . . . . . . .

62

170

0.5

1.3

11

34

17.7%

20.0%

128

141

1.0

1.2

34

38

1.6%

—%

40.2%

—%

1.7%

0.3%
27.8%

26.6%

27.0%

Total . . . . . . . . . . . . . . . . . . . . . . . .

$12,751 100.0% $ 88

0.7% $12,255 100.0% $115

0.9%

Residential(2):

Performing . . . . . . . . . . . . . . . . . . . . .

$ 2,221

96.2% $ 12

0.5% $ 1,389

94.4% $ 16

Restructured . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
Potentially delinquent

Delinquent or under foreclosure . . . . . . . .

4
4

79

0.2
0.2

3.4

—
—

2

—%
—%

2.5%

1
10

71

0.1
0.7

4.8

—
—

1

Total . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,308 100.0% $ 14

0.6% $ 1,471 100.0% $ 17

1.2%

—%
—%

1.4%

1.2%

(1) Of the $12.8 billion of agricultural mortgage loans outstanding at December 31, 2010, 53% were subject to rate resets prior to maturity. A

substantial portion of these mortgage loans have been successfully renegotiated and remain outstanding to maturity.

(2) Residential mortgage loans held-for-investment consist primarily of first lien residential mortgage loans, and to a much lesser extent,

second lien residential mortgage loans and home equity lines of credit.
See “Investments — Mortgage Loans” in Note 3 of the Notes to the Consolidated Financial Statements for tables that present, by portfolio
segment, mortgage loans by credit quality indicator and impaired loans, as well as information on past due and nonaccrual mortgage loans for
the year ended December 31, 2010.

MetLife, Inc.

53

Mortgage Loan Credit Quality — Monitoring Process — Commercial and Agricultural Mortgage Loans.

The Company reviews all
commercial mortgage loans on an ongoing basis. These reviews may include an analysis of the property financial statements and rent
roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt
service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are
classified as restructured, potentially delinquent, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt
service coverage ratios. The monitoring process for agricultural mortgage loans is generally similar, with a focus on higher risk loans, such as
loans with higher loan-to-value ratios, including reviews on a geographic and property type basis.

Loan-to-value ratios and debt service coverage ratios are common measures in the assessment of the quality of commercial mortgage
loans. Loan-to-value ratios are a common measure in the assessment of the quality of agricultural mortgage loans. Loan-to-value ratios
compare the amount of the loan to the estimated fair value of the underlying collateral. A loan-to-value ratio greater than 100% indicates that
the loan amount is greater than the collateral value. A loan-to-value ratio of less than 100% indicates an excess of collateral value over the loan
amount. The debt service coverage ratio compares a property’s net operating income to amounts needed to service the principal and interest
due under the loan. For commercial mortgage loans, the average loan-to-value ratio was 66% and 68% at December 31, 2010 and 2009,
respectively, and the average debt service coverage ratio was 2.4x, as compared to 2.2x at December 31, 2009. For agricultural mortgage
loans, the average loan-to-value ratio was 49% at both December 31, 2010 and 2009, respectively. The values utilized in calculating these
ratios are developed in connection with our review of the commercial and agricultural mortgage loans, and are updated routinely, including a
periodic quality rating process and an evaluation of the estimated fair value of the underlying collateral.

Mortgage Loan Credit Quality — Monitoring Process — Residential Mortgage Loans.

The Company has a conservative residential
mortgage loan portfolio and does not hold any option ARMs, sub-prime or low teaser rate. Higher risk loans include those that are classified as
restructured, potentially delinquent, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and interest-only loans. The
Company’s investment in residential junior lien loans and residential mortgage loans with a loan-to-value ratio of 80% or more was $95 million
and $76 million at December 31, 2010 and 2009, respectively, and the majority of the higher loan-to-value residential mortgage loans have
mortgage insurance coverage which reduces the loan-to-value ratio to less than 80%. Additionally, the Company’s investment in traditional
residential

interest-only mortgage loans was $389 million and $323 million at December 31, 2010 and 2009, respectively.

Mortgage Loan Valuation Allowances.

The Company’s valuation allowances are established both on a loan specific basis for those loans
considered impaired where a property specific or market specific risk has been identified that could likely result in a future loss, as well as for
pools of loans with similar risk characteristics where a property specific or market specific risk has not been identified, but for which the
Company expects to incur a loss. Accordingly, a valuation allowance is provided to absorb these estimated probable credit losses. The
Company records additions to and decreases in its valuation allowances and gains and losses from the sale of loans in net investment gains
(losses).

The Company records valuation allowances for loans considered to be impaired when it is probable that, based upon current information
and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Based on the facts and
circumstances of the individual loans being impaired, loan specific valuation allowances are established for the excess carrying value of the
loan over either: (i) the present value of expected future cash flows discounted at the loan’s original effective interest rate; (ii) the estimated fair
value of the loan’s underlying collateral
if the loan is in the process of foreclosure or otherwise collateral dependent; or (iii) the loan’s
observable market price.

The Company also establishes valuation allowances for loan losses for pools of loans with similar risk characteristics, such as property
types, loan-to-value ratios and debt service coverage ratios when, based on past experience, it is probable that a credit event has occurred
and the amount of loss can be reasonably estimated. These valuation allowances are based on loan risk characteristics, historical default
rates and loss severities, real estate market fundamentals and outlook, as well as, other relevant factors.

The determination of the amount of, and additions or decreases to, valuation allowances is based upon the Company’s periodic evaluation
and assessment of known and inherent risks associated with its loan portfolios. Such evaluations and assessments are based upon several
factors, including the Company’s experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk
characteristics. These evaluations and assessments are revised as conditions change and new information becomes available. We update
our evaluations regularly, which can cause the valuation allowances to increase or decrease over time as such evaluations are revised.
Negative credit migration including an actual or expected increase in the level of problem loans will result in an increase in the valuation
allowance. Positive credit migration including an actual or expected decrease in the level of problem loans will result in a decrease in the
valuation allowance. Such changes in the valuation allowance are recorded in net investment gains (losses).

See “Investments — Mortgage Loans” in Note 3 of the Notes to the Consolidated Financial Statements for a table that presents the activity
in the Company’s valuation allowances, by portfolio segment, for the years ended December 31, 2010, 2009 and 2008, respectively; and for
tables that present the Company’s valuation allowances, by type of credit loss, by portfolio segment, at December 31, 2010 and 2009,
respectively.

The Company held $197 million and $210 million in mortgage loans which are carried at estimated fair value based on the value of the
underlying collateral or independent broker quotations, if lower, of which $164 million and $202 million relate to impaired mortgage loans
held-for-investment and $33 million and $8 million to certain mortgage loans held-for-sale, at December 31, 2010 and 2009, respectively.
These impaired mortgage loans were recorded at estimated fair value and represent a nonrecurring fair value measurement. The estimated fair
value is categorized as Level 3. Included within net investment gains (losses) for such impaired mortgage loans were net impairments of
$17 million and $93 million for the years ended December 31, 2010 and 2009, respectively. Subsequent improvements in estimated fair value
on previously impaired loans recorded through a reduction in the previously established provision to the valuation allowance are reported as a
(release) above.

Real Estate and Real Estate Joint Ventures
The Company diversifies its real estate investments by both geographic region and property type to reduce risk of concentration. Of the
Company’s real estate investments, 88% are located in the U.S. with the remaining 12% located outside the U.S., at December 31, 2010. The
carrying value of the Company’s real estate investments was $8.0 billion, or 1.7%, and $6.9 billion, or 2.0%, of total cash and invested assets
at December 31, 2010 and 2009, respectively. See “Investments — Real Estate” in Note 3 of the Notes to the Consolidated Financial

54

MetLife, Inc.

Statements for tables that present the Company’s real estate investments by investment strategy and by property type at December 31, 2010
and 2009.

Properties acquired through foreclosure were $165 million, $127 million and less than $1 million for the years ended December 31, 2010,
2009 and 2008, respectively, and includes commercial, agricultural and residential properties. After the Company acquires properties
through foreclosure, it evaluates whether the property is appropriate for retention in its traditional real estate portfolio. Foreclosed real estate
held at December 31, 2010 and 2009 includes those properties the Company has not selected for retention in its traditional real estate
portfolio and which do not meet the criteria to be classified as held-for-sale.

Impairments recognized on real estate held-for-investment were $48 million, $160 million and $20 million for the years ended Decem-
ber 31, 2010, 2009 and 2008, respectively. Impairments recognized on real estate held-for-sale were $1 million for the year ended
December 31, 2010. There were no impairments recognized on real estate held-for-sale for each of the years ended December 31, 2009 and
2008. The Company’s carrying value of real estate held-for-sale has been reduced by impairments recorded prior to 2009 of $1 million at both
December 31, 2010 and 2009. The carrying value of non-income producing real estate was $137 million, $76 million and $28 million at
December 31, 2010, 2009 and 2008, respectively.

The impaired cost method basis real estate joint ventures were recorded at estimated fair value and represent a non-recurring fair value
measurement. The estimated fair value was categorized as Level 3. Impairments to estimated fair value for such cost method basis real estate
joint ventures of $25 million, $82 million, and $0 for the years ended December 31, 2010, 2009 and 2008, respectively, were recognized
within net investment gains (losses) and are included in the $48 million, $160 million and $20 million of impairments on real estate investments
held-for-investment for the years ended December 31, 2010, 2009 and 2008, respectively. The estimated fair value of the impaired cost
method real estate joint ventures after these impairments was $8 million and $93 million at December 31, 2010 and 2009, respectively.

Other Limited Partnership Interests
The carrying value of other limited partnership interests (which primarily represent ownership interests in pooled investment funds that
principally make private equity investments in companies in the U.S. and overseas) was $6.4 billion and $5.5 billion, or 1.3% and 1.6% of total
cash and invested assets at December 31, 2010 and 2009, respectively. Included within other limited partnership interests were $1.0 billion,
at both December 31, 2010 and 2009, of investments in hedge funds.

Impairments on cost basis limited partnership interests are recognized at estimated fair value determined from information provided in the
financial statements of the underlying other limited partnership interests in the period in which the impairment is recognized. Consistent with
equity securities, greater weight and consideration is given in the other limited partnership interests impairment review process to the severity
and duration of unrealized losses on such other limited partnership interests holdings. Impairments to estimated fair value for such other
limited partnership interests of $12 million, $354 million and $105 million for the years ended December 31, 2010, 2009 and 2008,
respectively, were recognized within net investment gains (losses). The estimated fair value of the impaired other limited partnership interests
after these impairments was $23 million, $561 million and $137 million at December 31, 2010, 2009 and 2008, respectively. These
impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited
activity and price transparency inherent in the market for such investments.

Other Invested Assets
See “Investments — Other Invested Assets” in Note 3 of the Notes to the Consolidated Financial Statements for a table that presents the

Company’s other invested assets by type at December 31, 2010 and 2009 and related information.

Short-term Investments
The carrying value of short-term investments, which include investments with remaining maturities of one year or less, but greater than
three months, at the time of purchase was $9.4 billion and $8.4 billion, or 2.0% and 2.5% of total cash and invested assets at December 31,
2010 and 2009, respectively. The Company is exposed to concentrations of credit risk related to securities of the U.S. government and
certain U.S. government agencies included within short-term investments, which were $4.0 billion and $7.5 billion at December 31, 2010 and
2009, respectively.

Cash Equivalents
The carrying value of cash equivalents, which includes investments with an original or remaining maturity of three months or less, at the
time of purchase was $9.6 billion and $8.4 billion at December 31, 2010 and 2009, respectively. The Company is exposed to concentrations
of credit risk related to securities of the U.S. government and certain U.S. government agencies included within cash equivalents, which were
$5.8 billion and $6.0 billion at December 31, 2010 and 2009, respectively.

Derivative Financial Instruments
Derivatives.

The Company is exposed to various risks relating to its ongoing business operations, including interest rate risk, foreign
currency risk, credit risk, and equity market risk. The Company uses a variety of strategies to manage these risks, including the use of
derivative instruments. See Note 4 of the Notes to Consolidated Financial Statements for:

(cid:129) A comprehensive description of the nature of the Company’s derivative instruments, including the strategies for which derivatives are

used in managing various risks.

(cid:129) Information about the notional amount, estimated fair value, and primary underlying risk exposure of the Company’s derivative financial

instruments, excluding embedded derivatives held at December 31, 2010 and 2009.

Hedging. See Note 4 of the Notes to Consolidated Financial Statements for information about:
(cid:129) The notional amount and estimated fair value of derivatives and non-derivative instruments designated as hedging instruments by type

of hedge designation at December 31, 2010 and 2009.

(cid:129) The notional amount and estimated fair value of derivatives that are not designated or do not qualify as hedging instruments by derivative

type at December 31, 2010 and 2009.

(cid:129) The statement of operations effects of derivatives in cash flow, fair value, or non-qualifying hedge relationships for the years ended

December 31, 2010, 2009, and 2008.

See “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures — Hedging Activities” for

more information about the Company’s use of derivatives by major hedge program.

MetLife, Inc.

55

Fair Value Hierarchy. Derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy, are

presented as follows:

December 31, 2010

Derivative
Assets

Derivative
Liabilities

(In millions)

Quoted prices in active markets for identical assets and liabilities (Level 1) . . . . . . . . . $ 156
7,176
Significant other observable inputs (Level 2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Significant unobservable inputs (Level 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

445

2% $

92

6

45
4,245

272

1%

93

6

Total estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,777

100% $4,562

100%

The valuation of Level 3 derivatives involves the use of significant unobservable inputs and generally requires a higher degree of
management judgment or estimation than the valuations of Level 1 and Level 2 derivatives. Although Level 3 inputs are based on assumptions
deemed appropriate given the circumstances and are assumed to be consistent with what other market participants would use when pricing
such instruments, the use of different inputs or methodologies could have a material effect on the estimated fair value of Level 3 derivatives
and could materially affect net income.

Derivatives categorized as Level 3 at December 31, 2010 include: interest rate forwards with maturities which extend beyond the
observable portion of the yield curve; interest rate lock commitments with certain unobservable inputs, including pull-through rates; equity
variance swaps with unobservable volatility inputs or that are priced via independent broker quotations; foreign currency swaps which are
cancelable and priced through independent broker quotations; interest rate swaps with maturities which extend beyond the observable
portion of the yield curve; credit default swaps based upon baskets of credits having unobservable credit correlations, as well as credit default
swaps with maturities which extend beyond the observable portion of the credit curves and credit default swaps priced through independent
broker quotes; foreign currency forwards priced via independent broker quotations or with liquidity adjustments; implied volatility swaps with
unobservable volatility inputs or that are priced via independent broker quotations; equity options with unobservable volatility inputs or that are
priced via independent broker quotations; currency options based upon baskets of currencies having unobservable currency correlations;
and credit forwards having unobservable repurchase rates.

At December 31, 2010 and 2009, 2.0% and 5.5%, respectively, of the net derivative estimated fair value was priced via independent

broker quotations.

A rollforward of the fair value measurements for derivatives measured at estimated fair value on a recurring basis using significant

unobservable (Level 3) inputs for the year ended December 31, 2010 is as follows:

Year Ended
December 31, 2010

(In millions)

Balance, at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$356

Total realized/unrealized gains (losses) included in:

Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)

(81)
(75)

(22)

Balance, at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$173

See “— Summary of Critical Accounting Estimates — Derivative Financial

Instruments” for further information on the estimates and

assumptions that affect the amounts reported above.

Credit Risk. See Note 4 of the Notes to Consolidated Financial Statements for information about how the Company manages credit risk

related to its freestanding derivatives, including the use of master netting agreements and collateral arrangements.

Credit Derivatives. See Note 4 of the Notes to Consolidated Financial Statements for information about the estimated fair value and

maximum amount at risk related to the Company’s written credit default swaps.

Embedded Derivatives.

The embedded derivatives measured at estimated fair value on a recurring basis and their corresponding fair

value hierarchy, are presented as follows:

Quoted prices in active markets for identical assets and liabilities (Level 1) . . . . . . . . $ —
—
Significant other observable inputs (Level 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(In millions)

—% $ —
11
—

—%
—

Significant unobservable inputs (Level 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

185

100

2,623

100

Total estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185

100% $2,634

100%

December 31, 2010
Net Embedded Derivatives Within

Asset Host
Contracts

Liability Host
Contracts

56

MetLife, Inc.

A rollforward of the fair value measurements for net embedded derivatives measured at estimated fair value on a recurring basis using

significant unobservable (Level 3) inputs is as follows:

Year Ended
December 31, 2010

(In millions)

Balance, at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(1,455)

Total realized/unrealized gains (losses) included in:

Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases, sales, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(335)

(226)

(422)
—

Balance, at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(2,438)

The valuation of guaranteed minimum benefits includes an adjustment for nonperformance risk. Included in net derivative gains (losses) for
the years ended December 31, 2010 and 2009 were gains (losses) of ($96) million and ($1,932) million, respectively, in connection with this
adjustment. These amounts are net of a loss of $955 million relating to a refinement for estimating nonperformance risk in fair value
measurements implemented at June 30, 2010. See “— Summary of Critical Accounting Estimates.”

See “— Summary of Critical Accounting Estimates — Embedded Derivatives” for further information on the estimates and assumptions

that affect the amounts reported above.

Off-Balance Sheet Arrangements

Commitments to Fund Partnership Investments
The Company makes commitments to fund partnership investments in the normal course of business for the purpose of enhancing the
Company’s total return on its investment portfolio. The amounts of these unfunded commitments were $3.8 billion and $4.1 billion at
December 31, 2010 and 2009, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five
years.

Mortgage Loan Commitments
The Company has issued interest rate lock commitments on certain residential mortgage loan applications totaling $2.5 billion and
$2.7 billion at December 31, 2010 and 2009, respectively. The Company intends to sell the majority of these originated residential mortgage
loans. Interest rate lock commitments to fund mortgage loans that will be held-for-sale are considered derivatives pursuant to the guidance on
derivatives and hedging, and their estimated fair value and notional amounts are included within interest rate forwards.

The Company also commits to lend funds under certain other mortgage loan commitments that will be held-for-investment in the normal
course of business for the purpose of enhancing the Company’s total return on its investment portfolio. The amounts of these mortgage loan
commitments were $3.8 billion and $2.2 billion at December 31, 2010 and 2009, respectively.

Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments
The Company commits to lend funds under bank credit facilities, bridge loans and private corporate bond investments in the normal
course of business for the purpose of enhancing the Company’s total return on its investment portfolio. The amounts of these unfunded
commitments were $2.4 billion and $1.3 billion at December 31, 2010 and 2009, respectively.

There are no other material obligations or liabilities arising from the commitments to fund partnership investments, mortgage loans, bank

credit facilities, and bridge loans and private corporate bond investment arrangements.

Lease Commitments
The Company, as lessee, has entered into various lease and sublease agreements for office space, information technology and other
equipment. The Company’s commitments under such lease agreements are included within the contractual obligations table. See “—
Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Contractual Obligations.”

Credit Facilities, Committed Facilities and Letters of Credit
The Company maintains committed and unsecured credit facilities and letters of credit with various financial institutions. See “— Liquidity
and Capital Resources — The Company — Liquidity and Capital Sources — Credit and Committed Facilities,” for further descriptions of
such arrangements.

Guarantees
See “Guarantees” in Note 16 of the Notes to the Consolidated Financial Statements.

Collateral for Securities Lending
The Company has no non-cash collateral for securities lending on deposit from customers, which cannot be sold or repledged, and which

has not been recorded on its consolidated balance sheets.

Insolvency Assessments

See Note 16 of the Notes to the Consolidated Financial Statements.

Policyholder Liabilities

The Company establishes, and carries as liabilities, actuarially determined amounts that are calculated to meet policy obligations when a
policy matures or is surrendered, an insured dies or becomes disabled or upon the occurrence of other covered events, or to provide for
future annuity payments. Amounts for actuarial liabilities are computed and reported in the consolidated financial statements in conformity
with GAAP. For more details on Policyholder Liabilities, see “— Summary of Critical Accounting Estimates.” Also see Notes 1 and 8 of the
Notes to the Consolidated Financial Statements for an analysis of certain policyholder liabilities at December 31, 2010 and 2009.

MetLife, Inc.

57

Due to the nature of the underlying risks and the high degree of uncertainty associated with the determination of actuarial liabilities, the
liabilities, and the ultimate

Company cannot precisely determine the amounts that will ultimately be paid with respect to these actuarial
amounts may vary from the estimated amounts, particularly when payments may not occur until well

into the future.

However, we believe our actuarial

liabilities for future benefits are adequate to cover the ultimate benefits required to be paid to
policyholders. We periodically review our estimates of actuarial liabilities for future benefits and compare them with our actual experience. We
revise estimates, to the extent permitted or required under GAAP, if we determine that future expected experience differs from assumptions
used in the development of actuarial

liabilities.

The Company has experienced, and will likely in the future experience, catastrophe losses and possibly acts of terrorism, and turbulent
financial markets that may have an adverse impact on our business, results of operations, and financial condition. Catastrophes can be
caused by various events, including pandemics, hurricanes, windstorms, earthquakes, hail, tornadoes, explosions, severe winter weather
(including snow, freezing water, ice storms and blizzards), fires and man-made events such as terrorist attacks. Due to their nature, we cannot
predict the incidence, timing, severity or amount of losses from catastrophes and acts of terrorism, but we make broad use of catastrophic
and non-catastrophic reinsurance to manage risk from these perils.

Future Policy Benefits
The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over an extended
period of time and related liabilities are calculated as the present value of expected future benefits to be paid, reduced by the present value of
expected future net premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and
applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits include mortality,
morbidity, policy lapse, renewal, retirement, investment returns, inflation, expenses and other contingent events as appropriate to the
respective product type. These assumptions are established at the time the policy is issued and are intended to estimate the experience for
the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. If experience is
less favorable than assumed and future losses are projected under loss recognition testing, then additional
liabilities may be required,
resulting in a charge to policyholder benefits and claims.

Insurance Products.

Future policy benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium policy
provisions, liabilities for survivor income benefit insurance, long-term care (“LTC”) policies, active life policies and premium stabilization and
other contingency liabilities held under participating life insurance contracts. In order to manage risk, the Company has often reinsured a
portion of the mortality risk on new individual life insurance policies. The reinsurance programs are routinely evaluated and this may result in
increases or decreases to existing coverage. The Company entered into various derivative positions, primarily interest rate swaps and
swaptions, to mitigate the risk that investment of premiums received and reinvestment of maturing assets over the life of the policy will be at
rates below those assumed in the original pricing of these contracts.

Retirement Products.

income annuities, supplemental
contracts with and without life contingencies, liabilities for Guaranteed Minimum Death Benefits (“GMDBs”) included in certain annuity
contracts, and a certain portion of guaranteed living benefits. See “— Variable Annuity Guarantees.”

Future policy benefits are comprised mainly of

liabilities for life-contingent

Corporate Benefit Funding.

Liabilities are primarily related to structured settlement annuities. There is no interest rate crediting flexibility
on these liabilities. A sustained low interest rate environment could negatively impact earnings as a result. The Company has various
derivative positions, primarily interest rate floors and interest rate swaps, to mitigate the risks associated with such a scenario.

Auto & Home.

Future policy benefits include liabilities for unpaid claims and claim expenses for property and casualty insurance and
represent the amount estimated for claims that have been reported but not settled and claims incurred but not reported. Liabilities for unpaid
claims are estimated based upon assumptions such as rates of claim frequencies, levels of severities, inflation, judicial trends, legislative
changes or regulatory decisions. Assumptions are based upon the Company’s historical experience and analyses of historical development
patterns of the relationship of loss adjustment expenses to losses for each line of business, and consider the effects of current developments,
anticipated trends and risk management programs, reduced for anticipated salvage and subrogation.

International.

Future policy benefits are held primarily for traditional

life and accident and health contracts in Japan, Asia Pacific and
life and savings
immediate annuities in Latin America. They are also held for total return pass-thru provisions included in certain universal
products mainly in Japan and Latin America, and traditional life, endowment and annuity contracts sold in various countries in Asia Pacific.
They also include certain liabilities for variable annuity guarantees of minimum death benefits, and longevity guarantees sold in Japan and Asia
Pacific. Finally, in Europe and the Middle East, they also include unearned premium liabilities established for credit insurance contracts
covering death, disability and involuntary loss of employment, as well as traditional
life, accident and health and endowment contracts.
Factors impacting these liabilities include sustained periods of lower yields than rates established at issue, lower than expected asset
reinvestment rates, higher than expected lapse rates, asset default and more rapid improvement of mortality levels than anticipated for life
contingent
immediate annuities. The Company mitigates its risks by implementing an asset/liability matching policy and through the
development of periodic experience studies. See “— Variable Annuity Guarantees.”

Estimates for the liabilities for unpaid claims and claim expenses are reset as actuarial indications change and these changes in the liability

are reflected in the current results of operation as either favorable or unfavorable development of prior year losses.

Banking, Corporate & Other.

Future policy benefits primarily include liabilities for quota-share reinsurance agreements for certain LTC
and workers’ compensation business written by MetLife Insurance Company of Connecticut (“MICC”), prior to its acquisition by MetLife, Inc.
These are run-off businesses that have been included within Banking, Corporate & Other since the acquisition of MICC.

Policyholder Account Balances
Policyholder account balances are generally equal to the account value, which includes accrued interest credited, but exclude the impact

of any applicable surrender charge that may be incurred upon surrender.

Insurance Products. Policyholder account balances are held for death benefit disbursement retained asset accounts, universal
life
policies, the fixed account of variable life insurance policies, specialized life insurance products for benefit programs and general account
universal
life policies. Policyholder account balances are credited interest at a rate set by the Company, which are influenced by current
market rates. The majority of the policyholder account balances have a guaranteed minimum credited rate between 0.5% and 6.0%. A
sustained low interest rate environment could negatively impact earnings as a result of the minimum credited rate guarantees. The Company
has various derivative positions, primarily interest rate floors, to partially mitigate the risks associated with such a scenario.

58

MetLife, Inc.

Retirement Products. Policyholder account balances are held for fixed deferred annuities and the fixed account portion of variable
annuities, for certain income annuities, and for certain portions of guaranteed benefits. Policyholder account balances are credited interest at
a rate set by the Company. Credited rates for deferred annuities are influenced by current market rates, and most of these contracts have a
minimum guaranteed rate between 1.0% and 4.0%. See “— Variable Annuity Guarantees.”

Corporate Benefit Funding. Policyholder account balances are comprised of funding agreements. Interest crediting rates vary by type of
contract, and can be fixed or variable. Variable interest crediting rates are generally tied to an external
index, most commonly 1-month or
3-month LIBOR. MetLife is exposed to interest rate risks, and foreign exchange risk when guaranteeing payment of interest and return of
principal at the contractual maturity date. The Company may invest in floating rate assets, or enter into floating rate swaps, also tied to external
indices, as well as caps to mitigate the impact of changes in market interest rates. The Company also mitigates its risks by implementing an
asset/liability matching policy and seeks to hedge all foreign currency risk through the use of foreign currency hedges, including cross
currency swaps.

International. Policyholder account balances are held largely for fixed income retirement and savings plans in Japan and Latin America
and to a lesser degree, amounts for unit-linked-type funds in certain countries across all regions that do not meet the GAAP definition of
separate accounts. Also included are certain liabilities for retirement and savings products sold in certain countries in Japan and Asia Pacific
that generally are sold with minimum credited rate guarantees. Liabilities for guarantees on certain variable annuities in Japan and Asia Pacific
are established in accordance with derivatives and hedging guidance and are also included within policyholder account balances. These
liabilities are generally impacted by sustained periods of low interest rates, where there are interest rate guarantees. The Company mitigates
its risks by implementing an asset/liability matching policy and by hedging its variable annuity guarantees. Liabilities for unit-linked-type funds
are impacted by changes in the fair value of the associated underlying investments, as the return on assets is generally passed directly to the
policyholder. See “— Variable Annuity Guarantees.”

Variable Annuity Guarantees
The Company issues certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return
based on their initial deposit (i.e., the benefit base) less withdrawals. In some cases the benefit base may be increased by additional deposits,
bonus amounts, accruals or market value resets. These guarantees are accounted for as insurance liabilities or as embedded derivatives
depending on how and when the benefit is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid
without requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is accounted for
as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable event, or (ii) upon annuitization. In
certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is
accounted for under a split of the two models.

The net amount at risk (“NAR”) for guarantees can change significantly during periods of sizable and sustained shifts in equity market
performance, increased equity volatility, or changes in interest rates. The NAR disclosed in Note 8 of the Notes to the Consolidated Financial
Statements represents management’s estimate of the current value of the benefits under these guarantees if they were all exercised
simultaneously at December 31, 2010 and 2009, respectively. However, there are features, such as deferral periods and benefits requiring
annuitization or death, that limit the amount of benefits that will be payable in the near future.

Guarantees, including portions thereof, accounted for as embedded derivatives, are recorded at estimated fair value and included in
policyholder account balances. Guarantees accounted for as embedded derivatives include GMAB, the non life-contingent portion of GMWB
and the portion of certain GMIB that do not require annuitization. For more detail on the determination of estimated fair value, see Note 5 of the
Notes to the Consolidated Financial Statements.

The table below contains the carrying value for guarantees included in policyholder account balances at:

December 31,

2010

2009

(In millions)

U.S. Business:

Guaranteed minimum accumulation benefit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

44

$

Guaranteed minimum withdrawal benefit
Guaranteed minimum income benefit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173
(51)

60

154
66

International:

Guaranteed minimum accumulation benefit
Guaranteed minimum withdrawal benefit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

454
1,936

195
1,025

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,556

$1,500

Included in net derivative gains (losses) for the years ended December 31, 2010 and 2009 were gains (losses) of ($269) million and
$1,806 million, respectively, in embedded derivatives related to the change in estimated fair value of the guarantees. The carrying amount of
guarantees accounted for at estimated fair value includes an adjustment for nonperformance risk. In connection with this adjustment, gains
(losses) of ($96) million and ($1,932) million are included in the gains (losses) of ($269) million and $1,806 million in net derivative gains
(losses) for the year ended December 31, 2010 and 2009, respectively.

The estimated fair value of guarantees accounted for as embedded derivatives can change significantly during periods of sizable and
sustained shifts in equity market performance, equity volatility, interest rates or foreign exchange rates. Additionally, because the estimated
fair value for guarantees accounted for at estimated fair value includes an adjustment for nonperformance risk, a decrease in the Company’s
credit spreads could cause the value of these liabilities to increase. Conversely, a widening of the Company’s credit spreads could cause the
value of these liabilities to decrease. The Company uses derivative instruments and reinsurance to mitigate the liability exposure, risk of loss
and the volatility of net income associated with these liabilities. The derivative instruments used are primarily equity and treasury futures,
equity options and variance swaps, and interest rate swaps. The change in valuation arising from the nonperformance risk is not hedged.

MetLife, Inc.

59

The table below presents the estimated fair value of the derivatives hedging guarantees accounted for as embedded derivatives:

December 31,

2010

2009

Primary Underlying
Risk Exposure

Derivative Type

Notional
Amount

Estimated Fair Value

Assets

Liabilities

Notional
Amount

Estimated Fair Value

Assets

Liabilities

(In millions)

Interest rate

Interest rate swaps . . . . . . . . . . . . .

$13,762

$ 401

$ 193

$ 8,847

$ 194

$ 275

Interest rate futures . . . . . . . . . . . . .
Interest rate options . . . . . . . . . . . . .

Foreign currency Foreign currency forwards . . . . . . . . .

Equity market

Currency options . . . . . . . . . . . . . . .
Equity futures . . . . . . . . . . . . . . . . .

Equity options . . . . . . . . . . . . . . . . .

Variance swaps . . . . . . . . . . . . . . . .
Total rate of return swaps . . . . . . . . .

5,822
614

2,320

—
6,959

32,942

17,635
1,547

32
15

46

—
17

10
—

1

—
9

1,720

1,196

190
—

118
—

4,997
—

2,016

327
6,033

26,661

13,267
126

5
—

4

14
31

4
—

30

—
20

1,596

1,018

174
—

58
—

Total . . . . . . . . . . . . . . . . . . . . . . .

$81,601

$2,421

$ 1527

$62,274

$2,018

$1,405

Included in net derivative gains (losses) for the years ended December 31, 2010 and 2009 were gains (losses) of $113 million and
($3,654) million related to the change in estimated fair value of the above derivatives. Additionally, included in net derivative gains (losses) for
the years ended December 31, 2010 and 2009 were gains (losses) of ($35) million and $0, respectively, related to ceded reinsurance.

Guarantees, including portions thereof, have liabilities established that are included in future policy benefits. Guarantees accounted for in
this manner include GMDBs, the life-contingent portion of certain GMWB, and the portion of GMIB that require annuitization. These liabilities
are accrued over the life of the contract in proportion to actual and future expected policy assessments based on the level of guaranteed
minimum benefits generated using multiple scenarios of separate account returns. The scenarios use best estimate assumptions consistent
with those used to amortize deferred acquisition costs. When current estimates of future benefits exceed those previously projected or when
current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge
to net income. The opposite result occurs when the current estimates of future benefits are lower than that previously projected or when
current estimates of future assessments exceed those previously projected. At each reporting period, the Company updates the actual
amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting
in a current period charge or increase to earnings.

The table below contains the carrying value for guarantees included in future policy benefits at:

December 31,
2010
2009

(In millions)

U.S. Business:

Guaranteed minimum death benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $167
507
Guaranteed minimum income benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$137
394

International:

Guaranteed minimum death benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guaranteed minimum income benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66
116

23
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $856

$554

Included in policyholder benefits and claims for the year ended December 31, 2010 is a charge of $302 million and for the year ended

December 31, 2009 is a credit of $92 million, related to the respective change in liabilities for the above guarantees.

The carrying amount of guarantees accounted for as insurance liabilities can change significantly during periods of sizable and sustained
shifts in equity market performance, increased equity volatility, or changes in interest rates. The Company uses reinsurance in combination
with derivative instruments to mitigate the liability exposure, risk of loss and the volatility of net income associated with these liabilities.
Derivative instruments used are primarily equity futures, treasury futures and interest rate swaps.

Included in policyholder benefits and claims associated with the hedging of the guarantees in future policy benefits for the year ended
December 31, 2010 and 2009 were gains (losses) of $8 million and ($114) million, respectively, related to reinsurance treaties containing
embedded derivatives carried at estimated fair value and gains (losses) of
($275) million and ($376) million, respectively, related to
freestanding derivatives.

While the Company believes that the hedging strategies employed for guarantees included in both policyholder account balances and in
future policy benefits, as well as other management actions, have mitigated the risks related to these benefits, the Company remains liable for
the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or unwilling to pay. Certain of the Company’s
reinsurance agreements and most derivative positions are collateralized and derivatives positions are subject to master netting agreements,
both of which, significantly reduces the exposure to counterparty risk. In addition, the Company is subject to the risk that hedging and other
management procedures prove ineffective or that unanticipated policyholder behavior or mortality, combined with adverse market events,
produces economic losses beyond the scope of the risk management techniques employed. Lastly, because the valuation of the guarantees
accounted for as embedded derivatives includes an adjustment for nonperformance risk that is not hedged, changes in the nonperformance
risk may result in significant volatility in net income.

60

MetLife, Inc.

Other Policy-related Balances
Other policy-related balances include policy and contract claims, unearned revenue liabilities, premiums received in advance, policy-

holder dividends due and unpaid, and policyholder dividends left on deposit.

The liability for policy and contract claims generally relates to incurred but not reported death, disability, LTC and dental claims, as well as
claims that have been reported but not yet settled. The liability for these claims is based on the Company’s estimated ultimate cost of settling
all claims. The Company derives estimates for the development of incurred but not reported claims principally from actuarial analyses of
historical patterns of claims and claims development for each line of business. The methods used to determine these estimates are
continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims
are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made.

The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be
provided in future periods. The charges are deferred as unearned revenue and amortized using the product’s estimated gross profits and
margins, similar to deferred acquisition costs. Such amortization is recorded in universal

life and investment-type product policy fees.

Also included in other policy-related balances are policyholder dividends due and unpaid on participating policies and policyholder

dividends left on deposit. Such liabilities are presented at amounts contractually due to policyholders.

Policyholder Dividends Payable
Policyholder dividends payable consists of liabilities related to dividends payable in the following calendar year on participating policies.

Liquidity and Capital Resources

Overview
Our business and results of operations are materially affected by conditions in the global capital markets and the economy, generally, both
in the U.S. and elsewhere around the world. The global economy and markets are now recovering from a period of significant stress that
began in the second half of 2007 and substantially increased through the first quarter of 2009. This disruption adversely affected the financial
services industry, in particular. Consequently, financial institutions paid higher spreads over benchmark U.S. Treasury securities than before
the market disruption began. The U.S. economy entered a recession in late 2007. This recession ended in mid-2009, but the recovery from
the recession has been below historic averages and the unemployment rate is expected to remain high for some time. Although conditions in
the financial markets continued to materially improve in 2010, there is still some uncertainty as to whether the stressed conditions that
prevailed during the market disruption could recur, which could affect the Company’s ability to meet liquidity needs and obtain capital.

Liquidity Management
Based upon the strength of its franchise, diversification of its businesses and strong financial fundamentals, we continue to believe the
Company has ample liquidity to meet business requirements under current market conditions and unlikely but reasonably possible stress
scenarios. The Company’s short-term liquidity position (cash and cash equivalents, short-term investments, excluding cash collateral
received under the Company’s securities lending program that has been reinvested in cash, cash equivalents, short-term investments and
publicly-traded securities, and cash collateral received from counterparties in connection with derivative instruments) was $17.6 billion and
$11.7 billion at December 31, 2010 and 2009, respectively. We continuously monitor and adjust our liquidity and capital plans for the Holding
Company and its subsidiaries in light of changing needs and opportunities.

The Company

Liquidity
Liquidity refers to a company’s ability to generate adequate amounts of cash to meet its needs. Liquidity needs are determined from a
rolling 6-month forecast by portfolio of investment assets and are monitored daily. Asset mix and maturities are adjusted based on the
forecast. Cash flow testing and stress testing provide additional perspectives on liquidity, which include various scenarios of the potential risk
of early contractholder and policyholder withdrawal. The Company includes provisions limiting withdrawal rights on many of its products,
including general account institutional pension products (generally group annuities, including funding agreements, and certain deposit fund
liabilities) sold to employee benefit plan sponsors. Certain of these provisions prevent the customer from making withdrawals prior to the
maturity date of the product.

In the event of significant cash requirements beyond anticipated liquidity needs, the Company has various alternatives available
depending on market conditions and the amount and timing of the liquidity need. These options include cash flows from operations, the
sale of liquid assets, global funding sources and various credit facilities.

Under certain stressful market and economic conditions, the Company’s access to, or cost of, liquidity may deteriorate. If the Company
requires significant amounts of cash on short notice in excess of anticipated cash requirements, the Company may have difficulty selling
investment assets in a timely manner, be forced to sell them for less than the Company otherwise would have been able to realize, or both. In
addition, in the event of such forced sale, accounting rules require the recognition of a loss for certain securities in an unrealized loss position
and may require the impairment of other securities based upon the Company’s ability to hold such securities, which may negatively impact the
Company’s financial condition.

In extreme circumstances, all general account assets — other than those which may have been pledged to a specific purpose — within a

statutory legal entity are available to fund obligations of the general account within that legal entity.

Capital
The Company’s capital position is managed to maintain its financial strength and credit ratings and is supported by its ability to generate
strong cash flows at the operating companies, borrow funds at competitive rates and raise additional capital to meet its operating and growth
needs.

The Company raised new capital from its debt issuances during the difficult market conditions prevailing since the second half of 2008, as
well as during the rebound and recovery periods beginning in the second quarter of 2009 (see “— The Company — Liquidity and Capital
Sources — Debt Issuances and Other Borrowings”). The increase in credit spreads experienced since then has resulted in an increase in the
cost of such new capital, as well as increases in facility fees. Conversely, as a result of reductions in interest rates, the Company’s interest
expense and dividends on floating rate securities have been lower.

MetLife, Inc.

61

Despite the still unsettled financial markets, the Company also raised new capital from a successful offering of the Holding Company’s
common stock in August 2010, which provided financing for the Acquisition. See “— The Company — Liquidity and Capital Sources —
Common Stock.”

Rating Agencies. Rating agencies assign insurer financial strength ratings to the Holding Company’s domestic life insurance subsid-
iaries and credit ratings to the Holding Company and certain of its subsidiaries. The level and composition of regulatory capital at the
subsidiary level and equity capital of the Company are among the many factors considered in determining the Company’s insurer financial
strength and credit ratings. Each agency has its own capital adequacy evaluation methodology, and assessments are generally based on a
combination of factors. In addition to heightening the level of scrutiny that they apply to insurance companies, rating agencies have increased
and may continue to increase the frequency and scope of their credit reviews, may request additional information from the companies that
they rate and may adjust upward the capital and other requirements employed in the rating agency models for maintenance of certain ratings
levels.

A downgrade in the credit or insurer financial strength ratings of the Holding Company or its subsidiaries would likely impact the cost and
availability of financing for the Company and its subsidiaries and result in additional collateral requirements or other required payments under
certain agreements, which are eligible to be satisfied in cash or by posting securities held by the subsidiaries subject to the agreements.
Statutory Capital and Dividends. Our insurance subsidiaries have statutory surplus well above levels to meet current regulatory

requirements.

Except for American Life, RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments
to identify companies that merit regulatory action. RBC is based on a formula calculated by applying factors to various asset, premium and
statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate
risk and business risk and is calculated on an annual basis. The formula is used as an early warning regulatory tool to identify possible
inadequately capitalized insurers for purposes of initiating regulatory action, and not as a means to rank insurers generally. These rules apply
to each of the Holding Company’s domestic insurance subsidiaries. State insurance laws provide insurance regulators the authority to require
various actions by, or take various actions against, insurers whose total adjusted capital does not meet or exceed certain RBC levels. At the
date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital of each of these
subsidiaries was in excess of each of those RBC levels.

American Life does not write business in Delaware or any other domestic state and, as such, is exempt from RBC by Delaware law. In
addition to Delaware, American Life operations are regulated by applicable authorities of the countries in which the company operates and are
subject to capital and solvency requirements in those countries.

The amount of dividends that our insurance subsidiaries can pay to the Holding Company or other parent entities is constrained by the
amount of surplus we hold to maintain our ratings and provides an additional margin for risk protection and investment in our businesses. We
proactively take actions to maintain capital consistent with these ratings objectives, which may include adjusting dividend amounts and
deploying financial resources from internal or external sources of capital. Certain of these activities may require regulatory approval.
Furthermore, the payment of dividends and other distributions to the Company by its insurance subsidiaries is regulated by insurance laws
and regulations. See “Business — U.S. Regulation — Insurance Regulation,” “— The Holding Company — Liquidity and Capital Sources —
Dividends from Subsidiaries” and Note 18 of the Notes to the Consolidated Financial Statements.”

Summary of Primary Sources and Uses of Liquidity and Capital.

The Company’s primary sources and uses of liquidity and capital are

described below, and summarized as follows:

Years Ended December 31,
2009

2010

2008

(In millions)

Sources:

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,996
4,557
Net cash provided by changes in policyholder account balances . . . . . . . . . . . . .

$ 3,803
—

$10,702
13,645

Net cash provided by changes in payables for collateral under securities loaned and
other transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by changes in bank deposits . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by short-term debt issuances . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt issued, net of issuance costs . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral financing arrangements issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash received in connection with collateral financing arrangements . . . . . . . . .

Junior subordinated debt securities issued . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock issued, net of issuance costs . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock issued to settle stock forward contracts . . . . . . . . . . . . . . . . . . .

Treasury stock issued in connection with common stock issuance, net of issuance

costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock issued to settle stock forward contracts . . . . . . . . . . . . . . . . . . .

Cash provided by other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash provided by the effect of change in foreign currency exchange rates . . . . . . .

3,076
—

—

5,076
—

—

—
3,576

—

—
—

—

—

—
3,164

—

2,931
105

375

500
—

1,035

—
—

—

108

—
2,185

1,992

305
310

—

750
290

—

1,936
1,035

7

—

Total sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,281

12,021

33,157

62

MetLife, Inc.

Years Ended December 31,

2010

2009

2008

(In millions)

Uses:

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,314

Net cash used for changes in policyholder account balances . . . . . . . . . . . . . . .

Net cash used for changes in payables for collateral under securities loaned and

other transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used for changes in bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

32

Net cash used for short-term debt repayments . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

606
1,061

Net cash paid in connection with collateral financing arrangements . . . . . . . . . . . .

Treasury stock acquired in connection with share repurchase agreements . . . . . . .
Dividends on preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash used in other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash used in the effect of change in foreign currency exchange rates . . . . . . . . . .

—

—
122

784

299
129

13,935

2,282

2,671

—

6,863

13,077

—

1,747
555

—

—
122

610

34
—

—

—
422

800

1,250
125

592

—
349

Total uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,347

26,148

19,286

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 2,934

$(14,127)

$13,871

Liquidity and Capital Sources
Cash Flows from Operations.

The Company’s principal cash inflows from its insurance activities come from insurance premiums, annuity
considerations and deposit funds. A primary liquidity concern with respect to these cash inflows is the risk of early contractholder and
policyholder withdrawal. See “— The Company — Liquidity and Capital Uses — Contractual Obligations.”

Cash Flows from Investments.

The Company’s principal cash inflows from its investment activities come from repayments of principal,
proceeds from maturities, sales of invested assets and net investment income. The primary liquidity concerns with respect to these cash
inflows are the risk of default by debtors and market volatility. The Company closely monitors and manages these risks through its credit risk
management process.

Liquid Assets. An integral part of the Company’s liquidity management is the amount of liquid assets it holds. Liquid assets include cash,
cash equivalents, short-term investments and publicly-traded securities, excluding: (i) cash collateral received under the Company’s
securities lending program that has been reinvested in cash, cash equivalents, short-term investments and publicly-traded securities;
(ii) cash collateral received from counterparties in connection with derivative instruments; (iii) cash, cash equivalents, short-term investments
and securities on deposit with regulatory agencies; and (iv) securities held in trust in support of collateral financing arrangements and pledged
in support of debt and funding agreements. At December 31, 2010 and 2009, the Company had $245.7 billion and $158.4 billion in liquid
assets, respectively. For further discussion of invested assets on deposit with regulatory agencies, held in trust in support of collateral
financing arrangements and pledged in support of debt and funding agreements, see “— Investments — Invested Assets on Deposit, Held in
Trust and Pledged as Collateral.”
Global Funding Sources.

Liquidity is provided by a variety of short-term instruments, including funding agreements, credit facilities and
commercial paper. Capital
is provided by a variety of instruments, including short-term and long-term debt, preferred securities, junior
subordinated debt securities and equity and equity-linked securities. The diversity of the Company’s funding sources enhances funding
flexibility, limits dependence on any one market or source of funds and generally lowers the cost of funds. The Company’s global funding
sources include:

(cid:129) The Holding Company and MetLife Funding, Inc. (“MetLife Funding”) each have commercial paper programs supported by $4.0 billion in
general corporate credit facilities (see “— The Company — Liquidity and Capital Sources — Credit and Committed Facilities”). MetLife
Funding, a subsidiary of MLIC, serves as a centralized finance unit for the Company. MetLife Funding raises cash from its commercial
paper program and uses the proceeds to extend loans, through MetLife Credit Corp., another subsidiary of MLIC, to the Holding
Company, MLIC and other affiliates in order to enhance the financial flexibility and liquidity of these companies. Outstanding balances for
the commercial paper program fluctuate in line with changes to affiliates’ financing arrangements. Pursuant to a support agreement,
MLIC has agreed to cause MetLife Funding to have a tangible net worth of at least one dollar. At both December 31, 2010 and 2009,
MetLife Funding had a tangible net worth of $12 million. At December 31, 2010 and 2009, MetLife Funding had total outstanding
liabilities for its commercial paper program, including accrued interest payable, of $102 million and $319 million, respectively.

(cid:129) MetLife Bank is a depository institution that is approved to use the Federal Reserve Bank of New York Discount Window borrowing
privileges. To utilize these privileges, MetLife Bank has pledged qualifying loans and investment securities to the Federal Reserve Bank
of New York as collateral. At both December 31, 2010 and 2009, MetLife Bank had no liability for advances from the Federal Reserve
Bank of New York under this facility.

(cid:129) MetLife Bank has a cash need to fund residential mortgage loans that it originates and generally holds for a relatively short period before
selling them to one of the government-sponsored enterprises such as FNMA or FHLMC. The outstanding volume of residential
mortgage originations varies from month to month and is cyclical within a month. To meet the variable funding requirements from this
mortgage activity, as well as to increase overall
liquidity from time to time, MetLife Bank takes advantage of short-term collateralized
borrowing opportunities with the Federal Home Loan Bank of New York (“FHLB of NY”). MetLife Bank has entered into advances
agreements with the FHLB of NY whereby MetLife Bank has received cash advances and under which the FHLB of NY has been granted
a blanket lien on certain of MetLife Bank’s residential mortgages, mortgage loans held-for-sale, commercial mortgages and mortgage-
backed securities to collateralize MetLife Bank’s repayment obligations. Upon any event of default by MetLife Bank, the FHLB of NY’s

MetLife, Inc.

63

recovery is limited to the amount of MetLife Bank’s liability under the advances agreement. MetLife Bank has received advances from the
FHLB of NY on both short- and long-term bases, with a total liability of $3.8 billion and $2.4 billion at December 31, 2010 and 2009,
respectively.

(cid:129) The Company also had obligations under funding agreements with the FHLB of NY of $12.6 billion and $13.7 billion at December 31,
2010 and 2009, respectively, for MLIC, and with the Federal Home Loan Bank of Boston (“FHLB of Boston”) of $100 million and
$326 million at December 31, 2010 and 2009, respectively, for MICC. See Note 8 of the Notes to the Consolidated Financial
Statements. In September 2010, MetLife Investors Insurance Company and General American Life Insurance Company, subsidiaries of
MetLife, Inc., each became a member of the Federal Home Loan Bank of Des Moines (“FHLB of Des Moines”), and each purchased
$10 million of FHLB of Des Moines common stock. Membership in the FHLB of Des Moines provides an additional source of contingent
liquidity for the Company. There were no funding agreements with the FHLB of Des Moines at December 31, 2010.

(cid:129) The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to
certain special purpose entities (“SPEs”) that have issued either debt securities or commercial paper for which payment of interest and
principal is secured by such funding agreements. During the years ended December 31, 2010, 2009 and 2008, the Company issued
$34.1 billion, $28.6 billion and $20.9 billion, respectively, and repaid $30.9 billion, $32.0 billion and $19.8 billion, respectively, of such
funding agreements. At December 31, 2010 and 2009, funding agreements outstanding, which are included in policyholder account
balances, were $27.2 billion and $23.3 billion, respectively.

(cid:129) MLIC and MICC have each issued funding agreements to certain SPEs that have issued debt securities for which payment of interest
and principal
is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and
principal by the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. The obligations under these
funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain
circumstances, be secured by other qualified collateral. The amount of the Company’s liability for funding agreements issued to such
SPEs was $2.8 billion and $2.5 billion at December 31, 2010 and 2009, respectively, which is included in policyholder account
balances. The obligations under these funding agreements are collateralized by designated agricultural real estate mortgage loans with
estimated fair values of $3.2 billion and $2.9 billion at December 31, 2010 and 2009, respectively.
Outstanding Debt.

The following table summarizes the outstanding debt of the Company at:

Short-term debt

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

306

$

912

Long-term debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,766

$13,156

Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,297
Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,191

$ 5,297
$ 3,191

(1) Excludes $6,820 million at December 31, 2010 of long-term debt relating to CSEs.

December 31,

2010

2009

(In millions)

Debt Issuances and Other Borrowings.

In connection with the financing of the Acquisition (see Note 2 of the Notes to the Consolidated
Financial Statements), in November 2010, MetLife, Inc. issued to ALICO Holdings $3,000 million in three series of debt securities (the
“Series C Debt Securities,” the “Series D Debt Securities” and the “Series E Debt Securities,” and, together, the “Debt Securities”), which
constitute a part of the MetLife, Inc. common equity units (the “Equity Units”) more fully described in Note 14 of the Notes to the Consolidated
Financial Statements. The Debt Securities are subject to remarketing, initially bear interest at 1.56%, 1.92% and 2.46%, respectively (an
average rate of 1.98%), and carry initial maturity dates of June 15, 2023, June 15, 2024 and June 15, 2045, respectively. The interest rates
will be reset in connection with the successful remarketings of the Debt Securities. Prior to the first scheduled attempted remarketing of the
Series C Debt Securities, such Debt Securities will be divided into two tranches equal in principal amount with maturity dates of June 15, 2018
and June 15, 2023. Prior to the first scheduled attempted remarketing of the Series E Debt Securities, such Debt Securities will be divided into
two tranches equal

in principal amount with maturity dates of June 15, 2018 and June 15, 2045.

In August 2010, in anticipation of the Acquisition, the Holding Company issued senior notes as follows:
(cid:129) $1,000 million senior notes due February 6, 2014, which bear interest at a fixed rate of 2.375%, payable semi-annually;
(cid:129) $1,000 million senior notes due February 8, 2021, which bear interest at a fixed rate of 4.75%, payable semi-annually;
(cid:129) $750 million senior notes due February 6, 2041, which bear interest at a fixed rate of 5.875%, payable semi-annually; and
(cid:129) $250 million floating rate senior notes due August 6, 2013, which bear interest at a rate equal to three-month LIBOR, reset quarterly, plus

1.25%, payable quarterly.

In connection with these offerings, the Holding Company incurred $15 million of issuance costs which have been capitalized and included

in other assets. These costs are being amortized over the terms of the senior notes.

In July 2009, the Holding Company issued $500 million of junior subordinated debt securities with a final maturity of August 2069. Interest
is payable semi-annually at a fixed rate of 10.75% up to, but not including, August 1, 2039, the scheduled redemption date. In the event the
debt securities are not redeemed on or before the scheduled redemption date, interest will accrue at an annual rate of 3-month LIBOR plus a
margin equal to 7.548%, payable quarterly in arrears. In connection with the offering, the Holding Company incurred $5 million of issuance
costs which have been capitalized and included in other assets. These costs are being amortized over the term of the securities. See Note 13
of the Notes to the Consolidated Financial Statements for a description of the terms of the junior subordinated debt securities.

In May 2009, the Holding Company issued $1.3 billion of senior notes due June 1, 2016. The notes bear interest at a fixed rate of 6.75%,
issuance costs which have been

payable semi-annually. In connection with the offering, the Holding Company incurred $6 million of
capitalized and included in other assets. These costs are being amortized over the term of the notes.

In March 2009, the Holding Company issued $397 million of floating rate senior notes due June 2012 under the FDIC’s Temporary Liquidity
Guarantee Program. The notes bear interest at a rate equal to three-month LIBOR, reset quarterly, plus 0.32%. The notes are not redeemable
prior to their maturity. In connection with the offering, the Holding Company incurred $15 million of issuance costs which have been
capitalized and included in other assets. These costs are being amortized over the term of the notes.

64

MetLife, Inc.

In February 2009, the Holding Company remarketed its existing $1.0 billion 4.91% Series B junior subordinated debt securities as
7.717% senior debt securities, Series B, due 2019. In August 2008, the Holding Company remarketed its existing $1.0 billion 4.82% Series A
junior subordinated debt securities as 6.817% senior debt securities, Series A, due 2018. Interest on both series of debt securities is payable
semi-annually. The Series A and Series B junior subordinated debt securities were originally issued in 2005 in connection with the common
equity units. See “— The Company — Liquidity and Capital Sources — Remarketing of Junior Subordinated Debt Securities and Settlement
of Stock Purchase Contracts.”

In April 2008, MetLife Capital Trust X, a VIE consolidated by the Company, issued exchangeable surplus trust securities (the “2008
Trust Securities”) with a face amount of $750 million. Interest on the 2008 Trust Securities or debt securities is payable semi-annually at a fixed
rate of 9.25% up to, but not including, April 8, 2038, the scheduled redemption date. In the event the 2008 Trust Securities or debt securities
are not redeemed on or before the scheduled redemption date, interest will accrue at an annual rate of 3-month LIBOR plus a margin equal to
5.540%, payable quarterly in arrears. See Note 13 of the Notes to the Consolidated Financial Statements for a description of the terms of
these debt securities.

Collateral Financing Arrangements. As described more fully in Note 12 of the Notes to the Consolidated Financial Statements:
(cid:129) In December 2007, the Holding Company, in connection with the collateral financing arrangement associated with MetLife Reinsurance
Company of Charleston’s (“MRC”) reinsurance of the closed block liabilities, entered into an agreement with the unaffiliated financial
institution that referenced the $2.5 billion aggregate principal amount of 35-year surplus notes issued by MRC. Under the agreement,
the Holding Company is entitled to the interest paid by MRC on the surplus notes of 3-month LIBOR plus 0.55% in exchange for the
payment of 3-month LIBOR plus 1.12%, payable quarterly on such amount as adjusted, as described below.
Under this agreement, the Holding Company may also be required to pledge collateral or make payments to the unaffiliated financial
institution related to any decline in the estimated fair value of the surplus notes. Any such payments would be accounted for as a
receivable and included in other assets on the Company’s consolidated balance sheets and would not reduce the principal amount
outstanding of the surplus notes. Such payments would, however, reduce the amount of interest payments due from the Holding
Company under the agreement. Any payment received from the unaffiliated financial
institution would reduce the receivable by an
amount equal to such payment and would also increase the amount of interest payments due from the Holding Company under the
agreement. In addition, the unaffiliated financial institution may be required to pledge collateral to the Holding Company related to any
increase in the estimated fair value of the surplus notes. During 2008, the Holding Company paid an aggregate of $800 million to the
unaffiliated financial institution relating to declines in the estimated fair value of the surplus notes. The Holding Company did not receive
any payments from the unaffiliated financial
institution during 2008. During 2009, on a net basis, the Holding Company received
$375 million from the unaffiliated financial institution related to changes in the estimated fair value of the surplus notes. No payments
were made or received by the Holding Company during 2010. Since the closing of the collateral financing arrangement in December
2007, on a net basis, the Holding Company has paid $425 million to the unaffiliated financial
institution related to changes in the
estimated fair value of the surplus notes. In addition, at December 31, 2010, the Holding Company had pledged collateral with an
estimated fair value of $49 million to the unaffiliated financial institution. At December 31, 2009, the Holding Company had no collateral
pledged to the unaffiliated financial institution in connection with this agreement. The Holding Company may also be required to make a
payment to the unaffiliated financial

institution in connection with any early termination of this agreement.

(cid:129) In May 2007, the Holding Company, in connection with the collateral financing arrangement associated with MetLife Reinsurance
life secondary guarantees, entered into an agreement with an
Company of South Carolina’s (“MRSC”) reinsurance of universal
unaffiliated financial
institution under which the Holding Company is entitled to the return on the investment portfolio held by trusts
established in connection with this collateral financing arrangement in exchange for the payment of a stated rate of return to the
unaffiliated financial institution of 3-month LIBOR plus 0.70%, payable quarterly. The collateral financing agreement may be extended by
agreement of the Holding Company and the unaffiliated financial institution on each anniversary of the closing. The Holding Company
may also be required to make payments to the unaffiliated financial institution, for deposit into the trusts, related to any decline in the
estimated fair value of the assets held by the trusts, as well as amounts outstanding upon maturity or early termination of the collateral
financing arrangement. During 2010, no payments were made or received by the Holding Company. During 2009 and 2008, the Holding
Company contributed $360 million and $320 million, respectively, as a result of declines in the estimated fair value of the assets in the
trusts. Cumulatively, since May 2007, the Holding Company has contributed a total of $680 million as a result of declines in the
estimated fair value of the assets in the trusts, all of which was deposited into the trusts.
In addition, the Holding Company may be required to pledge collateral to the unaffiliated financial institution under this agreement. At
December 31, 2010 and 2009, the Holding Company had pledged $63 million and $80 million under the agreement, respectively.
In February 2009, the Holding
Company closed the successful remarketing of the Series B portion of the junior subordinated debt securities underlying the common equity
units. The Series B junior subordinated debt securities were modified as permitted by their terms to be 7.717% senior debt securities,
Series B, due February 15, 2019. The Holding Company did not receive any proceeds from the remarketing. Most common equity unit holders
chose to have their junior subordinated debt securities remarketed and used the remarketing proceeds to settle their payment obligations
under the applicable stock purchase contract. For those common equity unit holders that elected not to participate in the remarketing and
elected to use their own cash to satisfy the payment obligations under the stock purchase contract, the terms of the debt are the same as the
remarketed debt. The subsequent settlement of the stock purchase contracts occurred on February 17, 2009, providing proceeds to the
Holding Company of $1,035 million in exchange for shares of the Holding Company’s common stock. The Holding Company delivered
24,343,154 shares of its newly issued common stock to settle the stock purchase contracts.

Remarketing of Junior Subordinated Debt Securities and Settlement of Stock Purchase Contracts.

In August 2008, the Holding Company closed the successful remarketing of the Series A portion of the junior subordinated debt securities
underlying the common equity units. The Series A junior subordinated debt securities were modified as permitted by their terms to be
6.817% senior debt securities, Series A, due August 15, 2018. The Holding Company did not receive any proceeds from the remarketing.
Most common equity unit holders chose to have their junior subordinated debt securities remarketed and used the remarketing proceeds to
settle their payment obligations under the applicable stock purchase contract. For those common equity unit holders that elected not to
participate in the remarketing and elected to use their own cash to satisfy the payment obligations under the stock purchase contract, the
terms of the debt are the same as the remarketed debt. The initial settlement of the stock purchase contracts occurred on August 15, 2008,
providing proceeds to the Holding Company of $1,035 million in exchange for shares of the Holding Company’s common stock. The Holding

MetLife, Inc.

65

Company delivered 20,244,549 shares of its common stock held in treasury at a value of $1,064 million to settle the stock purchase
contracts.
Other.

In March 2009, the Company sold Cova Corporation, the parent company of Texas Life Insurance Company, for $130 million in

cash consideration, excluding $1 million of transaction costs. The proceeds of the transaction were paid to the Holding Company.

Credit and Committed Facilities.

facilities and committed facilities, which aggregated
$4.0 billion and $12.4 billion, respectively, at December 31, 2010. When drawn upon, these facilities bear interest at varying rates in
accordance with the respective agreements.

The Company maintains unsecured credit

The unsecured credit facilities are used for general corporate purposes, to support the borrowers’ commercial paper programs and for the
issuance of letters of credit. At December 31, 2010, the Company had outstanding $1.5 billion in letters of credit and no drawdowns against
these facilities. Remaining unused commitments were $2.5 billion at December 31, 2010.

The committed facilities are used for collateral for certain of the Company’s affiliated reinsurance liabilities. At December 31, 2010, the
Company had outstanding $5.4 billion in letters of credit and $2.8 billion in aggregate drawdowns against these facilities. Remaining unused
commitments were $4.2 billion at December 31, 2010.

See Note 11 of the Notes to the Consolidated Financial Statements for further discussion of these facilities.
We have no reason to believe that our lending counterparties will be unable to fulfill their respective contractual obligations under these
facilities. As commitments associated with letters of credit and financing arrangements may expire unused, these amounts do not necessarily
reflect the Company’s actual future cash funding requirements.

instruments, credit

the Company’s debt

Covenants. Certain of

As a result of the successful offerings of certain senior notes and common stock in August 2010, the commitment letter for a $5.0 billion
senior credit facility, which the Holding Company signed to partially finance the Acquisition, was terminated. During March 2010, the Holding
Company paid $28 million in fees related to this senior credit facility, all of which were expensed during the year ended December 31, 2010.
facilities and committed facilities contain various administrative,
reporting, legal and financial covenants. The Company believes it was in compliance with all covenants at December 31, 2010 and 2009.
Preferred Stock. During the year ended December 31, 2010, the Holding Company did not issue any non-convertible preferred stock. In
December 2008, the Holding Company entered into a replacement capital covenant (the “Replacement Capital Covenant”) whereby the
Company agreed for the benefit of holders of one or more series of the Company’s unsecured long-term indebtedness designated from time
to time by the Company in accordance with the terms of the Replacement Capital Covenant (“Covered Debt”), that the Company will not repay,
redeem or purchase and will cause its subsidiaries not to repay, redeem or purchase, on or before the termination of the Replacement Capital
Covenant on December 31, 2018 (or earlier termination by agreement of the holders of Covered Debt or when there is no longer any
outstanding series of unsecured long-term indebtedness which qualifies for designation as “Covered Debt”), the Floating Rate Non-
Cumulative Preferred Stock, Series A, of the Holding Company or the 6.500% Non-Cumulative Preferred Stock, Series B, of the Holding
Company, unless such repayment, redemption or purchase is made from the proceeds of the issuance of certain replacement capital
securities and pursuant to the other terms and conditions set forth in the Replacement Capital Covenant.

Common Stock.

Convertible Preferred Stock.

to anti-dilution adjustments) upon a favorable vote of

In November 2010, the Holding Company issued to ALICO Holdings in connection with the financing of the
Acquisition 6,857,000 shares of Series B contingent convertible junior participating non-cumulative perpetual preferred stock (the “Con-
vertible Preferred Stock”) convertible into approximately 68,570,000 shares (valued at $40.90 per share at the time of the Acquisition) of the
Holding Company’s common stock (subject
the Holding Company’s common
stockholders. If a favorable vote of its common stockholders is not obtained by the first anniversary of the Acquisition Date, then the
Holding Company must pay ALICO Holdings $300 million and use reasonable efforts to list the preferred stock on the New York Stock
Exchange. Management considers the likelihood that the Holding Company will fail to obtain a vote of its common stockholders to be remote.
In November 2010, the Holding Company issued to ALICO Holdings in connection with the financing of the Acquisition
78,239,712 new shares of its common stock at $40.90 per share. The aggregate amount of MetLife, Inc.’s common stock to be issued to
ALICO Holdings in connection with the transaction is expected to be 214.6 million to 231.5 million shares, consisting of the 78.2 million
shares issued at closing, 68.6 million shares to be issued upon conversion of the Convertible Preferred Stock (with the stockholder vote on
such conversion to be held within one year after the closing) (together with $3.0 billion aggregate stated amount of Equity Units of MetLife,
Inc., the “Securities”) and between 67.8 million and 84.7 million shares of common stock, in total, issuable upon settlement of the purchase
contracts forming part of the Equity Units (in three tranches approximately two, three and four years after the closing). The ownership of the
Securities is subject to an investor rights agreement, which grants to ALICO Holdings certain rights and sets forth certain agreements with
respect to ALICO Holdings’ ownership, voting and transfer of the Securities, including minimum holding periods, restrictions on the number of
shares ALICO Holdings can sell at one time, its agreement to vote the common stock in the same proportion as the common stock voted by all
other stockholders, and its agreement not to seek control or influence the Company’s management or Board of Directors. ALICO Holdings has
indicated that it intends to monetize the Securities over time, subject to market conditions, following the lapse of agreed-upon minimum
holding periods. See “— The Company — Liquidity and Capital Sources — Equity Units.”

In August 2010, the Holding Company issued 86,250,000 new shares of its common stock at a price of $42.00 per share for gross
proceeds of $3,623 million. In connection with the offering of common stock, the Holding Company incurred $94 million of issuance costs
which have been recorded as a reduction of additional paid-in-capital.

In connection with the remarketing of

the junior subordinated debt securities, in February 2009, the Holding Company delivered
24,343,154 shares of its newly issued common stock, and in August 2008, the Holding Company delivered 20,244,549 shares of its
common stock from treasury stock, to settle the stock purchase contracts. See “— The Company — Liquidity and Capital Sources —
Remarketing of Junior Subordinated Debt Securities and Settlement of Stock Purchase Contracts.”

In October 2008, the Holding Company issued 86,250,000 shares of its common stock at a price of $26.50 per share for gross proceeds
of $2.3 billion. Of these shares issued, 75,000,000 shares were issued from treasury stock, and 11,250,000 were newly issued shares.
During the years ended December 31, 2010, 2009 and 2008, 332,121 shares, 861,586 shares and 2,271,188 shares of common stock
were issued from treasury stock for $18 million, $46 million and $118 million, respectively, to satisfy various stock option exercises. During the
year ended December 31, 2010, 2,182,174 new shares of common stock were issued for $74 million to satisfy various stock option
exercises. During both the years ended December 31, 2009 and 2008, no new shares of common stock were issued to satisfy stock option
exercises.

66

MetLife, Inc.

Equity Units.

In November 2010, the Holding Company issued to ALICO Holdings in connection with the financing of the Acquisition
$3.0 billion aggregate stated amount of Equity Units. The Equity Units, which are mandatorily convertible securities, will
initially consist of
(i) purchase contracts obligating the holder to purchase a variable number of shares of MetLife, Inc.’s common stock on each of three
specified future settlement dates (expected to be approximately two, three and four years after closing of the Acquisition), for a fixed amount
per purchase contract, (an aggregate of $1.0 billion on each settlement date) and (ii) an interest in each of three series of Debt Securities of
MetLife, Inc. The value of the purchase contracts at issuance of $247 million was calculated as the present value of the future contract
payments and was recorded in other liabilities. At future dates, the Series C, D and E Debt Securities will be subject to remarketing and sold to
investors. Holders of the Equity Units who elect to include their Debt Securities in a remarketing can use the proceeds thereof to meet their
obligations under the purchase contracts.

See Note 14 of the Notes to the Consolidated Financial Statements for further discussion of the Equity Units.

Liquidity and Capital Uses
Acquisitions.

The computation of the purchase price of the Acquisition is presented below:

November 1, 2010

(In millions)

Cash (includes $396 million of contractual purchase price adjustments) . . . . . . . . . . . . . . . . . . . . .

$ 7,196

MetLife, Inc.’s common stock (78,239,712 shares at $40.90 per share) . . . . . . . . . . . . . . . . . . . . .
MetLife, Inc.’s Convertible Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MetLife, Inc.’s Equity Units ($3.0 billion aggregate stated amount) . . . . . . . . . . . . . . . . . . . . . . . . .

3,200
2,805

3,189

Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$16,390

Debt Repayments. During the years ended December 31, 2010, 2009 and 2008, MetLife Bank made repayments of $349 million,
$497 million and $371 million, respectively, to the FHLB of NY related to long-term borrowings. During the years ended December 31, 2010,
2009 and 2008, MetLife Bank made repayments to the FHLB of NY related to short-term borrowings of $12.9 billion, $26.4 billion and
$4.6 billion, respectively. During the years ended December 31, 2009 and 2008, MetLife Bank made repayments related to short-term
borrowings to the Federal Reserve Bank of New York of $21.2 billion and 650 million, respectively. No repayments were made to the Federal
Reserve Bank of New York during the year ended December 31, 2010. During the year ended December 31, 2009, MICC made repayments of
$300 million to the FHLB of Boston related to short-term borrowings. No repayments were made to the FHLB of Boston during the years ended
December 31, 2010 and 2008.

Debt Repurchases. We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges
for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases or exchanges will be
dependent upon several factors, including our liquidity requirements, contractual restrictions, general market conditions, and applicable
regulatory, legal and accounting factors. Whether or not to repurchase any debt and the size and timing of any such repurchases will be
determined in the Company’s discretion.

Insurance Liabilities.

The Company’s principal cash outflows primarily relate to the liabilities associated with its various life insurance,
property and casualty, annuity and group pension products, operating expenses and income tax, as well as principal and interest on its
outstanding debt obligations. Liabilities arising from its insurance activities primarily relate to benefit payments under the aforementioned
products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse product
behavior differs somewhat by segment. In the Retirement Products segment, which includes individual annuities, lapses and surrenders tend
to occur in the normal course of business. During the years ended December 31, 2010 and 2009, general account surrenders and
withdrawals from annuity products were $3.8 billion and $4.3 billion, respectively. In the Corporate Benefit Funding segment, which includes
pension closeouts, bank owned life insurance and other
fixed annuity contracts, as well as funding agreements (including funding
agreements with the FHLB of NY and the FHLB of Boston) and other capital market products, most of the products offered have fixed
maturities or fairly predictable surrenders or withdrawals. With regard to Corporate Benefit Funding liabilities that provide customers with
limited liquidity rights, at December 31, 2010 there were $1,615 million of funding agreements and other capital market products that could be
put back to the Company after a period of notice. Of these liabilities, $1,565 million were subject to notice periods between 15 and 90 days.
The remainder of the balance was subject to a notice period of 9 months or greater. An additional $375 million of Corporate Benefit Funding
liabilities were subject to credit ratings downgrade triggers that permit early termination subject to a notice period of 90 days. See “— The
Company — Liquidity and Capital Uses — Contractual Obligations.”

Dividends.

The table below presents declaration, record and payment dates, as well as per share and aggregate dividend amounts, for

the common stock:

Declaration Date

Record Date

Payment Date

Per Share

Aggregate

Dividend

October 26, 2010 . . . . . . . . . . . . . . . . . . . . . .

November 9, 2010

December 14, 2010

October 29, 2009 . . . . . . . . . . . . . . . . . . . . . .
November 9, 2009
October 28, 2008 . . . . . . . . . . . . . . . . . . . . . . November 10, 2008

December 14, 2009
December 15, 2008

(In millions, except per
share data)

$0.74

$0.74
$0.74

$784(1)

$610
$592

(1)

Includes dividends on Convertible Preferred Stock issued in November 2010. See “— The Company — Liquidity and Capital Sources —
Convertible Preferred Stock.”
Future common stock dividend decisions will be determined by the Holding Company’s Board of Directors after taking into consideration
factors such as the Company’s current earnings, expected medium- and long-term earnings, financial condition, regulatory capital position,
and applicable governmental regulations and policies. Furthermore, the payment of dividends and other distributions to the Holding Company
by its insurance subsidiaries is regulated by insurance laws and regulations.

MetLife, Inc.

67

Information on the declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the Holding
Company’s Floating Rate Non-Cumulative Preferred Stock, Series A and 6.500% Non-Cumulative Preferred Stock, Series B is as follows for
the years ended December 31, 2010, 2009 and 2008:

Declaration Date

Record Date

Payment Date

Dividend

Series A
Per Share

Series A
Aggregate

Series B
per Share

Series B
Aggregate

(In millions, except per share data)

November 15, 2010 . . . . . . . . . . November 30, 2010

December 15, 2010

$0.2527777

$ 7

$0.4062500

$24

August 16, 2010 . . . . . . . . . . . . August 31, 2010
May 17, 2010 . . . . . . . . . . . . . . May 31, 2010

September 15, 2010
June 15, 2010

March 5, 2010 . . . . . . . . . . . . . February 28, 2010

March 15, 2010

$0.2555555
$0.2555555

$0.2500000

November 16, 2009 . . . . . . . . . . November 30, 2009

December 15, 2009

$0.2527777

August 17, 2009 . . . . . . . . . . . . August 31, 2009

September 15, 2009

$0.2555555

May 15, 2009 . . . . . . . . . . . . . . May 31, 2009

June 15, 2009

March 5, 2009 . . . . . . . . . . . . . February 28, 2009

March 16, 2009

$0.2555555

$0.2500000

November 17, 2008 . . . . . . . . . . November 30, 2008

December 15, 2008

$0.2527777

August 15, 2008 . . . . . . . . . . . . August 31, 2008
May 15, 2008 . . . . . . . . . . . . . . May 31, 2008

September 15, 2008
June 16, 2008

March 5, 2008 . . . . . . . . . . . . . February 29, 2008

March 17, 2008

$0.2555555
$0.2555555

$0.3785745

$0.4062500
$0.4062500

$0.4062500

$0.4062500

$0.4062500

$0.4062500

$0.4062500

$0.4062500

$0.4062500
$0.4062500

$0.4062500

6
7

6

$26

$ 7

6

7

6

$26

$ 7

6
7

9

$29

24
24

24

$96

$24

24

24

24

$96

$24

24
24

24

$96

Share Repurchases. At January 1, 2008, the Company had $511 million remaining under its common stock repurchase program
authorizations. In both January and April 2008, the Company’s Board of Directors authorized $1.0 billion common stock repurchase
programs. During the year ended December 31, 2008, the Company repurchased 19,716,418 shares for $1.2 billion under accelerated
share repurchases and 1,550,000 shares for $88 million in open market repurchases. At December 31, 2008, the Company had $1.3 billion
remaining under its common stock repurchase program authorizations. During the years ended December 31, 2010 and 2009, the Company
did not repurchase any shares.

Under these common stock repurchase program authorizations, the Holding Company may purchase its common stock from the MetLife
Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in privately negotiated transactions. Any future common
stock repurchases will be dependent upon several factors, including the Company’s capital position, its liquidity, its financial strength and
credit ratings, general market conditions and the price of MetLife, Inc.’s common stock compared to management’s assessment of the
stock’s underlying value and applicable regulatory, legal and accounting factors. Whether or not to purchase any common stock and the size
and timing of any such purchases will be determined in the Company’s complete discretion.

Residential Mortgage Loans Held-for-Sale. At December 31, 2010, the Company held $3,321 million in residential mortgage loans
held-for-sale, compared with $2,728 million at December 31, 2009, an increase of $593 million. From time to time, MetLife Bank has an
increased cash need to fund mortgage loans that it generally holds for a relatively short period before selling them to one of the government-
sponsored enterprises such as FNMA or FHLMC. To meet these increased funding requirements, as well as to increase overall
liquidity,
MetLife Bank takes advantage of collateralized borrowing opportunities with the Federal Reserve Bank of New York and the FHLB of NY. For
further detail on MetLife Bank’s use of these funding sources, see “— The Company — Liquidity and Capital Sources — Global Funding
Sources.”

Investment and Other. Additional cash outflows include those related to obligations of securities lending activities, investments in real
estate, limited partnerships and joint ventures, as well as litigation-related liabilities. Also, the Company pledges collateral to, and has
collateral pledged to it by, counterparties under the Company’s current derivative transactions. With respect to derivative transactions with
credit ratings downgrade triggers, a two-notch downgrade would have increased the Company’s derivative collateral requirements by
$159 million at December 31, 2010. In addition, the Company has pledged collateral and has had collateral pledged to it, and may be required
from time to time to pledge additional collateral or be entitled to have additional collateral pledged to it, in connection with collateral financing
arrangements related to the reinsurance of closed block liabilities and universal life secondary guarantee liabilities. See “— The Company —
Liquidity and Capital Sources — Collateral Financing Arrangements.”

Securities Lending.

The Company participates in a securities lending program whereby blocks of securities, which are included in fixed
maturity securities and short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks, and the Company
receives cash collateral from the borrower, which must be returned to the borrower when the loaned securities are returned to the Company.
Under the Company’s securities lending program, the Company was liable for cash collateral under its control of $24.6 billion and $21.5 billion
at December 31, 2010 and 2009, respectively. Of these amounts, $2.8 billion and $3.3 billion at December 31, 2010 and 2009, respectively,
were on open terms, meaning that the related loaned security could be returned to the Company on the next business day upon return of cash
collateral. Of the $2.7 billion of estimated fair value of the securities related to the cash collateral on open terms at December 31, 2010,
$2.3 billion were U.S. Treasury, agency and government guaranteed securities which, if put to the Company, can be immediately sold to
satisfy the cash requirements. See “— Investments — Securities Lending” for further information.

Other.

In September 2008, in connection with the split-off of Reinsurance Group of America (“RGA”) as described in Note 2 of the Notes
to the Consolidated Financial Statements, the Company received from MetLife stockholders 23,093,689 shares of MetLife, Inc.’s common

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MetLife, Inc.

stock with a market value of $1.3 billion and, in exchange, delivered 29,243,539 shares of RGA Class B common stock with a net book value
of $1.7 billion resulting in a loss on disposition, including transaction costs, of $458 million.

Contractual Obligations.

The following table summarizes the Company’s major contractual obligations at December 31, 2010:

Contractual Obligations

Total

One Year
or Less

More Than
One Year to
Three Years

(In millions)

More Than
Three Years
to Five Years

More Than
Five Years

Future policy benefits . . . . . . . . . . . . . . . . . . . . . . $319,565

$

6,271

$10,295

$12,205

$290,794

Policyholder account balances . . . . . . . . . . . . . . . .

289,823

Other policyholder liabilities . . . . . . . . . . . . . . . . . .

9,983

Payables for collateral under securities loaned and

other transactions . . . . . . . . . . . . . . . . . . . . . . .

Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .

Collateral financing arrangements . . . . . . . . . . . . . .

Junior subordinated debt securities . . . . . . . . . . . . .
Commitments to lend funds . . . . . . . . . . . . . . . . . .

Operating leases . . . . . . . . . . . . . . . . . . . . . . . . .

27,272

10,406

306
31,184

6,696

10,191
12,537

2,151

35,981

7,995

27,272

8,879

306
2,340

64

258
11,215

366

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,356

14,873

46,274

35,280

172,288

485

124

1,379

—

1,499

—
4,773

127

517
710

517

52

—

28

—
5,932

127

516
55

303

3

—

—

—
18,139

6,378

8,900
557

965

428

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $735,470

$115,820

$65,249

$54,573

$499,828

Future policy benefits — Future policy benefits include liabilities related to traditional whole life policies, term life policies, pension
closeout and other group annuity contracts, structured settlements, master terminal
funding agreements, single premium immediate
annuities, long-term disability policies, individual disability income policies, LTC policies and property and casualty contracts. Included
within future policy benefits are contracts where the Company is currently making payments and will continue to do so until the occurrence of a
specific event such as death, as well as those where the timing of a portion of the payments has been determined by the contract. Also
included are contracts where the Company is not currently making payments and will not make payments until the occurrence of an insurable
event, such as death or illness, or where the occurrence of the payment triggering event, such as a surrender of a policy or contract, is outside
the control of the Company. The Company has estimated the timing of the cash flows related to these contracts based on historical
experience, as well as its expectation of future payment patterns.

Liabilities related to accounting conventions, or which are not contractually due, such as shadow liabilities, excess interest reserves and

property and casualty loss adjustment expenses, of $1.4 billion have been excluded from amounts presented in the table above.

Amounts presented in the table above, excluding those related to property and casualty contracts, represent the estimated cash
payments for benefits under such contracts including assumptions related to the receipt of future premiums and assumptions related to
mortality, morbidity, policy lapse, renewal, retirement, inflation, disability incidence, disability terminations, policy loans and other contingent
events as appropriate to the respective product type. Payments for case reserve liabilities and incurred but not reported liabilities associated
with property and casualty contracts of $1.5 billion have been included using an estimate of the ultimate amount to be settled under the
policies based upon historical payment patterns. The ultimate amount to be paid under property and casualty contracts is not determined until
the Company reaches a settlement with the claimant, which may vary significantly from the liability or contractual obligation presented above
especially as it relates to incurred but not reported liabilities. All estimated cash payments presented in the table above are undiscounted as to
interest, net of estimated future premiums on policies currently in-force and gross of any reinsurance recoverable. The more than five years
category includes estimated payments due for periods extending for more than 100 years from the present date.

The sum of the estimated cash flows shown for all years in the table of $319.6 billion exceeds the liability amount of $173.4 billion included
on the consolidated balance sheet principally due to the time value of money, which accounts for at least 80% of the difference, as well as
differences in assumptions, most significantly mortality, between the date the liabilities were initially established and the current date.

For the majority of the Company’s insurance operations, estimated contractual obligations for future policy benefits and policyholder
account balance liabilities as presented in the table above are derived from the annual asset adequacy analysis used to develop actuarial
opinions of statutory reserve adequacy for state regulatory purposes. These cash flows are materially representative of the cash flows under
GAAP. (See “— Policyholder account balances” below.)

Actual cash payments to policyholders may differ significantly from the liabilities as presented in the consolidated balance sheet and the
estimated cash payments as presented in the table above due to differences between actual experience and the assumptions used in the
establishment of these liabilities and the estimation of these cash payments.

Policyholder account balances — Policyholder account balances include liabilities related to conventional guaranteed interest contracts,
guaranteed interest contracts associated with formal offering programs, funding agreements, individual and group annuities, total control
accounts, individual and group universal

life and company-owned life insurance.

life, variable universal

Included within policyholder account balances are contracts where the amount and timing of the payment is essentially fixed and
determinable. These amounts relate to policies where the Company is currently making payments and will continue to do so, as well as those
where the timing of the payments has been determined by the contract. Other contracts involve payment obligations where the timing of future
payments is uncertain and where the Company is not currently making payments and will not make payments until the occurrence of an
insurable event, such as death, or where the occurrence of the payment triggering event, such as a surrender of or partial withdrawal on a
policy or deposit contract, is outside the control of the Company. The Company has estimated the timing of the cash flows related to these
contracts based on historical experience, as well as its expectation of future payment patterns.

MetLife, Inc.

69

Excess interest reserves representing purchase accounting adjustments of $539 million, as well as $2.4 billion relating to embedded
derivatives, have been excluded from amounts presented in the table above as they represent accounting conventions and not contractual
obligations.

Amounts presented in the table above represent the estimated cash payments to be made to policyholders undiscounted as to interest
and including assumptions related to the receipt of future premiums and deposits; withdrawals, including unscheduled or partial withdrawals;
policy lapses; surrender charges; annuitization; mortality; future interest credited; policy loans and other contingent events as appropriate to
the respective product type. Such estimated cash payments are also presented net of estimated future premiums on policies currently in-
force and gross of any reinsurance recoverable. For obligations denominated in foreign currencies, cash payments have been estimated
using current spot rates.

The sum of the estimated cash flows shown for all years in the table of $289.8 billion exceeds the liability amount of $211.0 billion included
on the consolidated balance sheet principally due to the time value of money, which accounts for at least 80% of the difference, as well as
differences in assumptions between the date the liabilities were initially established and the current date. See the comments under “— Future
policy benefits” above regarding the source and uncertainties associated with the estimation of the contractual obligations related to future
policyholder benefits and policyholder account balances.

Other policyholder liabilities — Other policyholder liabilities are comprised of other policy-related balances, policyholder dividends

payable and the policyholder dividend obligation. Amounts included in the table above related to these balances are as follows:

a. Other policy-related balances includes liabilities for incurred but not reported claims and claims payable on group term life, long-term
disability, long-term care and dental; policyholder dividends left on deposit and policyholder dividends due and unpaid related primarily
to traditional
life and group life and health; and premiums received in advance. Liabilities related to unearned revenue and negative
VOBA of $2.2 billion and $4.3 billion, respectively, have been excluded from the cash payments presented in the table above because
they reflect accounting conventions and not contractual obligations. With the exception of policyholder dividends left on deposit, and
those items excluded as noted in the preceding sentence, the contractual obligation presented in the table above related to other
policy-related balances is equal to the liability reflected in the consolidated balance sheet. Such amounts are reported in the one year
or less category due to the short-term nature of the liabilities. Contractual obligations on policyholder dividends left on deposit are
projected based on assumptions of policyholder withdrawal activity.

b. Policyholder dividends payable consists of liabilities related to dividends payable in the following calendar year on participating
policies. As such, the contractual obligation related to policyholder dividends payable is presented in the table above in the one year or
less category at the amount of the liability presented in the consolidated balance sheet.

c. The nature of the policyholder dividend obligation is described in Note 18 of the Notes to the Consolidated Financial Statements.
Because the exact timing and amount of the ultimate policyholder dividend obligation is subject to significant uncertainty and the
amount of the policyholder dividend obligation is based upon a long-term projection of the performance of the closed block, we have
reflected the obligation at the amount of the liability, if any, presented in the consolidated balance sheet in the more than five years
category. This was presented to reflect the long-duration of the liability and the uncertainty of the ultimate cash payment.

Payables for collateral under securities loaned and other transactions — The Company has accepted cash collateral in connection with
securities lending and derivative transactions. As the securities lending transactions expire within the next year or the timing of the return of the
collateral is uncertain, the return of the collateral has been included in the one year or less category in the table above. The Company also
holds non-cash collateral, which is not reflected as a liability in the consolidated balance sheet, of $984 million at December 31, 2010.

Bank deposits — Bank deposits of $10.4 billion exceed the amount on the balance sheet of $10.3 billion due to the inclusion of estimated
interest payments. Liquid deposits, including demand deposit accounts, money market accounts and savings accounts, are assumed to
mature at carrying value within one year. Certificates of deposit are assumed to pay all

interest and principal at maturity.

Short-term debt, long-term debt, collateral financing arrangements and junior subordinated debt securities — Amounts presented in the
table above for short-term debt, long-term debt, collateral financing arrangements and junior subordinated debt securities differ from the
balances presented on the consolidated balance sheet as the amounts presented in the table above do not include premiums or discounts
upon issuance or purchase accounting fair value adjustments. The amounts presented above also include interest on such obligations as
described below.

Short-term debt consists of borrowings with original maturities of one year or less carrying fixed interest rates. The contractual obligation
for short-term debt presented in the table above represents the principal amounts due upon maturity plus the related interest for the period
from January 1, 2011 through maturity.

Long-term debt bears interest at fixed and variable interest rates through their respective maturity dates. Interest on fixed rate debt was
computed using the stated rate on the obligations for the period from January 1, 2011 through maturity. Interest on variable rate debt was
computed using prevailing rates at December 31, 2010 and, as such, does not consider the impact of future rate movements. Long-term debt
also includes payments under capital lease obligations of $3 million, $2 million, $0 and $27 million, in the one year or less, more than one year
to three years, more than three years to five years and more than five years categories, respectively. Long-term debt presented in the table
above excludes $6,820 million at December 31, 2010 of long-term debt relating to CSEs.

Collateral financing arrangements bear interest at fixed and variable interest rates through their respective maturity dates. Interest on fixed
rate debt was computed using the stated rate on the obligations for the period from January 1, 2011 through maturity. Interest on variable rate
debt was computed using prevailing rates at December 31, 2010 and, as such, does not consider the impact of future rate movements.
Pursuant to these collateral financing arrangements, the Holding Company may be required to deliver cash or pledge collateral to the
respective unaffiliated financial institutions. See “— The Company — Liquidity and Capital Sources — Collateral Financing Arrangements.”
Junior subordinated debt securities bear interest at fixed interest rates through their respective redemption dates. Interest was computed
using the stated rates on the obligations for the period from January 1, 2011 through the scheduled redemption dates as it is the Company’s
expectation that the debt will be redeemed at that time. Inclusion of interest payments on junior subordinated debt through the final maturity
dates would increase the contractual obligation by $7.7 billion.

Commitments to lend funds — The Company commits to lend funds under mortgage loans, partnerships, bank credit facilities, bridge
loans and private corporate bond investments. In the table above, the timing of the funding of mortgage loans and private corporate bond
investments is based on the expiration date of the commitment. As it relates to commitments to lend funds to partnerships and under bank
credit facilities, the Company anticipates that these amounts could be invested any time over the next five years; however, as the timing of the

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MetLife, Inc.

fulfillment of the obligation cannot be predicted, such obligations are presented in the one year or less category in the table above.
Commitments to fund bridge loans are short-term obligations and, as a result, are presented in the one year or less category in the table
above. See “— Off-Balance Sheet Arrangements.”

Operating leases — As a lessee, the Company has various operating leases, primarily for office space. Contractual provisions exist that
could increase or accelerate those lease obligations presented, including various leases with early buyouts and/or escalation clauses.
However, the impact of any such transactions would not be material to the Company’s financial position or results of operations. See “— Off-
Balance Sheet Arrangements.”

Other — Includes other miscellaneous contractual obligations of $32 million not included elsewhere in the table above. Other liabilities
presented in the table above are principally comprised of amounts due under reinsurance arrangements, payables related to securities
purchased but not yet settled, securities sold short, accrued interest on debt obligations, estimated fair value of derivative obligations,
deferred compensation arrangements, guaranty liabilities, the estimated fair value of forward stock purchase contracts, as well as general
accruals and accounts payable due under contractual obligations. If the timing of any of the other liabilities is sufficiently uncertain, the
amounts are included within the one year or less category.

The other liabilities presented in the table above differ from the amount presented in the consolidated balance sheet by $5.0 billion due
primarily to the exclusion of items such as legal liabilities, pension and postretirement benefit obligations, taxes due other than income tax,
unrecognized tax benefits and related accrued interest, accrued severance and employee incentive compensation and other liabilities such
as deferred gains and losses. Such items have been excluded from the table above as they represent accounting conventions or are not
liabilities due under contractual obligations.

The net funded status of the Company’s pension and other postretirement liabilities included within other liabilities has been excluded from
the amounts presented in the table above. Rather, the amounts presented represent the discretionary contributions of $175 million to be
made by the Company to our pension plan in 2011 and the discretionary contributions of $120 million, based on the current year’s expected
gross benefit payments to participants, to be made by the Company to the postretirement benefit plans during 2011. Virtually all contributions
to the pension and postretirement benefit plans are made by the insurance subsidiaries of the Holding Company with little impact on the
Holding Company’s cash flows.

Excluded from the table above are unrecognized tax benefits and related accrued interest of $810 million and $221 million, respectively,

for which the Company cannot reliably determine the timing of payment. Current income tax payable is also excluded from the table.

See also “— Off-Balance Sheet Arrangements.”
Separate account liabilities are excluded from the table above. Generally, the separate account owner, rather than the Company, bears the
investment risk of these funds. The separate account assets are legally segregated and are not subject to the claims that arise out of any other
business of the Company. Net deposits, net investment income and realized and unrealized capital gains and losses on the separate
accounts are fully offset by corresponding amounts credited to contractholders whose liability is reflected with the separate account
liabilities. Separate account liabilities are fully funded by cash flows from the separate account assets and are set equal to the estimated fair
value of separate account assets.

The Company also enters into agreements to purchase goods and services in the normal course of business; however, these purchase

obligations were not material to its consolidated results of operations or financial position at December 31, 2010.

Additionally, the Company has agreements in place for services it conducts, generally at cost, between subsidiaries relating to insurance,
reinsurance, loans and capitalization. Intercompany transactions have appropriately been eliminated in consolidation. Intercompany trans-
actions among insurance subsidiaries and affiliates have been approved by the appropriate departments of insurance as required.

Support Agreements.

The Holding Company and several of its subsidiaries (each, an “Obligor”) are parties to various capital support
commitments, guarantees and contingent reinsurance agreements with certain subsidiaries of the Holding Company and a corporation in
which the Holding Company owns 50% of the equity. Under these arrangements, each Obligor, with respect to the applicable entity, has
agreed to cause such entity to meet specified capital and surplus levels, has guaranteed certain contractual obligations or has agreed to
provide, upon the occurrence of certain contingencies, reinsurance for such entity’s insurance liabilities. We anticipate that in the event that
these arrangements place demands upon the Company, there will be sufficient liquidity and capital to enable the Company to meet
anticipated demands. See “— The Holding Company — Liquidity and Capital Uses — Support Agreements.”

Litigation. Putative or certified class action litigation and other litigation, and claims and assessments against the Company, in addition to
those discussed elsewhere herein and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the
course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lending bank,
employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities
regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and
regulations.

It is not possible to predict or determine the ultimate outcome of all pending investigations and legal proceedings. In some of the matters
referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these
considerations, it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial
position, based on information currently known by the Company’s management, in its opinion, the outcome of such pending investigations
and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these
matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a
material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

The Holding Company

Capital
Restrictions and Limitations on Bank Holding Companies and Financial Holding Companies.

The Holding Company and its insured
depository institution subsidiary, MetLife Bank, are subject to risk-based and leverage capital guidelines issued by the federal banking
regulatory agencies for banks and bank and financial holding companies. The federal banking regulatory agencies are required by law to take
specific prompt corrective actions with respect to institutions that do not meet minimum capital standards. As of their most recently filed
reports with the federal banking regulatory agencies, the Holding Company and MetLife Bank met the minimum capital standards as per
federal banking regulatory agencies with all of MetLife Bank’s risk-based and leverage capital ratios meeting the federal banking regulatory

MetLife, Inc.

71

agencies “well capitalized” standards and all of the Holding Company’s risk-based and leverage capital ratios meeting the “adequately
capitalized” standards. In addition to requirements which may be imposed in connection with the implementation of Dodd-Frank, if endorsed
and adopted in the U.S., Basel III will also lead to increased capital and liquidity requirements for bank holding companies, such as MetLife,
Inc. See “— Industry Trends — Financial and Economic Environment— Regulatory Changes.”

The following table contains the RBC ratios and the regulatory requirements for MetLife, Inc., as a bank holding company, and MetLife

Bank:

MetLife, Inc.
RBC Ratios — Bank Holding Company

December 31,

2010

2009

Regulatory
Requirements
Minimum

Regulatory
Requirements
“Well Capitalized”

Total RBC Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.52% 9.88%

Tier 1 RBC Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.21% 9.44%
Tier 1 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11% 5.71%

8.00%

4.00%
4.00%

10.00%

6.00%
n/a

MetLife Bank
RBC Ratios — Bank

December 31,

2010

2009

Regulatory
Requirements
Minimum

Regulatory
Requirements
“Well Capitalized”

Total RBC Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00% 13.41%
Tier 1 RBC Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.16% 12.16%

Tier 1 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.14% 6.64%

8.00%
4.00%

4.00%

10.00%
6.00%

5.00%

Summary of Primary Sources and Uses of Liquidity and Capital.

For information regarding the primary sources and uses of Holding

Company liquidity and capital, see “— The Company — Capital — Summary of Primary Sources and Uses of Liquidity and Capital.”

Liquidity and Capital
Liquidity and capital are managed to preserve stable, reliable and cost-effective sources of cash to meet all current and future financial
obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix of short- and long-term funding
sources from the wholesale financial markets and the ability to borrow through credit and committed credit facilities. The Holding Company is
an active participant in the global financial markets through which it obtains a significant amount of funding. These markets, which serve as
cost-effective sources of funds, are critical components of the Holding Company’s liquidity and capital management. Decisions to access
these markets are based upon relative costs, prospective views of balance sheet growth and a targeted liquidity profile and capital structure.
A disruption in the financial markets could limit the Holding Company’s access to liquidity.

The Holding Company’s ability to maintain regular access to competitively priced wholesale funds is fostered by its current credit ratings
from the major credit rating agencies. We view our capital ratios, credit quality, stable and diverse earnings streams, diversity of liquidity
sources and our liquidity monitoring procedures as critical to retaining such credit ratings. See “— The Company — Capital — Rating
Agencies.”

Liquidity is monitored through the use of internal

liquidity risk metrics, including the composition and level of the liquid asset portfolio,
timing differences in short-term cash flow obligations, access to the financial markets for capital and debt transactions and exposure to
contingent draws on the Holding Company’s liquidity.

Liquidity and Capital Sources
Dividends from Subsidiaries.

The Holding Company relies in part on dividends from its subsidiaries to meet its cash requirements. The
Holding Company’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of
their respective domiciles. The dividend limitation for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end
of the immediately preceding calendar year and statutory net gain from operations for the immediately preceding calendar year. Statutory
accounting practices, as prescribed by insurance regulators of various states in which the Company conducts business, differ in certain
respects from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences relate to the
treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation assumptions, goodwill and surplus
notes.

The table below sets forth the dividends permitted to be paid by the respective insurance subsidiary without insurance regulatory approval

and the respective dividends paid:

Company

Metropolitan Life Insurance Company . . . . . . . . . . . . . . . . . .
American Life Insurance Company(6) . . . . . . . . . . . . . . . . . . .
MetLife Insurance Company of Connecticut
. . . . . . . . . . . . . .
Metropolitan Property and Casualty Insurance Company . . . . . .
Metropolitan Tower Life Insurance Company . . . . . . . . . . . . . .

2011

Permitted
w/o

2010

Permitted
w/o

Approval(1) Paid(2)

Approval(3) Paid(2)
(In millions)

2009

Permitted
w/o
Approval(3)

2008

Permitted
w/o
Approval(3)

Paid(2)

$ —
$631(4) $1,262
$1,321
N/A
$ — $ 511
$ 661
$ 659
$ 517
$ —
$330
$ — $300
$ — $260
$ —
$

$569(7) $

93

80

$552
N/A
$714
9
$
$ 88

$1,318(5) $1,299
N/A
N/A
$1,026
$ 500
$ —
$ 300
$ 277(8) $ 113

(1) Reflects dividend amounts that may be paid during 2011 without prior regulatory approval. However, because dividend tests may be
based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2011, some or all of such
dividends may require regulatory approval.

(2) All amounts paid, including those requiring regulatory approval.
(3) Reflects dividend amounts that could have been paid during the relevant year without prior regulatory approval.

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MetLife, Inc.

Includes securities transferred to the Holding Company of $399 million.

(4)
(5) Consists of shares of RGA stock distributed by MLIC to the Holding Company as an in-kind dividend of $1,318 million.
(6) Reflects dividends permitted to be paid and the respective dividends paid since the Acquisition Date. See Note 2 to the Notes to the

(7)
(8)

Consolidated Financial Statements.
Includes shares of an affiliate distributed to the Holding Company as an in-kind dividend of $475 million.
Includes shares of an affiliate distributed to the Holding Company as an in-kind dividend of $164 million.
In addition to the amounts presented in the table above, for the years ended December 31, 2010, 2009 and 2008, cash dividends in the

aggregate amount of $0, $215 million and $235 million, respectively, were paid to the Holding Company.

The dividend capacity of non-U.S. operations is subject to similar restrictions established by the local regulators. The non-U.S. regulatory
regimes also commonly limit the dividend payments to the parent to a portion of the prior year’s statutory income, as determined by the local
accounting principles. The regulators of the non-U.S. operations, including the Japan branch of American Life, may also limit or not permit
profit repatriations or other transfers of funds to the U.S. if such transfers would be detrimental to the solvency or financial strength of the
operations of the non-U.S. operations, or for other reasons. Most of the non-U.S. subsidiaries are second tier subsidiaries and are not directly
owned by the Holding Company. The capital and rating considerations applicable to the first tier subsidiaries may also impact the dividend
flow into the Holding Company.

The Company’s management actively manages its target and excess capital levels and dividend flows on a pro-active basis and forecasts
local capital positions as part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to
business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market.
Management of the Holding Company cannot provide assurances that the Holding Company’s subsidiaries will have statutory earnings to
support payment of dividends to the Holding Company in an amount sufficient to fund its cash requirements and pay cash dividends and that
the applicable regulators will not disapprove any dividends that such subsidiaries must submit for approval. See Note 18 of the Notes to the
Consolidated Financial Statements.

Liquid Assets. An integral part of the Holding Company’s liquidity management is the amount of liquid assets it holds. Liquid assets
include cash, cash equivalents, short-term investments and publicly-traded securities, excluding: (i) cash collateral received under the
Company’s securities lending program that has been reinvested in cash, cash equivalents, short-term investments and publicly-traded
securities; and (ii) cash collateral received from counterparties in connection with derivative instruments. At December 31, 2010 and 2009,
the Holding Company had $2.8 billion and $3.8 billion, respectively, in liquid assets. In addition, the Holding Company has pledged collateral
and has had collateral pledged to it, and may be required from time to time to pledge additional collateral or be entitled to have additional
collateral pledged to it. At December 31, 2010 and 2009, the Holding Company had pledged $362 million and $289 million, respectively, of
liquid assets under collateral support agreements.

Shelf Registration.

In November 2010, the Holding Company filed a shelf registration statement (the “2010 Shelf Registration State-
ment”) with the U.S. Securities and Exchange Commission (“SEC”), which was automatically effective upon filing, in accordance with SEC
rules. SEC rules also allow for pay-as-you-go fees and the ability to add securities by filing automatically effective amendments for
companies, such as the Holding Company, which qualify as “Well-Known Seasoned Issuers.” The 2010 Shelf Registration Statement
registered an unlimited amount of debt and equity securities and replaces the shelf registration statement that the Holding Company filed in
November 2007, which expired in the fourth quarter of 2010. The terms of any offering will be established at the time of the offering.

Global Funding Sources.

Liquidity is also provided by a variety of short-term instruments, including commercial paper. Capital

is
provided by a variety of
financing
arrangements, capital securities and stockholders’ equity. The diversity of the Holding Company’s funding sources enhances funding
flexibility, limits dependence on any one source of funds and generally lowers the cost of funds. Other sources of the Holding Company’s
liquidity include programs for short-and long-term borrowing, as needed.

instruments, including medium- and long-term debt, junior subordinated debt securities, collateral

We continuously monitor and adjust our liquidity and capital plans for the Holding Company and its subsidiaries in light of changing

requirements and market conditions.

Long-term Debt.

The following table summarizes the outstanding long-term debt of the Holding Company at:

December 31,

2010

2009

(In millions)

Long-term debt — unaffiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,258
Long-term debt — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

665(1) $

$10,458
500

Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,797

Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,748

$ 2,797

$ 1,748

(1)

Includes $165 million of affiliated senior notes associated with bonds held by ALICO.
Short-term Debt. MetLife, Inc. maintains a commercial paper program, proceeds of which can be used to finance the general liquidity
needs of MetLife, Inc. and its subsidiaries. The Holding Company had no short-term debt outstanding at both December 31, 2010 and 2009.
There was no short-term debt activity in 2010. During the years ended December 31, 2009 and 2008, the weighted average interest rate on
short-term debt, comprised only of commercial paper, was 1.25% and 2.5%, respectively. During the year ended December 31, 2009, the
average daily balance on short-term debt was $5 million, and the average days outstanding was 6 days.

Debt Issuances and Other Borrowings.

For information on debt issuances and other borrowings entered into by the Holding Company,

see “— The Company — Liquidity and Capital Sources — Debt Issuances and Other Borrowings.”

MetLife, Inc.

73

Senior Notes.

The following table summarizes the Holding Company’s outstanding senior notes series by maturity date, excluding any

premium or discount, at December 31, 2010:

Maturity Date

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2018(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2041 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2045(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principal

(In millions)

$ 750
$ 400

$ 397

$ 500
$ 250

$ 350

$1,000
$1,000

$1,250

$1,035
$ 500

$ 500

$1,035
$ 729

$1,000

$ 500
$1,000

$ 673

$ 600

$ 200
$ 750

$1,000

$ 750
$ 500

Interest Rate

6.13%
5.38%

3-month LIBOR + .032%

5.00%
3-month LIBOR + 1.25%

5.50%

2.38%
5.00%

6.75%

6.82%
1.56%

2.46%

7.72%
5.25%

4.75%

1.56%
1.92%

5.38%

6.50%

5.88%
6.38%

5.70%

5.88%
2.46%

(1) Represents one of two tranches comprising the Series C Debt Securities.
(2) Represents one of two tranches comprising the Series E Debt Securities.

Collateral Financing Arrangements.

For information on collateral financing arrangements entered into by the Holding Company, see

“— The Company — Liquidity and Capital Sources — Collateral Financing Arrangements.”

Credit and Committed Facilities. At December 31, 2010, the Holding Company, along with MetLife Funding, maintained $4.0 billion in
unsecured credit facilities, the proceeds of which are available to be used for general corporate purposes, to support the borrowers’
commercial paper programs and for the issuance of letters of credit. At December 31, 2010, the Holding Company had outstanding
$1.5 billion in letters of credit and no drawdowns against this facility. Remaining unused commitments were $2.5 billion at December 31,
2010.

The Holding Company maintains committed facilities with a capacity of $300 million. At December 31, 2010, the Holding Company had
outstanding $300 million in letters of credit and no drawdowns against these facilities. There were no remaining unused commitments at
December 31, 2010. In addition, the Holding Company is a party to committed facilities of certain of its subsidiaries, which aggregated
$12.1 billion at December 31, 2010. The committed facilities are used as collateral for certain of the Company’s affiliated reinsurance
liabilities.

See Note 11 of the Notes to the Consolidated Financial Statements for further detail on these facilities.
Covenants. Certain of the Holding Company’s debt instruments, credit facilities and committed facilities contain various administrative,
reporting, legal and financial covenants. The Holding Company believes it was in compliance with all covenants at December 31, 2010 and
2009.

Preferred Stock, Convertible Preferred Stock, Common Stock and Equity Units.

For information on preferred stock, convertible
preferred stock, common stock and common equity units issued by the Holding Company, see “— The Company — Liquidity and Capital
Sources — Preferred Stock,” “— Convertible Preferred Stock,” “— Common Stock,” and “— Equity Units,” respectively.

Liquidity and Capital Uses
The primary uses of liquidity of the Holding Company include debt service, cash dividends on preferred, convertible preferred and
common stock, capital contributions to subsidiaries, payment of general operating expenses and acquisitions. Based on our analysis and
comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior
insurance regulatory approval, our asset portfolio and other cash flows and anticipated access to the capital markets, we believe there will be
sufficient liquidity and capital to enable the Holding Company to make payments on debt, make cash dividend payments on its preferred,
convertible preferred and common stock, contribute capital to its subsidiaries, pay all general operating expenses and meet its cash needs.
For information regarding the purchase price of the Acquisition, see “— The Company — Liquidity and Capital Uses —

Acquisitions.

Acquisitions.”

Affiliated Capital Transactions. During the years ended December 31, 2010, 2009 and 2008, the Holding Company invested an

aggregate of $699 million (excludes the Acquisition), $986 million and $2.6 billion, respectively, in various subsidiaries.

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MetLife, Inc.

The Holding Company lends funds, as necessary, to its subsidiaries, some of which are regulated, to meet their capital requirements.

Such loans are included in loans to subsidiaries and consisted of the following at:

Subsidiaries

Interest Rate

Maturity Date

2010

2009

December 31,

(In millions)

Metropolitan Life Insurance Company . . . . . . . . 6-month LIBOR + 1.80% December 31, 2011
Metropolitan Life Insurance Company . . . . . . . . 6-month LIBOR + 1.80% December 31, 2011

$ 775
—

$ 775
300

Metropolitan Life Insurance Company . . . . . . . .

Metropolitan Life Insurance Company . . . . . . . .

7.13%

7.13%

December 15, 2032

January 15, 2033

400

100

400

100

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,275

$1,575

Debt Repayments.

The Holding Company intends to either repay all or refinance in whole or in part the debt that is due in December

2011. See “— The Holding Company — Liquidity and Capital Sources — Senior Notes.”

Support Agreements.

its
subsidiaries and a corporation in which it owns 50% of the equity. Under these arrangements, the Holding Company has agreed to cause
each such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations.

The Holding Company is party to various capital support commitments and guarantees with certain of

In November 2010, the Holding Company guaranteed the obligations of Exeter Reassurance Company, Ltd. (“Exeter”) in an aggregate
amount up to $1.0 billion, under a reinsurance agreement with MetLife Europe Limited (“MEL”), under which Exeter reinsures the guaranteed
living benefits and guaranteed death benefits associated with certain unit-linked annuity contracts issued by MEL.

In January 2010, the Holding Company guaranteed the obligations of its subsidiary, Missouri Reinsurance (Barbados) Inc. (“MoRe”), under
a retrocession agreement with RGA Reinsurance (Barbados) Inc., pursuant to which MoRe retrocedes certain group term life insurance
issued by MLIC.

In December 2009, the Holding Company, in connection with MetLife Reinsurance Company of Vermont (“MRV”)’s reinsurance of certain
life and term life insurance risks, committed to the Vermont Department of Banking, Insurance, Securities and Health Care
universal
Administration to take necessary action to cause the third protected cell of MRV to maintain total adjusted capital equal to or greater than
200% of such protected cell’s authorized control level RBC, as defined in state insurance statutes. See “— The Company — Liquidity and
Capital Sources — Credit and Committed Facilities” and Note 11 of the Notes to the Consolidated Financial Statements.

The Holding Company, in connection with MRV’s reinsurance of certain universal

life and term life insurance risks, committed to the
Vermont Department of Banking, Insurance, Securities and Health Care Administration to take necessary action to cause each of the two initial
protected cells of MRV to maintain total adjusted capital equal to or greater than 200% of such protected cell’s authorized control level RBC,
as defined in state insurance statutes. See “— The Company — Liquidity and Capital Sources — Credit and Committed Facilities” and
Note 11 of the Notes to the Consolidated Financial Statements.

The Holding Company, in connection with the collateral financing arrangement associated with MRC’s reinsurance of a portion of the
liabilities associated with the closed block, committed to the South Carolina Department of Insurance to make capital contributions, if
necessary, to MRC so that MRC may at all times maintain its total adjusted capital at a level of not less than 200% of the company action
level RBC, as defined in state insurance statutes as in effect on the date of determination or December 31, 2007, whichever calculation
produces the greater capital requirement, or as otherwise required by the South Carolina Department of Insurance. See “— The Company —
Liquidity and Capital Sources — Debt Issuances and Other Borrowings” and Note 12 of the Notes to the Consolidated Financial Statements.
The Holding Company, in connection with the collateral financing arrangement associated with MRSC’s reinsurance of universal
life
secondary guarantees, committed to the South Carolina Department of Insurance to take necessary action to cause MRSC to maintain total
adjusted capital equal to the greater of $250,000 or 100% of MRSC’s authorized control level RBC, as defined in state insurance statutes. See
“— The Company — Liquidity and Capital Sources — Debt Issuances and Other Borrowings” and Note 12 of the Notes to the Consolidated
Financial Statements.

The Holding Company has net worth maintenance agreements with two of

its insurance subsidiaries, MetLife Investors Insurance
Company and First MetLife Investors Insurance Company. Under these agreements, as subsequently amended, the Holding Company
agreed, without limitation as to the amount, to cause each of these subsidiaries to have a minimum capital and surplus of $10 million, total
adjusted capital at a level not less than 150% of the company action level RBC, as defined by state insurance statutes, and liquidity necessary
to enable it to meet its current obligations on a timely basis.

The Holding Company entered into a net worth maintenance agreement with Mitsui Sumitomo MetLife Insurance Company Limited (“MSI
MetLife”), an investment in Japan of which the Holding Company owns 50% of the equity. Under the agreement, the Holding Company agreed,
without limitation as to amount, to cause MSI MetLife to have the amount of capital and surplus necessary for MSI MetLife to maintain a
solvency ratio of at least 400%, as calculated in accordance with the Insurance Business Law of Japan, and to make such loans to MSI MetLife
as may be necessary to ensure that MSI MetLife has sufficient cash or other liquid assets to meet its payment obligations as they fall due. As
described in Note 2 of the Notes to the Consolidated Financial Statements, the Holding Company reached an agreement to sell
its 50%
interest in MSI MetLife to a third-party. Upon the close of such sale, the Holding Company’s obligations under the net worth maintenance
agreement will terminate.

The Holding Company has guaranteed the obligations of its subsidiary, Exeter, under a reinsurance agreement with MSI MetLife, under
which Exeter reinsures variable annuity business written by MSI MetLife. This guarantee will remain in place until such time as the reinsurance
agreement between Exeter and MSI MetLife is terminated, notwithstanding any prior disposition of the Holding Company’s interest in MSI
MetLife as described in Note 2 of the Notes to the Consolidated Financial Statements.

The Holding Company also guarantees the obligations of a number of its subsidiaries under credit facilities with third-party banks. See

Note 11 of the Notes to the Consolidated Financial Statements.

Adoption of New Accounting Pronouncements

See “Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Consolidated Financial Statements.

MetLife, Inc.

75

Future Adoption of New Accounting Pronouncements

See “Future Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Consolidated Financial Statements.

Subsequent Events

Dividends
On February 18, 2011, the Holding Company announced dividends of $0.2500000 per share, for a total of $6 million, on its Series A
preferred shares, and $0.4062500 per share, for a total of $24 million, on its Series B preferred shares, subject to the final confirmation that it
has met the financial tests specified in the Series A and Series B preferred shares, which the Company anticipates will be made on or about
March 7, 2011. Both dividends will be payable March 15, 2011 to shareholders of record as of February 28, 2011.

Credit Facility
On February 1, 2011, the Holding Company entered into a committed facility with a third-party bank to provide letters of credit for the
benefit of MoRe, a captive reinsurance subsidiary, to address its short-term solvency needs based on guidance from the regulator. This one-
year facility provides for the issuance of letters of credit in amounts up to $350 million. Under the facility, a letter of credit for $250 million was
issued on February 2, 2011 and increased to $295 million on February 23, 2011, which management believes satisfies MoRe’s solvency
requirements.

Quantitative and Qualitative Disclosures About Market Risk

Risk Management
The Company must effectively manage, measure and monitor the market risk associated with its assets and liabilities. It has developed an
integrated process for managing risk, which it conducts through its Enterprise Risk Management Department, Asset/Liability Management
Unit, Treasury Department and Investment Department along with the management of the business segments. The Company has established
and implemented comprehensive policies and procedures at both the corporate and business segment level to minimize the effects of
potential market volatility.

The Company regularly analyzes its exposure to interest rate, equity market price and foreign currency exchange rate risks. As a result of
that analysis, the Company has determined that the estimated fair values of certain assets and liabilities are materially exposed to changes in
interest rates, foreign currency exchange rates and changes in the equity markets.

Enterprise Risk Management. MetLife has established several financial and non-financial senior management committees as part of its
risk management process. These committees manage capital and risk positions, approve ALM strategies and establish appropriate corporate
business standards. Further enhancing its committee structure, during the second quarter of 2010, MetLife created an Enterprise Risk
Committee made up of the following voting members: the Chief Financial Officer, the Chief Investment Officer, the President of U.S. Business,
the President of International and the Chief Risk Officer. This committee is responsible for reviewing all material risks to the enterprise and
deciding on actions if necessary, in the event risks exceed desirable targets, taking into consideration best practices to resolve or mitigate
those risks.

MetLife also has a separate Enterprise Risk Management Department, which is responsible for risk management throughout MetLife and

reports to MetLife’s Chief Risk Officer. The Enterprise Risk Management Department’s primary responsibilities consist of:

(cid:129) implementing a corporate risk framework, which outlines the Company’s approach for managing risk on an enterprise-wide basis;
(cid:129) developing policies and procedures for managing, measuring, monitoring and controlling those risks identified in the corporate risk

framework;

(cid:129) establishing appropriate corporate risk tolerance levels;
(cid:129) deploying capital on an economic capital basis; and
(cid:129) reporting on a periodic basis to the Finance and Risk Committee of the Company’s Board of Directors; with respect to credit risk, to the
Investment Committee of the Company’s Board of Directors; and, reporting on various aspects of risk, to financial and non-financial
senior management committees.

Asset/Liability Management.

The Company actively manages its assets using an approach that balances quality, diversification, asset/
liability matching, liquidity, concentration and investment return. The goals of the investment process are to optimize, net of income tax, risk-
adjusted investment income and risk-adjusted total return while ensuring that the assets and liabilities are reasonably managed on a cash flow
and duration basis. The ALM process is the shared responsibility of the Financial Risk Management and Asset/Liability Management Unit,
Enterprise Risk Management, the Portfolio Management Unit, and the senior members of the business segments and is governed by the ALM
Committees. The ALM Committees’ duties include reviewing and approving target portfolios, establishing investment guidelines and limits
and providing oversight of the ALM process on a periodic basis. The directives of the ALM Committees are carried out and monitored through
ALM Working Groups which are set up to manage by product type. In addition, an ALM Steering Committee oversees the activities of the
underlying ALM Committees.

MetLife establishes target asset portfolios for each major insurance product, which represent the investment strategies used to profitably
fund its liabilities within acceptable levels of risk. These strategies are monitored through regular review of portfolio metrics, such as effective
duration, yield curve sensitivity, convexity, liquidity, asset sector concentration and credit quality by the ALM Working Groups.

Market Risk Exposures

The Company has exposure to market risk through its insurance operations and investment activities. For purposes of this disclosure,

“market risk” is defined as the risk of loss resulting from changes in interest rates, foreign currency exchange rates and equity market.

Interest Rates.

The Company’s exposure to interest rate changes results most significantly from its holdings of fixed maturity securities,
as well as its interest rate sensitive liabilities. The fixed maturity securities include U.S. and foreign government bonds, securities issued by
government agencies, corporate bonds and mortgage-backed securities, all of which are mainly exposed to changes in medium- and long-
term interest rates. The interest rate sensitive liabilities for purposes of this disclosure include debt, policyholder account balances related to
certain investment type contracts, and net embedded derivatives on variable annuities with guaranteed minimum benefits which have the
same type of interest rate exposure (medium- and long-term interest rates) as fixed maturity securities. The Company employs product
design, pricing and ALM strategies to reduce the adverse effects of interest rate movements. Product design and pricing strategies include

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MetLife, Inc.

the use of surrender charges or restrictions on withdrawals in some products and the ability to reset credited rates for certain products. ALM
strategies include the use of derivatives and duration mismatch limits. See “Risk Factors — Changes in Market
Interest Rates May
Significantly Affect Our Profitability.”

Foreign Currency Exchange Rates.

The Company’s exposure to fluctuations in foreign currency exchange rates against the U.S. dollar
results from its holdings in non-U.S. dollar denominated fixed maturity and equity securities, mortgage loans, and certain liabilities, as well as
through its investments in foreign subsidiaries. The principal currencies that create foreign currency exchange rate risk in the Company’s
investment portfolios are the Euro, the Japanese yen and the Canadian dollar. The principal currencies that create foreign currency risk in the
Company’s liabilities are the British pound, the Euro and the Swiss franc. Selectively, the Company uses U.S. dollar assets to support certain
long duration foreign currency liabilities. Through its investments in foreign subsidiaries and joint ventures, the Company is primarily exposed
to the Mexican peso, the Japanese yen, the South Korean won, the Canadian dollar, the British pound, the Chilean peso, the Australian dollar,
the Argentine peso, the Polish zloty, the Euro and the Hong Kong dollar. In addition to hedging with foreign currency swaps, forwards and
options, local surplus in some countries is held entirely or in part in U.S. dollar assets which further minimizes exposure to foreign currency
exchange rate fluctuation risk. The Company has matched much of its foreign currency liabilities in its foreign subsidiaries with their respective
foreign currency assets, thereby reducing its risk to foreign currency exchange rate fluctuation. See “Risk Factors — Fluctuations in Foreign
Currency Exchange Rates Could Negatively Affect Our Profitability.”

Equity Market.

The Company has exposure to equity market risk through certain liabilities that involve long-term guarantees on equity
performance such as net embedded derivatives on variable annuities with guaranteed minimum benefits, certain policyholder account
balances along with investments in equity securities. We manage this risk on an integrated basis with other risks through our ALM strategies
including the dynamic hedging of certain variable annuity guarantee benefits. The Company also manages equity market risk exposure in its
investment portfolio through the use of derivatives. Equity exposures associated with other limited partnership interests are excluded from this
section as they are not considered financial

instruments under GAAP.

Management of Market Risk Exposures

The Company uses a variety of strategies to manage interest rate, foreign currency exchange rate and equity market risk, including the use

of derivative instruments.

Interest Rate Risk Management.

To manage interest rate risk, the Company analyzes interest rate risk using various models, including
multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivative
instruments. These projections involve evaluating the potential gain or loss on most of the Company’s in-force business under various
increasing and decreasing interest rate environments. The New York State Insurance Department regulations require that MetLife perform
some of these analyses annually as part of MetLife’s review of the sufficiency of its regulatory reserves. For several of its legal entities, the
Company maintains segmented operating and surplus asset portfolios for the purpose of ALM and the allocation of investment income to
product lines. For each segment, invested assets greater than or equal to the GAAP liabilities less the DAC asset and any non-invested assets
allocated to the segment are maintained, with any excess swept to the surplus segment. The business segments may reflect differences in
legal entity, statutory line of business and any product market characteristic which may drive a distinct investment strategy with respect to
duration, liquidity or credit quality of the invested assets. Certain smaller entities make use of unsegmented general accounts for which the
investment strategy reflects the aggregate characteristics of liabilities in those entities. The Company measures relative sensitivities of the
value of its assets and liabilities to changes in key assumptions utilizing Company models. These models reflect specific product charac-
teristics and include assumptions based on current and anticipated experience regarding lapse, mortality and interest crediting rates. In
addition, these models include asset cash flow projections reflecting interest payments, sinking fund payments, principal payments, bond
calls, mortgage prepayments and defaults.

Common industry metrics, such as duration and convexity, are also used to measure the relative sensitivity of assets and liability values to
changes in interest rates. In computing the duration of liabilities, consideration is given to all policyholder guarantees and to how the Company
intends to set indeterminate policy elements such as interest credits or dividends. Each asset portfolio has a duration target based on the
liability duration and the investment objectives of that portfolio. Where a liability cash flow may exceed the maturity of available assets, as is the
case with certain retirement and non-medical health products, the Company may support such liabilities with equity investments, derivatives
or curve mismatch strategies.

Foreign Currency Exchange Rate Risk Management.

Foreign currency exchange rate risk is assumed primarily in three ways: invest-
ments in foreign subsidiaries, purchases of foreign currency denominated investments in the investment portfolio and the sale of certain
insurance products.

(cid:129) The Company’s Treasury Department is responsible for managing the exposure to investments in foreign subsidiaries. Limits to

exposures are established and monitored by the Treasury Department and managed by the Investment Department.

(cid:129) The Investment Department is responsible for managing the exposure to foreign currency investments. Exposure limits to unhedged
foreign currency investments are incorporated into the standing authorizations granted to management by the Board of Directors and
are reported to the Board of Directors on a periodic basis.

(cid:129) The lines of business are responsible for establishing limits and managing any foreign exchange rate exposure caused by the sale or

issuance of insurance products.

MetLife uses foreign currency swaps and forwards to hedge its foreign currency denominated fixed income investments, its equity

exposure in subsidiaries and its foreign currency exposures caused by the sale of insurance products.

Equity Market Risk Management. Equity market risk exposure through the issuance of variable annuities is managed by the Company’s
Asset/Liability Management Unit in partnership with the Investment Department. Equity market risk is realized through its investment in equity
securities and is managed by its Investment Department. MetLife uses derivatives to hedge its equity exposure both in certain liability
guarantees such as variable annuities with guaranteed minimum benefit and equity securities. These derivatives include exchange-traded
equity futures, equity index options contracts and equity variance swaps. The Company also employs reinsurance to manage these
exposures.

Hedging Activities. MetLife uses derivative contracts primarily to hedge a wide range of risks including interest rate risk, foreign currency
risk, and equity risk. Derivative hedges are designed to reduce risk on an economic basis while considering their impact on accounting results
and GAAP and Statutory capital. The construction of the Company’s derivative hedge programs vary depending on the type of risk being

MetLife, Inc.

77

hedged. Some hedge programs are asset or liability specific while others are portfolio hedges that reduce risk related to a group of liabilities or
assets. The Company’s use of derivatives by major hedge programs is as follows:

(cid:129) Risks Related to Living Guarantee Benefits — The Company uses a wide range of derivative contracts to hedge the risk associated with
variable annuity living guarantee benefits. These hedges include equity and interest rate futures, interest rate swaps, currency futures/
forwards, equity indexed options and interest rate option contracts and equity variance swaps.

(cid:129) Minimum Interest Rate Guarantees — For certain Company liability contracts, the Company provides the contractholder a guaranteed
minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. The Company purchases interest
rate floors to reduce risk associated with these liability guarantees.

(cid:129) Reinvestment Risk in Long Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to certain long duration

liability contracts, such as deferred annuities. Hedges include zero coupon interest rate swaps and swaptions.

(cid:129) Foreign Currency Risk — The Company uses currency swaps and forwards to hedge foreign currency risk. These hedges primarily

swap foreign currency denominated bonds, investments in foreign subsidiaries or equity exposures to U.S. dollars.

(cid:129) General ALM Hedging Strategies — In the ordinary course of managing the Company’s asset/liability risks, the Company uses interest
rate futures, interest rate swaps, interest rate caps, interest rate floors and inflation swaps. These hedges are designed to reduce
interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash flows.

Risk Measurement: Sensitivity Analysis

The Company measures market risk related to its market sensitive assets and liabilities based on changes in interest rates, equity prices
and foreign currency exchange rates utilizing a sensitivity analysis. This analysis estimates the potential changes in estimated fair value based
on a hypothetical 10% change (increase or decrease) in interest rates, equity market prices and foreign currency exchange rates. The
Company believes that a 10% change (increase or decrease) in these market rates and prices is reasonably possible in the near-term. In
performing the analysis summarized below, the Company used market rates at December 31, 2010. The sensitivity analysis separately
calculates each of the Company’s market risk exposures (interest rate, equity market and foreign currency exchange rate) relating to its
trading and non-trading assets and liabilities. The Company modeled the impact of changes in market rates and prices on the estimated fair
values of its market sensitive assets and liabilities as follows:

(cid:129) the net present values of its interest rate sensitive exposures resulting from a 10% change (increase or decrease) in interest rates;
(cid:129) the U.S. dollar equivalent estimated fair values of the Company’s foreign currency exposures due to a 10% change (increase or

decrease) in foreign currency exchange rates; and

(cid:129) the estimated fair value of its equity positions due to a 10% change (increase or decrease) in equity market prices.
The sensitivity analysis is an estimate and should not be viewed as predictive of the Company’s future financial performance. The
Company cannot ensure that its actual losses in any particular period will not exceed the amounts indicated in the table below. Limitations
related to this sensitivity analysis include:

(cid:129) the market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis,

including the impact of prepayment rates on mortgages;

(cid:129) for the derivatives that qualify as hedges, the impact on reported earnings may be materially different from the change in market values;
(cid:129) the analysis excludes other significant real estate holdings and liabilities pursuant to insurance contracts; and
(cid:129) the model assumes that the composition of assets and liabilities remains unchanged throughout the period.
Accordingly, the Company uses such models as tools and not as substitutes for the experience and judgment of its management. Based
on its analysis of the impact of a 10% change (increase or decrease) in market rates and prices, MetLife has determined that such a change
could have a material adverse effect on the estimated fair value of certain assets and liabilities from interest rate, foreign currency exchange
rate and equity exposures.

The table below illustrates the potential loss in estimated fair value for each market risk exposure of the Company’s market sensitive assets

and liabilities at December 31, 2010:

Non-trading:
Interest rate risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency exchange rate risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity market risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading:

Interest rate risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,358

$3,669

$

$

14

24

Foreign currency exchange rate risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 346

December 31, 2010

(In millions)

78

MetLife, Inc.

Sensitivity Analysis: Interest Rates. The table below provides additional detail regarding the potential loss in fair value of the Company’s

trading and non-trading interest sensitive financial

instruments at December 31, 2010 by type of asset or liability:

December 31, 2010

Estimated
Fair
Value(3)

(In millions)

Assuming a
10% Increase
in the Yield
Curve

Notional
Amount

$327,284
3,606
18,589

$(5,961)
—
(25)

Assets:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans:

Held-for-investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mortgage loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate joint ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets:

Mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net embedded derivatives within asset host contracts(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,754
Commitments to fund bank credit facilities, bridge loans and private corporate bond

investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,437
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities:

Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . . . . .
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities:

Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net embedded derivatives within liability host contracts(2)

Derivative Instruments:

$

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,803
Interest rate floors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,866
Interest rate caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,412
Interest rate futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,385
Interest rate options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,761
Interest rate forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,374
Synthetic GICs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,397
Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,626
Foreign currency forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,443
Currency futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
493
Currency options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,426
Non-derivative hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
169
Credit default swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,957
90
Credit forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Equity futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,794
Equity options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,688
Variance swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,022
Total rate of return swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,547

Total Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,846
3,321

64,167
13,406
482
1,619
9,387

950
1,490
13,046
4,381
4,048
453
185
(17)

—

$152,850
27,272
10,371
306
21,892
4,757
3,461

46
2,777
2,634

1,138
564
175
26
121
(29)
—
334
28
2
50
(185)
69
(1)
12
646
80
—

(355)
(24)

(379)
(179)
—
—
(2)

70
—
(2)
—
(331)
(9)
(17)
(13)

—

$(6,848)

$

849
—
5
—
361
(9)
160

1
—
1,515
$ 2,882

$(1,254)
(67)
57
20
(8)
(32)
—
(12)
1
—
—
—
—
—
—
(96)
(9)
(16)

$(1,416)
$(5,382)

(1) Represents only those investments accounted for using the cost method.
(2) Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.
(3) Separate account assets and liabilities which are interest rate sensitive are not included herein as any interest rate risk is borne by the

holder of the separate account.

MetLife, Inc.

79

This quantitative measure of risk has increased by $1,325 million, or 33%, to $5,382 million at December 31, 2010 from $4,057 million at
December 31, 2009. Excluding the Acquisition which increased risk by $647 million, the quantitative measure of risk increased by
$678 million or 17% at December 31, 2010 from December 31, 2009. The increase in risk is due to a change in the net assets and
liabilities bases of $641 million. In addition, an increase of $954 million was due to the use of derivatives employed by the Company
($445 million), an increase in the duration of the investment portfolio ($389 million), and an increase in premiums, reinsurance and other
receivables ($120 million). This increase in risk was partially offset by a decrease in interest rates across the long end of the Swaps and
U.S. Treasury curves resulting in a decrease of $424 million. Additionally, net embedded derivatives within liability host contracts increased by
$520 million, partially due to a change made in the second quarter of 2010 related to how the Company estimates the spread over the swap
curve for purposes of determining the discount rate used to value those derivatives, which caused a corresponding decrease in risk. The
items.
remainder of the fluctuation is attributable to numerous immaterial

80

MetLife, Inc.

Sensitivity Analysis: Foreign Currency Exchange Rates. The table below provides additional detail regarding the potential loss in estimated
fair value of the Company’s portfolio due to a 10% change in foreign currency exchange rates at December 31, 2010 by type of asset or
liability:

Notional
Amount

December 31, 2010

Estimated
Fair
Value (1)

(In millions)

Assuming a
10% Increase
in the Foreign
Exchange Rate

$327,284
3,606
18,589

$(6,516)
(74)
(346)

Assets:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans:

Held-for-investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mortgage loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets:

Mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities:

Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Net embedded derivatives within liability host contracts(2)

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Derivative Instruments:

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,083
Interest rate floors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,866
Interest rate caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,412
Interest rate futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,385
Interest rate options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,761
Interest rate forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,374
Synthetic GICs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,397
Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,626
Foreign currency forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,443
Currency futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
493
Currency options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,426
Non-derivative hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
169
Credit default swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,957
Credit forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
90
Equity futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,794
Equity options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,688
Variance swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,022
Total rate of return swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,547

60,846
3,321

64,167
13,406
9,387

950
1,490
13,046
4,381
4,048

$152,850
10,371
21,892
2,777
2,634

$

1,138
564
175
26
121
(29)
—
334
28
2
50
(185)
69
(1)
12
646
80
—

(414)
—

(414)
(199)
(200)

—
(143)
(139)
(11)
(16)

$(8,058)

$ 3,255
—
37
9
437

$ 3,738

$

(17)
—
—
(2)
(2)
—
—
271
73
(49)
107
—
—
—
2
(77)
(1)
—

Total Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

305

$(4,015)

(1) Estimated fair value presented in the table above represents the estimated fair value of all financial

instruments within this financial

statement caption not necessarily those solely subject to foreign exchange risk.

(2) Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.

Foreign currency exchange rate risk increased by $3,124 million, to $4,015 million at December 31, 2010 from $891 million at
December 31, 2009. Excluding the Acquisition which increased risk by $2,646 million, the foreign currency exchange risk has increased

MetLife, Inc.

81

by $478 million or 54% at December 31, 2010 from December 31, 2009. This change was due to an increase in exchange rate risk relating to
fixed maturity securities of $722 million due to higher exposures primarily within the British pound and the Euro and to the sale of the pension
closeout business in the U.K. Additionally, a decrease in the foreign exposure related to long-term debt and PABs contributed $66 million and
$41 million, respectively, to the increase. This was partially offset by an increase in the foreign exposure related to net embedded derivatives
within liability host contracts and the use of derivatives employed by the Company of $315 million and $101 million, respectively. The
items.
remainder of the fluctuation is attributable to numerous immaterial

Sensitivity Analysis: Equity Market Prices.

The table below provides additional detail regarding the potential loss in estimated fair value of

the Company’s portfolio due to a 10% change in equity at December 31, 2010 by type of asset or liability:

Notional
Amount

December 31, 2010

Estimated
Fair
Value(1)

(In millions)

Assuming a
10% Decrease
in Equity
Prices

Assets:

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

3,606

$(355)

Other invested assets:
Net embedded derivatives within asset host contracts(2)

. . . . . . . . . . . . . . . . . . . . . . . . .

185

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities:

Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities:
Net embedded derivatives within liability host contracts(2) . . . . . . . . . . . . . . . . . . . . . . . . .

$152,850

10,371

2,634

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

$(344)

$ —

—

(456)

$(456)

Derivative Instruments:

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,803

$

1,138

$ —

Interest rate floors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,866

Interest rate caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,412
Interest rate futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,385

Interest rate options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,761

Interest rate forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,374
Synthetic GICs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,397

Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,626

Foreign currency forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,443
493
Currency futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Currency options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,426

Non-derivative hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
169
Credit default swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,957

Credit forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

90

Equity futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,794

Equity options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,688
Variance swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,022

Total rate of return swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,547

Total Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

564

175
26

121

(29)
—

334

28
2

50

(185)
69

(1)

12

646
80

—

—

—
—

—

—
—

—

—
—

—

—
—

—

3

628
—

155

$ 786

$ (14)

(1) Estimated fair value presented in the table above represents the estimated fair value of all financial

instruments within this financial

statement caption not necessarily those solely subject to equity market risk.

(2) Embedded derivatives are recognized in the consolidated balance sheet in the same caption as the host contract.
(3) During the fourth quarter of 2010, the analysis of the impact of a 10% change (increase or decrease) in equity market rates determined that
due to the inclusion of ALICO, a decrease of 10% had the most adverse effect on our equity risk while the prior year end’s analysis of equity
market rates shows an increase of 10% had the most adverse effect.
Equity price risk decreased by $204 million to $14 million at December 31, 2010 from $218 million at December 31, 2009. Excluding the
Acquisition which shifted the impact of a 10% change to a decrease in the equity market rates, the equity price risk has decreased by
$191 million at December 31, 2010 from December 31, 2009. This decrease is primarily due to a change of $210 million attributed to the use
of derivatives employed by the Company to hedge its equity exposures. Additionally, an increase in the net exposures related to net
embedded derivatives within liability host contracts of $42 million contributed to the decrease. This was partially offset by a decrease of
$60 million in equity securities. The remainder of the fluctuation is attributable to numerous insignificant items.

82

MetLife, Inc.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of MetLife, Inc. and subsidiaries is responsible for establishing and maintaining adequate internal control over financial
reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related
costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with
management’s authorization and recorded properly to permit
the preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America (“GAAP”).

Management has documented and evaluated the effectiveness of the internal control of the Company at December 31, 2010 pertaining to
financial reporting in accordance with the criteria established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.

On November 1, 2010, the Holding Company acquired all of the issued and outstanding capital stock of American Life Insurance Company
and Delaware American Life Insurance Company (collectively, “ALICO”). As allowed under the U.S. Securities and Exchange Commission (the
“SEC”) guidance, management’s assessment of and conclusion regarding the design and effectiveness of internal control over financial
reporting excluded the internal control over financial reporting of ALICO, which is relevant to the Company’s 2010 consolidated financial
statements as of and for the year ended December 31, 2010. ALICO represents 17% of total assets, and 2% of total revenues of MetLife, Inc.
as of and for the year ended December 31, 2010. The financial reporting systems of ALICO have not yet been integrated into the Company’s
financial reporting systems and, as such, the Company did not have the practical ability to perform an assessment of ALICO’s internal control
over financial reporting in time for this current year-end. Management expects to complete the process of integrating ALICO’s internal control
over financial reporting over the course of 2011. The ALICO acquisition represents a material change in internal control over financial reporting
as defined in Exchange Act Rule 13a-15(f) during the quarter ended December 31, 2010.

In the opinion of management, MetLife, Inc. maintained effective internal control over financial reporting at December 31, 2010.
Deloitte & Touche LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in
the Annual Report on Form 10-K for the year ended December 31, 2010. The Report of the Independent Registered Public Accounting Firm on
their audit of the consolidated financial statements is included at page F-1.

Attestation Report of the Company’s Registered Public Accounting Firm

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued their attestation report on manage-

ment’s internal control over financial reporting which is set forth below.

MetLife, Inc.

83

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
MetLife, Inc.:

We have audited the internal control over financial reporting of MetLife, Inc. and subsidiaries (the “Company”) as of December 31, 2010,
based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded
from its assessment the internal control over financial reporting at ALICO, acquired on November 1, 2010, as the financial reporting systems
of ALICO have not yet been integrated into the Company’s financial reporting systems and, as such, the Company did not have the practical
ability to perform an assessment of ALICO’s internal control over financial reporting in time for this current year-end. ALICO represents 17% of
total assets and 2% of total revenues of the Company as of and for the year ended December 31, 2010. Accordingly, our audit did not include
the internal control over financial reporting at ALICO. The Company’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal
executive and principal
financial officers, or persons performing similar functions, and effected by the company’s board of directors,
management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2010, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements of the Company as of and for the year ended December 31, 2010, and our report dated February 24, 2011
expressed an unqualified opinion on those consolidated financial statements.

/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York

February 24, 2011

84

MetLife, Inc.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-1

Financial Statements at December 31, 2010 and 2009 and for the Years Ended December 31, 2010, 2009, and 2008:

Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2

F-3

F-4

F-7
F-9

Page

MetLife, Inc.

85

(This page intentionally left blank)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
MetLife, Inc.:

We have audited the accompanying consolidated balance sheets of MetLife, Inc. and subsidiaries (the “Company”) as of December 31,
2010 and 2009, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended
December 31, 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of MetLife, Inc. and
subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1, the Company changed its method of accounting for the recognition and presentation of other-than-temporary
impairment losses for certain investments as required by accounting guidance adopted on April 1, 2009, and changed its method of
accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1,
2008.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control —
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report, dated February 24,
2011, expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York

February 24, 2011

MetLife, Inc.

F-1

MetLife, Inc.

Consolidated Balance Sheets
December 31, 2010 and 2009
(In millions, except share and per share data)

2010

2009

Assets
Investments:

Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $320,008 and $229,709, respectively;

includes $3,330 and $3,171, respectively, relating to variable interest entities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $327,284
3,606

Equity securities available-for-sale, at estimated fair value (cost: $3,625 and $3,187, respectively) . . . . . . . . . . . . . . . . . . .
Trading and other securities, at estimated fair value (includes $463 and $420 of actively traded securities, respectively; and

$387 and $0, respectively, relating to variable interest entities)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mortgage loans:

Held-for-investment, principally at amortized cost (net of valuation allowances of $664 and $721, respectively; includes

$6,840 and $0, respectively, at estimated fair value, relating to variable interest entities) . . . . . . . . . . . . . . . . . . . . . . .
Held-for-sale, principally at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mortgage loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate and real estate joint ventures (includes $10 and $18, respectively, relating to variable interest entities) . . . . . . . . . .
Other limited partnership interests (includes $298 and $236, respectively, relating to variable interest entities)
. . . . . . . . . . . .
Short-term investments, principally at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets, principally at estimated fair value (includes $104 and $137, respectively, relating to variable interest entities) . . . . . . . . . .

$227,642
3,084

18,589

2,384

59,055
3,321

62,376
11,914
8,030
6,416
9,387
15,430

48,181
2,728

50,909
10,061
6,896
5,508
8,374
12,709

Total

investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

463,032

327,567

Cash and cash equivalents, principally at estimated fair value (includes $69 and $68, respectively, relating to variable interest

entities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued investment income (includes $34 and $0, respectively, relating to variable interest entities)
. . . . . . . . . . . . . . . . . . .
Premiums, reinsurance and other receivables (includes $2 and $0, respectively, relating to variable interest entities) . . . . . . . . . .
Deferred policy acquisition costs and value of business acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current income tax recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (includes $6 and $16, respectively, relating to variable interest entities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separate account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,046
4,381
19,830
27,307
—
—
11,781
8,192
183,337

10,112
3,173
16,752
19,256
316
1,228
5,047
6,822
149,041

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $730,906

$539,314

Liabilities and Equity
Liabilities

Future policy benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $173,373
211,020
Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,806
Other policy-related balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
830
Policyholder dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
876
Policyholder dividend obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,272
Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,316
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
306
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,586
Long-term debt (includes $6,902 and $64, respectively, at estimated fair value, relating to variable interest entities) . . . . . . . . .
5,297
Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,191
Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316
Current income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,881
Deferred income tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities (includes $93 and $26, respectively, relating to variable interest entities)
20,386
. . . . . . . . . . . . . . . . . . . . . . . . .
183,337
Separate account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$135,879
138,673
8,446
761
—
24,196
10,211
912
13,220
5,297
3,191
—
—
15,989
149,041

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

681,793

505,816

Contingencies, Commitments and Guarantees (Note 16)
Redeemable noncontrolling interests in partially owned consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized:

Preferred stock, 84,000,000 shares issued and outstanding; $2,100 aggregate liquidation preference . . . . . . . . . . . . . . . . .
Convertible preferred stock, 6,857,000 shares issued and outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . . . .

Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 989,031,704 and 822,359,818 shares issued at
December 31, 2010 and 2009, respectively; 985,837,817 and 818,833,810 shares outstanding at December 31, 2010 and
2009, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost; 3,193,887 and 3,526,008 shares at December 31, 2010 and 2009, respectively . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss)

Total MetLife, Inc.’s stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

1
—

10
26,423
21,363
(172)
1,000

48,625
371

48,996

—

1
—

8
16,859
19,501
(190)
(3,058)

33,121
377

33,498

Total

liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $730,906

$539,314

See accompanying notes to the consolidated financial statements.

F-2

MetLife, Inc.

MetLife, Inc.

Consolidated Statements of Operations
For the Years Ended December 31, 2010, 2009 and 2008
(In millions, except per share data)

2010

2009

2008

Revenues
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,394
6,037
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . . .
Universal
17,615
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,328
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities . . . . . . . . . . . . . . . . . . .
Other-than-temporary impairments on fixed maturity securities transferred to other

(682)

$26,460
5,203
14,837
2,329

$25,914
5,381
16,289
1,586

(2,439)

(1,296)

comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total net investment gains (losses)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

212
78

(392)
(265)

939
(1,406)

(2,906)
(4,866)

—
(802)

(2,098)
3,910

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,717

41,057

50,982

Expenses
Policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policyholder dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,545
4,925
1,486
12,803

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,759

Income (loss) from continuing operations before provision for income tax . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income tax expense (benefit)

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

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

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

3,958
1,181

2,777
9

2,786
(4)

2,790
122

28,336
4,849
1,650
10,556

45,391

(4,334)
(2,015)

(2,319)
41

(2,278)
(32)

(2,246)
122

27,437
4,788
1,751
11,947

45,923

5,059
1,580

3,479
(201)

3,278
69

3,209
125

Net income (loss) available to MetLife, Inc.’s common shareholders . . . . . . . . . . . . . . . $ 2,668

$ (2,368)

$ 3,084

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s

common shareholders per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.01

$ (2.94)

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2.99

$ (2.94)

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

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.02

$ (2.89)

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.00

$ (2.89)

Cash dividends per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.74

$

0.74

$

$

$

$

$

4.60

4.54

4.19

4.14

0.74

See accompanying notes to the consolidated financial statements.

MetLife, Inc.

F-3

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T

F-6

MetLife, Inc.

MetLife, Inc.

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2010, 2009 and 2008
(In millions)

Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2010

2009

2008

2,786

$ (2,278)

$

3,278

Depreciation and amortization expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of premiums and accretion of discounts associated with investments, net
. . . . .
(Gains) losses on investments and derivatives and from sales of businesses, net
. . . . . . . . .
Undistributed equity earnings of real estate joint ventures and other limited partnership

interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Universal
life and investment-type product policy fees . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in trading and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in residential mortgage loans held-for-sale, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . . . . . . . . .
Change in deferred policy acquisition costs, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in income tax recoverable (payable) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in insurance-related liabilities and policy-related balances . . . . . . . . . . . . . . . . . . .
Change in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flows from investing activities
Sales, maturities and repayments of:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received in connection with freestanding derivatives . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid in connection with freestanding derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales of businesses, net of cash and cash equivalents disposed of $0, $180 and $0,

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposal of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of businesses, net of cash and cash equivalents acquired of $4,175, $0 and $314,

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in other invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

585
(1,078)
854

(430)
4,925
137
(6,037)
(1,369)
(487)
(165)
(206)
(1,023)
(541)
1,292
1,948
6,489
(315)
631

7,996

86,529
1,371
6,361
322
522

(100,713)
(949)
(8,967)
(786)
(1,008)
1,814
(2,548)

—
—

(3,021)
(225)
3,033
137
(186)

520
(967)
7,715

1,118
4,852
163
(5,218)
(1,152)
(800)
(687)
(110)
(1,653)
(1,837)
(2,614)
(660)
6,401
865
145

3,803

64,428
2,545
5,769
43
947

(83,940)
(1,986)
(4,692)
(579)
(803)
3,292
(5,393)

(50)
(19)

—
(259)
5,534
1,388
(160)

375
(939)
(1,127)

679
4,911
166
(5,462)
(418)
(1,946)
(185)
428
(1,929)
545
920
5,737
5,307
163
199

10,702

102,250
2,707
6,077
140
593

(86,874)
(1,494)
(10,096)
(1,170)
(1,643)
8,168
(6,454)

(4)
(313)

(469)
(467)
(11,269)
(2,206)
(147)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (18,314)

$(13,935)

$ (2,671)

See accompanying notes to the consolidated financial statements.

MetLife, Inc.

F-7

MetLife, Inc.

Consolidated Statements of Cash Flows — (Continued)
For the Years Ended December 31, 2010, 2009 and 2008
(In millions)

2010

2009

2008

Cash flows from financing activities

Policyholder account balances:

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 74,296
(69,739)
Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,076
Net change in payables for collateral under securities loaned and other transactions
. . . . . . . . . . . . . . . . . . . . . . . .
(32)
Net change in bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(606)
Net change in short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,090
Long-term debt issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,061)
Long-term debt repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Collateral financing arrangements issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Cash received in connection with collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Cash paid in connection with collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Junior subordinated debt securities issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(14)
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,576
Common stock issued, net of issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Common stock issued to settle stock forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Treasury stock acquired in connection with share repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Treasury stock issued in connection with common stock issuance, net of issuance costs . . . . . . . . . . . . . . . . . . . . . .
—
Treasury stock issued to settle stock forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(122)
Dividends on preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(784)
Dividends on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(299)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 77,517
(79,799)
(6,863)
3,164
(1,747)
2,961
(555)
105
775
(400)
500
(30)
—
1,035
—
—
—
(122)
(610)
(34)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,381

(4,103)

Effect of change in foreign currency exchange rates on cash and cash equivalents balances . . . . . . . . . . . . . . . . . . . . .

(129)

108

Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of year

2,934
10,112

(14,127)
24,239

$ 70,051
(56,406)
(13,077)
2,185
1,992
339
(422)
310
—
(800)
750
(34)
290
—
(1,250)
1,936
1,035
(125)
(592)
7

6,189

(349)

13,871
10,368

Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,046

$ 10,112

$ 24,239

Cash and cash equivalents, subsidiaries held-for-sale, beginning of year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

32

$

407

Cash and cash equivalents, subsidiaries held-for-sale, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

— $

32

Cash and cash equivalents, from continuing operations, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,112

$ 24,207

$ 9,961

Cash and cash equivalents, from continuing operations, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,046

$ 10,112

$ 24,207

Supplemental disclosures of cash flow information:

Net cash paid (received) during the year for:

Interest

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,489

Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(23)

Non-cash transactions during the year:

Business acquisitions:

Assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 125,689
(109,267)
Liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(130)
Redeemable and non-redeemable noncontrolling interests assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid, excluding transaction costs of $88, $0 and $0, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other purchase price adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,292
(7,196)
98

$

$

$

989

$ 1,107

397

$

27

— $ 2,083
(1,300)
—
—
—

—
—
—

783
(783)
—

Securities issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

9,194

$

— $

—

Disposal of subsidiary:

Assets disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Liabilities disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— $
—

— $ 22,135
(20,689)
—

Net assets disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction costs, including cash paid of $0, $19 and $43, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock received in common stock exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
—

Loss on disposal of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

—
—
2
—

2

Remarketing of debt securities:

Fixed maturity securities redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

32

1,446
270
60
(1,318)

458

32

$

$

Long-term debt issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $ 1,035

$ 1,035

Junior subordinated debt securities redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $ 1,067

$ 1,067

Purchase money mortgage loans on sales of real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2

$

93

$

—

Fixed maturity securities received in connection with insurance contract commutation . . . . . . . . . . . . . . . . . . . . . . . . $

— $

— $

115

Real estate and real estate joint ventures acquired in satisfaction of debt

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

93

$

211

$

1

See accompanying notes to the consolidated financial statements.

F-8

MetLife, Inc.

MetLife, Inc.

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

Notes to the Consolidated Financial Statements

Business
“MetLife” or the “Company” refers to MetLife, Inc., a Delaware corporation incorporated in 1999 (the “Holding Company”), its subsidiaries
and affiliates. MetLife is a leading global provider of insurance, annuities and employee benefit programs throughout the United States,
Japan, Latin America, Asia Pacific and Europe and the Middle East. Through its subsidiaries and affiliates, MetLife offers life insurance,
annuities, auto and homeowners insurance, mortgage and deposit products and other financial services to individuals, as well as group
insurance and retirement & savings products and services to corporations and other institutions.

Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Holding Company and its subsidiaries, as well as
partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary
beneficiary. See “— Adoption of New Accounting Pronouncements.” Closed block assets, liabilities, revenues and expenses are combined
on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.
See Note 10. Intercompany accounts and transactions have been eliminated.

On November 1, 2010 (the “Acquisition Date”), MetLife, Inc. completed the acquisition of American Life Insurance Company (“American
Life”) from ALICO Holdings LLC (“ALICO Holdings”), a subsidiary of American International Group, Inc. (“AIG”), and Delaware American Life
Insurance Company (“DelAm”) from AIG, (American Life, together with DelAm, collectively, “ALICO”) (the “Acquisition”) for a total purchase
price of $16.4 billion. The Acquisition has been accounted for using the acquisition method of accounting, which requires, among other
things, that the consideration transferred be measured at fair value at the Acquisition Date and that most assets acquired and liabilities
assumed be recognized at their estimated fair values as of the Acquisition Date. In addition, acquisition-related transaction costs are
expensed as incurred. Any excess of the purchase price consideration over the assigned values of the net assets acquired is recorded as
goodwill. ALICO’s fiscal year-end is November 30. Accordingly, the Company’s consolidated financial statements reflect the assets and
liabilities of ALICO as of November 30, 2010 and the operating results of ALICO from the Acquisition Date through November 30, 2010. See
Note 2.

Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform with the 2010 presentation. Such

reclassifications include:

(cid:129) Reclassification from other net investment gains (losses) of ($4,866) million and $3,910 million to net derivative gains (losses) in the

consolidated statements of operations for the years ended December 31, 2009 and 2008, respectively;

(cid:129) Reclassification from net change in other invested assets of $3,292 million and $8,168 million to cash received in connection with
freestanding derivatives and ($5,393) million and ($6,454) million to cash paid in connection with freestanding derivatives, all within
cash flows from investing activities, in the consolidated statements of cash flows for the years ended December 31, 2009 and 2008,
respectively; and

(cid:129) Realignment that affected assets, liabilities and results of operations on a segment basis with no impact to the consolidated results. See

Note 22.

See Note 23 for reclassifications related to discontinued operations.

Summary of Significant Accounting Policies and Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the
consolidated financial statements.

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

Fair Value

As described below, certain assets and liabilities are measured at estimated fair value on the Company’s consolidated balance sheets. In
addition, the notes to these consolidated financial statements include further disclosures of estimated fair values. The Company defines fair
value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants on the measurement date. In many cases, the exit price
and the transaction (or entry) price will be the same at initial recognition. However, in certain cases, the transaction price may not represent fair
value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third party with the same credit standing. It
requires that fair value be a market-based measurement in which the fair value is determined based on a hypothetical transaction at the
measurement date, considered from the perspective of a market participant. When quoted prices are not used to determine fair value of an
asset, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost
approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability of
sufficient inputs. The Company prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent
that observable inputs are not available. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level
hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability’s
classification within the fair value hierarchy is based on the lowest level of input to its valuation. The input levels are as follows:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on
average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed
maturity securities.

MetLife, Inc.

F-9

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 2 inputs include
quoted prices for similar assets or liabilities other than quoted prices in Level 1; quoted prices in markets that are not active; or
other significant inputs that are observable or can be derived principally from or corroborated by observable market data for
substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or
liabilities. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants
would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined
using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the
determination of estimated fair value requires significant management judgment or estimation.

Prior to January 1, 2009, the measurement and disclosures of fair value based on exit price excluded certain items such as nonfinancial
assets and nonfinancial liabilities initially measured at estimated fair value in a business combination, reporting units measured at estimated
fair value in the first step of a goodwill impairment test and indefinite-lived intangible assets measured at estimated fair value for impairment
assessment.

In addition, the Company elected the fair value option (“FVO”) for certain of its financial instruments to better match measurement of assets

and liabilities in the consolidated statements of operations.

Investments

The accounting policies for the Company’s principal

investments are as follows:

Fixed Maturity and Equity Securities.
are reported at their estimated fair value.

The Company’s fixed maturity and equity securities are classified as available-for-sale and

Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income
(loss), net of policyholder-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis.
Investment gains and losses on sales of securities are determined on a specific identification basis.

Interest income on fixed maturity securities is recorded when earned using an effective yield method giving effect to amortization of
premiums and accretion of discounts. Dividends on equity securities are recorded when declared. These dividends and interest
income are recorded in net investment income.

Included within fixed maturity securities are loan-backed securities including mortgage-backed and asset-backed securities
(“ABS”). Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of
prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated
when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated.
Prepayment assumptions for single class and multi-class mortgage-backed and ABS are estimated by management using inputs
obtained from third-party specialists, including broker-dealers, and based on management’s knowledge of the current market. For
credit-sensitive mortgage-backed and ABS and certain prepayment-sensitive securities, the effective yield is recalculated on a
prospective basis. For all other mortgage-backed and ABS, the effective yield is recalculated on a retrospective basis.

The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments
have occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in estimated fair value.
The Company’s review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized
losses by three categories of severity and/or age of the gross unrealized loss, as summarized in Note 3 “— Aging of Gross Unrealized
Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale.” An extended and severe unrealized loss position on a
fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and
the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized
cost based on the present value of the expected future cash flows to be collected. In contrast, for certain equity securities, greater
weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will
recover.

Additionally, 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 by the Company in the impairment evaluation process include, but are not limited to: (i) the length of
time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments of
securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or
sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments
of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources;
(vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a
particular security before the decline in estimated fair value below cost or amortized cost recovers; (vii) with respect to equity
securities, whether the Company’s ability and intent to hold the security for a period of time sufficient to allow for the recovery of its
estimated fair value to an amount equal to or greater than cost; (viii) unfavorable changes in forecasted cash flows on mortgage-
backed and ABS; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating
agencies.

Effective April 1, 2009, the Company prospectively adopted guidance on the recognition and presentation of other-than-temporary
impairment (“OTTI”) losses as described in “— Adoption of New Accounting Pronouncements — Financial Instruments.” The guidance
requires that an OTTI be recognized in earnings for a fixed maturity security in an unrealized loss position when it is anticipated that the
amortized cost will not be recovered. In such situations, the OTTI recognized in earnings is the entire difference between the fixed
maturity security’s amortized cost and its estimated fair value only when either: (i) the Company has the intent to sell the fixed maturity

F-10

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

security; or (ii) it is more likely than not that the Company will be required to sell the fixed maturity security before recovery of the decline
in estimated fair value below amortized cost. If neither of these two conditions exist, the difference between the amortized cost of the
fixed maturity security and the present value of projected future cash flows expected to be collected is recognized as an OTTI
in
earnings (“credit loss”). If the estimated fair value is less than the present value of projected future cash flows expected to be collected,
this portion of OTTI related to other-than credit factors (“noncredit loss”) is recorded in other comprehensive income (loss). There was
no change for equity securities which, when an OTTI has occurred, continue to be impaired for the entire difference between the equity
security’s cost and its estimated fair value with a corresponding charge to earnings. The Company does not make any adjustments for
subsequent recoveries in value.

Prior to the adoption of the OTTI guidance, the Company recognized in earnings an OTTI for a fixed maturity security in an unrealized
loss position unless it could assert that it had both the intent and ability to hold the fixed maturity security for a period of time sufficient to
allow for a recovery of estimated fair value to the security’s amortized cost. Also, prior to the adoption of this guidance, the entire
difference between the fixed maturity security’s amortized cost basis and its estimated fair value was recognized in earnings if it was
determined to have an OTTI.

With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security
for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale
decision is made for an equity security and it is not expected to recover to an amount at least equal to cost prior to the expected time of
the sale, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will
be recorded in earnings. When an OTTI loss has occurred, the OTTI loss is the entire difference between the equity security’s cost and
its estimated fair value with a corresponding charge to earnings.

With respect to perpetual hybrid securities that have attributes of both debt and equity, some of which are classified as fixed
maturity securities and some of which are classified as non-redeemable preferred stock within equity securities, the Company
considers in its OTTI analysis whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of
the securities that are in a severe and extended unrealized loss position. The Company also considers whether any perpetual hybrid
securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred,
the OTTI
loss is the entire difference between the perpetual hybrid security’s cost and its estimated fair value with a corresponding
charge to earnings.

The Company’s methodology and significant inputs used to determine the amount of the credit loss on fixed maturity securities

under the OTTI guidance are as follows:

(i)

The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of
future cash flows expected to be received. The discount rate is generally the effective interest rate of the fixed maturity security
prior to impairment.

(ii) When determining the collectability and the period over which value is expected to recover, the Company applies the same
considerations utilized in its overall
impairment evaluation process which incorporates information regarding the specific
security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic
conditions. Projected future cash flows are estimated using assumptions derived from management’s best estimates of likely
scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: general
payment terms of the security; the likelihood that the issuer can service the scheduled interest and principal payments; the
quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible
corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies.
(iii) Additional considerations are made when assessing the unique features that apply to certain structured securities such as
residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and ABS. These addi-
tional factors for structured securities include, but are not limited to: the quality of underlying collateral; expected prepayment
speeds; current and forecasted loss severity; consideration of the payment terms of the underlying assets backing a particular
security; and the payment priority within the tranche structure of the security.

(iv) When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and
state and political subdivision securities, management considers the estimated fair value as the recovery value when available
information does not indicate that another value is more appropriate. When information is identified that indicates a recovery
value other than estimated fair value, management considers in the determination of recovery value the same considerations
utilized in its overall impairment evaluation process which incorporates available information and management’s best estimate
of scenarios-based outcomes regarding the specific security and issuer; possible corporate restructurings or asset sales by
the issuer; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer;
fundamentals of the industry and geographic area in which the security issuer operates, and the overall macroeconomic
conditions.

The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI

in the period in which the determination is
made. These impairments are included within net investment gains (losses). The Company does not change the revised cost basis for
subsequent recoveries in value.

In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it
had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new
cost basis is accreted into net investment income over the remaining term of the fixed maturity security in a prospective manner based
on the amount and timing of estimated future cash flows.

The Company purchases and receives beneficial interests in special purpose entities (“SPEs”), which enhance the Company’s total
return on its investment portfolio principally by providing equity-based returns on fixed maturity securities. These investments are

MetLife, Inc.

F-11

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

generally made through structured notes and similar instruments (collectively, “Structured Investment Transactions”). The Company
has not guaranteed the performance, liquidity or obligations of the SPEs and its exposure to loss is limited to its carrying value of the
beneficial interests in the SPEs. The Company does not consolidate such SPEs as it has determined it is not the primary beneficiary.
These Structured Investment Transactions are included in fixed maturity securities and their investment income is generally recognized
using the retrospective interest method. Impairments of these investments are included in net investment gains (losses). In addition,
the Company has invested in certain structured transactions that are VIEs. These structured transactions include reinsurance trusts,
asset-backed securitizations, hybrid securities, real estate joint ventures, other limited partnership interests, and limited liability
companies. The Company consolidates those VIEs for which it is deemed to be the primary beneficiary. The Company reconsiders
whether it is the primary beneficiary for investments designated as VIEs on a quarterly basis.

Trading and Other Securities.

Trading and other securities are stated at estimated fair value. Trading and other securities include
investments that are actively purchased and sold (“Actively Traded Securities”). These Actively Traded Securities are principally fixed
maturity securities. Short sale agreement liabilities related to Actively Traded Securities, included in other liabilities, are also stated at
estimated fair value. Trading and other securities also includes securities for which the FVO has been elected (“FVO Securities”). FVO
Securities include certain fixed maturity and equity securities held-for-investment by the general account to support asset and liability
matching strategies for certain insurance products. FVO Securities also include contractholder-directed investments supporting unit-
linked variable annuity type liabilities which do not qualify for presentation and reporting as separate account summary total assets and
liabilities. These investments are primarily mutual funds and, to a lesser extent, fixed maturity and equity securities, short-term
investments and cash and cash equivalents. The investment returns on these investments inure to contractholders and are offset by a
corresponding change in policyholder account balances through interest credited to policyholder account balances. Changes in
estimated fair value of such trading and other securities subsequent to purchase are included in net investment income. FVO
Securities also include securities held by consolidated securitization entities (“CSEs”) (former qualifying special purpose entities
(“QSPEs”)) with changes in estimated fair value subsequent to consolidation included in net investment gains (losses). Interest and
dividends related to all trading and other securities are included in net investment income.

Securities Lending. Securities loaned transactions, whereby blocks of securities, which are included in fixed maturity securities
and short-term investments, are loaned to third parties, are treated as financing arrangements and the associated liability is recorded
at the amount of cash received. At the inception of a loan, the Company obtains collateral, generally cash, in an amount at least equal to
102% of the estimated fair value of the securities loaned and maintains it at a level greater than or equal to 100% for the duration of the
loan. The Company monitors the estimated fair value of the securities loaned on a daily basis with additional collateral obtained as
necessary. Substantially all of the Company’s securities loaned transactions are with brokerage firms and commercial banks. Income
and expenses associated with securities loaned transactions are reported as investment income and investment expense, respec-
tively, within net investment income.

Mortgage Loans — Mortgage Loans Held-For-Investment.

For the purposes of determining valuation allowances the Company
disaggregates its mortgage loan investments into three portfolio segments: (1) commercial, (2) agricultural, and (3) residential. The
accounting and valuation allowance policies that are applicable to all portfolio segments are presented below, followed by the policies
applicable to both commercial and agricultural

loans, which are very similar, as well as policies applicable to residential

loans.

Commercial, Agricultural and Residential Mortgage Loans — Mortgage loans held-for-investment are stated at unpaid principal
balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and net of valuation allowances. Interest
income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Amortization of premiums and
discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts and prepayment
fees are reported in net investment income. Interest ceases to accrue when collection of interest is not considered probable and/or
when interest or principal payments are past due as follows: commercial — 60 days; and agricultural and residential — 90 days,
unless, in the case of a residential
loan, it is both well-secured and in the process of collection. When a loan is placed on non-
accrual status, uncollected past due interest is charged-off against net investment income. Generally, the accrual of interest
income resumes after all delinquent amounts are paid and management believes all future principal and interest payments will be
collected. Cash receipts on non-accruing loans are recorded in accordance with the loan agreement as a reduction of principal
and/or interest income. Charge-offs occur upon the realization of a credit loss, typically through foreclosure or after a decision is
made to sell a loan, or for residential loans when, after considering the individual consumer’s financial status, management believes
that uncollectability is other-than-temporary. Gain or loss upon charge-off is recorded, net of previously established valuation
allowances, in net investment gains (losses). Cash recoveries on principal amounts previously charged-off are generally recorded
as an increase to the valuation allowance, unless the valuation allowance adequately provides for expected credit losses; then the
recovery is recorded in net investment gains (losses). Gains and losses from sales of loans and increases or decreases to valuation
allowances are recorded in net investment gains (losses).

Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the
Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Specific valuation allowances
are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the
present value of expected future cash flows discounted at the loan’s original effective interest rate, (ii) the estimated fair value of the
loan’s underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan’s observable
market price. A common evaluation framework is used for establishing non-specific valuation allowances for all
loan portfolio
segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that
is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with
similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company
loan portfolio segment-specific factors, including the
expects to incur a credit loss. These evaluations are based upon several

F-12

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Company’s experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics.
The Company typically uses ten years, or more, of historical experience, in these evaluations. These evaluations are revised as
conditions change and new information becomes available.

Commercial and Agricultural Mortgage Loans — All commercial and agricultural loans are monitored on an ongoing basis for
potential credit losses. For commercial loans, these ongoing reviews may include an analysis of the property financial statements
and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral,
loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk
loans, which include those that are classified as restructured, potentially delinquent, delinquent or in foreclosure, as well as loans
with higher loan-to-value ratios and lower debt service coverage ratios. The monitoring process for agricultural loans is generally
similar, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk commercial and
loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are
agricultural
established using the methodology described above for all loan portfolio segments. Quarterly, the remaining loans are reviewed on
a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation
allowances are established as described above using inputs that are unique to each segment of the loan portfolio.

For commercial

loans, the Company’s primary credit quality indicator is the debt service coverage ratio, which compares a
property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the
debt service coverage ratio, the higher the risk of experiencing a credit loss. The values utilized in calculating these ratios are
developed in connection with the ongoing review of the commercial

loan portfolio and are routinely updated.

For agricultural loans, the Company’s primary credit qualify indicator is the loan-to-value ratio. Loan-to-value ratios compare the
amount of the loan to the estimated fair value of the underlying collateral. A loan-to-value ratio greater than 100% indicates that the
loan amount is greater than the collateral value. A loan-to-value ratio of less than 100% indicates an excess of collateral value over
the loan amount. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The values utilized in
calculating these ratios are developed in connection with the ongoing review of the agricultural
loan portfolio and are routinely
updated.

Residential Mortgage Loans — The Company’s residential

loan portfolio is comprised primarily of closed end, amortizing
loans and home equity lines of credit and it does not hold any optional adjustable rate mortgages, sub-prime, or low

residential
teaser rate loans.

In contrast to the commercial and agricultural loan portfolios, residential loans are smaller-balance homogeneous loans that are
collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described
above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio.
Loan specific valuation allowances are only established on residential loans when they have been restructured and are established
using the methodology described above for all

loan portfolio segments.

For residential loans, the Company’s primary credit quality indicator is whether the loan is performing or non-performing. The
Company generally defines non-performing residential
loans as those that are 90 or more days past due and/or in non-accrual
status. The determination of performing or non-performing status is assessed monthly. Generally, non-performing residential loans
have a higher risk of experiencing a credit loss.

Also included in mortgage loans held-for-investment are commercial mortgage loans held by CSEs that were consolidated by
the Company on January 1, 2010 upon the adoption of new guidance. The Company elected FVO for these commercial mortgage
loans, and thus they are stated at estimated fair value with changes in estimated fair value subsequent to consolidation recognized
in net investment gains (losses).
Mortgage Loans — Mortgage Loans Held-For-Sale. Mortgage loans held-for-sale primarily include residential mortgage loans
which are originated with the intent to sell and for which FVO was elected. These residential mortgage loans are stated at estimated fair
value with subsequent changes in estimated fair value recognized in other revenue. This caption also includes mortgage loans
previously designated as held-for-investment about which the Company has subsequently changed its intention. At the time of transfer
to held-for-sale status, such mortgage loans are recorded at the lower of amortized cost or estimated fair value less expected
disposition costs determined on an individual
loan basis. Amortized cost is determined in the same manner as for mortgage loans
held-for-investment as described above. The amount by which amortized cost exceeds estimated fair value, less expected disposition
costs, is recognized in net investment gains (losses).

Policy Loans. Policy loans are stated at unpaid principal balances. Interest income on such loans is recorded as earned in net
investment income using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy’s anniversary date.
Valuation allowances are not established for policy loans, as these loans are fully collateralized by the cash surrender value of the
underlying insurance policies. Any unpaid principal or interest on the loan is deducted from the cash surrender value or the death
benefit prior to settlement of the policy.

Real Estate. Real estate held-for-investment, including related improvements, is stated at cost less accumulated depreciation.
Depreciation is provided on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is
recognized on a straight-line basis over the term of the respective leases. The Company classifies a property as held-for-sale if it
commits to a plan to sell a property within one year and actively markets the property in its current condition for a price that is
reasonable in comparison to its estimated fair value. The Company classifies the results of operations and the gain or loss on sale of a
property that either has been disposed of or classified as held-for-sale as discontinued operations, if the ongoing operations of the
property will be eliminated from the ongoing operations of the Company and if the Company will not have any significant continuing
involvement in the operations of the property after the sale. Real estate held-for-sale is stated at the lower of depreciated cost or
estimated fair value less expected disposition costs. Real estate is not depreciated while it is classified as held-for-sale. The Company

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

periodically reviews its properties held-for-investment for impairment and tests properties for recoverability whenever events or
changes in circumstances indicate the carrying amount of the asset may not be recoverable and the carrying value of the property
exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to
their estimated fair value, with the impairment loss included in net investment gains (losses). Impairment losses are based upon the
estimated fair value of real estate, which is generally computed using the present value of expected future cash flows from the real
estate discounted at a rate commensurate with the underlying risks. Real estate acquired upon foreclosure is recorded at the lower of
estimated fair value or the carrying value of the mortgage loan at the date of foreclosure.

Real Estate Joint Ventures and Other Limited Partnership Interests.

The Company uses the equity method of accounting for
investments in real estate joint ventures and other limited partnership interests consisting of leveraged buy-out funds, hedge funds and
other private equity funds in which it has more than a minor equity interest or more than a minor influence over the joint ventures or
partnership’s operations, but does not have a controlling interest and is not the primary beneficiary. The equity method is also used for
such investments in which the Company has more than a minor influence or more than a 20% interest. Generally, the Company records
its share of earnings using a three-month lag methodology for instances where the timely financial
information is available and the
contractual right exists to receive such financial information on a timely basis. The Company uses the cost method of accounting for
investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no
influence over the joint ventures or the partnership’s operations. The Company reports the distributions from real estate joint ventures
and other limited partnership interests accounted for under the cost method and equity in earnings from real estate joint ventures and
other limited partnership interests accounted for under the equity method in net investment income. In addition to the investees
performing regular evaluations for the impairment of underlying investments, the Company routinely evaluates its investments in real
estate joint ventures and other limited partnerships for impairments. The Company considers its cost method investments for OTTI
when the carrying value of real estate joint ventures and other limited partnership interests exceeds the net asset value (“NAV”). The
Company takes into consideration the severity and duration of
is
other-than-temporarily impaired. For equity method investees, the Company considers financial and other information provided by
the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in
determining whether an impairment has occurred. When an OTTI is deemed to have occurred, the Company records a realized capital
loss within net investment gains (losses) to record the investment at its estimated fair value.

this excess when deciding if

the cost method investment

Short-term Investments. Short-term investments include investments with remaining maturities of one year or less, but greater
than three months, at the time of purchase and are stated at amortized cost, which approximates estimated fair value, or stated at
estimated fair value, if available.

Other Invested Assets. Other invested assets consist principally of freestanding derivatives with positive estimated fair values,
leveraged leases, investments in insurance enterprise joint ventures, tax credit partnerships, funding agreements, mortgage servicing
rights (“MSRs”) and funds withheld.

Freestanding derivatives with positive estimated fair values are described in the derivatives accounting policy which follows.
Leveraged leases are recorded net of non-recourse debt. The Company participates in lease transactions which are diversified by
industry, asset type and geographic area. The Company recognizes income on the leveraged leases by applying the leveraged lease’s
estimated rate of return to the net investment in the lease. The Company regularly reviews residual values and impairs them to expected
values.

Joint venture investments represent the Company’s investments in entities that engage in insurance underwriting activities and are

accounted for under the equity method.

Tax credit partnerships are established for the purpose of investing in low-income housing and other social causes, where the
primary return on investment is in the form of tax credits and are also accounted for under the equity method or under the effective yield
method. The Company reports the equity in earnings of joint venture investments and tax credit partnerships in net investment income.
Funding agreements represent arrangements where the Company has long-term interest bearing amounts on deposit with third

parties and are generally stated at amortized cost.

MSRs are measured at estimated fair value and are either acquired or are generated from the sale of originated residential mortgage
loans where the servicing rights are retained by the Company. Changes in estimated fair value of MSRs are reported in other revenues
in the period in which the change occurs.

Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The
Company records a funds withheld receivable rather than the underlying investments. The Company recognizes interest on funds
withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying
investments and records it in net investment income.

Investments Risks and Uncertainties.

The Company’s investments are exposed to four primary sources of risk: credit, interest rate,
liquidity risk, and market valuation. The financial statement risks, stemming from such investment risks, are those associated with the
determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition
of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies,
assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the
consolidated financial statements.

When available, the estimated fair value of the Company’s fixed maturity and equity securities are based on quoted prices in active markets
that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these
securities does not involve management judgment.

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation
methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other

F-14

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing
of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated
duration and management’s assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are
based on available market information and management’s judgments about financial

instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price
transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such
observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and
observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain
types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated
fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These
unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market
activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent
with what other market participants would use when pricing such securities.

The estimated fair value of residential mortgage loans held-for-sale is determined based on observable pricing of residential mortgage
loans held-for-sale with similar characteristics, or observable pricing for securities backed by similar types of loans, adjusted to convert the
securities prices to loan prices. Generally, quoted market prices are not available. When observable pricing for similar loans, or securities that
are backed by similar loans, are not available, the estimated fair values of residential mortgage loans held-for-sale are determined using
independent broker quotations, which is intended to approximate the amounts that would be received from third parties. Certain other
mortgage loans have also been designated as held-for-sale which are recorded at the lower of amortized cost or estimated fair value less
loan basis. For these loans, estimated fair value is determined using independent
expected disposition costs determined on an individual
broker quotations or, when the loan is in foreclosure or otherwise determined to be collateral dependent, the estimated fair value of the
underlying collateral estimated using internal models.

The estimated fair value of MSRs is principally determined through the use of internal discounted cash flow models which utilize various
assumptions. Valuation inputs and assumptions include generally observable items such as type and age of loan, loan interest rates, current
market interest rates, and certain unobservable inputs, including assumptions regarding estimates of discount rates, loan prepayments and
servicing costs, all of which are sensitive to changing market conditions. The use of different valuation assumptions and inputs, as well as
assumptions relating to the collection of expected cash flows, may have a material effect on the estimated fair values of MSRs.

Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset
liquidity. The Company’s ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in
the market and increases the use of judgment in determining the estimated fair value of certain securities.

The determination of the amount of allowances and impairments, as applicable, is described previously by investment type. The
determination of such allowances and impairments is highly subjective and is based upon the Company’s periodic evaluation and
assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as
conditions change and new information becomes available.

The recognition of income on certain investments (e.g. loan-backed securities, including mortgage-backed and ABS, certain structured
investment transactions, trading and other securities) is dependent upon market conditions, which could result in prepayments and changes
in amounts to be earned.

The accounting guidance for the determination of when an entity is a VIE and when to consolidate a VIE is complex and requires significant
management judgment. 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. The Company generally uses a qualitative
approach to determine whether it is the primary beneficiary.

For most VIEs, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or
receive benefits that could be significant to the VIE is considered the primary beneficiary. However, for VIEs that are investment companies or
apply measurement principles consistent with those utilized by investment companies, the primary beneficiary is based on a risks and
rewards model and is defined as the entity that will absorb a majority of a VIE’s expected losses, receive a majority of a VIE’s expected residual
returns if no single entity absorbs a majority of expected losses, or both. The Company reassesses its involvement with VIEs on a quarterly
basis. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect
on the amounts presented within the consolidated financial statements.

Derivative Financial

Instruments

Derivatives are financial

instruments whose values are derived from interest rates, foreign currency exchange rates, credit spreads,
and/or other financial
indices. Derivatives may be exchange-traded or contracted in the over-the-counter market. The Company uses a
variety of derivatives, including swaps, forwards, futures and option contracts, to manage various risks relating to its ongoing business. To a
lesser extent, the Company uses credit derivatives, such as credit default swaps, to synthetically replicate investment risks and returns which
are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment
contracts and engages in certain reinsurance contracts that have embedded derivatives.

Freestanding derivatives are carried on the Company’s consolidated balance sheets either as assets within other invested assets or as
liabilities within other liabilities at estimated fair value as determined through the use of quoted market prices for exchange-traded derivatives
and interest rate forwards to sell certain to-be-announced securities or through the use of pricing models for over-the-counter derivatives.
The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies
and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

valuations can be affected by changes in interest rates, foreign currency exchange rates, financial
(including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

indices, credit spreads, default risk

The Company does not offset the fair value amounts recognized for derivatives executed with the same counterparty under the same

master netting agreement.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the
estimated fair value of the derivative are generally reported in net derivative gains (losses) except for those (i) in policyholder benefits and
claims for economic hedges of variable annuity guarantees included in future policy benefits; (ii) in net investment income for economic
hedges of equity method investments in joint ventures, or for all derivatives held in relation to the trading portfolios; (iii) in other revenues for
derivatives held in connection with the Company’s mortgage banking activities; and (iv) in other expenses for economic hedges of foreign
currency exposure related to the Company’s international subsidiaries. The fluctuations in estimated fair value of derivatives which have not
been designated for hedge accounting can result in significant volatility in net income.

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management
objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (i) a hedge of the estimated fair
value of a recognized asset or liability (“fair value hedge”); (ii) a hedge of a forecasted transaction or of the variability of cash flows to be
received or paid related to a recognized asset or liability (“cash flow hedge”); or (iii) a hedge of a net investment in a foreign operation. In this
documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item
and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness and the
method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly
effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically
throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are
also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net
income.

The accounting for derivatives is complex and interpretations of the primary accounting guidance continue to evolve in practice.
Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting
treatment under such accounting guidance. If it was determined that hedge accounting designations were not appropriately applied,
reported net income could be materially affected.

Under a fair value hedge, changes in the estimated fair value of the hedging derivative, including amounts measured as ineffectiveness,
and changes in the estimated fair value of the hedged item related to the designated risk being hedged, are reported within net derivative
gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the
consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals
that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

Under a cash flow hedge, changes in the estimated fair value of the hedging derivative measured as effective are reported within other
comprehensive income (loss), a separate component of stockholders’ equity, and the deferred gains or losses on the derivative are
reclassified into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the
hedged item. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net derivative
gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the
consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals
that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

In a hedge of a net investment in a foreign operation, changes in the estimated fair value of the hedging derivative that are measured as
effective are reported within other comprehensive income (loss) consistent with the translation adjustment for the hedged net investment in
the foreign operation. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net
derivative gains (losses).

The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in
offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it
is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument.

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the
estimated fair value or cash flows of a hedged item, the derivative continues to be carried in the consolidated balance sheets at its estimated
fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). The carrying value of the hedged
recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the
cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged
forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in other comprehensive
income (loss) related to discontinued cash flow hedges are released into the consolidated statement of operations when the Company’s
earnings are affected by the variability in cash flows of the hedged item.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated
date or within two months of that date, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with
changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in
other comprehensive income (loss) pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are
recognized immediately in net derivative gains (losses).

In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value in the consolidated

balance sheets, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).

The Company is also a party to financial

instruments that contain terms which are deemed to be embedded derivatives. The Company
assesses each identified embedded derivative to determine whether it is required to be bifurcated. If the instrument would not be accounted

F-16

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

for in its entirety at estimated fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the
economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument,
the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are
carried in the consolidated balance sheets at estimated fair value with the host contract and changes in their estimated fair value are generally
reported in net derivative gains (losses) except for those in policyholder benefits and claims related to ceded reinsurance of guaranteed
minimum income benefits (“GMIBs”). If the Company is unable to properly identify and measure an embedded derivative for separation from its
host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the
current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on
the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses)
or net investment income if that contract contains an embedded derivative that requires bifurcation.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of

purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value.

Property, Equipment, Leasehold Improvements and Computer Software

Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation
and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, as appropriate. The
estimated life for company occupied real estate property is generally 40 years. Estimated lives generally range from five to ten years for
leasehold improvements and three to seven years for all other property and equipment. The cost basis of the property, equipment and
leasehold improvements was $2.4 billion and $1.9 billion at December 31, 2010 and 2009, respectively. Accumulated depreciation and
amortization of property, equipment and leasehold improvements was $1.2 billion and $1.0 billion at December 31, 2010 and 2009,
respectively. Related depreciation and amortization expense was $152 million, $152 million and $150 million for the years ended Decem-
ber 31, 2010, 2009 and 2008, respectively.

Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well
as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are
capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software
was $2.0 billion and $1.7 billion at December 31, 2010 and 2009, respectively. Accumulated amortization of capitalized software was
$1.4 billion and $1.2 billion at December 31, 2010 and 2009, respectively. Related amortization expense was $189 million, $171 million and
$153 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Deferred Policy Acquisition Costs (“DAC”) and Value of Business Acquired (“VOBA”)

The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that vary with and relate to
the production of new business are deferred as DAC. Such costs consist principally of commissions and agency and policy issuance
expenses. VOBA is an intangible asset that represents the excess of book value over the estimated fair value of acquired insurance, annuity,
and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on actuarially
determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate
account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual
experience on the purchased business may vary from these projections. The recovery of DAC and VOBA is dependent upon the future
profitability of the related business. DAC and VOBA are aggregated in the consolidated financial statements for reporting purposes.

DAC for credit, property and casualty insurance contracts, which is primarily composed of commissions and certain underwriting

expenses, is amortized on a pro rata basis over the applicable contract term or reinsurance treaty.

DAC and VOBA on life insurance, accident and health or investment-type contracts are amortized in proportion to gross premiums, gross

margins or gross profits, depending on the type of contract as described below.

The Company amortizes DAC and VOBA related to non-participating and non-dividend-paying traditional contracts (term insurance, non-
participating whole life insurance, traditional group life insurance, credit insurance, non-medical health insurance, and accident and health
insurance) over the entire premium paying period in proportion to the present value of actual historic and expected future gross premiums.
The present value of expected premiums is based upon the premium requirement of each policy and assumptions for mortality, morbidity,
persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), that include provisions for adverse
deviation and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised
after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a
premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes.

The Company amortizes DAC and VOBA related to participating, dividend-paying traditional contracts over the estimated lives of the
contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or
acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales,
mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables,
such as inflation. For participating contracts within the closed block (dividend paying traditional contracts) future gross margins are also
dependent upon changes in the policyholder dividend obligation. Of these factors, the Company anticipates that investment returns,
expenses, persistency and other factor changes as well as policyholder dividend scales are reasonably likely to impact significantly the rate of
DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that
period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re-
estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously
estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when
the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously
estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when
the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also
reviews the estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances.

The Company amortizes DAC and VOBA related to fixed and variable universal

life contracts and fixed and variable deferred annuity
contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest
based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in
excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business,
creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these
factors, the Company anticipates that investment returns, expenses and persistency are reasonably likely to impact significantly the rate of
DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that
period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-
estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated,
the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual
gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of
business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously
estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when
the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews
the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances.

Separate account rates of return on variable universal

life contracts and variable deferred annuity contracts affect in-force account
balances on such contracts each reporting period which can result in significant fluctuations in amortization of DAC and VOBA. Returns that
are higher than the Company’s long-term expectation produce higher account balances, which increases the Company’s future fee
expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher
expected future gross profits. The opposite result occurs when returns are lower than the Company’s long-term expectation. The Company’s
practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity
markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company
monitors these events and only changes the assumption when its long-term expectation changes.

The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits.
These include investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency and expenses to administer
business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have
significantly changed. If
the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA
amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update
causes expected future gross margins and profits to decrease.

Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new
contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to
as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and
any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the
contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related
modification are expensed.

Sales Inducements

The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a
bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s
deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on
the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using
the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in policyholder benefits
and claims. Each year, or more frequently if circumstances indicate a potentially significant recoverability issue exists, the Company reviews
the deferred sales inducements to determine the recoverability of these balances.

Value of Distribution Agreements and Customer Relationships Acquired

Value of distribution agreements (“VODA”)

is reported in other assets and represents the present value of expected future profits
associated with the expected future business derived from the distribution agreements. Value of customer relationships acquired (“VOCRA”)
is also reported in other assets and represents the present value of the expected future profits associated with the expected future business
acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past acquisitions are
amortized over useful lives ranging from 10 to 40 years and such amortization is included in other expenses. Each year, or more frequently if
circumstances indicate a potentially significant recoverability issue exists, the Company reviews VODA and VOCRA to determine the
recoverability of these balances.

Goodwill

Goodwill is the excess of cost over the estimated fair value of net assets acquired which represents the future economic benefits arising
from such net assets acquired that could not be individually identified. Goodwill is not amortized but is tested for impairment at least annually
or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for
conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon

F-18

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the
business is acquired unless there is a significant identified impairment event.

Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the “reporting unit”
level. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial
information is
prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, a significant portion of goodwill
within Banking, Corporate & Other is allocated to reporting units within the Company’s segments.

For purposes of goodwill

impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there might be an
indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill
that would be determined in a business acquisition. The excess of the carrying value of goodwill over the implied fair value of goodwill would
be recognized as an impairment and recorded as a charge against net income.

In performing the Company’s goodwill impairment tests, the estimated fair values of the reporting units are first determined using a market
multiple approach. When further corroboration is required, the Company uses a discounted cash flow approach. For reporting units which are
particularly sensitive to market assumptions, such as the retirement products and individual
life reporting units, the Company may use
additional valuation methodologies to estimate the reporting units’ fair values.

The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected
earnings, current book value (with and without accumulated other comprehensive income), the level of economic capital required to support
the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new and
renewal business, as well as margins on such business, the level of interest rates, credit spreads, equity market levels and the discount rate
that the Company believes is appropriate for the respective reporting unit. The estimated fair values of the retirement products and individual
life reporting units are particularly sensitive to the equity market levels.

When testing goodwill for impairment, the Company also considers its market capitalization in relation to the aggregate estimated fair value

of its reporting units.

The Company applies significant judgment when determining the estimated fair value of the Company’s reporting units and when
assessing the relationship of market capitalization to the aggregate estimated fair value of its reporting units. The valuation methodologies
utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and
represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions
upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair value
of the Company’s reporting units could result in goodwill impairments in future periods which could materially adversely affect the Company’s
results of operations or financial position.

During the 2010 impairment tests of goodwill, the Company concluded that the fair values of all reporting units were in excess of their
carrying values and, therefore, goodwill was not impaired. On an ongoing basis, the Company evaluates potential triggering events that may
affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse
market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result
in future impairments of goodwill.

See Note 7 for further consideration of goodwill

impairment testing during 2010.

Liability for Future Policy Benefits and Policyholder Account Balances

The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, traditional annuities,
certain accident and health, and non-medical health insurance. Generally, amounts are payable over an extended period of time and related
liabilities are calculated as the present value of future expected benefits to be paid reduced by the present value of future expected premiums.
Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards.
Principal assumptions used in the establishment of
liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal,
retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to
the respective product type and geographical area. These assumptions are established at the time the policy is issued and are intended to
estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of
business basis.

Future policy benefit liabilities for participating traditional life insurance policies are equal to the aggregate of (i) net level premium reserves
for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate, ranging from 3% to 7% for domestic
business and 1% to 12% for international business, and mortality rates guaranteed in calculating the cash surrender values described in such
contracts); and (ii) the liability for terminal dividends for domestic business.

Participating business represented approximately 6% of the Company’s life insurance in-force at both December 31, 2010 and 2009.
Participating policies represented approximately 26%, 28% and 27% of gross life insurance premiums for the years ended December 31,
2010, 2009 and 2008, respectively.

Future policy benefit liabilities for non-participating traditional

life insurance policies are equal to the aggregate of the present value of
expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality
and persistency are based upon the Company’s experience when the basis of the liability is established. Interest rate assumptions for the
aggregate future policy benefit liabilities range from 3% to 8% for domestic business and 1% to 12% for international business.

Future policy benefit liabilities for individual and group traditional fixed annuities after annuitization are equal to the present value of
expected future payments. Interest rate assumptions used in establishing such liabilities range from 2% to 11% for domestic business and 3%
to 12% for international business.

Future policy benefit liabilities for non-medical health insurance, primarily related to domestic business, are calculated using the net level
premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate
assumptions used in establishing such liabilities range from 4% to 7%.

MetLife, Inc.

F-19

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as
to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 3% to 8% for domestic
business and 2% to 9% for international business.

Liabilities for unpaid claims and claim expenses for property and casualty insurance are included in future policyholder benefits and
represent the amount estimated for claims that have been reported but not settled and claims incurred but not reported. Liabilities for unpaid
claims are estimated based upon the Company’s historical experience and other actuarial assumptions that consider the effects of current
developments, anticipated trends and risk management programs, reduced for anticipated salvage and subrogation. The effects of changes
in such estimated liabilities are included in the results of operations in the period in which the changes occur.

The Company establishes future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity

contracts and secondary and paid-up guarantees relating to certain life policies as follows:

(cid:129) Guaranteed minimum death benefit (“GMDB”) liabilities are determined by estimating the expected value of death benefits in excess of
the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments.
The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit
expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in
estimating the GMDB liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk.
The assumptions of investment performance and volatility are consistent with the historical experience of the appropriate underlying
equity index, such as the Standard & Poor’s (“S&P”) 500 Index. The benefit assumptions used in calculating the liabilities are based on
the average benefits payable over a range of scenarios.

(cid:129) Guaranteed minimum income benefit (“GMIB”) liabilities are determined by estimating the expected value of the income benefits in
excess of the projected account balance at any future date of annuitization and recognizing the excess ratably over the accumulation
liability
period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional
balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions
should be revised. The assumptions used for estimating the GMIB liabilities are consistent with those used for estimating the GMDB
liabilities. In addition, the calculation of guaranteed annuitization benefit liabilities incorporates an assumption for the percentage of the
potential annuitizations that may be elected by the contractholder. Certain GMIBs have settlement features that result in a portion of that
guarantee being accounted for as an embedded derivative and are recorded in policyholder account balances as described below.
Liabilities for universal and variable life secondary guarantees and paid-up guarantees are determined by estimating the expected value of
death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period
based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balances, with a
related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The
assumptions used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing DAC, and are
thus subject to the same variability and risk. The assumptions of investment performance and volatility for variable products are consistent
with historical S&P experience. The benefits used in calculating the liabilities are based on the average benefits payable over a range of
scenarios.

The Company establishes policyholder account balances for guaranteed minimum benefits relating to certain variable annuity products as

follows:

(cid:129) Guaranteed minimum withdrawal benefits (“GMWB”) guarantee the contractholder a return of their purchase payment via partial
withdrawals, even if the account value is reduced to zero, provided that the contractholder’s cumulative withdrawals in a contract year
do not exceed a certain limit. The initial guaranteed withdrawal amount is equal to the initial benefit base as defined in the contract
(typically, the initial purchase payments plus applicable bonus amounts). The GMWB is an embedded derivative, which is measured at
estimated fair value separately from the host variable annuity product.
(cid:129) Guaranteed minimum accumulation benefits (“GMAB”) and settlement

features in certain GMIB described above provide the
contractholder, after a specified period of time determined at the time of issuance of the variable annuity contract, with a minimum
accumulation of their purchase payments even if the account value is reduced to zero. The initial guaranteed accumulation amount is
equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The
GMAB is an embedded derivative, which is measured at estimated fair value separately from the host variable annuity product.
For GMWB, GMAB and certain GMIB, the initial benefit base is increased by additional purchase payments made within a certain time
period and decreases by benefits paid and/or withdrawal amounts. After a specified period of time, the benefit base may also increase as a
result of an optional reset as defined in the contract.

GMWB, GMAB and certain GMIB are accounted for as embedded derivatives with changes in estimated fair value reported in net

derivative gains (losses).

At inception of the GMWB, GMAB and certain GMIB contracts, the Company attributes to the embedded derivative a portion of the
projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any
additional fees represent “excess” fees and are reported in universal

life and investment-type product policy fees.

The estimated fair values of these embedded derivatives are then determined based on the present value of projected future benefits
minus the present value of projected future fees. The projections of future benefits and future fees require capital market and actuarial
assumptions including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash
flows from the guarantees are projected under multiple capital market scenarios using observable risk free rates. The valuation of these
embedded derivatives also includes an adjustment for the Company’s nonperformance risk and risk margins for non-capital market inputs.
The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary
market for the Holding Company’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to
reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to the Holding Company. Risk

F-20

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market
participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium
persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment.
These guaranteed minimum benefits may be more costly than expected in volatile or declining equity markets. Market conditions
including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, changes in
nonperformance risk, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital
market inputs may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

The Company periodically reviews its estimates of actuarial

liabilities for future policy benefits and compares them with its actual
experience. Differences between actual experience and the assumptions used in pricing these policies and guarantees, and in the
establishment of the related liabilities result in variances in profit and could result in losses. The effects of changes in such estimated
liabilities are included in the results of operations in the period in which the changes occur.

Policyholder account balances relate to investment-type contracts, universal life-type policies and certain guaranteed minimum benefits.
Investment-type contracts principally include traditional individual fixed annuities in the accumulation phase and non-variable group annuity
contracts. Policyholder account balances for these contracts are equal to (i) policy account values, which consist of an accumulation of gross
premium payments and investment performance; (ii) credited interest, ranging from 1% to 17% for domestic business and 1% to 38% for
international business, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments relating to business combinations.

Other Policy-Related Balances

Other policy-related balances include policy and contract claims, unearned revenue liabilities, premiums received in advance, negative

VOBA, policyholder dividends due and unpaid and policyholder dividends left on deposit.

The liability for policy and contract claims generally relates to incurred but not reported death, disability, long-term care and dental claims,
as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company’s estimated ultimate
cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from actuarial
analyses of historical patterns of claims and claims development for each line of business. The methods used to determine these estimates
are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for
claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made.
The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be
provided in future periods. The charges are deferred as unearned revenue and amortized using the product’s estimated gross profits and
margins, similar to DAC. Such amortization is recorded in universal

life and investment-type product policy fees.

The Company accounts for the prepayment of premiums on its individual

life, group life and health contracts as premium received in

advance and applies the cash received to premiums when due.

For certain acquired blocks of business, the estimated fair value of the in-force contract obligations exceeded the book value of assumed
in-force insurance policy liabilities, resulting in negative VOBA, which is presented separately from VOBA as an additional insurance liability.
The fair value of the in-force contract obligations is based on actuarial determined projections by each block of business. Negative VOBA is
amortized over the policy period in proportion to the approximate consumption of losses included in the liability usually expressed in terms of
insurance in-force or account value. Such amortization is recorded as a contra-expense in other expenses in the consolidated statements of
operations.

Also included in other policy-related balances are policyholder dividends due and unpaid on participating policies and policyholder

dividends left on deposit. Such liabilities are presented at amounts contractually due to policyholders.

Recognition of Insurance Revenue and Related Benefits

Premiums related to traditional life and annuity policies with life contingencies and long-duration accident and health and credit insurance
policies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided against such revenues to
recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which
benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for
annuities, the amount of expected future policy benefit payments.

Premiums related to short-duration non-medical health and disability contracts are recognized on a pro rata basis over the applicable

contract term.

Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such
contracts consist of amounts assessed against policyholder account balances for mortality, policy administration and surrender charges and
are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged
to operations include interest credited and benefit claims incurred in excess of related policyholder account balances.

Premiums related to property and casualty contracts are recognized as revenue on a pro rata basis over the applicable contract term.
Unearned premiums, representing the portion of premium written relating to the unexpired coverage, are included in future policy benefits.

Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance.
The portion of fees allocated to embedded derivatives described previously is recognized within net derivative gains (losses) as part of the

estimated fair value of embedded derivatives.

Other Revenues

Other revenues include, in addition to items described elsewhere herein, advisory fees, broker-dealer commissions and fees and
administrative service fees. Such fees and commissions are recognized in the period in which services are performed. Other revenues also
include changes in account value relating to corporate-owned life insurance (“COLI”). Under certain COLI contracts, if the Company reports
certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject
to market value adjustment, which could result in a reduction of the account value.

MetLife, Inc.

F-21

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Policyholder Dividends

Policyholder dividends are approved annually by the insurance subsidiaries’ boards of directors. The aggregate amount of policyholder
dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management’s judgment as to the
appropriate level of statutory surplus to be retained by the insurance subsidiaries.

Income Taxes

The Holding Company and its includable life insurance and non-life insurance subsidiaries file a consolidated U.S. federal

income tax
return in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Non-includable subsidiaries file
either separate individual corporate tax returns or separate consolidated tax returns.

The Company’s accounting for income taxes represents management’s best estimate of various events and transactions.
Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and
liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary
differences are expected to reverse.

For U.S. federal

income tax purposes, the Company anticipates making an election under the Code Section 338 as it relates to the
Acquisition. As such, the tax basis in the acquired assets and liabilities is adjusted as of the Acquisition Date resulting in a change to the
related deferred income taxes.

The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward
periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on
available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in
determining whether valuation allowances should be established, as well as the amount of such allowances. When making such deter-
mination, consideration is given to, among other things, the following:

(i)
(ii)
(iii)
(iv)

future taxable income exclusive of reversing temporary differences and carryforwards;
future reversals of existing taxable temporary differences;
taxable income in prior carryback years; and
tax planning strategies.

The Company may be required to change its provision for income taxes in certain circumstances. Examples of such circumstances
include when the ultimate deductibility of certain items is challenged by taxing authorities (see Note 15) or when estimates used in determining
valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in
valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations,
could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts
reported in the consolidated financial statements in the year these changes occur.

The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing
authorities before any part of the benefit can be recorded in the financial statements. A tax position is measured at the largest amount of
benefit that is greater than 50 percent likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not
meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made.
The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax.

Reinsurance

The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a

provider of reinsurance for some insurance products issued by third parties.

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability
relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly
those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims.
For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between
the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance
at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC and recognized as a
component of other expenses on a basis consistent with the way the acquisition costs on the underlying reinsured contracts would be
recognized. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new
business, are recorded as ceded (assumed) premiums and ceded (assumed) future policy benefit liabilities are established.

For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are
recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums and are reflected as a component of premiums and other
receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion
to the amount of protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting,
amounts paid (received) in excess of (which do not exceed) the related insurance liabilities ceded (assumed) are recognized immediately as a
loss. Any gains on such retroactive agreements are deferred and recorded in other liabilities. The gains are amortized primarily using the
recovery method.

The assumptions used to account for both long and short-duration reinsurance agreements are consistent with those used for the
underlying contracts. Ceded policyholder and contract related liabilities, other than those currently due, are reported gross on the balance
sheet.

Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts
currently payable are included in other liabilities. Such assets and liabilities relating to reinsurance agreements with the same reinsurer may be
recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their

F-22

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

obligations to the Company under the terms of the reinsurance agreements, reinsurance balances recoverable could become uncollectible.
In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance.

Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance

ceded. Amounts received from reinsurers for policy administration are reported in other revenues.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss
from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other
liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent
with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other
expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the
deposit asset or liability through other revenues or other expenses, as appropriate.

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the
underlying business and the potential
impact of counterparty credit risks. The Company periodically reviews actual and anticipated
experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance
and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security
impairment process discussed previously.

Cessions under reinsurance arrangements do not discharge the Company’s obligations as the primary insurer.

Employee Benefit Plans

Certain subsidiaries of the Holding Company (the “Subsidiaries”) sponsor and/or administer various plans that provide defined benefit
pension and other postretirement benefits covering eligible employees and sales representatives. Measurement dates used for all of the
Subsidiaries’ defined benefit pension and other postretirement benefit plans correspond with the fiscal year ends of sponsoring Subsidiaries,
which are December 31 for U.S. Subsidiaries and November 30 for most foreign Subsidiaries.

Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits based
upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional
accounts which credit participants with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually based
upon the average annual rate of interest on 30-year Treasury securities, for each account balance.

The Subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance benefits for retired
employees. Employees of the Subsidiaries who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and
service criteria while working for one of the Subsidiaries, may become eligible for these other postretirement benefits, at various levels, in
accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement
medical benefits. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits.

The projected pension benefit obligation (“PBO”) is defined as the actuarially calculated present value of vested and non-vested pension
benefits accrued based on future salary levels. The accumulated pension benefit obligation (“ABO”) is the actuarial present value of vested
and non-vested pension benefits accrued based on current salary levels. Obligations, both PBO and ABO, of the defined benefit pension
plans are determined using a variety of actuarial assumptions, from which actual results may vary, as described below.

The expected postretirement plan benefit obligations (“EPBO”) represents the actuarial present value of all other postretirement benefits
expected to be paid after retirement to employees and their dependents and is used in measuring the periodic postretirement benefit
expense. The accumulated postretirement plan benefit obligations (“APBO”) represents the actuarial present value of future other postre-
tirement benefits attributed to employee services rendered through a particular date and is the valuation basis upon which liabilities are
established. The APBO is determined using a variety of actuarial assumptions, from which actual results may vary, as described below.

The Company recognizes the funded status of the PBO for pension plans and the APBO for other postretirement plans for each of its plans
in the consolidated balance sheets. The actuarial gains or losses, prior service costs and credits and the remaining net transition asset or
obligation that had not yet been included in net periodic benefit costs are charged, net of income tax, to accumulated other comprehensive
income (loss).

Net periodic benefit cost is determined using management estimates and actuarial assumptions to derive service cost, interest cost, and
expected return on plan assets for a particular year. Net periodic benefit cost also includes the applicable amortization of any prior service
cost (credit) arising from the increase (decrease) in prior years’ benefit costs due to plan amendments or initiation of new plans. These costs
are amortized into net periodic benefit cost over the expected service years of employees whose benefits are affected by such plan
amendments. Actual experience related to plan assets and/or the benefit obligations may differ from that originally assumed when
determining net periodic benefit cost for a particular period, resulting in gains or losses. To the extent such aggregate gains or losses
exceed 10 percent of the greater of the benefit obligations or the market-related asset value of the plans, they are amortized into net periodic
benefit cost over the expected service years of employees expected to receive benefits under the plans.

The obligations and expenses associated with these plans require an extensive use of assumptions such as the discount rate, expected
rate of return on plan assets, rate of future compensation increases, healthcare cost trend rates, as well as assumptions regarding participant
demographics such as rate and age of retirements, withdrawal rates and mortality. Management, in consultation with its external consulting
actuarial firms, determines these assumptions based upon a variety of factors such as historical performance of the plan and its assets,
currently available market and industry data and expected benefit payout streams. The assumptions used may differ materially from actual
results due to, among other factors, changing market and economic conditions and changes in participant demographics. These differences
may have a significant effect on the Company’s consolidated financial statements and liquidity.

The Subsidiaries also sponsor defined contribution savings and investment plans (“SIP”) for substantially all employees under which a
portion of employee contributions is matched. Applicable matching contributions are made each payroll period. Accordingly, the Company
recognizes compensation cost for current matching contributions. As all contributions are transferred currently as earned to the SIP trust, no
liability for matching contributions is recognized in the consolidated balance sheets.

MetLife, Inc.

F-23

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Stock-Based Compensation

As more fully described in Note 18, the Company grants certain employees and directors stock-based compensation awards under
various plans that are subject to specific vesting conditions. The cost of all stock-based transactions is measured at fair value at grant date
and recognized over the period during which a grantee is required to provide goods or services in exchange for the award. Although the terms
of the Company’s stock-based plans do not accelerate vesting upon retirement, or the attainment of retirement eligibility, the requisite service
period subsequent to attaining such eligibility is considered nonsubstantive. Accordingly, the Company recognizes compensation expense
related to stock-based awards over the shorter of the requisite service period or the period to attainment of retirement eligibility. An estimation
of future forfeitures of stock-based awards is incorporated into the determination of compensation expense when recognizing expense over
the requisite service period.

Foreign Currency

Assets, liabilities and operations of foreign affiliates and subsidiaries are recorded based on the functional currency of each entity. The
determination of the functional currency is made based on the appropriate economic and management indicators. With the exception of
certain foreign operations, primarily Japan, where multiple functional currencies exist, the local currencies of foreign operations are the
functional currencies. Assets and liabilities of foreign affiliates and subsidiaries are translated from the functional currency to U.S. dollars at
the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing
during the year. The resulting translation adjustments are charged or credited directly to other comprehensive income or loss, net of
applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and
liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur.

Discontinued Operations

The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in
discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the
Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the
component after the disposal transaction.

Earnings Per Common Share

Basic earnings per common share are computed based on the weighted average number of common shares, or their equivalent,
outstanding during the period. The difference between the number of shares assumed issued and number of shares assumed purchased
represents the dilutive shares. Diluted earnings per common share include the dilutive effect of the assumed: (i) exercise or issuance of stock-
based awards using the treasury stock method; (ii) settlement of stock purchase contracts underlying common equity units using the treasury
stock method; and (iii) settlement of accelerated common stock repurchase contracts. Under the treasury stock method, exercise or
issuance of stock-based awards and settlement of the stock purchase contracts underlying common equity units is assumed to occur with
the proceeds used to purchase common stock at the average market price for the period. See Notes 14, 18 and 20.

Litigation Contingencies

The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent
unpredictability of these matters, it is difficult to estimate the impact on the Company’s financial position. Liabilities are established when it is
probable that a loss has been incurred and the amount of the loss can be reasonably estimated. On a quarterly and annual basis, the
Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to
be reflected in the Company’s consolidated financial statements. It is possible that an adverse outcome in certain of the Company’s litigation
and regulatory investigations, or the use of different assumptions in the determination of amounts recorded, could have a material effect upon
the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Separate Accounts

Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any
other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets
exceeds the separate account liabilities. Assets within the Company’s separate accounts primarily include: mutual funds, fixed maturity and
equity securities, mortgage loans, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash
equivalents. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate
accounts if (i) such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from the
Company’s general account liabilities; (iii) investments are directed by the contractholder; and (iv) all investment performance, net of contract
fees and assessments, is passed through to the contractholder. The Company reports separate account assets meeting such criteria at their
fair value which is based on the estimated fair values of the underlying assets comprising the portfolios of an individual separate account.
Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the
corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the consolidated statements
of operations. Separate accounts credited with a contractual
investment return are combined on a line-by-line basis with the Company’s
general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies
described herein for similar financial
instruments held within the general account. Unit-linked separate account investments which are
directed by contractholders but do not meet one or more of the other above criteria are included in trading and other securities.

The Company’s revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration

fees, investment management fees and surrender charges.

F-24

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Adoption of New Accounting Pronouncements

Financial

Instruments

Effective December 31, 2010, the Company adopted new guidance regarding disclosures about the credit quality of financing receivables
and valuation allowances for credit losses, including credit quality indicators. Such disclosures must be disaggregated by portfolio segment
or class based on how a company develops its valuation allowances for credit losses and how it manages its credit exposure. The Company
has provided all material required disclosures in its consolidated financial statements. Certain additional disclosures will be required for
reporting periods beginning March 31, 2011 and certain disclosures relating to troubled debt restructurings have been deferred indefinitely.
Effective July 1, 2010, the Company adopted new guidance regarding accounting for embedded credit derivatives within structured
securities. This guidance clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements.
Specifically, embedded credit derivatives resulting only from subordination of one financial instrument to another continue to qualify for the
scope exception. Embedded credit derivative features other than subordination must be analyzed to determine whether they require
bifurcation and separate accounting.

As a result of the adoption of this guidance, the Company elected FVO for certain structured securities that were previously accounted for
as fixed maturity securities. Upon adoption, the Company reclassified $50 million of securities from fixed maturity securities to trading and
other securities. These securities had cumulative unrealized losses of $10 million, net of income tax, which was recognized as a cumulative
effect adjustment to decrease retained earnings with a corresponding increase to accumulated other comprehensive income (loss) as of
July 1, 2010.

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

As a result of the adoption of this guidance, the Company consolidated certain former QSPEs that were previously accounted for as fixed
maturity CMBS and equity security collateralized debt obligations. The Company also elected FVO for all of the consolidated assets and
liabilities of these entities. Upon consolidation, the Company recorded $278 million of securities classified as trading and other securities,
$6,769 million of commercial mortgage loans and $6,822 million of long-term debt based on estimated fair values at January 1, 2010 and de-
recognized $179 million in fixed maturity securities and less than $1 million in equity securities. The consolidation also resulted in a decrease
in retained earnings of $12 million, net of income tax, and an increase in accumulated other comprehensive income (loss) of $42 million, net of
income tax, at January 1, 2010. For the year ended December 31, 2010, the Company recorded $426 million of net investment income on the
consolidated assets, $411 million of interest expense in other expenses on the related long-term debt, and $6 million in net investment gains
(losses) to remeasure the assets and liabilities at their estimated fair values.

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

impact on the Company’s consolidated financial statements.

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

As more fully described in “Summary of Significant Accounting Policies and Critical Accounting Estimates,” effective April 1, 2009, the
Company adopted OTTI guidance. This guidance amends the previously used methodology for determining whether an OTTI exists for fixed
maturity securities, changes the presentation of OTTI for fixed maturity securities and requires additional disclosures for OTTI on fixed maturity
and equity securities in interim and annual financial statements.

The Company’s net cumulative effect adjustment of adopting the OTTI guidance was an increase of $76 million to retained earnings with a
corresponding increase to accumulated other comprehensive loss to reclassify the noncredit loss portion of previously recognized OTTI
losses on fixed maturity securities held at April 1, 2009. This cumulative effect adjustment was comprised of an increase in the amortized cost
basis of fixed maturity securities of $126 million, net of policyholder related amounts of $10 million and net of deferred income taxes of
$40 million, resulting in the net cumulative effect adjustment of $76 million. The increase in the amortized cost basis of fixed maturity
securities of $126 million by sector was as follows: $53 million — ABS, $43 million — RMBS, $17 million — U.S. corporate securities and
$13 million — CMBS.

As a result of the adoption of the OTTI guidance, the Company’s pre-tax earnings for the year ended December 31, 2009 increased by
$857 million, offset by an increase in other comprehensive loss representing OTTI relating to noncredit losses recognized during the year
ended December 31, 2009.

Effective January 1, 2009, the Company adopted guidance on disclosures about derivative instruments and hedging. This guidance
requires enhanced qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value
amounts of and gains and losses on derivative instruments and disclosures about credit risk-related contingent features in derivative
agreements. The Company has provided all of the material disclosures in its consolidated financial statements.

MetLife, Inc.

F-25

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following pronouncements relating to financial

instruments had no material

impact on the Company’s consolidated financial

statements:

(cid:129) Effective January 1, 2009, the Company adopted prospectively an update on accounting for transfers of

financial assets and
repurchase financing transactions. This update provides guidance for evaluating whether to account for a transfer of a financial asset
and repurchase financing as a single transaction or as two separate transactions.

(cid:129) Effective December 31, 2008, the Company adopted guidance on the recognition of interest income and impairment on purchased
beneficial interests and beneficial interests that continue to be held by a transferor in securitized financial assets. This new guidance
more closely aligns the determination of whether an OTTI has occurred for a beneficial interest in a securitized financial asset with the
original guidance for fixed maturity securities classified as available-for-sale or held-to-maturity.

(cid:129) Effective January 1, 2008, the Company adopted guidance relating to application of the shortcut method of accounting for derivative
instruments and hedging activities. This guidance permits interest rate swaps to have a non-zero fair value at inception when applying
the shortcut method of assessing hedge effectiveness as long as the difference between the transaction price (zero) and the fair value
(exit price), as defined by current accounting guidance on fair value measurements, is solely attributable to a bid-ask spread. In
addition, entities are not precluded from applying the shortcut method of assessing hedge effectiveness in a hedging relationship of
interest rate risk involving an interest bearing asset or liability in situations where the hedged item is not recognized for accounting
purposes until settlement date as long as the period between trade date and settlement date of the hedged item is consistent with
generally established conventions in the marketplace.

(cid:129) Effective January 1, 2008, the Company adopted guidance that permits a reporting entity to offset fair value amounts recognized for the
right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized
for derivative instruments executed with the same counterparty under the same master netting arrangement that have been offset. This
guidance also includes certain terminology modifications. Upon adoption of this guidance, the Company did not change its accounting
policy of not offsetting fair value amounts recognized for derivative instruments under master netting arrangements.

Business Combinations and Noncontrolling Interests
Effective January 1, 2009, the Company adopted revised guidance on business combinations and accounting for noncontrolling interests

in the consolidated financial statements. Under this guidance:

(cid:129) All business combinations (whether full, partial or “step” acquisitions) result in all assets and liabilities of an acquired business being

recorded at fair value, with limited exceptions.

(cid:129) Acquisition costs are generally expensed as incurred; restructuring costs associated with a business combination are generally

expensed as incurred subsequent to the acquisition date.

(cid:129) The fair value of the purchase price, including the issuance of equity securities, is determined on the acquisition date.
(cid:129) Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if the
acquisition-date fair value can be reasonably determined. If the fair value is not estimable, an asset or liability is recorded if existence or
incurrence at the acquisition date is probable and its amount is reasonably estimable.

(cid:129) Changes in deferred income tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect

income tax expense.

(cid:129) Noncontrolling interests (formerly known as “minority interests”) are valued at fair value at the acquisition date and are presented as

equity rather than liabilities.

(cid:129) Net income (loss) includes amounts attributable to noncontrolling interests.
(cid:129) When control is attained on previously noncontrolling interests, the previously held equity interests are remeasured at fair value and a

gain or loss is recognized.

(cid:129) Purchases or sales of equity interests that do not result in a change in control are accounted for as equity transactions.
(cid:129) When control is lost in a partial disposition, realized gains or losses are recorded on equity ownership sold and the remaining ownership

interest is remeasured and holding gains or losses are recognized.

The adoption of this guidance on a prospective basis did not have an impact on the Company’s consolidated financial statements.
Financial statements and disclosures for periods prior to 2009 reflect the retrospective application of the accounting for noncontrolling
interests as required under this guidance.

Effective January 1, 2009, the Company adopted prospectively guidance on determination of the useful

life of intangible assets. This
guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a
recognized intangible asset. This change is intended to improve the consistency between the useful life of a recognized intangible asset and
the period of expected future cash flows used to measure the fair value of the asset. The Company determines useful lives and provides all of
the material disclosures prospectively on intangible assets acquired on or after January 1, 2009 in accordance with this guidance.

Fair Value
Effective January 1, 2010, the Company adopted new guidance that requires new disclosures about significant transfers into and/or out
of Levels 1 and 2 of the fair value hierarchy and activity in Level 3. In addition, this guidance provides clarification of existing disclosure
requirements about level of disaggregation and inputs and valuation techniques. The adoption of this guidance did not have an impact on the
Company’s consolidated financial statements.

Effective January 1, 2008, the Company adopted fair value measurements guidance which defines fair value, establishes a consistent
framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and
requires enhanced disclosures about fair value measurements and applied this guidance prospectively to assets and liabilities measured at
fair value. The adoption of this guidance changed the valuation of certain freestanding derivatives by moving from a mid to bid pricing
convention as it relates to certain volatility inputs, as well as the addition of liquidity adjustments and adjustments for risks inherent in a
particular input or valuation technique. The adoption of this guidance also changed the valuation of the Company’s embedded derivatives,

F-26

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

most significantly the valuation of embedded derivatives associated with certain guarantees on variable annuity contracts. The change in
valuation of embedded derivatives associated with guarantees on annuity contracts resulted from the incorporation of risk margins
associated with non-capital market
inputs and the inclusion of the Company’s nonperformance risk in their valuation. At January 1,
2008, the impact of adopting the guidance on assets and liabilities measured at estimated fair value was $30 million ($19 million, net of
income tax) and was recognized as a change in estimate in the accompanying consolidated statement of operations where it was presented
in the respective statement of operations caption to which the item measured at estimated fair value is presented. There were no significant
changes in estimated fair value of items measured at fair value and reflected in accumulated other comprehensive income (loss). The addition
of risk margins and the Company’s nonperformance risk adjustment in the valuation of embedded derivatives associated with annuity
contracts may result in significant volatility in the Company’s consolidated net income in future periods. The Company provided all of the
material disclosures in Note 5.

In February 2007, the Financial Accounting Standards Board (“FASB”) issued guidance related to the FVO for financial assets and financial
liabilities. This guidance permits entities the option to measure most financial
instruments and certain other items at fair value at specified
election dates and to recognize related unrealized gains and losses in earnings. The FVO is applied on an instrument-by-instrument basis
upon adoption of the standard, upon the acquisition of an eligible financial asset, financial
liability or firm commitment or when certain
specified reconsideration events occur. The fair value election is an irrevocable election. Effective January 1, 2008, the Company elected
FVO on fixed maturity and equity securities backing certain pension products sold in Brazil. Such securities are presented as trading and other
securities in the consolidated balance sheets with subsequent changes in estimated fair value recognized in net investment income.
Previously, these securities were accounted for as available-for-sale securities and unrealized gains and losses on these securities were
recorded as a separate component of accumulated other comprehensive income (loss). The Company’s insurance joint venture in Japan also
elected FVO for certain of its existing single premium deferred annuities and the assets supporting such liabilities. FVO was elected to achieve
improved reporting of the asset/liability matching associated with these products. Adoption of this guidance by the Company and its
Japanese joint venture resulted in an increase in retained earnings of $27 million, net of income tax, at January 1, 2008. The election of FVO
resulted in the reclassification of $10 million, net of income tax, of net unrealized gains from accumulated other comprehensive income (loss)
to retained earnings on January 1, 2008.

The following pronouncements relating to fair value had no material
(cid:129) Effective September 30, 2008, the Company adopted guidance relating to the fair value measurements of financial assets when the
market for those assets is not active. It provides guidance on how a company’s internal cash flow and discount rate assumptions should
be considered in the measurement of fair value when relevant market data does not exist, how observable market information in an
inactive market affects fair value measurement and how the use of market quotes should be considered when assessing the relevance
of observable and unobservable data available to measure fair value.

impact on the Company’s consolidated financial statements:

(cid:129) Effective January 1, 2009, the Company implemented fair value measurements guidance for certain nonfinancial assets and liabilities
that are recorded at fair value on a non-recurring basis. This guidance applies to such items as: (i) nonfinancial assets and nonfinancial
liabilities initially measured at estimated fair value in a business combination; (ii) reporting units measured at estimated fair value in the
first step of a goodwill
impairment test; and (iii) indefinite-lived intangible assets measured at estimated fair value for impairment
assessment.

(cid:129) Effective January 1, 2009, the Company adopted prospectively guidance on issuer’s accounting for liabilities measured at fair value
with a third-party credit enhancement. This guidance states that an issuer of a liability with a third-party credit enhancement should not
include the effect of the credit enhancement in the fair value measurement of the liability. In addition, it requires disclosures about the
existence of any third-party credit enhancement related to liabilities that are measured at fair value.

(cid:129) Effective April 1, 2009, the Company adopted guidance on: (i) estimating the fair value of an asset or liability if there was a significant
decrease in the volume and level of trading activity for these assets or liabilities; and (ii) identifying transactions that are not orderly. The
Company has provided all of the material disclosures in its consolidated financial statements.

(cid:129) Effective December 31, 2009, the Company adopted guidance on: (i) measuring the fair value of investments in certain entities that
calculate NAV per share; (ii) how investments within its scope would be classified in the fair value hierarchy; and (iii) enhanced disclosure
requirements, for both interim and annual periods, about the nature and risks of investments measured at fair value on a recurring or
non-recurring basis.

(cid:129) Effective December 31, 2009, the Company adopted guidance on measuring liabilities at fair value. This guidance provides clarification
for measuring fair value in circumstances in which a quoted price in an active market for the identical
liability is not available. In such
circumstances a company is required to measure fair value using either a valuation technique that uses: (i) the quoted price of the
liability when traded as an asset; or (ii) quoted prices for similar liabilities or similar liabilities when traded as assets; or
identical
(iii) another valuation technique that is consistent with the principles of fair value measurement such as an income approach (e.g.,
present value technique) or a market approach (e.g., “entry” value technique).

Defined Benefit and Other Postretirement Plans
Effective December 31, 2009, the Company adopted guidance to enhance the transparency surrounding the types of assets and
associated risks in an employer’s defined benefit pension or other postretirement benefit plans. This guidance requires an employer to
disclose information about the valuation of plan assets similar to that required under other fair value disclosure guidance. The Company
provided all of the material disclosures in its consolidated financial statements.

Other Pronouncements
Effective April 1, 2009,

the Company adopted prospectively guidance which establishes general standards for accounting and
disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or available to be issued.
The Company has provided all of the material disclosures in its consolidated financial statements.

MetLife, Inc.

F-27

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following pronouncements had no material
(cid:129) Effective January 1, 2009, the Company adopted guidance on determining whether an instrument (or embedded feature) is indexed to
an entity’s own stock. This guidance provides a framework for evaluating the terms of a particular instrument and whether such terms
qualify the instrument as being indexed to an entity’s own stock.

impact on the Company’s consolidated financial statements:

(cid:129) Effective January 1, 2008, the Company adopted guidance on written loan commitments recorded at fair value through earnings. It
provides guidance on (i) incorporating expected net future cash flows when related to the associated servicing of a loan when
measuring fair value; and (ii) broadening the U.S. Securities and Exchange Commission (“SEC”) staff’s view that internally-developed
intangible assets should not be recorded as part of the fair value of a derivative loan commitment or to written loan commitments that are
accounted for at fair value through earnings. Internally-developed intangible assets are not considered a component of the related
instruments.

(cid:129) Effective January 1, 2008, the Company prospectively adopted guidance on the sale of real estate when the agreement includes a buy-
sell clause. This guidance addresses whether the existence of a buy-sell arrangement would preclude partial sales treatment when real
estate is sold to a jointly owned entity and concludes that the existence of a buy-sell clause does not necessarily preclude partial sale
treatment under current guidance.

Future Adoption of New Accounting Pronouncements
In December 2010, the FASB issued new guidance addressing when a business combination should be assumed to have occurred for the
purpose of providing pro forma disclosure (Accounting Standards Update (“ASU”) 2010-29, Business Combinations (Topic 805): Disclosure
of Supplementary Pro Forma Information for Business Combinations). Under the new guidance, if an entity presents comparative financial
statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during
the current year had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the
supplemental pro forma disclosures to include additional narratives. The guidance is effective for fiscal years beginning on or after
December 15, 2010. The Company will apply the guidance prospectively on its accounting for future acquisitions and does not expect
the adoption of this guidance to have a material

impact on the Company’s consolidated financial statements.

In December 2010, the FASB issued new guidance regarding goodwill

impairment testing (ASU 2010-28, Intangibles — Goodwill and
Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts). This
guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units,
an entity would be required to perform Step 2 of the test if qualitative factors indicate that it is more likely than not that goodwill impairment
exists. The guidance is effective for the first quarter of 2011. The Company does not expect the adoption of this new guidance to have a
material

impact on its consolidated financial statements.

In October 2010, the FASB issued new guidance regarding accounting for deferred acquisition costs (ASU 2010-26, Accounting for
Costs Associated with Acquiring or Renewing Insurance Contracts) effective for the first quarter of 2012. This guidance clarifies the costs that
should be deferred by insurance entities when issuing and renewing insurance contracts. The guidance also specifies that only costs related
directly to successful acquisition of new or renewal contracts can be capitalized. All other acquisition-related costs should be expensed as
incurred. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In April 2010, the FASB issued new guidance regarding accounting for investment funds determined to be VIEs (ASU 2010-15, How
Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments). Under this guidance, an
insurance entity would not be required to consolidate a voting-interest investment fund when it holds the majority of the voting interests of the
fund through its separate accounts. In addition, an insurance entity would not consider the interests held through separate accounts for the
benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contractholder is a related party. The
guidance is effective for the first quarter of 2011. The Company does not expect the adoption of this new guidance to have a material impact
on its consolidated financial statements.

2. Acquisitions and Dispositions

2010 Acquisition of ALICO

Description of Transaction
On the Acquisition Date, MetLife, Inc. acquired all of the issued and outstanding capital stock of American Life from ALICO Holdings, a
subsidiary of AIG, and DelAm from AIG for a total purchase price of $16.4 billion, which consisted of (i) cash of $7.2 billion (includes settlement
of intercompany balances and certain other adjustments), and (ii) securities of MetLife, Inc. valued at $9.2 billion.

The $7.2 billion cash portion of the purchase price was funded through the issuance of common stock as described in Note 18, fixed and
floating rate senior debt as described in Note 11 as well as cash on hand. The securities issued to ALICO Holdings included
(a) 78,239,712 shares of MetLife, Inc.’s common stock; (b) 6,857,000 shares of Series B Contingent Convertible Junior Participating
Non-Cumulative Perpetual Preferred Stock (the “Convertible Preferred Stock”) of MetLife, Inc.; and (c) 40 million common equity units of
MetLife, Inc. (the “Equity Units”) with an aggregate stated amount at issuance of $3.0 billion, initially consisting of (i) three purchase contracts
(the “Series C Purchase Contracts,” the “Series D Purchase Contracts” and the “Series E Purchase Contracts” and, together, the “Purchase
Contracts”), obligating the holder to purchase, on specified future settlement dates, a variable number of shares of MetLife, Inc.’s common
stock for a fixed price; and (ii) an interest in each of three series of debt securities (the “Series C Debt Securities,” the “Series D Debt
Securities” and the “Series E Debt Securities,” and, together, the “Debt Securities”) issued by MetLife, Inc. Distributions on the Equity Units
will be made quarterly, through contract payments on the Purchase Contracts and interest payments on the Debt Securities, initially at an
aggregate annual rate of 5.00% (an average annual rate of 3.02% on the Purchase Contracts and an average annual rate of 1.98% on the Debt
Securities) as described in Note 14.

ALICO is an international

life insurance company, providing consumers and businesses with products and services for life insurance,
accident and health insurance, retirement and wealth management solutions in 54 countries. The Acquisition will significantly broaden the

F-28

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Company’s diversification by product, distribution and geography, meaningfully accelerate MetLife’s global growth strategy, and create the
opportunity to build an international franchise leveraging the key strengths of ALICO. ALICO’s largest international market is Japan. As of
December 31, 2010, the Japan operation’s total assets represented approximately 12% of the Company’s total assets.

Fair Value and Allocation of Purchase Price
The computation of total purchase consideration and the amounts recognized for each major class of assets acquired and liabilities

assumed, based upon their respective fair values at the Acquisition Date, and the resulting goodwill, are presented below:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MetLife, Inc.’s common stock (78,239,712 shares)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MetLife, Inc.’s Convertible Preferred Stock(1), (2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MetLife, Inc.’s Equity Units ($3.0 billion aggregate stated amount)(3) . . . . . . . . . . . . . . . . . . . . . . .

November 1, 2010

(In millions)

$ 6,800
3,200

2,805

3,189

Total cash paid and securities issued to ALICO Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,994

Contractual purchase price adjustments(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

396

Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective settlement of pre-existing relationships (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contingent consideration(6)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$16,390
(186)

88

Total purchase consideration for ALICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$16,292

(1) Fair value is based on the opening price of MetLife, Inc.’s common stock of $40.90 on the New York Stock Exchange (“NYSE”) on

November 1, 2010.

(2) Convertible into 68,570,000 shares of MetLife, Inc.’s common stock upon a favorable vote of MetLife, Inc.’s common stockholders before

the first anniversary of the Acquisition Date. See Note 18.

(3) The Equity Units include the Debt Securities and the Purchase Contracts that will settle in MetLife, Inc.’s common stock on specified

future dates. See Note 14.

(4) Relates to the cash settlement of intercompany balances prior to the Acquisition for amounts in excess of certain agreed-upon thresholds

and certain other adjustments.

(5) Effective settlement of debt securities issued by MetLife, Inc. that are owned by ALICO and reduces the total purchase consideration.
(6) Estimated fair value of potential payments related to the adequacy of reserves for guarantees on the fair value of a fund of assets backing

certain United Kingdom (“U.K.”) unit-linked contracts.
The aggregate amount of MetLife, Inc.’s common stock to be issued to ALICO Holdings in connection with the transaction is expected to
be between 214.6 million to 231.5 million shares, consisting of 78.2 million shares issued at closing, 68.6 million shares to be issued upon
conversion of the Convertible Preferred Stock and between 67.8 million and 84.7 million shares of common stock, in total, issuable upon
settlement of the Purchase Contracts forming part of the Equity Units. See Note 14. The ownership of the shares issued to ALICO Holdings is
subject to an investor rights agreement, which grants to ALICO Holdings certain rights and sets forth certain agreements with respect to
ALICO Holdings’ ownership of, voting on and transfer of the shares, including minimum holding periods and restrictions on the number of
shares ALICO Holdings can sell at one time.

MetLife, Inc.

F-29

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Recording of Assets Acquired and Liabilities Assumed
The following table summarizes the amounts recognized at fair value for each major class of assets acquired and liabilities assumed and

the resulting goodwill as of the Acquisition Date.

Assets acquired:
Total

investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separate account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

November 1, 2010

(In millions)

$101,036

4,175

948
1,971

9,210

1,146
244

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$118,730

Liabilities assumed:
Future policy benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other policy-related balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current and deferred income tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Separate account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 31,811

66,652

7,306
336

2,918

244

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$109,267

Redeemable noncontrolling interests in partially owned consolidated subsidiaries

assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

109

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(21)

6,959

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 16,292

Goodwill
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic
benefits arising from other assets acquired and liabilities assumed that could not be individually identified. The goodwill recorded as part of
the Acquisition includes the expected synergies and other benefits that management believes will result from combining the operations of
ALICO with the operations of MetLife, including further diversification in geographic mix and product offerings and an increase in distribution
strength.

Of the $7.0 billion of goodwill, approximately $4.0 billion is estimated to be deductible for tax purposes. Of the $4.0 billion, approximately
$573 million is estimated to be deductible for U.S. tax purposes prior to the completion of the anticipated restructuring of American Life’s
foreign branches. See “—Branch Restructuring”. The goodwill resulting from the Acquisition was presented within the Company’s Inter-
national segment.

Identified Intangibles
VOBA reflects the estimated fair value of in-force contracts acquired and represents the portion of the purchase price that is allocated to

the value of future profits embedded in acquired insurance annuity and investment-type contracts in-force at the Acquisition Date.

The value of VODA and VOCRA, included in other assets, reflects the estimated fair value of ALICO’s distribution agreements and
customer relationships acquired at November 1, 2010 and will be amortized over the useful lives. Each year the Company will review VODA
and VOCRA to determine the recoverability of these balances.

The use of discount rates was necessary to establish the fair value of VOBA and the identifiable intangibles. In selecting the appropriate
discount rates, management considered its weighted average cost of capital, as well as the weighted average cost of capital required by
market participants. The fair value of acquired liabilities was determined using risk free rates adjusted for a nonperformance risk premium. The
nonperformance adjustment was determined by taking into consideration publicly available information relating to spreads in the secondary
market for the Holding Company’s debt, including related credit default swaps. These observable spreads were then adjusted to reflect the
priority of these liabilities, the claims paying ability of the insurance subsidiaries compared to the Holding Company and, as necessary, the
relative credit spreads of the liabilities’ currencies of denomination as compared to USD spreads.

F-30

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The fair values of business acquired, distribution agreements and customer relationships and the weighted average amortization periods

are as follows as of November 1, 2010:

November 1, 2010

Weighted Average
Amortization Period

(In millions)

(In years)

VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$9,210

VODA and VOCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

341

Total value of amortizable intangible assets acquired . . . . . . . . . . . . . . . . . . . .

$9,551

8.2

10.3

8.6

The estimated future amortization expense allocated to other expenses for

the next

five years for VOBA, VODA and VOCRA is

$1,312 million in 2011, $1,076 million in 2012, $884 million in 2013, $759 million in 2014 and $653 million in 2015.

For certain acquired blocks of business, the estimated fair value of acquired liabilities exceeded the initial policy reserves assumed at
November 1, 2010, resulting in a negative VOBA of $4.4 billion recorded at the Acquisition Date. Negative VOBA is recorded in other policy-
related balances. The fair value of the in-force contract obligations was based on actuarially determined projections for each block of
business. Negative VOBA is amortized over the policy period in proportion to premiums or the approximate consumption of losses included in
the liability usually expressed in terms of insurance in-force or account value. Such amortization is recorded as a contra-expense in other
expenses.

Trademark Assets
In connection with the Acquisition, the Company recognized $47 million in trademark assets recorded in other assets. The fair value of the

trademark assets will be recognized ratably over their expected useful

lives which is generally between five to ten years.

Indemnification Assets and Contingent Consideration
The stock purchase agreement dated as of March 7, 2010, as amended by and among MetLife, Inc., AIG and ALICO Holdings (the “Stock
Purchase Agreement”) and related agreements include indemnification provisions that allocate the risk of losses arising out of contingencies
or other uncertainties that existed as of the Acquisition Date in accordance with the terms, and subject to the limitations and procedures,
provided by such provisions. As applicable, the Company recognizes an indemnification asset at the same time that it recognizes the
indemnified item, measured on the same basis as the indemnified item. The Company recognized the following indemnification assets and
contingencies as of the Acquisition Date in accordance with the indemnification provisions of the Stock Purchase Agreement and related
agreements:

Investments — The Company established indemnification assets for the fair value of amounts expected to be recovered from
defaults of certain fixed maturity securities, CMBS and mortgage loans. These indemnification assets are included in other invested
assets at December 31, 2010.

Litigation — The Company established indemnification assets associated with certain settlements expected to be made in
connection with the suspension of withdrawals from certain unit-linked funds offered to certain policyholders. These indemnification
assets are included in other assets at December 31, 2010.

Section 338 Elections — MetLife, Inc. and American Life will be fully indemnified by ALICO Holdings for all taxes and any interest
and penalties resulting from anticipated elections to be made with respect
to American Life and its subsidiaries under Sec-
tion 338(h)(10) and Section 338(g) of the Code. This indemnification asset is included in premiums, reinsurance and other receivables
at December 31, 2010.

The Company recognized an aggregate amount of $574 million for indemnification assets as of the Acquisition Date in accordance with

the indemnification provisions of the Stock Purchase Agreement and related agreements.

Contingent Consideration — American Life has guaranteed that the fair value of a fund of assets backing certain U.K. unit-linked contracts
will have a value of at least £1 per unit on July 1, 2012. In accordance with the provisions of the Stock Purchase Agreement if the shortfall
between the aggregate guaranteed amount and the fair value of the fund exceeds £106 million AIG will pay the difference to American Life and
conversely, if the shortfall at July 1, 2012 is less than £106 million ALICO will pay the difference to AIG. The Company believes that the fair
value of the fund will equal or exceed the guaranteed amount by July 1, 2012. Therefore, the Company recognized a contingent consideration
liability in the amount of $88 million as of the Acquisition Date which was included as additional purchase consideration in determining the
amount paid for ALICO.

Indemnification Collateral
ALICO Holdings may satisfy certain of its indemnification and other payment obligations by delivering cash, shares of stock or Equity Units
issued by MetLife, Inc. in connection with the Acquisition. The Equity Units were deposited into an indemnification collateral account on the
Acquisition Date as security for these obligations. This collateral will be released periodically over a 30-month period on each of the
12-month, 24-month and 30-month anniversaries of the Acquisition Date as follows: Equity Units with an aggregate stated amount of
$1.0 billion (or such amount of net cash proceeds from the sale of Equity Units or other eligible collateral equal to such stated amount), less,
on each such release date, specified reserve amounts, including, but not limited to, amounts necessary to satisfy then outstanding
indemnification claims made by MetLife, Inc. However, if an AIG bankruptcy event occurs, any then remaining indemnification collateral will
remain in the indemnification collateral account and will be released in part on each of the 30-month, 36-month and 48-month anniversaries of
the Acquisition Date, less, on each such release date, any such specified reserved amounts.

Branch Restructuring
On March 4, 2010, American Life entered into a closing agreement (the “Closing Agreement”) with the Commissioner of the IRS with
respect to a U.S. withholding tax issue arising as a result of payments made by its foreign branches. The Closing Agreement provides that
American Life’s foreign branches will not be required to withhold U.S. income tax on the income portion of payments made pursuant to

MetLife, Inc.

F-31

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

American Life’s life insurance and annuity contracts (“Covered Payments”) for any tax periods beginning on January 1, 2005 and ending on
December 31, 2013 (the “Deferral Period”). The Closing Agreement requires that American Life submit a plan to the IRS within 90 days after
the close of the Acquisition, indicating the steps American Life will take (on a country by country basis) to ensure that no substantial amount of
U.S. withholding tax will arise from Covered Payments made by American Life’s foreign branches to foreign customers after the Deferral
Period. Such plan, which was submitted to the Internal Revenue Service (“IRS”) on January 29, 2011, involves the transfer of businesses from
certain of the foreign branches of American Life to one or more existing or newly-formed subsidiaries of MetLife, Inc. or American Life.

A liability of $277 million was recognized in purchase accounting as of November 1, 2010, for the anticipated and estimated costs

associated with restructuring American Life’s foreign branches into subsidiaries in connection with the Closing Agreement.

Current and Deferred Income Tax
The future tax effects of temporary differences between financial reporting and tax bases of assets and liabilities are measured at the
balance sheet dates and are recorded as deferred income tax assets and liabilities, with certain exceptions such as certain temporary
differences relating to goodwill under purchase accounting.

For federal income tax purposes, MetLife, Inc. and ALICO Holdings are expected to make Section 338 elections with respect to American
Life and certain of its subsidiaries. In addition, MetLife, Inc. and AIG are expected to make a Section 338 election with respect to DelAm.
Under such elections, the U.S. tax basis of the assets deemed acquired and liabilities assumed of ALICO were adjusted as of the Acquisition
Date to reflect the consequences of the Section 338 elections.

The reversal of temporary differences (between financial reporting and U.S. tax bases of assets and liabilities) of American Life’s foreign
branches, post-branch restructuring, in connection with the Closing Agreement (i.e., generally, after the end of the Deferral Period) is not
expected to result in any direct U.S. tax effect. Thus, as of November 1, 2010, American Life reduced its net deferred tax asset of $425 million
by $671 million that reflects the amount of U.S. deferred tax asset that is expected to reverse post-branch restructuring. Therefore, American
Life recognized a U.S. net deferred tax liability of approximately $246 million in purchase accounting.

As of the Acquisition Date, ALICO’s current and deferred income tax liabilities are provisional and not yet finalized. Current income taxes
may be adjusted pending the resolution of the tax value of MetLife, Inc. securities delivered to ALICO Holdings as part of the purchase
consideration on the Acquisition Date, the amount of taxes resulting from the Section 338 elections and the filing of income tax returns.
Deferred income taxes may be adjusted as a result of changes in estimates and assumptions relating to the reversal of U.S. temporary
differences prior to the completion of the anticipated restructuring of American Life’s foreign branches, the filing of income tax returns and as
additional information becomes available during the measurement period. We expect to finalize these amounts as soon as possible but no
later than one year from the Acquisition Date.

Revenues and Earnings of ALICO
The following table presents information for ALICO that is included in the Company’s consolidated statement of operations from the

Acquisition Date through November 30, 2010:

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

ALICO’s Operations
Included in MetLife’s
Results for the
Year Ended December 31, 2010

(In millions)

$950

$ (2)

Supplemental Pro Forma Information (unaudited)
The following table presents unaudited supplemental pro forma information as if the Acquisition had occurred on January 1, 2010 for the

year ended December 31, 2010 and on January 1, 2009 for the year ended December 31, 2009.

Years Ended December 31,

2010

2009

(In millions, except
per share data)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $64,680
Income (loss) from continuing operations, net of income tax, attributable to common

$54,282

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,888

$ (1,353)

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

shareholders per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.60

3.57

$ (1.29)

$ (1.29)

The pro forma information was derived from the historical financial information of MetLife and ALICO, reflecting the results of operations of
MetLife and ALICO for 2010 and 2009. The historical financial information has been adjusted to give effect to the pro forma events that are
directly attributable to the Acquisition and factually supportable and expected to have a continuing impact on the combined results.
Discontinued operations and the related earnings per share have been excluded from the presentation as they are non-recurring in nature.
The pro forma information is not intended to reflect the results of operations of the combined company that would have resulted had the
Acquisition been effective during the periods presented or the results that may be obtained by the combined company in the future. The pro
forma information does not reflect future events that may occur after the Acquisition, including, but not limited to, expense efficiencies or
revenue enhancements arising from the Acquisition and also does not give effect to certain one-time charges that MetLife expects to incur
such as restructuring and integration costs.

F-32

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The pro forma information primarily reflects the following pro forma adjustments:
(cid:129) reduction in net investment income to reflect the amortization or accretion associated with the new cost basis of the acquired fixed

maturities available-for-sale portfolio;

(cid:129) elimination of amortization associated with the elimination of ALICO’s historical DAC;
(cid:129) amortization of VOBA, VODA and VOCRA associated with the establishment of VOBA, VODA and VOCRA arising from the Acquisition;
(cid:129) reduction in other expenses associated with the amortization of negative VOBA;
(cid:129) reduction in revenues associated with the elimination of ALICO’s historical unearned revenue liability;
(cid:129) interest expense associated with the issuance of the Debt Securities to ALICO Holdings and the public issuance of senior notes in

connection with the financing of the Acquisition;

(cid:129) certain adjustments to conform to MetLife’s accounting policies; and
(cid:129) reversal of investment and derivative gains (losses) associated with certain transactions that were completed prior to the Acquisition

Date (conditions of closing).

Costs Related to Acquisition
Transaction and Integration-Related Expenses.

The Company incurred $100 million of transaction costs for the year ended Decem-
ber 31, 2010. Transaction costs represent costs directly related to effecting the Acquisition and primarily include banking and legal expenses.
Such costs have been expensed as incurred and are included in other expenses. These expenses have been reported within Banking,
Corporate & Other.

Integration-related expenses incurred for the year ended December 31, 2010 and included in other expenses were $176 million.
Integration costs represent incremental costs directly related to integrating ALICO, including expenses for consulting, rebranding and the
integration of information systems. As the integration of ALICO is an enterprise-wide initiative, these expenses have been reported within
Banking, Corporate & Other.

Restructuring Costs and Other Charges. As part of the integration of ALICO’s operations, management has initiated restructuring plans
focused on increasing productivity and improving the efficiency of the Company’s operations. For the year ended December 31, 2010, the
Company recognized a severance-related restructuring charge of $4 million associated with the termination of certain employees in
connection with this initiative which were reflected within other expenses. The Company did not make any cash payments related to these
severance costs as of December 31, 2010.

Estimated restructuring costs may change as management continues to execute its restructuring plans. Management anticipates further
restructuring charges including severance, contract termination costs and other associated costs through the year ended December 31,
2011. However, such restructuring plans are not sufficiently developed to enable the Company to make an estimate of such restructuring
charges at December 31, 2010.

2010 Pending Disposition
In October 2010, the Company and its joint venture partner, MS&AD Insurance Group Holdings, Inc. (“MS&AD”), reached an agreement
under which the Company intends to sell its 50% interest in Mitsui Sumitomo MetLife Insurance Co., Ltd. (“MSI MetLife”), a Japan domiciled
life insurance company, to MS&AD for approximately $275 million (¥22.5 billion). During the year ended December 31, 2010, the Company
recorded an investment loss of $136 million, net of income tax, to record its investment in MSI MetLife at its estimated recoverable amount. It
is anticipated that the sale will close on or about April 1, 2011, subject to customary closing conditions, including obtaining required
regulatory approvals.

2009 Disposition
In March 2009, the Company sold Cova Corporation (“Cova”), the parent company of Texas Life Insurance Company (“Texas Life”) to a
third-party for $130 million in cash consideration, excluding $1 million of transaction costs. The net assets sold were $101 million, resulting in
a gain on disposal of $28 million, net of income tax. The Company also reclassified $4 million, net of income tax, of the 2009 operations of
Texas Life into discontinued operations in the consolidated financial statements. As a result, the Company recognized income from
discontinued operations of $32 million, net of income tax, during the year ended December 31, 2009. See Note 23.

2009 Disposition through Assumption Reinsurance
On October 30, 2009, the Company completed the disposal, through assumption reinsurance, of substantially all of the insurance
business of MetLife Canada, a wholly-owned indirect subsidiary, to a third-party. Pursuant to the assumption reinsurance agreement, the
consideration paid by the Company was $259 million, comprised of cash of $14 million and fixed maturity securities, mortgage loans and
other assets totaling $245 million. At the date of the assumption reinsurance agreement, the carrying value of insurance liabilities transferred
was $267 million, resulting in a gain of $5 million, net of income tax. The gain was recognized in net investment gains (losses).

2008 Acquisitions and Disposition
During 2008, the Company made five acquisitions for $783 million. As a result of these acquisitions, MetLife’s Insurance Products
segment increased its product offering of dental and vision benefit plans, MetLife Bank, National Association (“MetLife Bank”) within Banking,
Corporate & Other entered the mortgage origination and servicing business and the International segment increased its presence in Mexico
and Brazil. The acquisitions were each accounted for using the purchase method of accounting and, accordingly, commenced being
included in the operating results of the Company upon their respective closing dates. Total consideration paid by the Company for these
acquisitions consisted of $763 million in cash and $20 million in transaction costs. The net fair value of assets acquired and liabilities assumed
totaled $527 million, resulting in goodwill of $256 million. Goodwill increased by $122 million, $73 million and $61 million in the International
segment, Insurance Products segment and Banking, Corporate & Other, respectively. The goodwill is deductible for tax purposes. VOCRA,
VOBA and other intangibles increased by $137 million, $7 million and $6 million, respectively, as a result of these acquisitions. Further
information on VOBA, goodwill and VOCRA is provided in Notes 6, 7 and 8, respectively.

MetLife, Inc.

F-33

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

In September 2008, the Company completed a tax-free split-off of

its majority-owned subsidiary, Reinsurance Group of America,
Incorporated (“RGA”). The Company and RGA entered into a recapitalization and distribution agreement, pursuant to which the Company
agreed to divest substantially all of its 52% interest in RGA to the Company’s stockholders. The split-off was effected through the following:
(cid:129) A recapitalization of RGA common stock into two classes of common stock — RGA Class A common stock and RGA Class B common
stock. Pursuant to the terms of the recapitalization, each outstanding share of RGA common stock, including the 32,243,539 shares of
RGA common stock beneficially owned by the Company and its subsidiaries, was reclassified as one share of RGA Class A common
stock. Immediately thereafter, the Company and its subsidiaries exchanged 29,243,539 shares of its RGA Class A common stock —
which represented all of
the RGA Class A common stock beneficially owned by the Company and its subsidiaries other than
3,000,000 shares of RGA Class A common stock — with RGA for 29,243,539 shares of RGA Class B common stock.

(cid:129) An exchange offer, pursuant to which the Company offered to acquire MetLife common stock from its stockholders in exchange for all of
its 29,243,539 shares of RGA Class B common stock. The exchange ratio was determined based upon a ratio of the value of the MetLife
and RGA shares during the three-day period prior to the closing of the exchange offer. The 3,000,000 shares of the RGA Class A
common stock were not subject to the tax-free exchange.

As a result of completion of the recapitalization and exchange offer, the Company received from MetLife stockholders 23,093,689 shares
of the Holding Company’s common stock with a market value of $1,318 million and, in exchange, delivered 29,243,539 shares of RGA’s
Class B common stock with a net book value of $1,716 million. The resulting loss on disposition, inclusive of transaction costs of $60 million,
was $458 million. During the third quarter of 2009, the Company incurred $2 million, net of income tax, of additional costs related to this split-
off. The 3,000,000 shares of RGA Class A common stock retained by the Company are marketable equity securities which do not constitute
significant continuing involvement in the operations of RGA; accordingly, they were classified within equity securities in the consolidated
financial statements of the Company at a cost basis of $157 million which is equivalent to the net book value of the shares. The equity
securities have been recorded at fair value at each subsequent reporting date. The Company agreed to dispose of the remaining shares of
RGA within the next five years. In connection with the Company’s agreement to dispose of the remaining shares, the Company also
recognized, in its provision for income tax on continuing operations, a deferred tax liability of $16 million which represents the difference
between the book and taxable basis of the remaining investment in RGA. On February 15, 2011, the Company sold to RGA such remaining
shares. The impact of the disposition of the Company’s investment in RGA was reflected in the Company’s consolidated financial statements
as discontinued operations. See Note 23.

3.

Investments

Fixed Maturity and Equity Securities Available-for-Sale
The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company’s fixed
maturity and equity securities and the percentage that each sector represents by the respective total holdings for the periods shown. The
unrealized loss amounts presented below include the noncredit loss component of OTTI

loss:

Cost or
Amortized
Cost

December 31, 2010

Gross Unrealized

Gain

Temporary
Loss

OTTI
Loss

(In millions)

Estimated
Fair
Value

% of
Total

Fixed Maturity Securities:
U.S. corporate securities . . . . . . . . . . . . . . . . . . . $ 89,713

Foreign corporate securities . . . . . . . . . . . . . . . . .

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed

securities(1)

. . . . . . . . . . . . . . . . . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . . . . .

Other fixed maturity securities . . . . . . . . . . . . . . . .

65,784

44,468
42,154

32,469

20,213
14,725

10,476

6

$ 4,486

$1,631

$ — $ 92,568

28.3%

3,333

1,652
1,856

1,394

740
274

171

1

939

917
610

559

266
590

518

—

—

470
—

—

12
119

—

—

68,178

44,733
43,400

33,304

20,675
14,290

10,129

7

20.8

13.7
13.2

10.2

6.3
4.4

3.1

—

Total fixed maturity securities(2), (3)

. . . . . . . . . . . $320,008

$13,907

$6,030

$601

$327,284

100.0%

Equity Securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-redeemable preferred stock(2) . . . . . . . . . . . . .

2,060
1,565

Total equity securities (4) . . . . . . . . . . . . . . . . . . $

3,625

$

$

146
76

222

$

12
229

$ — $
—

2,194
1,412

60.8%
39.2

$ 241

$ — $

3,606

100.0%

F-34

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Cost or
Amortized
Cost

December 31, 2009

Gross Unrealized

Gain

Temporary
Loss

OTTI
Loss

(In millions)

Estimated
Fair
Value

% of
Total

Fixed Maturity Securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . $ 72,075

$2,821

$2,699

$ 10

$ 72,187

31.7%

Foreign corporate securities . . . . . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign government securities . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed

securities(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . . . . .

37,254
45,343

11,010

25,712
16,555

14,272

7,468
20

2,011
1,234

1,076

745
191

189

151
1

1,226
1,957

139

1,010
1,106

1,077

411
2

9
600

—

—
18

222

—
—

38,030
44,020

11,947

25,447
15,622

13,162

7,208
19

16.7
19.3

5.2

11.2
6.9

5.8

3.2
—

Total fixed maturity securities(2), (3) . . . . . . . . . . . . $229,709

$8,419

$9,627

$859

$227,642

100.0%

Equity Securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-redeemable preferred stock(2) . . . . . . . . . . . . . .

1,537
1,650

$

92
80

$

8
267

$ — $
—

1,621
1,463

52.6%
47.4

Total equity securities(4)

. . . . . . . . . . . . . . . . . . . $

3,187

$ 172

$ 275

$ — $

3,084

100.0%

(1) The Company has classified within the U.S. Treasury, agency and government guaranteed securities caption certain corporate fixed
maturity securities issued by U.S. financial
institutions that were guaranteed by the Federal Deposit Insurance Corporation (“FDIC”)
pursuant to the FDIC’s Temporary Liquidity Guarantee Program (“FDIC Program”) of $223 million and $407 million at estimated fair value
with unrealized gains of $4 million and $2 million at December 31, 2010 and 2009, respectively.

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

December 31,

Consolidated Balance Sheets

Sector Table

Primary Issuers

Classification

Equity securities

Equity securities

Non-redeemable preferred stock

Non-U.S. financial

institutions

Non-redeemable preferred stock

U.S. financial

institutions

Fixed maturity securities
Fixed maturity securities

Foreign corporate securities
U.S. corporate securities

Non-U.S. financial
U.S. financial

institutions

institutions

2010

2009

Estimated
Fair
Value

Estimated
Fair
Value

(In millions)

$1,046

$ 236

$2,038
83
$

$ 988

$ 349

$2,626
91
$

(3) The Company’s holdings in redeemable preferred stock with stated maturity dates, commonly referred to as “capital securities”, were
primarily issued by U.S. financial
features. The Company held $2.7 billion and
$2.5 billion at estimated fair value of such securities at December 31, 2010 and 2009, respectively, which are included in the U.S. and
foreign corporate securities sectors within fixed maturity securities.

institutions and have cumulative interest deferral

(4) Equity securities primarily consist of investments in common and preferred stocks, including certain perpetual hybrid securities and
mutual fund interests. Privately-held equity securities were $1.3 billion and $1.0 billion at estimated fair value at December 31, 2010 and
2009, respectively.
The Company held foreign currency derivatives with notional amounts of $12.2 billion and $9.1 billion to hedge the exchange rate risk

associated with foreign denominated fixed maturity securities at December 31, 2010 and 2009, respectively.

The below investment grade and non-income producing amounts presented below are based on rating agency designations and
equivalent designations of the National Association of Insurance Commissioners (“NAIC”), with the exception of certain structured securities
described below held by the Company’s insurance subsidiaries that file NAIC statutory financial statements. Non-agency RMBS, including
RMBS backed by sub-prime mortgage loans reported within ABS, CMBS and all other ABS held by the Company’s insurance subsidiaries that
file NAIC statutory financial statements are presented based on final ratings from the revised NAIC rating methodologies which became
effective December 31, 2009 for non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported within ABS, and

MetLife, Inc.

F-35

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

December 31, 2010 for CMBS and the remaining ABS (which may not correspond to rating agency designations). All NAIC designation (e.g.,
NAIC 1 — 6) amounts and percentages presented herein are based on the revised NAIC methodologies. All rating agency designation (e.g.,
Aaa/AAA) amounts and percentages presented herein are based on rating agency designations without adjustment for the revised NAIC
methodologies described above. Rating agency designations are based on availability of applicable ratings from rating agencies on the NAIC
acceptable rating organization list, including Moody’s Investors Service (“Moody’s”), S&P and Fitch Ratings (“Fitch”).
The following table presents selected information about certain fixed maturity securities held by the Company at:

December 31,

2010

2009

(In millions)

Below investment grade or non-rated fixed maturity securities:

Estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,886
(696)
Net unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

$20,201
$ (2,609)

Non-income producing fixed maturity securities:

Estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

130
(23)

$
$

312
(31)

Concentrations of Credit Risk (Fixed Maturity Securities) — Summary.

The following section contains a summary of the concentrations

of credit risk related to fixed maturity securities holdings.

The Company was not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company’s equity, other
than the government securities summarized in the table below. The estimated fair value of the Company’s holdings in sovereign fixed maturity
securities of Portugal, Ireland, Italy, Greece and Spain, commonly referred to as “Europe’s perimeter region,” was $1,562 million and
$6 million prior to, and was $1,392 million and $6 million, after considering net purchased credit default swap protection at December 31,
2010 and 2009, respectively. Collectively, the net exposure in these Europe perimeter region sovereign fixed maturity securities was 2.8% of
the Company’s equity and 0.3% of total cash and invested assets at December 31, 2010.

Government and agency fixed maturity securities:

United States(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,304

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,591
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,050

$25,447

$
—
$ 4,813

December 31,

2010

2009

Estimated Fair Value

(In millions)

(1)

Includes certain corporate fixed maturity securities guaranteed by the FDIC Program, as described above.
Concentrations of Credit Risk (Fixed Maturity Securities) — U.S. and Foreign Corporate Securities.

The Company maintains a diversified
portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have an exposure to any single issuer in
excess of 1% of total investments. The tables below present for all corporate fixed maturity securities holdings, corporate securities by sector,
U.S. corporate securities by major industry types, the largest exposure to a single issuer and the combined holdings in the ten issuers to
which it had the largest exposure at:

December 31,

2010

2009

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

(In millions)

Corporate fixed maturity securities — by sector:
Foreign corporate fixed maturity securities(1)

. . . . . . . . . . . . . . . . . . . . $ 68,178

42.4% $ 38,030

34.5%

U.S. corporate fixed maturity securities — by industry:

Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,314
21,737
20,917
17,027
7,375
3,198

13.9
13.5
13.0
10.6
4.6
2.0

17,246
16,924
13,756
14,785
6,580
2,896

15.6
15.4
12.5
13.4
6.0
2.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,746

100.0% $110,217

100.0%

(1)

Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity securities.

F-36

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

December 31,

2010

2009

Estimated
Fair
Value

% of Total
Investments

Estimated
Fair
Value

% of Total
Investments

(In millions)

Concentrations within corporate fixed maturity securities:

Largest exposure to a single issuer

. . . . . . . . . . . . . . . . . . . . . $ 2,291

Holdings in ten issuers with the largest exposures . . . . . . . . . . . . $14,247

0.5%

3.1%

$1,038

$7,506

0.3%

2.3%

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS.

The table below presents the Company’s RMBS holdings and

portion rated Aaa/AAA and portion rated NAIC 1 at:

December 31,

2010

2009

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

(In millions)

By security type:

Pass-through securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,430

50.1% $19,540

44.4%

Collateralized mortgage obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,303

49.9

24,480

55.6

Total RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,733

100.0% $44,020

100.0%

By risk profile:

Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34,254

76.6% $33,334

75.7%

Prime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alternative residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,258
4,221

14.0
9.4

6,775
3,911

15.4
8.9

Total RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,733

100.0% $44,020

100.0%

Portion rated Aaa/AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36,085

80.7% $35,626

80.9%

Portion rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,984

87.1% $38,464

87.4%

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

Prime residential mortgage lending includes the origination of residential mortgage loans to the most creditworthy borrowers with high
quality credit profiles. Alternative residential mortgage loans (“Alt-A”) are a classification of mortgage loans where the risk profile of the
borrower falls between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with
weak credit profiles. Included within Alt-A RMBS are resecuritization of real estate mortgage investment conduit (“Re-REMIC”) securities. Re-
REMIC Alt-A RMBS involve the pooling of previous issues of Alt-A RMBS and restructuring the combined pools to create new senior and
subordinated securities. The credit enhancement on the senior tranches is improved through the resecuritization. The Company’s holdings
are in senior tranches with significant credit enhancement.

The following tables present the Company’s investment in Alt-A RMBS by vintage year (vintage year refers to the year of origination and not

to the year of purchase) and certain other selected data:

December 31,

2010

2009

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

(In millions)

Vintage Year:
2004 & Prior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

93

2.2% $ 109

2.8%

1,483

1,013
922

7

671
32

35.1

24.0
21.8

0.2

15.9
0.8

1,395

811
814

—

782
—

35.7

20.7
20.8

—

20.0
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,221

100.0% $3,911

100.0%

MetLife, Inc.

F-37

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) All of the Company’s Alt-A RMBS holdings in the 2009 and 2010 vintage years are Re-REMIC Alt-A RMBS that were purchased in 2009
and 2010 and are comprised of original issue vintage year 2005 through 2007 Alt-A RMBS. All of the Company’s Re-REMIC Alt-A RMBS
holdings are NAIC 1 rated.

Net unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rated Aa/AA or better . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Distribution of holdings — at estimated fair value — by collateral type:

Fixed rate mortgage loans collateral

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hybrid adjustable rate mortgage loans collateral

. . . . . . . . . . . . . . . . . . . . .

Total Alt-A RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2010

2009

Amount

% of
Total

Amount

% of
Total

(In millions)

$(670)

$(1,248)

15.9%

39.5%

90.7%

9.3

100.0%

26.3%

31.3%

89.3%

10.7

100.0%

Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS.

The Company’s holdings in CMBS were $20.7 billion and $15.6 bil-
lion at estimated fair value at December 31, 2010 and 2009, respectively. The Company had no exposure to CMBS index securities at
December 31, 2010 or 2009. The Company held commercial real estate collateralized debt obligations securities of $138 million and
$111 million at estimated fair value at December 31, 2010 and 2009, respectively.

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

Aaa

Aa

A

Baa

Below
Investment
Grade

Total

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

December 31, 2010

(In millions)

2003 & Prior

. . . . . . . . . . . $ 7,411 $ 7,640

$ 282

$ 282

$228

$227

$

74

$

71

$ 28

$ 24

$ 8,023 $ 8,244

2004 . . . . . . . . . . . . . . . .

2005 . . . . . . . . . . . . . . . .

2006 . . . . . . . . . . . . . . . .

2007 . . . . . . . . . . . . . . . .

2008 . . . . . . . . . . . . . . . .

2009 . . . . . . . . . . . . . . . .

2010 . . . . . . . . . . . . . . . .

3,489

3,113

1,463

840

2

3

8

3,620

3,292

1,545

791

2

3

8

277

322

159

344

—

—

—

273

324

160

298

—

—

—

216

286

168

96

—

—

4

209

280

168

95

—

—

4

181

263

385

119

—

—

—

175

255

398

108

—

—

—

91

73

166

122

—

—

—

68

66

156

133

—

—

—

4,254

4,057

2,341

1,521

2

3

12

4,345

4,217

2,427

1,425

2

3

12

Total . . . . . . . . . . . . . . . $16,329 $16,901

$1,384

$1,337

$998

$983

$1,022

$1,007

$480

$447

$20,213 $20,675

Ratings Distribution . . . . . . .

81.7%

6.4%

4.8%

4.9%

2.2%

100.0%

The December 31, 2010 table reflects rating agency designations assigned by nationally recognized rating agencies including Moody’s,

S&P, Fitch and Realpoint, LLC.

Aaa

Aa

A

Baa

Below
Investment
Grade

Total

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

December 31, 2009

(In millions)

2003 & Prior

. . . . . . . . . . . $ 6,836 $ 6,918

$394

$365

$ 162

$140

$ 52

$ 41

$ 36

$ 18

$ 7,480 $ 7,482

2004 . . . . . . . . . . . . . . . .

2005 . . . . . . . . . . . . . . . .

2006 . . . . . . . . . . . . . . . .

2007 . . . . . . . . . . . . . . . .

2008 . . . . . . . . . . . . . . . .

2009 . . . . . . . . . . . . . . . .

2,240

2,956

1,087

432

5

—

2,255

2,853

1,009

314

5

—

200

144

162

13

—

—

166

108

139

12

—

—

114

85

380

361

—

—

71

65

323

257

—

—

133

39

187

234

—

—

87

24

129

153

—

—

88

57

123

35

—

—

58

51

48

13

—

—

2,775

3,281

1,939

1,075

5

—

2,637

3,101

1,648

749

5

—

Total . . . . . . . . . . . . . . . $13,556 $13,354

$913

$790

$1,102

$856

$645

$434

$339

$188

$16,555 $15,622

Ratings Distribution . . . . . . .

85.4%

5.1%

5.5%

2.8%

1.2%

100.0%

F-38

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The December 31, 2009 table reflects rating agency designations assigned by nationally recognized rating agencies including Moody’s,

S&P and Fitch.

The NAIC rating distribution of the Company’s holdings of CMBS was as follows at:

December 31,

2010

2009

NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.7% 96.0%

NAIC 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NAIC 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.2% 2.8%
1.8% 1.0%

NAIC 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.0% 0.1%

NAIC 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NAIC 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.3% 0.1%
—% —%

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS.

The Company’s holdings in ABS were $14.3 billion and $13.2 billion at
estimated fair value at December 31, 2010 and 2009, respectively. The Company’s ABS are diversified both by collateral type and by issuer.

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

December 31,

2010

2009

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

(In millions)

By collateral type:

Credit card loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,027
2,416
Student loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42.2% $ 7,057
1,855
16.9

RMBS backed by sub-prime mortgage loans . . . . . . . . . . . . . . . . . . . . . .

Automobile loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,119

605
4,123

7.8

4.2
28.9

1,044

963
2,243

53.6%
14.1

7.9

7.3
17.1

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,290

100.0% $13,162

100.0%

Portion rated Aaa/AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,411

72.9% $ 9,354

71.1%

Portion rated NAIC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,136

91.9% $11,573

87.9%

The Company had ABS supported by sub-prime mortgage loans with estimated fair values of $1,119 million and $1,044 million and
unrealized losses of $317 million and $593 million at December 31, 2010 and 2009, respectively. Approximately 54% of this portfolio was
rated Aa or better, of which 88% was in vintage year 2005 and prior at December 31, 2010. Approximately 61% of this portfolio was rated Aa or
better, of which 91% was in vintage year 2005 and prior at December 31, 2009. These older vintages from 2005 and prior benefit from better
underwriting, improved enhancement levels and higher residential property price appreciation. Approximately 66% and 73% of this portfolio
was rated NAIC 2 or better at December 31, 2010 and 2009, respectively.

Concentrations of Credit Risk (Equity Securities).

The Company was not exposed to any concentrations of credit risk in its equity
securities holdings of any single issuer greater than 10% of the Company’s equity or 1% of total investments at December 31, 2010 and 2009.
The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity

Maturities of Fixed Maturity Securities.

date (excluding scheduled sinking funds), were as follows at:

December 31,

2010

2009

Amortized
Cost

Estimated
Fair
Value

Amortized
Cost

Estimated
Fair
Value

(In millions)

Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

8,593

$

8,715

$

6,845

$

6,924

Due after one year through five years . . . . . . . . . . . . . . . . . . . . . .

Due after five years through ten years . . . . . . . . . . . . . . . . . . . . .
Due after ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65,378

77,054
89,577

67,040

80,163
91,668

38,408

40,448
67,838

39,399

41,568
66,947

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240,602

247,586

153,539

154,838

RMBS, CMBS and ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79,406

79,698

76,170

72,804

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . $320,008

$327,284

$229,709

$227,642

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due
at a single maturity date have been included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown
separately in the table, as they are not due at a single maturity.

MetLife, Inc.

F-39

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

As discussed further in Note 2, an indemnification asset has been established in connection with certain investments acquired from

American Life.

Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment
As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale
securities holdings, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment
policy in order to evaluate whether such investments are other-than-temporarily impaired. As described more fully in Note 1, effective April 1,
2009, the Company adopted OTTI guidance that amends the methodology for determining for fixed maturity securities whether an OTTI
exists, and for certain fixed maturity securities, changes how the amount of the OTTI loss that is charged to earnings is determined. There was
no change in the OTTI methodology for equity securities.

Net Unrealized Investment Gains (Losses)
The components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss), were as

follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,817

$(1,208)

$(21,246)

Fixed maturity securities with noncredit OTTI

losses in accumulated other

comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(601)

(859)

—

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,216
(3)

(59)

42

(2,067)
(103)

(144)

71

(21,246)
(934)

(2)

53

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,196

(2,243)

(22,129)

Amounts allocated from:

Insurance liability loss recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DAC and VOBA related to noncredit OTTI

losses recognized in accumulated other

(672)

(118)

comprehensive income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38

DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policyholder dividend obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,205)
(876)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,715)

Deferred income tax benefit (expense) related to noncredit OTTI

losses recognized in

accumulated other comprehensive income (loss)

. . . . . . . . . . . . . . . . . . . . . . . .

197

Deferred income tax benefit (expense)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,692)

71

145
—

98

275

539

42

—

3,025
—

3,067

—

6,508

Net unrealized investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized investment gains (losses) attributable to noncontrolling interests . . . . . .

2,986
4

(1,331)
1

(12,554)
(10)

Net unrealized investment gains (losses) attributable to MetLife, Inc. . . . . . . . . . . . . . $ 2,990

$(1,330)

$(12,564)

Fixed maturity securities with noncredit OTTI

losses in accumulated other comprehensive income (loss), as presented above of
($601) million at December 31, 2010, includes ($859) million recognized prior to January 1, 2010, ($212) million (($202) million, net of
DAC) of noncredit OTTI losses recognized in the year ended December 31, 2010, $16 million transferred to retained earnings in connection
with the adoption of guidance related to the consolidation of VIEs (see Note 1) for the year ended December 31, 2010, $137 million related to
securities sold during the year ended December 31, 2010 for which a noncredit OTTI loss was previously recognized in accumulated other
comprehensive income (loss) and $317 million of subsequent increases in estimated fair value during the year ended December 31, 2010 on
such securities for which a noncredit OTTI

loss was previously recognized in accumulated other comprehensive income (loss).

Fixed maturity securities with noncredit OTTI

losses in accumulated other comprehensive income (loss), as presented above of
($859) million at December 31, 2009, includes ($126) million related to the transition adjustment recorded in 2009 upon the adoption of
guidance on the recognition and presentation of OTTI, ($939) million (($857) million, net of DAC) of noncredit OTTI losses recognized in the
year ended December 31, 2009 (as more fully described in Note 1), $20 million related to securities sold during the year ended December 31,
2009 for which a noncredit OTTI
loss was previously recognized in accumulated comprehensive income (loss) and $186 million of
subsequent increases in estimated fair value during the year ended December 31, 2009 on such securities for which a noncredit OTTI
loss was previously recognized in accumulated other comprehensive income (loss).

F-40

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

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

Years Ended December 31,
2009

2008

2010

(In millions)

Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,330)

$(12,564)

$

971

Cumulative effect of change in accounting principles, net of income tax . . . . . . . . . .
losses have been recognized . . . . .
Fixed maturity securities on which noncredit OTTI

52
242

(76)
(733)

(10)
—

Unrealized investment gains (losses) during the year

. . . . . . . . . . . . . . . . . . . . . .

9,117

20,745

(25,536)

Unrealized investment losses of subsidiaries at the date of disposal
Unrealized investment gains (losses) relating to:

. . . . . . . . . . . .

—

—

Insurance liability gain (loss) recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(554)

(160)

DAC and VOBA related to noncredit OTTI

losses recognized in accumulated other

comprehensive income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(33)

61

149

650

—

DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,350)

(2,880)

3,370

DAC and VOBA of subsidiary at date of disposal
. . . . . . . . . . . . . . . . . . . . . . .
Policyholder dividend obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
(876)

—
—

Deferred income tax benefit (expense) related to noncredit OTTI

losses recognized

in accumulated other comprehensive income (loss)

. . . . . . . . . . . . . . . . . . . .

(73)

Deferred income tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax benefit (expense) of subsidiaries at date of disposal . . . . . . . .

(2,208)
—

235

(5,969)
—

(18)
789

—

6,991
(60)

Net unrealized investment gains (losses)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,987

(1,341)

(12,704)

Net unrealized investment gains (losses) attributable to noncontrolling interests . . . . .
Net unrealized investment gains (losses) attributable to noncontrolling interests of

subsidiary at date of disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

—

11

—

(10)

150

Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,990

$ (1,330)

$(12,564)

Change in net unrealized investment gains (losses)
Change in net unrealized investment gains (losses) attributable to noncontrolling

. . . . . . . . . . . . . . . . . . . . . . . $ 4,317

$ 11,223

$(13,665)

interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in net unrealized investment gains (losses) attributable to noncontrolling

interests of subsidiary at date of disposal

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

—

11

—

(10)

150

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

. . . . . $ 4,320

$ 11,234

$(13,525)

MetLife, Inc.

F-41

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale by Sector
The following tables present the estimated fair value and gross unrealized loss of the Company’s fixed maturity and equity securities in an
unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position.
The unrealized loss amounts presented below include the noncredit component of OTTI loss. Fixed maturity securities on which a noncredit
OTTI
loss has been recognized in accumulated other comprehensive income (loss) are categorized by length of time as being “less than
12 months” or “equal to or greater than 12 months” in a continuous unrealized loss position based on the point in time that the estimated fair
value initially declined to below the amortized cost basis and not the period of time since the unrealized loss was deemed a noncredit OTTI
loss.

Less than 12 Months

December 31, 2010

Equal to or Greater
than 12 Months

Total

Estimated
Fair
Value

Gross
Unrealized
Loss

Estimated
Fair
Value

Gross
Unrealized
Loss

Estimated
Fair
Value

Gross
Unrealized
Loss

(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . $ 23,309
22,530
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . .
7,588
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . .
26,828
U.S. Treasury, agency and government guaranteed

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . . . . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . .

13,401
3,787
2,713
5,061
1

$ 464
417
212
593

$ 8,386
4,007
6,700
189

$1,167
522
1,175
17

$ 31,695
26,537
14,288
27,017

$1,631
939
1,387
610

530
29
42
246
—

118
1,363
3,029
988
—

29
249
667
272
—

13,519
5,150
5,742
6,049
1

559
278
709
518
—

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . $105,218

$2,533

$24,780

$4,098

$129,998

$6,631

Equity Securities:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . $

89
191

280

$

$

12
9

21

Total number of securities in an unrealized loss position . . . .

5,793

$

$

1
824

825

1,738

$ —
220

$ 220

$

$

90
1,015

1,105

$

12
229

$ 241

Less than 12 Months

December 31, 2009

Equal to or Greater
than 12 Months

Total

Estimated
Fair
Value

Gross
Unrealized
Loss

Estimated
Fair
Value

Gross
Unrealized
Loss

Estimated
Fair
Value

Gross
Unrealized
Loss

(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,641
3,786
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . .
5,623
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,318
Foreign government securities . . . . . . . . . . . . . . . . . . . . . .
15,051
U.S. Treasury, agency and government guaranteed securities . .
2,052
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,259
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,086
State and political subdivision securities . . . . . . . . . . . . . . . .
6
Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . $40,822

Equity Securities:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . .

56
66

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . $

122

Total number of securities in an unrealized loss position . . . . . .

2,210

$ 395
139
119
55
990
29
143
94
2

$1,966

$

$

7
41

48

$18,004
7,282
10,268
507
51
5,435
5,875
1,843
—

$49,265

$

$

14
930

944

3,333

$2,314
1,096
2,438
84
20
1,095
1,156
317
—

$8,520

$26,645
11,068
15,891
2,825
15,102
7,487
7,134
3,929
6

$ 2,709
1,235
2,557
139
1,010
1,124
1,299
411
2

$90,087

$10,486

$

1
226

$

70
996

$ 227

$ 1,066

$

$

8
267

275

F-42

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale
The following tables present the cost or amortized cost, gross unrealized loss, including the portion of OTTI

loss on fixed maturity
securities recognized in accumulated other comprehensive income (loss), gross unrealized loss as a percentage of cost or amortized cost
and number of securities for fixed maturity and equity securities where the estimated fair value had declined and remained below cost or
amortized cost by less than 20%, or 20% or more at:

Cost or Amortized Cost

December 31, 2010

Gross Unrealized
Loss

Number of
Securities

Less than
20%

20% or
more

Less than
20%

20% or
more

Less than
20%

20% or
more

(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,968
1,125
Six months or greater but less than nine months . . . . . . . . . . . . . . .
Nine months or greater but less than twelve months . . . . . . . . . . . . .
375
21,721
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twelve months or greater

$1,408
376
89
5,567

$2,379
29
28
1,876

$ 369
102
27
1,821

5,472
104
51
1,267

125
29
9
316

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $129,189

$7,440

$4,312

$2,319

Percentage of amortized cost

. . . . . . . . . . . . . . . . . . . . . . . . . . .

3%

31%

Equity Securities:
Less than six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Six months or greater but less than nine months . . . . . . . . . . . . . . .
Nine months or greater but less than twelve months . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twelve months or greater

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

247
29
6
518

800

$

$

94
65
47
340

$ 546

$

10
5
—
56

71

$

22
16
16
116

$ 170

131
7
4
40

33
2
2
15

Percentage of cost

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9%

31%

Cost or Amortized Cost

December 31, 2009

Gross Unrealized
Loss

Number of
Securities

Less than
20%

20% or
more

Less than
20%

20% or
more

Less than
20%

20% or
more

(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,163
4,908
Six months or greater but less than nine months . . . . . . . . . . . . . . .
1,723
Nine months or greater but less than twelve months . . . . . . . . . . . . .
41,721
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twelve months or greater

$ 2,658
674
1,659
12,067

$ 933
508
167
3,207

$ 713
194
517
4,247

1,725
124
106
2,369

186
49
79
724

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $83,515

$17,058

$4,815

$5,671

Percentage of amortized cost

. . . . . . . . . . . . . . . . . . . . . . . . . . .

6%

33%

Equity Securities:
Less than six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Six months or greater but less than nine months . . . . . . . . . . . . . . .
Nine months or greater but less than twelve months . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twelve months or greater

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

66
6
13
610

695

$

$

63
1
94
488

646

$

$

7
1
2
73

83

$

14
1
39
138

$ 192

199
15
8
50

8
2
6
24

Percentage of cost

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12%

30%

Equity securities with a gross unrealized loss of 20% or more for twelve months or greater decreased from $138 million at December 31,
2009 to $116 million at December 31, 2010. As shown in the section “— Evaluating Temporarily Impaired Available-for-Sale Securities”
below, the $116 million of equity securities with a gross unrealized loss of 20% or more for twelve months or greater at December 31, 2010
were non-redeemable preferred stock, of which $115 million, or 99%, were financial services industry investment grade non-redeemable
preferred stock, of which 77% were rated A or better.

MetLife, Inc.

F-43

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale
The Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI

loss on fixed
maturity securities recognized in accumulated other comprehensive income (loss) of $6.9 billion and $10.8 billion at December 31, 2010 and
2009, respectively, were concentrated, calculated as a percentage of gross unrealized loss and OTTI loss, by sector and industry as follows:

December 31,
2010
2009

Sector:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24%
20

25%
24

Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

10
9

8

8
4

3

11

12
1

9

4
10

4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100%

Industry:

Mortgage-backed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24%

34%

Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Asset-backed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consumer

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial

Other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

10
9

8

8
5

4

2
2

7

22

12
1

9

4
4

4

2
1

7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100%

Evaluating Temporarily Impaired Available-for-Sale Securities
The following table presents the Company’s fixed maturity and equity securities, each with a gross unrealized loss of greater than

$10 million, the number of securities, total gross unrealized loss and percentage of total gross unrealized loss at:

December 31,

2010

2009

Fixed Maturity
Securities

Equity
Securities

Fixed Maturity
Securities

Equity
Securities

(In millions, except number of securities)

Number of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107

Total gross unrealized loss . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,014

6

$103

223

$4,465

9

$132

Percentage of total gross unrealized loss . . . . . . . . . . . . . . . . .

30%

43%

43%

48%

Fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million, decreased $2.5 billion during the year
ended December 31, 2010. The cause of the decline in, or improvement in, gross unrealized losses for the year ended December 31, 2010,
was primarily attributable to a decrease in interest rates and narrowing of credit spreads. These securities were included in the Company’s
OTTI review process. Based upon the Company’s current evaluation of these securities and other available-for-sale securities in an unrealized
loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of
security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are not
other-than-temporarily impaired.

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

F-44

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following table presents certain information about the Company’s equity securities available-for-sale with a gross unrealized loss of

20% or more at December 31, 2010:

Non-Redeemable Preferred Stock

All Equity
Securities

Gross
Unrealized
Loss

All Types of
Non-Redeemable
Preferred Stock

All Industries

Financial Services Industry

Investment Grade

Gross
Unrealized
Loss

% of All
Equity
Securities

Gross
Unrealized
Loss

% of All
Non-Redeemable
Preferred Stock

Gross
Unrealized
Loss

% of All
Industries

% A
Rated or
Better

(In millions)

$ 22

$ 18

82%

$

9

50%

$

9

100%

100%

32

116

32

116

100%

100%

32

115

100%

99%

32

115

100%

100%

50%

77%

Less than six months . . . . . . . . . . . . .
Six months or greater but less than

twelve months . . . . . . . . . . . . . . . .

Twelve months or greater . . . . . . . . . .

All equity securities with a gross

unrealized loss of 20% or more . . . . .

$170

$166

98%

$156

94%

$156

100%

73%

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

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

Future OTTIs will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash
flows expected to be collected), changes in credit rating, changes in collateral valuation, changes in interest rates and changes in credit
spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.

Net Investment Gains (Losses)
See “— Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment” for a discussion of changes in guidance adopted

April 1, 2009 that impacted how fixed maturity security OTTI

losses that are charged to earnings are measured.

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

Years Ended December 31,

2010

2009

2008

(In millions)

Total gains (losses) on fixed maturity securities:

Total OTTI
Less: Noncredit portion of OTTI

losses recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(682)
losses transferred to and recognized in other

$(2,439)

$(1,296)

comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

212

939

—

Net OTTI

losses on fixed maturity securities recognized in earnings . . . . . . . . . . . . . .

(470)

(1,500)

(1,296)

Fixed maturity securities — net gains (losses) on sales and disposals . . . . . . . . . . . . .

215

(163)

(657)

Total gains (losses) on fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . .

(255)

(1,663)

(1,953)

Other net investment gains (losses):

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investment portfolio gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104
22

(54)

(18)
(6)

(399)
(442)

(164)

(356)
(26)

(253)
(136)

(18)

(140)
134

Subtotal — investment portfolio gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . .

(207)

(3,050)

(2,366)

FVO consolidated securitization entities:

Commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt — related to commercial mortgage loans . . . . . . . . . . . . . . . . . . . . .
Long-term debt — related to securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other gains (losses)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

758

(78)

(722)
48

(191)

Subtotal FVO consolidated securitization entities and other gains (losses) . . . . . . . . .

(185)

—

—

—
—

144

144

—

—

—
—

268

268

Total net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(392)

$(2,906)

$(2,098)

MetLife, Inc.

F-45

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) Other gains (losses) for the year ended December 31, 2010 includes a loss of $209 million related to recording the Company’s investment

in MSI MetLife at its estimated recoverable amount. See Note 2.
See “— Variable Interest Entities” for discussion of CSEs included in the table above.
Gains (losses) from foreign currency transactions included within net investment gains (losses) were $246 million, $226 million and

$363 million for the years ended December 31, 2010, 2009 and 2008, respectively.

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

Fixed Maturity Securities

Equity Securities

Total

Years Ended December 31,

Years Ended December 31,

Years Ended December 31,

2010

2009

2008

2010

2009

2008

2010

2009

2008

(In millions)

Proceeds . . . . . . . . . . . . . . . . . . . . $54,559

$38,972

$62,495

$623

$ 950

$2,107

$55,182

$39,922

$64,602

Gross investment gains . . . . . . . . . . .

832

947

858

129

134

440

961

1,081

1,298

Gross investment losses . . . . . . . . . .

(617)

(1,110)

(1,515)

(11)

(133)

(263)

(628)

(1,243)

(1,778)

Total OTTI

losses recognized in

earnings:

Credit-related . . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . . . .

(423)
(47)

(1,137)
(363)

(1,138)
(158)

—
(14)

—
(400)

—
(430)

(423)
(61)

(1,137)
(763)

(1,138)
(588)

Total OTTI

losses recognized in
earnings . . . . . . . . . . . . . . . . . .

(470)

(1,500)

(1,296)

(14)

(400)

(430)

(484)

(1,900)

(1,726)

Net investment gains (losses)

. . . . . . . $

(255)

$ (1,663)

$ (1,953)

$104

$(399)

$ (253)

$

(151)

$ (2,062)

$ (2,206)

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

losses recognized in earnings related to the following sectors and industries within the U.S. and foreign

corporate securities sector:

Years Ended December 31,

2010

2009

2008

(In millions)

Sector:

U.S. and foreign corporate securities — by industry:

Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $126

$ 459

$ 673

Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial

Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total U.S. and foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

16

3
2

—

183

103

98

86
—

211

235

89
30

26

107

134

5
26

185

1,050

1,130

168

193

88
1

99

—

65
2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $470

$1,500

$1,296

F-46

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Equity security OTTI

losses recognized in earnings related to the following sectors and industries:

Years Ended December 31,
2008

2009

2010

Sector:

Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7
7

$ 333
67

$ 319
111

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14

$ 400

$ 430

(In millions)

Industry:

Financial services industry:

Perpetual hybrid securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Common and remaining non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . .

Total financial services industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

—

3
11

$ 310

$

90

30

340
60

251

341
89

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14

$ 400

$ 430

Credit Loss Rollforward — Rollforward of the Cumulative Credit Loss Component of OTTI Loss Recognized in Earn-
ings on Fixed Maturity Securities Still Held for Which a Portion of the OTTI Loss Was Recognized in Other Compre-
hensive Income (Loss)
The table below presents a rollforward of the cumulative credit loss component of OTTI

loss recognized in earnings on fixed maturity
securities still held by the Company at December 31, 2010 and 2009, respectively, for which a portion of the OTTI loss was recognized in
other comprehensive income (loss):

Years Ended December 31,

2010

2009

(In millions)

Balance, at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 581

$ —

Credit loss component of OTTI

loss not reclassified to other comprehensive income (loss) in

the cumulative effect transition adjustment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

Additions:

Initial
Additional

impairments — credit loss OTTI recognized on securities not previously impaired . . . . .
impairments — credit loss OTTI recognized on securities previously impaired . . . .

109
125

230

311
91

Reductions:

Due to sales (maturities, pay downs or prepayments) during the period of securities

previously credit loss OTTI

impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(260)

(49)

Due to securities de-recognized in connection with the adoption of new guidance related to

the consolidation of VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(100)

Due to securities impaired to net present value of expected future cash flows . . . . . . . . . . .
. . . . . . . . . . . . . .
Due to increases in cash flows — accretion of previous credit loss OTTI

(2)
(10)

—

—
(2)

Balance, at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 443

$581

MetLife, Inc.

F-47

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Net Investment Income
The components of net investment income were as follows:

Years Ended December 31,
2009

2010

2008

(In millions)

Investment income:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,489
128
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$11,617
178

$13,577
258

Trading and other securities — Actively Traded Securities and FVO general account

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73
2,826

116
2,743

(27)
2,855

Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash, cash equivalents and short-term investments . . . . . . . . . . . . . . . . . . . . . . .

International
Other

joint ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

657

439
879

102

(81)
235

648

(197)
174

129

(115)
205

601

572
(170)

353

43
350

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,747

15,498

18,412

Less: Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

930

945

1,957

Subtotal, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,817

14,553

16,455

Trading and other securities — FVO contractholder-directed unit-linked investments . .

372

284

(166)

FVO consolidated securitization entities:

Commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

411

15

798

—

—

—

—

284

(166)

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,615

$14,837

$16,289

(1) Amounts are presented net of changes in estimated fair value of derivatives related to economic hedges of the Company’s investment in
joint venture investments that do not qualify for hedge accounting of $36 million, ($143) million and

these equity method international
$178 million for the years ended December 31, 2010, 2009 and 2008, respectively.
See “— Variable Interest Entities” for discussion of CSEs included in the table above.

Securities Lending
The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and
short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. The Company generally obtains
collateral, generally cash, in an amount equal to 102% of the estimated fair value of the securities loaned, which is obtained at the inception of
a loan and maintained at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be
sold or repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control. These
transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received.

F-48

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Elements of the securities lending programs are presented below at:

December 31,

2010

2009

(In millions)

Securities on loan:

Amortized cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,715
Estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,230

$21,012
$20,949

Aging of cash collateral

liability:

Open(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,752
12,301
Less than thirty days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Thirty days or greater but less than sixty days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sixty days or greater but less than ninety days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ninety days or greater

4,399

2,291
2,904

$ 3,290
13,605

3,534

92
995

Total cash collateral

liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,647

$21,516

Security collateral on deposit from counterparties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

6

Reinvestment portfolio — estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,177

$20,339

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

immediately return the cash collateral.
The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2010 was $2.7 billion, of which
$2.3 billion were U.S. Treasury, agency and government guaranteed securities which, if put to the Company, can be immediately sold to
satisfy the cash requirements. The remainder of the securities on loan were primarily U.S. Treasury, agency and government guaranteed
securities, and very liquid RMBS. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities
(including RMBS, U.S. corporate, U.S. Treasury, agency and government guaranteed and ABS).

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged,
unless the counterparty is in default, and is not reflected in the consolidated financial statements. Separately, the Company had $49 million
and $46 million, at estimated fair value, of cash and security collateral on deposit from a counterparty to secure its interest in a pooled
investment that is held by a third-party trustee, as custodian, at December 31, 2010 and 2009, respectively. This pooled investment is
included within fixed maturity securities and had an estimated fair value of $49 million and $51 million at December 31, 2010 and 2009,
respectively.

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

December 31,

2010

2009

(In millions)

Invested assets on deposit:

Regulatory agencies(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,110

$ 1,383

Invested assets held in trust:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral financing arrangements(2)
Reinsurance arrangements(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,340
3,090

5,653
2,719

Invested assets pledged as collateral:

Funding agreements and advances — FHLB of NY(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,975

20,612

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding agreements — FHLB of Boston(4)
Funding agreements — Farmer Mac(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Reserve Bank of New York(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Collateral financing arrangements(7)
Derivative transactions(8)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short sale agreements(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

211
3,159

1,822

112
1,726

465

419
2,871

1,537

80
1,671

496

Total

invested assets on deposit, held in trust and pledged as collateral

. . . . . . . . . . . . . . . . $40,010

$37,441

(1) The Company has investment assets on deposit with regulatory agencies consisting primarily of cash and cash equivalents, short-term

investments, fixed maturity securities and equity securities.

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

MetLife, Inc.

F-49

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(3) The Company held in trust certain investments, primarily fixed maturity securities, in connection with certain reinsurance transactions.
(4) The Company has pledged fixed maturity securities and mortgage loans in support of its funding agreements with, and advances from, the
Federal Home Loan Bank of New York (“FHLB of NY”) and has pledged fixed maturity securities in support of its funding agreements with
the Federal Home Loan Bank of Boston (“FHLB of Boston”). The nature of these Federal Home Loan Bank arrangements is described in
Notes 8 and 11.

(5) The Company has pledged certain agricultural mortgage loans in connection with funding agreements issued to certain SPEs that have
these Farmer Mac

issued securities guaranteed by the Federal Agricultural Mortgage Corporation (“Farmer Mac”). The nature of
arrangements is described in Note 8.

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

(7) The Holding Company has pledged certain collateral
in support of the collateral financing arrangements described in Note 12.
(8) Certain of the Company’s invested assets are pledged as collateral for various derivative transactions as described in Note 4.
(9) Certain of the Company’s Actively Traded Securities and cash and cash equivalents are pledged to secure liabilities associated with short

sale agreements in the Actively Traded Securities portfolio.
See also “— Securities Lending” for the amount of the Company’s cash received from and due back to counterparties pursuant to the
Company’s securities lending program. See “— Variable Interest Entities” for assets of certain CSEs that can only be used to settle liabilities of
such entities.

Trading and Other Securities
The tables below present certain information about the Company’s trading securities and other securities for which the FVO has been

elected:

Actively Traded Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

FVO general account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2010

2009

(In millions)

463

131

$ 420

78

FVO contractholder-directed unit-linked investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,794

1,886

FVO securities held by consolidated securitization entities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

201

—

Total trading and other securities — at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . $18,589

$2,384

Actively Traded Securities — at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

463

$ 420

Short sale agreement liabilities — at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(46)

(106)

Net long/short position — at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

417

$ 314

Investments pledged to secure short sale agreement liabilities . . . . . . . . . . . . . . . . . . . . . . . . . $

465

$ 496

Years Ended
December 31,

2010

2009

2008

(In millions)

Actively Traded Securities:

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54

Changes in estimated fair value included in net investment income . . . . . . . . . . . . . . . . . . $ 12

FVO general account securities:

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19

Changes in estimated fair value included in net investment income . . . . . . . . . . . . . . . . . . $ 18

FVO contractholder-directed unit-linked investments:

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $372

Changes in estimated fair value included in net investment income . . . . . . . . . . . . . . . . . . $322

FVO securities held by consolidated securitization entities:

$ 98

$ 18

$ (13)

$

(2)

$ 18

$ 16

$ (14)

$ (17)

$284

$275

$(166)

$(155)

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15

$ — $ —

Changes in estimated fair value included in net investment gains (losses) . . . . . . . . . . . . . . $ (78)

$ — $ —

See Note 1 for discussion of FVO contractholder-directed unit-linked investments and “— Variable Interest Entities” for discussion of
CSEs included in the tables above. The FVO contractholder-directed unit-linked investments held as of December 31, 2010 were primarily
due to the Acquisition (see Note 2).

F-50

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Mortgage Loans
Mortgage loans are summarized as follows at:

December 31,

2010

2009

Carrying
Value

% of
Total

Carrying
Value

% of
Total

(In millions)

Mortgage loans held-for-investment:

Commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,820

60.7% $35,176

69.0%

Agricultural mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,751

Residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,308

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,879

Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(664)

20.4

3.7

84.8

(1.1)

12,255

1,471

48,902

(721)

24.1

2.9

96.0

(1.4)

Subtotal mortgage loans held-for-investment, net . . . . . . . . . . . . . . . . . .

52,215

83.7

48,181

94.6

Commercial mortgage loans held by consolidated securitization entities —

FVO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,840

Total mortgage loans held-for-investment, net . . . . . . . . . . . . . . . . . . . .

59,055

Mortgage loans held-for-sale:

Residential mortgage loans — FVO . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,510

Mortgage loans — lower of amortized cost or estimated fair value(1) . . . . . . .

811

Total mortgage loans held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,321

11.0

94.7

4.0

1.3

5.3

—

—

48,181

94.6

2,470

258

2,728

4.9

0.5

5.4

Total mortgage loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,376

100.0% $50,909

100.0%

(1)

Includes agricultural and residential mortgage loans.
See “— Variable Interest Entities” for discussion of CSEs included in the table above.
Concentration of Credit Risk — The Company diversifies its mortgage loan portfolio by both geographic region and property type to
reduce the risk of concentration. The Company’s commercial and agricultural mortgage loans are collateralized by properties primarily
located in the United States, at 91%, with the remaining 9% collateralized by properties located outside the United States, calculated as a
percent of total mortgage loans held-for-investment (excluding commercial mortgage loans held by CSEs) at December 31, 2010. The
carrying value of the Company’s commercial and agricultural mortgage loans located in California, New York and Texas were 21%, 8% and
7%, respectively, of total mortgage loans held-for-investment (excluding commercial mortgage loans held by CSEs) at December 31, 2010.
Additionally, the Company manages risk when originating commercial and agricultural mortgage loans by generally lending only up to 75% of
the estimated fair value of the underlying real estate.

Certain of the Company’s real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgage loans

were $283 million and $368 million at December 31, 2010 and 2009, respectively.

The following tables present the recorded investment in mortgage loans held-for-investment, by portfolio segment, by method of

evaluation of credit loss, and the related valuation allowances, by type of credit loss, at:

Commercial

Agricultural

Residential

Total

2010

2009

2010

2009

2010

2009

2010

2009

December 31,

(In millions)

Mortgage loans:

Evaluated individually for credit losses . . . . . $

120

$

102

$

146

$

211

$

15

$

3

$

281

$

316

Evaluated collectively for credit losses . . . . .

37,700

35,074

12,605

12,044

2,293

1,468

52,598

48,586

Total mortgage loans . . . . . . . . . . . . . .

37,820

35,176

12,751

12,255

2,308

1,471

52,879

48,902

Valuation allowances:

Specific credit losses . . . . . . . . . . . . . . .

Non-specifically identified credit losses . . . .

Total valuation allowances . . . . . . . . . . .

36

526

562

41

548

589

52

36

88

82

33

115

—

14

14

—

17

17

88

576

664

123

598

721

Mortgage loans, net of valuation allowance . . . $37,258

$34,587

$12,663

$12,140

$2,294

$1,454

$52,215

$48,181

MetLife, Inc.

F-51

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following tables present the changes in the valuation allowance, by portfolio segment:

Mortgage Loan Valuation Allowances

Commercial

Agricultural

Residential

Total

(In millions)

Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$167

$ 24

$ 6

$197

Provision (release) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision (release) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision (release) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .

145
(80)

232

384
(27)

589

(5)
(22)

49
(12)

61

79
(25)

115

12
(39)

6
(1)

11

12
(6)

17

2
(5)

200
(93)

304

475
(58)

721

9
(66)

Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .

$562

$ 88

$14

$664

Commercial Mortgage Loans — by Credit Quality Indicators with Estimated Fair Value: Presented below for the commercial mortgage
loans held-for-investment is the recorded investment, prior to valuation allowances, by the indicated loan-to-value ratio categories and debt
service coverage ratio categories and estimated fair value of such mortgage loans by the indicated loan-to-value ratio categories at:

December 31, 2010

Recorded Investment

Loan-to-value ratios:

(In millions)

Debt Service Coverage Ratios
1.00x - 1.20x

H 1.20x

G 1.00x

Total

% of Total

Estimated
Fair Value

(In millions)

% of Total

Less than 65% . . . . . . . . . . . . . . . $16,664
9,023
65% to 75% . . . . . . . . . . . . . . . . .

76% to 80% . . . . . . . . . . . . . . . . .

Greater than 80% . . . . . . . . . . . . .

3,033

4,155

$ 125
765

304

1,813

$ 483
513

$17,272
10,301

45.7% $18,183
10,686
27.2

135

807

3,472

6,775

9.2

17.9

3,536

6,374

46.9%
27.6

9.1

16.4

Total

. . . . . . . . . . . . . . . . . . . . $32,875

$3,007

$1,938

$37,820

100.0% $38,779

100.0%

Agricultural and Residential Mortgage Loans — by Credit Quality Indicator:

The recorded investment in agricultural and residential

mortgage loans held-for-investment, prior to valuation allowances, by credit quality indicator, was at:

Agricultural Mortgage Loans

Recorded Investment
(In millions)

% of Total

December 31, 2010

Loan-to-value ratios:

Less than 65% . . . . . . . . . . . . . . . . . .
65% to 75% . . . . . . . . . . . . . . . . . . . .

76% to 80% . . . . . . . . . . . . . . . . . . . .
Greater than 80% . . . . . . . . . . . . . . . .

$11,483
885

48
335

Performance indicators:

90.1% Performing . . . . . . . .
Nonperforming . . . . . .

6.9

0.4
2.6

Total . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . .

$12,751

100.0%

Residential Mortgage Loans

Recorded Investment
(In millions)

% of Total

$2,225
83

$2,308

96.4%
3.6

100.0%

Past Due and Interest Accrual Status of Mortgage Loans.

The Company has a high quality, well performing, mortgage loan portfolio with

approximately 99% of all mortgage loans classified as performing.

Past Due.

The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are
past due as follows: commercial mortgage loans — 60 days past due; agricultural mortgage loans — 90 days past due; and residential
mortgage loans — 60 days past due. The recorded investment in mortgage loans held-for-investment, prior to valuation allowances, past
due according to these aging categories was $58 million, $159 million and $79 million for commercial, agricultural and residential mortgage
loans, respectively, at December 31, 2010; and for all mortgage loans was $296 million and $220 million at December 31, 2010 and 2009,
respectively.

Accrual Status. Past Due 90 Days or More and Still Accruing Interest.

The recorded investment in mortgage loans held-for-investment,
prior to valuation allowances, that were past due 90 days or more and still accruing interest was $1 million, $13 million and $11 million for
commercial, agricultural and residential mortgage loans, respectively, at December 31, 2010; and for all mortgage loans, was $25 million and
$14 million at December 31, 2010 and 2009, respectively.
Accrual Status. Mortgage Loans in Nonaccrual Status.

The recorded investment in mortgage loans held-for-investment, prior to
valuation allowances, that were in nonaccrual status was $7 million, $177 million and $25 million for commercial, agricultural and residential

F-52

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

mortgage loans, respectively, at December 31, 2010; and for all mortgage loans, was $209 million and $263 million at December 31, 2010
and 2009, respectively.

Impaired Mortgage Loans.

allowances, for impaired mortgage loans held-for-investment, by portfolio segment, at December 31, 2010 and for all
loans held-for-investment at December 31, 2009, were as follows at:

The unpaid principal balance, recorded investment, valuation allowances and carrying value, net of valuation
impaired mortgage

Impaired Mortgage Loans

Loans with a Valuation Allowance

Unpaid
Principal
Balance

Recorded
Investment

Valuation
Allowances

Carrying
Value

Loans without
a Valuation Allowance

Unpaid
Principal
Balance

Recorded
Investment

All Impaired Loans

Unpaid
Principal
Balance

Carrying
Value

At December 31, 2010:

Commercial mortgage loans . . . . . . . . .
Agricultural mortgage loans . . . . . . . . . .

Residential mortgage loans . . . . . . . . . .

$120
146

3

Total

. . . . . . . . . . . . . . . . . . . . . . .

$269

$120
146

3

$269

$ 36
52

—

$ 88

(In millions)

$ 84
94

3

$181

$ 99
123

16

$238

$ 87
119

16

$222

$219
269

19

$507

$171
213

19

$403

Total mortgage loans at December 31,

2009 . . . . . . . . . . . . . . . . . . . . . . . .

$316

$316

$123

$193

$106

$106

$422

$299

Unpaid principal balance is generally prior to any charge-off.
The average investment in impaired mortgage loans held-for-investment, and the related interest income, by portfolio segment, for the

year ended December 31, 2010 and for all mortgage loans for the years ended December 31, 2009 and 2008, respectively, was:

Impaired Mortgage Loans

Average Investment

Interest Income Recognized

Cash Basis

Accrual Basis

(In millions)

For the Year Ended December 31, 2010:

Commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agricultural mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31, 2009 . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31, 2008 . . . . . . . . . . . . . . . . . . .

$192

284
16

$492

$338

$389

$ 5

6
—

$11

$ 8

$12

$ 1

2
—

$ 3

$ 1

$10

Real Estate and Real Estate Joint Ventures
Real estate investments by type consisted of the following:

December 31,

2010

2009

Carrying
Value

% of
Total

Carrying
Value

% of
Total

(In millions)

Traditional

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,163

64.3% $4,135

60.0%

Real estate joint ventures and funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,707

Real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . .

7,870

Foreclosed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152

Real estate held-for-investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,022
8

33.7

98.0

1.9

99.9
0.1

2,579

6,714

127

6,841
55

37.4

97.4

1.8

99.2
0.8

Total real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . $8,030

100.0% $6,896

100.0%

The Company classifies within traditional real estate its investment in income-producing real estate, which is comprised primarily of
wholly-owned real estate and, to a much lesser extent joint ventures with interests in single property income-producing real estate. The
Company classifies within real estate joint ventures and funds, its investments in joint ventures with interests in multi-property projects with
varying strategies ranging from the development of properties to the operation of income-producing properties as well as its investments in
real estate private equity funds. From time to time, the Company transfers investments from these joint ventures to traditional real estate, if the
Company retains an interest in the joint venture after a completed property commences operations and the Company intends to retain an
interest in the property.

MetLife, Inc.

F-53

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Properties acquired through foreclosure were $165 million, $127 million and less than $1 million for the years ended December 31, 2010,
2009 and 2008, respectively, and includes commercial, agricultural and residential properties. After the Company acquires properties
through foreclosure, it evaluates whether the property is appropriate for retention in its traditional real estate portfolio. Foreclosed real estate
held at December 31, 2010 and 2009 includes those properties the Company has not selected for retention in its traditional real estate
portfolio and which do not meet the criteria to be classified as held-for-sale.

The wholly-owned real estate within traditional real estate is net of accumulated depreciation of $1.7 billion and $1.4 billion at
December 31, 2010 and 2009, respectively. Related depreciation expense on traditional wholly-owned real estate was $151 million,
$135 million and $136 million for the years ended December 31, 2010, 2009 and 2008, respectively. These amounts include depreciation
expense related to discontinued operations of less than $1 million for the year ended December 31, 2010, and $1 million for both the years
ended December 31, 2009 and 2008. The estimated fair value of the traditional real estate investment portfolio was $6.6 billion and $5.4
billion at December 31, 2010, and 2009, respectively.

Impairments recognized on real estate held-for-investment were $48 million, $160 million and $20 million for the years ended Decem-
ber 31, 2010, 2009 and 2008, respectively. Impairments recognized on real estate held-for-sale were $1 million for the year ended
December 31, 2010. There were no impairments recognized on real estate held-for-sale for each of the years ended December 31, 2009 and
2008. The Company’s carrying value of real estate held-for-sale has been reduced by impairments recorded prior to 2009 of $1 million at both
December 31, 2010 and 2009. The carrying value of non-income producing real estate was $137 million, $76 million and $28 million at
December 31, 2010, 2009 and 2008, respectively.

The Company diversifies its real estate investments by both geographic region and property type to reduce risk of concentration. The
Company’s real estate investments are primarily located in the United States, at 88%, with the remaining 12% located outside the United
States , at December 31, 2010. The three locations with the largest real estate investments were California, Florida and Japan at 21%, 12%
and 10%, respectively, at December 31, 2010.

The Company’s real estate investments by property type are categorized as follows:

December 31,

2010

2009

Carrying
Value

% of
Total

Carrying
Value

% of
Total

(In millions)

Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,369

54.4% $3,557

51.6%

Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate private equity funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,774
552

22.1
6.9

1,438
504

20.9
7.3

Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retail
Hotel

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

433

389
233

133

17
130

5.4

4.8
2.9

1.7

0.2
1.6

436

467
203

110

57
124

6.3

6.8
2.9

1.6

0.8
1.8

Total real estate and real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . $8,030

100.0% $6,896

100.0%

Other Limited Partnership Interests
The carrying value of other limited partnership interests (which primarily represent ownership interests in pooled investment funds that
principally make private equity investments in companies in the United States and overseas) was $6.4 billion and $5.5 billion at December 31,
2010 and 2009, respectively. Included within other limited partnership interests were $1.0 billion, at both December 31, 2010 and 2009, of
investments in hedge funds. Impairments of other limited partnership interests, principally cost method other limited partnership interests,
were $12 million, $354 million and $105 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Collectively Significant Equity Method Investments
The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of
leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for
under the equity method had a carrying value of $8.7 billion as of December 31, 2010. The Company’s maximum exposure to loss related to
these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $2.9 billion as of
December 31, 2010. Except for certain real estate joint ventures, the Company’s investments in real estate funds and other limited
partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities.

As further described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month
lag methodology and within net investment income. As of December 31, 2010, aggregate net investment income from these equity method
real estate joint ventures, real estate funds and other limited partnership interests exceeded 10% of the Company’s consolidated pre-tax
income (loss) from continuing operations. Accordingly, the Company is providing the following aggregated summarized financial data for such
equity method investments. This aggregated summarized financial data does not represent the Company’s proportionate share of the assets,
liabilities, or earnings of such entities.

As of, and for the year ended December 31, 2010, the aggregated summarized financial data presented below reflects the latest available
financial information. Aggregate total assets of these entities totaled $262.9 billion and $209.9 billion as of December 31, 2010 and 2009,
these entities totaled $77.6 billion and $64.5 billion as of December 31, 2010 and 2009,
respectively. Aggregate total

liabilities of

F-54

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

respectively. Aggregate net income (loss) of these entities totaled $18.7 billion, $22.8 billion and ($23.3) billion for the years ended
December 31, 2010, 2009 and 2008, respectively. Aggregate net income (loss) from real estate joint ventures, real estate funds and other
limited partnership interests is primarily comprised of investment income, including recurring investment income and realized and unrealized
investment gains (losses).

Other Invested Assets
The following table presents the carrying value of the Company’s other invested assets by type at:

December 31,

2010

2009

Carrying
Value

% of
Total

Carrying
Value

% of
Total

(In millions)

Freestanding derivatives with positive fair values . . . . . . . . . . . . . . . . . . . . . $ 7,777

50.4% $ 6,133

48.2%

Leveraged leases, net of non-recourse debt . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,191
976

MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Joint venture investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Funds withheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

950

694

551
—

14.2
6.3

6.2

4.5

3.6
—

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,291

14.8

2,227
719

17.5
5.7

878

977

505
409

861

6.9

7.7

4.0
3.2

6.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,430

100.0% $12,709

100.0%

See Note 4 for information regarding the freestanding derivatives with positive estimated fair values. See the following sections,
“Leveraged Leases” and “Mortgage Servicing Rights,” for the composition of leveraged leases and for information on MSRs. Tax credit
partnerships are established for the purpose of investing in low-income housing and other social causes, where the primary return on
investment is in the form of income tax credits, and are accounted for under the equity method or under the effective yield method. Joint
venture investments are accounted for under the equity method and represent the Company’s investment in insurance underwriting joint
ventures in China, Japan (see Note 2) and Chile. Funds withheld represent amounts contractually withheld by ceding companies in
accordance with reinsurance agreements. Funding agreements represent arrangements where the Company has long-term interest bearing
amounts on deposit with third parties and are generally stated at amortized cost.

Leveraged Leases

Investment in leveraged leases, included in other invested assets, consisted of the following:

December 31,

2010

2009

(In millions)

Rental receivables, net
Estimated residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,882
1,682

$ 1,698
1,921

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,564

3,619

Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,373)

(1,392)

Investment in leveraged leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,191

$ 2,227

The rental receivables set forth above are generally due in periodic installments. The payment periods range from one to 15 years, but in
certain circumstances are as long as 30 years. For rental receivables, the Company’s primary credit quality indicator is whether the rental
receivable is performing or non-performing. The Company generally defines non-performing rental receivables as those that are 90 days or
more past due. The determination of performing or non-performing status is assessed monthly. As of December 31, 2010, all of the rental
receivables were performing.

The Company’s deferred income tax liability related to leveraged leases was $1.4 billion and $1.3 billion at December 31, 2010 and 2009,

respectively.

The components of net income from investment in leveraged leases were as follows:

Net income from investment in leveraged leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $123
(43)
Less: Income tax expense on leveraged leases net investment income . . . . . . . . . . . . . . . .

$114
(40)

$116
(40)

Net investment income after income tax from investment in leveraged leases . . . . . . . . . . . . $ 80

$ 74

$ 76

Years Ended December 31,

2010

2009

2008

(In millions)

MetLife, Inc.

F-55

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Mortgage Servicing Rights

The following table presents the carrying value and changes in capitalized MSRs, which are included in other invested assets:

Years Ended December 31,

2010

2009

2008

(In millions)

Estimated fair value at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 878

$ 191

$ —

Acquisition of MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Origination of MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to loan payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reductions due to loan sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in estimated fair value due to:
Changes in valuation model

inputs or assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110

220
(136)

(43)

117

511
(113)

—

350

—
(10)

—

(79)

172

(149)

Estimated fair value at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 950

$ 878

$ 191

The Company recognizes the rights to service residential mortgage loans as MSRs. MSRs are either acquired or are generated from the
sale of originated residential mortgage loans where the servicing rights are retained by the Company. MSRs are carried at estimated fair value
and changes in estimated fair value, primarily due to changes in valuation inputs and assumptions and to the collection of expected cash
flows, are reported in other revenues in the period in which the change occurs. Valuation inputs and assumptions include generally
observable inputs such as type and age of loan, loan interest rates, current market interest rates and certain unobservable inputs, including
assumptions regarding estimates of discount rates, loan prepayments and servicing costs, all of which are sensitive to changing market
conditions. See Note 5 for further information about how the estimated fair value of MSRs is determined and other related information.

Short-term Investments
The carrying value of short-term investments, which includes investments with remaining maturities of one year or less, but greater than
three months, at the time of purchase was $9.4 billion and $8.4 billion at December 31, 2010 and 2009, respectively. The Company is
exposed to concentrations of credit risk related to securities of the U.S. government and certain U.S. government agencies included within
short-term investments, which were $4.0 billion and $7.5 billion at December 31, 2010 and 2009, respectively.

Cash Equivalents
The carrying value of cash equivalents, which includes investments with an original or remaining maturity of three months or less, at the
time of purchase was $9.6 billion and $8.4 billion at December 31, 2010 and 2009, respectively. The Company is exposed to concentrations
of credit risk related to securities of the U.S. government and certain U.S. government agencies included within cash equivalents, which were
$5.8 billion and $6.0 billion at December 31, 2010 and 2009, respectively.

Purchased Credit Impaired Investments
Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that
the Company will be unable to collect all contractually required payments are classified as purchased credit impaired investments. For each
investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as
the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and
events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are
significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the
contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the
acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income.
Decreases in cash flows expected to be collected can result in OTTI or the recognition of mortgage loan valuation allowances (see Note 1).

The table below presents the purchased credit impaired investments, by invested asset class, held at:

December 31, 2010

Fixed Maturity Securities

Mortgage Loans

(In millions)

Outstanding principal and interest balance(1)

. . . . . . . . . . . . . . . . . . . . . .

Carrying value (2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,548

$1,050

$504

$195

(1) Represents the contractually required payments which is the sum of contractual principal, whether or not currently due, and accrued

interest.

(2) Estimated fair value plus accrued interest for fixed maturity securities and amortized cost, plus accrued interest, less any valuation

allowances for mortgage loans.
The following table presents information about purchased credit impaired investments, as of their respective acquisition dates, for:

Contractually required payments (including interest)

. . . . . . . . . . . . . . . .

Cash flows expected to be collected(1) (2) . . . . . . . . . . . . . . . . . . . . . .
Fair value of investments acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,126

$1,782
$1,076

$553

$374
$201

Year Ended December 31, 2010

Fixed Maturity Securities

Mortgage Loans

(In millions)

F-56

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) Represents undiscounted principal and interest cash flow expectations, at the date of acquisition.

(2) A portion of the difference between the contractually required payments (including interest) and the cash flows expected to be collected
on certain of the investments acquired from American Life has been established as an indemnification asset as discussed further in
Note 2.
The following table presents activity for the accretable yield on purchased credit impaired investments for:

December 31, 2010

Fixed Maturity Securities

Mortgage Loans

(In millions)

Accretable yield, January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investments purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accretion recognized in net investment income . . . . . . . . . . . . . . . . . . . .

Reclassification (to) from nonaccretable difference . . . . . . . . . . . . . . . . . .

Accretable yield, December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

606
100

(62)

(103)

$ 541

$ —

—
173

(3)

—

$170

(1) As described further in Note 2, all

investments acquired with American Life were recorded at estimated fair value as of the Acquisition
Date. This activity relates to acquired fixed maturity securities and mortgage loans with a credit impairment inherent in the estimated fair
value.

Variable Interest Entities
The Company holds investments in certain 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, consistent with the new guidance described
in Note 1, is deemed to be the primary beneficiary or consolidator of the entity. The following table presents the total assets and total liabilities
relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated in the Company’s financial
statements at December 31, 2010 and 2009. 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.

December 31,

2010

2009

Total
Assets

Total
Liabilities

Total
Assets

Total
Liabilities

(In millions)

Consolidated securitization entities(1)

. . . . . . . . . . . . . . . . . . . . . . . . . $ 7,114

$6,892

$ —

$ —

MRSC collateral financing arrangement(2) . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,333
319

186

108
20

—
85

—

1
17

3,230
367

—

27
22

—
72

—

1
17

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,080

$6,995

$3,646

$90

(1) As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company consolidated former QSPEs that are
structured as CMBS and former QSPEs that are structured as collateralized debt obligations. At December 31, 2010, these entities held
total assets of $7,114 million, consisting of $201 million of FVO securities held by CSEs classified within trading and other securities,
$6,840 million of commercial mortgage loans, $34 million of accrued investment income and $39 million of cash. These entities had total
liabilities of $6,892 million, consisting of $6,820 million of long-term debt and $72 million of other liabilities. The assets of these entities
can only be used to settle their respective liabilities, and under no circumstances is the Company or any of its subsidiaries or affiliates
liable for any principal or interest shortfalls should any arise. The Company’s exposure is limited to that of its remaining investment in the
former QSPEs of $201 million at estimated fair value at December 31, 2010. The long-term debt referred to above bears interest at
primarily fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis and is expected to be repaid over the next 7 years.
Interest expense related to these obligations, included in other expenses, was $411 million for the year ended December 31, 2010.

(2) See Note 12 for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement. These

assets consist of the following, at estimated fair value at:

MetLife, Inc.

F-57

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

December 31,

2010

2009

(In millions)

Fixed maturity securities available-for-sale:

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,333
893
U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 963
1,049

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed securities . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents (including cash held in trust of less than $1 million for both years)

. . . . .

547

383
139

—

30
5

3

672

348
80

33

21
5

59

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,333

$3,230

The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds significant

variable interests but is not the primary beneficiary and which have not been consolidated at:

December 31,

2010

2009

Carrying
Amount

Maximum
Exposure
to Loss(1)

Carrying
Amount

Maximum
Exposure
to Loss(1)

(In millions)

Fixed maturity securities available-for-sale:

RMBS(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,733

$44,733

$ — $ —

CMBS(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,675
14,290

Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,968

2,447
4,383

789

576
350

40

20,675
14,290

2,968

2,447
6,479

789

773
350

108

—
—

1,254

1,216
2,543

—

416
—

30

—
—

1,254

1,216
2,887

—

409
—

30

Equity securities available-for-sale:

Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

31

31

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $91,251

$93,612

$5,490

$5,827

(1) The maximum exposure to loss relating to the fixed maturity, equity and trading securities is equal to the carrying amounts or carrying
amounts of retained interests. The maximum exposure to loss relating to the other limited partnership interests and real estate joint
ventures is equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to
occur only upon bankruptcy of the issuer or investee. The maximum exposure to loss relating to the mortgage loans is equal to the carrying
amounts plus any unfunded commitments of the Company. 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 a creditworthy third-party. For such investments, the maximum exposure to loss
is equal to the carrying amounts plus any unfunded commitments, reduced by amounts guaranteed by third parties of $231 million and
$232 million at December 31, 2010 and 2009, respectively.

(2) As discussed in Note 1, the Company adopted new guidance effective January 1, 2010 which eliminated the concept of a QSPE. As a
result, the Company concluded it held variable interests in RMBS, CMBS and ABS. For these interests, the Company’s involvement is
limited to that of a passive investor.
As described in Note 16, the Company makes commitments to fund partnership investments in the normal course of business. Excluding
these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended
December 31, 2010, 2009 and 2008.

4. Derivative Financial Instruments

Accounting for Derivative Financial Instruments
See Note 1 for a description of the Company’s accounting policies for derivative financial
See Note 5 for information about the fair value hierarchy for derivatives.

instruments.

F-58

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Primary Risks Managed by Derivative Financial Instruments and Non-Derivative Financial Instruments
The Company is exposed to various risks relating to its ongoing business operations, including interest rate risk, foreign currency risk,
credit risk and equity market risk. The Company uses a variety of strategies to manage these risks, including the use of derivative instruments.
The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the Company’s derivative
financial

instruments, excluding embedded derivatives, held at:

Primary Underlying
Risk Exposure

Interest rate

Instrument Type

December 31,

2010

Estimated Fair
Value(1)

Assets

Liabilities

Notional
Amount

2009

Estimated Fair
Value(1)

Assets

Liabilities

Notional
Amount

(In millions)

Interest rate swaps . . . . . . . . . . . . . . . . . . .
Interest rate floors . . . . . . . . . . . . . . . . . . .

$ 54,803
23,866

$2,654
630

$1,516
66

Interest rate caps . . . . . . . . . . . . . . . . . . . .

35,412

Interest rate futures . . . . . . . . . . . . . . . . . .
Interest rate options . . . . . . . . . . . . . . . . . .

Interest rate forwards . . . . . . . . . . . . . . . . .

Synthetic GICs . . . . . . . . . . . . . . . . . . . . .
Foreign currency Foreign currency swaps . . . . . . . . . . . . . . .

Foreign currency forwards . . . . . . . . . . . . . .

Currency futures . . . . . . . . . . . . . . . . . . . .
Currency options . . . . . . . . . . . . . . . . . . . .

Non-derivative hedging instruments(2)

. . . . . .

Credit default swaps . . . . . . . . . . . . . . . . . .
Credit forwards . . . . . . . . . . . . . . . . . . . . .

Credit

Equity market

Equity futures . . . . . . . . . . . . . . . . . . . . . .

Equity options . . . . . . . . . . . . . . . . . . . . . .
Variance swaps . . . . . . . . . . . . . . . . . . . . .

Total rate of return swaps . . . . . . . . . . . . . .

9,385
8,761

10,374

4,397
17,626

10,443

493
5,426

169

10,957
90

8,794

33,688
18,022

1,547

176

43
144

106

—
1,616

119

2
50

—

173
2

21

1,843
198

—

1

17
23

135

—
1,282

91

—
—

185

104
3

9

1,197
118

—

$ 38,152
23,691

28,409

7,563
4,050

9,921

4,352
16,879

6,485

—
822

—

6,723
220

7,405

27,175
13,654

376

$1,570
461

$1,255
37

283

8
117

66

—

10
57

27

—
1,514

—
1,392

83

—
18

—

74
2

44

57

—
—

—

130
6

21

1,712
181

—

1,018
58

47

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

$254,253

$7,777

$4,747

$195,877

$6,133

$4,115

(1) The estimated fair value of all derivatives in an asset position is reported within other invested assets in the consolidated balance sheets
and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the consolidated balance sheets.

(2) The estimated fair value of non-derivative hedging instruments represents the amortized cost of the instruments, as adjusted for foreign
currency transaction gains or losses. Non-derivative hedging instruments are reported within policyholder account balances in the
consolidated balance sheets.

MetLife, Inc.

F-59

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following table presents the gross notional amount of derivative financial

instruments by maturity at December 31, 2010:

One Year or
Less

After One Year
Through Five
Years

After Five Years
Through Ten
Years

After Ten
Years

Total

Remaining Life

Interest rate swaps . . . . . . . . . . . . . . . . . . . . .
Interest rate floors . . . . . . . . . . . . . . . . . . . . .

$ 4,970
—

Interest rate caps . . . . . . . . . . . . . . . . . . . . . .

Interest rate futures . . . . . . . . . . . . . . . . . . . . .
Interest rate options . . . . . . . . . . . . . . . . . . . .

Interest rate forwards . . . . . . . . . . . . . . . . . . .

Synthetic GICs . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency swaps . . . . . . . . . . . . . . . . . .

5,000

9,385
1,853

9,409

4,397
3,262

Foreign currency forwards . . . . . . . . . . . . . . . .

10,337

Currency futures . . . . . . . . . . . . . . . . . . . . . .
Currency options . . . . . . . . . . . . . . . . . . . . . .

Non-derivative hedging instruments . . . . . . . . . .

Credit default swaps . . . . . . . . . . . . . . . . . . . .
Credit forwards . . . . . . . . . . . . . . . . . . . . . . .

Equity futures . . . . . . . . . . . . . . . . . . . . . . . .

Equity options . . . . . . . . . . . . . . . . . . . . . . . .
Variance swaps . . . . . . . . . . . . . . . . . . . . . . .

Total rate of return swaps . . . . . . . . . . . . . . . . .

493
5,426

169

111
90

8,794

20,856
1,411

1,492

$14,491
13,048

28,436

—
5,206

860

—
5,857

24

—
—

—

10,197
—

—

3,346
1,795

55

(In millions)

$16,403
7,318

$18,939
3,500

$ 54,803
23,866

1,976

—
1,702

105

—
5,999

20

—
—

—

649
—

—

9,486
14,493

—

—

—
—

—

—
2,508

62

—
—

—

—
—

—

—
323

—

35,412

9,385
8,761

10,374

4,397
17,626

10,443

493
5,426

169

10,957
90

8,794

33,688
18,022

1,547

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$87,455

$83,315

$58,151

$25,332

$254,253

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate
exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with
another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by
reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single
net payment to be made by the counterparty at each due date. The Company utilizes interest rate swaps in fair value, cash flow and non-
qualifying hedging relationships.

The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. In a basis swap, both legs of
the swap are floating with each based on a different index. Generally, no cash is exchanged at the outset of the contract and no principal
payments are made by either party. A single net payment is usually made by one counterparty at each due date. Basis swaps are included in
interest rate swaps in the preceding table. The Company utilizes basis swaps in non-qualifying hedging relationships.

Inflation swaps are used as an economic hedge to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are

included in interest rate swaps in the preceding table. The Company utilizes inflation swaps in non-qualifying hedging relationships.

Implied volatility swaps are used by the Company primarily as economic hedges of interest rate risk associated with the Company’s
investments in mortgage-backed securities. In an implied volatility swap, the Company exchanges fixed payments for floating payments that
are linked to certain market volatility measures. If implied volatility rises, the floating payments that the Company receives will increase, and if
implied volatility falls, the floating payments that the Company receives will decrease. Implied volatility swaps are included in interest rate
swaps in the preceding table. The Company utilizes implied volatility swaps in non-qualifying hedging relationships.

The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a
specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to
protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the
Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The
Company utilizes interest rate caps and floors in non-qualifying hedging relationships.

In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of
contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an
amount equal to the difference in the daily market values of those contracts. The Company enters into exchange- traded futures with
regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are
used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to
hedge against changes in value of securities the Company owns or anticipates acquiring and to hedge against changes in interest rates on
anticipated liability issuances by replicating Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures
in non-qualifying hedging relationships.

Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and invested assets. A
swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic
impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions

F-60

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

and receives a premium for written swaptions. Swaptions are included in interest rate options in the preceding table. The Company utilizes
swaptions in non-qualifying hedging relationships.

The Company writes covered call options on its portfolio of U.S. Treasuries as an income generation strategy. In a covered call transaction,
the Company receives a premium at the inception of the contract in exchange for giving the derivative counterparty the right to purchase the
referenced security from the Company at a predetermined price. The call option is “covered” because the Company owns the referenced
security over the term of the option. Covered call options are included in interest rate options in the preceding table. The Company utilizes
covered call options in non-qualifying hedging relationships.

The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment
for such a contract is made at a specified future date. The Company also uses interest rate forwards to sell to be announced securities as
economic hedges against the risk of changes in the fair value of mortgage loans held-for-sale and interest rate lock commitments. The
Company utilizes interest rate forwards in cash flow and non-qualifying hedging relationships.

Interest rate lock commitments are short-term commitments to fund mortgage loan applications in process (the pipeline) for a fixed term for
a fixed rate or spread. During the term of an interest rate lock commitment, the Company is exposed to the risk that interest rates will change
from the rate quoted to the potential borrower. Interest rate lock commitments to fund mortgage loans that will be held-for-sale are considered
derivative instruments. Interest rate lock commitments are included in interest rate forwards in the preceding table. Interest rate lock
commitments are not designated as hedging instruments.

A synthetic GIC is a contract that simulates the performance of a traditional guaranteed interest contract through the use of financial
instruments. Under a synthetic GIC, the policyholder owns the underlying assets. The Company guarantees a rate return on those assets for a
premium. Synthetic GICs are not designated as hedging instruments.

Foreign currency derivatives, including foreign currency swaps, foreign currency forwards and currency option contracts, are used by the
Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in
foreign currencies. The Company also uses foreign currency forwards and swaps to hedge the foreign currency risk associated with certain of
its net investments in foreign operations.

In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between
one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon principal amount.
The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company
utilizes foreign currency swaps in fair value, cash flow, net investment in foreign operations and non-qualifying hedging relationships.

In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at
a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at
the specified future date. The Company utilizes foreign currency forwards in net investment in foreign operations and non-qualifying hedging
relationships.

In exchange-traded currency futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of
which is determined by referenced currencies, and to post variation margin on a daily basis in an amount equal to the difference in the daily
market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are
members of the exchange. Exchange-traded currency futures are used primarily to hedge currency mismatches between assets and
liabilities. The Company utilizes exchange-traded currency futures in non-qualifying hedging relationships.

The Company enters into currency option contracts that give it the right, but not the obligation, to sell the foreign currency amount in
exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on
differentials in the foreign exchange rate and the strike price. The Company uses currency options to hedge against the foreign currency
exposure inherent in certain of its variable annuity products. The Company also uses currency options as an economic hedge of foreign
currency exposure related to the Company’s international subsidiaries. The Company utilizes currency options in non-qualifying hedging
relationships.

The Company uses certain of its foreign currency denominated funding agreements to hedge portions of its net investments in foreign
operations against adverse movements in exchange rates. Such contracts are included in non-derivative hedging instruments in the
preceding table.

Swap spreadlocks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads.
Swap spreadlocks are forward transactions between two parties whose underlying reference index is a forward starting interest rate swap
where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on
a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. The
Company utilizes swap spreadlocks in non-qualifying hedging relationships.

Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to
diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified
intervals, to pay a premium to hedge credit risk. If a credit event, as defined by the contract, occurs, generally the contract will require the
swap to be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional in exchange for the
payment of cash amounts by the counterparty equal to the par value of the investment surrendered. The Company utilizes credit default
swaps in non-qualifying hedging relationships.

Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in
the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury or Agency security. The
Company also enters into certain credit default swaps held in relation to trading portfolios for the purpose of generating profits on short-term
differences in price. These credit default swaps are not designated as hedging instruments.

The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the
time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these

MetLife, Inc.

F-61

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these as
credit forwards. The Company utilizes credit forwards in cash flow hedging relationships.

In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of
which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the
difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission
merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge liabilities embedded in certain
variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in non-qualifying hedging
relationships.

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products
offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index
within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise
and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the
Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the
purchase and sale of options. Equity index options are included in equity options in the preceding table. The Company utilizes equity index
options in non-qualifying hedging relationships.

Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products
offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on
changes in equity volatility over a defined period. Equity variance swaps are included in variance swaps in the preceding table. The Company
utilizes equity variance swaps in non-qualifying hedging relationships.

Total rate of return swaps (“TRRs”) are swaps whereby the Company agrees with another party to exchange, at specified intervals, the
difference between the economic risk and reward of an asset or a market index and the London Inter-Bank Offer Rate (“LIBOR”), calculated by
reference to an agreed notional principal amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of
the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net
payment to be made by the counterparty at each due date. The Company uses TRRs to hedge its equity market guarantees in certain of its
insurance products. TRRs can be used as hedges or to synthetically create investments. The Company utilizes TRRs in non-qualifying
hedging relationships.

Hedging
The following table presents the gross notional amount and estimated fair value of derivatives designated as hedging instruments by type

of hedge designation at:

Derivatives Designated as Hedging Instruments

Fair Value Hedges:

December 31,

2010

Estimated
Fair
Value

2009

Estimated
Fair
Value

Notional
Amount

Assets

Liabilities

Notional
Amount

Assets

Liabilities

(In millions)

Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . . $ 4,524 $ 907

$ 145

$ 4,807 $ 854

$132

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . .

5,108

823

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,632

1,730

Cash Flow Hedges:

Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . .

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate forwards . . . . . . . . . . . . . . . . . . . . . . . .

Credit forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,556

3,562
1,140

90

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,348

Foreign Operations Hedges:

Foreign currency forwards . . . . . . . . . . . . . . . . . . . . .

1,935

Non-derivative hedging instruments . . . . . . . . . . . . . . .

169

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,104

213

102
—

2

317

9

—

9

169

314

347

116
107

3

573

26

185

211

4,824

500

9,631

1,354

75

207

4,108

1,740
—

220

6,068

1,880

—

1,880

127

347

—
—

2

48
—

6

129

401

27

—

27

13

—

13

Total Qualifying Hedges . . . . . . . . . . . . . . . . . . . . . . . . $22,084 $2,056

$1,098

$17,579 $1,510

$621

F-62

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following table presents the gross notional amount and estimated fair value of derivatives that were not designated or do not qualify as

hedging instruments by derivative type at:

December 31,

2010

Estimated
Fair
Value

2009

Estimated
Fair
Value

Derivatives Not Designated or Not
Qualifying as Hedging Instruments

Notional
Amount

Assets

Liabilities

Notional
Amount

Assets

Liabilities

(In millions)

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . $ 46,133
23,866
Interest rate floors . . . . . . . . . . . . . . . . . . . . . .
35,412
Interest rate caps . . . . . . . . . . . . . . . . . . . . . .
9,385
Interest rate futures . . . . . . . . . . . . . . . . . . . . .
8,761
Interest rate options . . . . . . . . . . . . . . . . . . . . .
9,234
Interest rate forwards . . . . . . . . . . . . . . . . . . . .
4,397
Synthetic GICs . . . . . . . . . . . . . . . . . . . . . . . .
7,546
Foreign currency swaps . . . . . . . . . . . . . . . . . .
8,508
Foreign currency forwards . . . . . . . . . . . . . . . . .
493
Currency futures . . . . . . . . . . . . . . . . . . . . . . .
5,426
Currency options . . . . . . . . . . . . . . . . . . . . . . .
10,957
Credit default swaps . . . . . . . . . . . . . . . . . . . .
8,794
Equity futures . . . . . . . . . . . . . . . . . . . . . . . . .
33,688
Equity options . . . . . . . . . . . . . . . . . . . . . . . . .
18,022
Variance swaps . . . . . . . . . . . . . . . . . . . . . . . .
1,547
Total rate of return swaps . . . . . . . . . . . . . . . . .

$1,729
630
176
43
144
106
—
496
110
2
50
173
21
1,843
198
—

$1,231
66
1
17
23
28
—
790
65
—
—
104
9
1,197
118
—

$ 31,588
23,691
28,409
7,563
4,050
9,921
4,352
7,964
4,605
—
822
6,723
7,405
27,175
13,654
376

$1,070
461
283
8
117
66
—
533
56
—
18
74
44
1,712
181
—

$1,132
37
—
10
57
27
—
913
44
—
—
130
21
1,018
58
47

Total non-designated or non-qualifying

derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . $232,169

$5,721

$3,649

$178,298

$4,623

$3,494

Net Derivative Gains (Losses)
The components of net derivative gains (losses) were as follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Derivatives and hedging gains (losses)(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 122

$(6,624)

$ 6,560

Embedded derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(387)

1,758

(2,650)

Total net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(265)

$(4,866)

$ 3,910

(1)

Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedge relationships, which are not
presented elsewhere in this note.
The following table presents the settlement payments recorded in income for the:

Years Ended December 31,

2010

2009

2008

(In millions)

Qualifying hedges:

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83

Interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . . .

233

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-qualifying hedges:

Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)

(3)

Net derivative gains (losses)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65
108

$ 49

220

(3)

(2)

91
77

$ 19

105

(9)

1

49
3

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $480

$432

$168

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 investments to floating rate investments; (ii) interest rate swaps to convert fixed rate liabilities to
floating rate liabilities; and (iii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated
investments and liabilities.

MetLife, Inc.

F-63

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains
(losses). The following table represents the amount of such net derivative gains (losses) recognized for the years ended December 31, 2010,
2009 and 2008:

Derivatives in Fair Value
Hedging Relationships

Hedged Items in Fair Value
Hedging Relationships

Net Derivative
Gains (Losses)
Recognized
for Derivatives

Net Derivative Gains
(Losses) Recognized
for Hedged Items

(In millions)

Ineffectiveness
Recognized in
Net Derivative
Gains (Losses)

For the Year Ended December 31, 2010:
Interest rate swaps:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . .
Policyholder account balances(1) . . . . . . . . . . . . . . . .

Foreign currency

swaps:

Foreign-denominated fixed maturity securities . . . . . . . .
Foreign-denominated policyholder account balances(2) . .

$ (14)
140

14
9

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 149

For the Year Ended December 31, 2009:
Interest rate swaps:

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . .
Policyholder account balances(1) . . . . . . . . . . . . . . . .

Foreign currency

swaps:

Foreign-denominated fixed maturity securities . . . . . . . .
Foreign-denominated policyholder account balances(2) . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . .

$ 49
(963)

(13)
462

$(465)

$ 245

$ 16
(142)

(14)
(20)

$(160)

$ (42)
951

10
(449)

$ 470

$(248)

$ 2
(2)

—
(11)

$(11)

$ 7
(12)

(3)
13

$ 5

$ (3)

(1) Fixed rate liabilities
(2) Fixed rate or floating rate liabilities

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Cash Flow Hedges
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging:
(i) interest rate swaps to convert floating rate investments to fixed rate investments; (ii) interest rate swaps to convert floating rate liabilities to
fixed rate liabilities; (iii)
foreign currency denominated
investments and liabilities; (iv) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments;
(v) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments; and (vi) interest rate swaps and
interest rate forwards to hedge forecasted fixed-rate borrowings.

foreign currency swaps to hedge the foreign currency cash flow exposure of

For the years ended December 31, 2010 and 2009, the Company recognized $1 million and ($3) million, respectively, of net derivative
gains (losses) which represented the ineffective portion of all cash flow hedges. For the year ended December 31, 2008, the Company did not
recognize any net derivative gains (losses) which represented the ineffective portion of all cash flow hedges. All components of each
derivative’s gain or loss were included in the assessment of hedge effectiveness. In certain instances, the Company discontinued cash flow
hedge accounting because the forecasted transactions did not occur on the anticipated date or within two months of that date. The net
amounts reclassified into net derivative gains (losses) for the years ended December 31, 2010, 2009 and 2008 related to such discontinued
cash flow hedges were gains (losses) of $9 million, ($7) million and ($12) million, respectively. At December 31, 2010 and 2009, 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
seven years and five years, respectively. There were no hedged forecasted transactions, other than the receipt or payment of variable interest
payments, for the year ended December 31, 2008.

The following table presents the components of accumulated other comprehensive income (loss), before income tax, related to cash flow

hedges:

Years Ended December 31,

2010

2009

2008

(In millions)

Accumulated other comprehensive income (loss), balance at January 1, . . . . . . . . . . . . . . . $(76)

$ 82

$(270)

Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash
flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified to net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amounts reclassified to net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(51)
65

4

Amounts reclassified to other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
Amortization of transition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

(221)
54

8

3
(2)

203
140

9

(1)
1

Accumulated other comprehensive income (loss), balance at December 31,

. . . . . . . . . . . . $(59)

$ (76)

$ 82

F-64

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

At December 31, 2010, $3 million of deferred net losses on derivatives in accumulated other comprehensive income (loss) was expected

to be reclassified to earnings within the next 12 months.

The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and

the consolidated statements of equity for the years ended December 31, 2010, 2009 and 2008:

Derivatives in Cash Flow
Hedging Relationships

Amount of Gains
(Losses) Deferred
in Accumulated Other
Comprehensive Income
(Loss) on Derivatives

Amount and Location
of Gains (Losses)
Reclassified from
Accumulated Other Comprehensive
Income (Loss) into Income (Loss)

(Effective Portion)

(Effective Portion)

Amount and Location
of Gains (Losses)
Recognized in Income (Loss)
on Derivatives

(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)

Net Derivative
Gains (Losses)

Net Investment
Income

Other
Expenses

Net Derivative
Gains (Losses)

Net Investment
Income

(In millions)

For the Year Ended

December 31, 2010:
Interest rate swaps . . . . . . . . . . .

Foreign currency swaps . . . . . . .

Interest rate forwards . . . . . . . . .
Credit forwards . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . .

For the Year Ended

December 31, 2009:
Interest rate swaps . . . . . . . . . . .

Foreign currency swaps . . . . . . .

Interest rate forwards . . . . . . . . .
Credit forwards . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . .

For the Year Ended

December 31, 2008:
Foreign currency swaps . . . . . . .

$ 13

34

(117)
19

$ (51)

$ (45)

(319)

147
(4)

$(221)

$ —

(79)

14
—

$ —

(6)

2
—

$ (65)

$ (4)

$ —

(133)

79
—

$ —

(6)

—
—

$ (54)

$ (6)

$ (1)

2

—
—

$ 1

$ (4)

1

—
—

$ (3)

$ 3

—

(2)
—

$ 1

$ (2)

(1)

—
—

$ (3)

$ 203

$(140)

$(10)

$ 1

$—

$—

—

—
—

$—

$—

—

—
—

$—

$—

Hedges of Net Investments in Foreign Operations
The Company uses foreign exchange contracts, which may include foreign currency swaps, forwards and options, to hedge portions of its
net investments in foreign operations against adverse movements in exchange rates. The Company measures ineffectiveness on these
contracts based upon the change in forward rates. In addition, the Company may also use non-derivative financial
instruments to hedge
portions of its net investments in foreign operations against adverse movements in exchange rates. The Company measures ineffectiveness
on non-derivative financial

instruments based upon the change in spot rates.

When net investments in foreign operations are sold or substantially liquidated, the amounts in accumulated other comprehensive income
(loss) are reclassified to the consolidated statements of operations, while a pro rata portion will be reclassified upon partial sale of the net
investments in foreign operations.

The following table presents the effects of derivatives and non-derivative financial instruments in net investment hedging relationships in
the consolidated statements of operations and the consolidated statements of equity for the years ended December 31, 2010, 2009 and
2008:

Derivatives and Non-Derivative Hedging Instruments in Net
Investment Hedging Relationships (1), (2)

Amount of Gains (Losses)
Deferred in Accumulated
Other Comprehensive
Income (Loss)
(Effective Portion)

Amount and Location
of Gains (Losses)
Reclassified From
Accumulated Other
Comprehensive
Income
(Loss) into Income
(Loss)
(Effective Portion)
Net Investment Gains
(Losses)

Years Ended December 31,

2010

2009

2008
(In millions)

2010

Years Ended
December 31,

2009

2008

Foreign currency forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(167)

$(244)

$338

$— $ (59)

$—

Foreign currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-derivative hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
(16)

(18)
(37)

76
81

—
—

(63) —
(11) —

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(183)

$(299)

$495

$— $(133)

$—

MetLife, Inc.

F-65

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) During the years ended December 31, 2010 and 2008, there were no sales or substantial

liquidations of net investments in foreign
operations that would have required the reclassification of gains or losses from accumulated other comprehensive income (loss) into
earnings. During the year ended December 31, 2009, the Company substantially liquidated, through assumption reinsurance (see
Note 2), the portion of its Canadian operations that was being hedged in a net investment hedging relationship. As a result, the Company
reclassified losses of $133 million from accumulated other comprehensive income (loss) into earnings.

(2) There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations.

At December 31, 2010 and 2009, the cumulative foreign currency translation gain (loss) recorded in accumulated other comprehensive

income (loss) related to hedges of net investments in foreign operations was ($223) million and ($40) million, respectively.

Non-Qualifying Derivatives and Derivatives for Purposes Other Than Hedging
The Company enters into the following derivatives that do not qualify for hedge accounting or for purposes other than hedging: (i) interest
rate swaps, implied volatility swaps, caps and floors and interest rate futures to economically hedge its exposure to interest rates; (ii) foreign
currency forwards, swaps, option contracts, and future contracts to economically hedge its exposure to adverse movements in exchange
rates; (iii) credit default swaps to economically hedge exposure to adverse movements in credit; (iv) equity futures, equity index options,
interest rate futures, TRRs and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products;
(v) swap spreadlocks to economically hedge invested assets against the risk of changes in credit spreads; (vi) interest rate forwards to buy
and sell securities to economically hedge its exposure to interest rates; (vii) credit default swaps and TRRs to synthetically create
investments; (viii) basis swaps to better match the cash flows of assets and related liabilities; (ix) credit default swaps held in relation to
trading portfolios; (x) swaptions to hedge interest rate risk; (xi) inflation swaps to reduce risk generated from inflation-indexed liabilities;
interest rate lock commitments; (xiv) synthetic GICs; and (xv) equity options to
(xii) covered call options for income generation; (xiii)
economically hedge certain invested assets against adverse changes in equity indices.

The following tables present the amount and location of gains (losses) recognized in income for derivatives that were not designated or

qualifying as hedging instruments:

Net
Derivative
Gains (Losses)

Net
Investment
Income(1)

Policyholder
Benefits
and Claims(2)

(In millions)

Other
Revenues(3)

Other
Expenses(4)

For the Year Ended December 31, 2010:

Interest rate swaps . . . . . . . . . . . . . . . . . . . .

$

622

$

Interest rate floors . . . . . . . . . . . . . . . . . . . . .
Interest rate caps . . . . . . . . . . . . . . . . . . . . .

Interest rate futures . . . . . . . . . . . . . . . . . . . .

Equity futures . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency swaps . . . . . . . . . . . . . . . . .

Foreign currency forwards . . . . . . . . . . . . . . . .

Currency futures . . . . . . . . . . . . . . . . . . . . . .
Currency options . . . . . . . . . . . . . . . . . . . . . .

Equity options . . . . . . . . . . . . . . . . . . . . . . . .

Interest rate options . . . . . . . . . . . . . . . . . . . .
Interest rate forwards . . . . . . . . . . . . . . . . . . .

Variance swaps . . . . . . . . . . . . . . . . . . . . . . .

Credit default swaps . . . . . . . . . . . . . . . . . . .
Total rate of return swaps . . . . . . . . . . . . . . . .

144
(185)

77

(58)
52

250

(23)
(83)

(683)

25
8

(55)

34
14

4

—
—

(4)

(25)
—

55

—
(1)

(16)

—
—

—

(2)
—

$ 39

$ 172

$—

—
—

—

(314)
—

—

—
—

—

—
—

—

—
—

—
—

(3)

—
—

—

—
—

—

(6)
(74)

—

—
—

—
—

—

—
—

—

—
(4)

—

—
—

—

—
—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

139

$ 11

$(275)

$ 89

$ (4)

For the Year Ended December 31, 2009:

Interest rate swaps . . . . . . . . . . . . . . . . . . . .
Interest rate floors . . . . . . . . . . . . . . . . . . . . .

$(1,700)
(907)

$

Interest rate caps . . . . . . . . . . . . . . . . . . . . .

Interest rate futures . . . . . . . . . . . . . . . . . . . .
Equity futures . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency swaps . . . . . . . . . . . . . . . . .

Foreign currency forwards . . . . . . . . . . . . . . . .
Currency options . . . . . . . . . . . . . . . . . . . . . .

33

(366)
(681)

(405)

(102)
(36)

Equity options . . . . . . . . . . . . . . . . . . . . . . . .

(1,713)

Interest rate options . . . . . . . . . . . . . . . . . . . .
Interest rate forwards . . . . . . . . . . . . . . . . . . .

(379)
(7)

(5)
—

—

2
(38)

—

(24)
(1)

(68)

—
—

$ (13)
—

—

—
(363)

—

—
—

—

—
—

$(161)
—

—

—
—

—

—
—

—

—
(4)

$—
—

—

—
—

—

—
(3)

—

—
—

F-66

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Net
Derivative
Gains (Losses)

Net
Investment
Income(1)

Policyholder
Benefits
and Claims(2)

(In millions)

Other
Revenues(3)

Other
Expenses(4)

Variance swaps . . . . . . . . . . . . . . . . . . . . . . .

Swap spreadlocks . . . . . . . . . . . . . . . . . . . . .
Credit default swaps . . . . . . . . . . . . . . . . . . .

Total rate of return swaps . . . . . . . . . . . . . . .

(276)

(38)
(243)

63

(13)

—
(11)

—

—

—
—

—

—

—
—

—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(6,757)

$(158)

For the Year Ended December 31, 2008 . . . .

$ 6,688

$ 240

$(376)

$ 331

$(165)

$ 146

—

—
—

—

$ (3)

$—

(1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures, and changes in estimated fair

value related to derivatives held in relation to trading portfolios.

(2) Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.
(3) Changes in estimated fair value related to derivatives held in connection with the Company’s mortgage banking activities.
(4) Changes in estimated fair value related to economic hedges of foreign currency exposure associated with the Company’s international

subsidiaries.

Credit Derivatives
In connection with synthetically created investment transactions and credit default swaps held in relation to the trading portfolio, the
Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the non-
qualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, generally the
contract will require the Company to pay 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
$5,089 million and $3,101 million at December 31, 2010 and 2009, respectively. The Company can terminate these contracts at any time
through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At December 31,
2010 and 2009, the Company would have received $62 million and $53 million, respectively, to terminate all of these contracts.

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of

written credit default swaps at December 31, 2010 and 2009:

Estimated
Fair
Value of Credit
Default
Swaps

2010

Maximum
Amount
of Future
Payments under
Credit Default
Swaps(2)

December 31,

Weighted
Average
Years to
Maturity(3)

Estimated
Fair Value
of Credit
Default
Swaps

(In millions)

2009

Maximum
Amount of
Future
Payments under
Credit Default
Swaps(2)

Weighted
Average
Years to
Maturity(3)

Rating Agency Designation of Referenced
Credit Obligations (1)

Aaa/Aa/A

Single name credit default swaps (corporate)
. . .
Credit default swaps referencing indices . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . .

Baa
Single name credit default swaps (corporate)

. . .

Credit default swaps referencing indices . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ba

Single name credit default swaps (corporate)

. . .

Credit default swaps referencing indices . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . .

B
Single name credit default swaps (corporate)

. . .

Credit default swaps referencing indices . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5
45

50

5

7

12

—

—

—

—

—

—

$ 470
2,928

3,398

735

931

1,666

25

—

25

—

—

—

3.8
3.7

3.7

4.3

5.0

4.7

4.4

—

4.4

—

—

—

4.1

$ 5
46

51

2

—

2

—

—

—

—

—

—

$ 175
2,676

2,851

195

10

205

25

—

25

—

20

20

$53

$3,101

4.3
3.4

3.5

4.8

5.0

4.8

5.0

—

5.0

—

5.0

5.0

3.6

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$62

$5,089

(1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. If no

rating is available from a rating agency, then an internally developed rating is used.

MetLife, Inc.

F-67

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(2) Assumes the value of the referenced credit obligations is zero.
(3) The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the
table above. As a result, the maximum amounts of potential future recoveries available to offset the $5,089 million and $3,101 million from the
table above were $120 million and $31 million at December 31, 2010 and 2009, respectively.

Credit Risk on Freestanding Derivatives
The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial
instruments. Generally, the current credit exposure of the Company’s derivative contracts is limited to the net positive estimated fair value
of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received
pursuant to credit support annexes.

The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counter-
parties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by
one counterparty to another at each due date and upon termination. Because exchange-traded futures are effected through regulated
exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of
nonperformance by counterparties to such derivative instruments. See Note 5 for a description of the impact of credit risk on the valuation of
derivative instruments.

The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with
its derivative instruments. At December 31, 2010 and 2009, the Company was obligated to return cash collateral under its control of
$2,625 million and $2,680 million, respectively. This unrestricted cash collateral
is included in cash and cash equivalents or in short-term
investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the
consolidated balance sheets. At December 31, 2010 and 2009, the Company had also accepted collateral consisting of various securities
with a fair market value of $984 million and $221 million, respectively, which were held in separate custodial accounts. The Company is
permitted by contract to sell or repledge this collateral, but at December 31, 2010, none of the collateral had been sold or repledged.

The Company’s collateral arrangements for its over-the-counter derivatives generally require the counterparty in a net liability position,
after considering the effect of netting agreements, to pledge collateral when the fair value of that counterparty’s derivatives reaches a pre-
determined threshold. Certain of
these
thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of the Company and/or the
counterparty. In addition, certain of the Company’s netting agreements for derivative instruments contain provisions that require the Company
to maintain a specific investment grade credit rating from at least one of the major credit rating agencies. If the Company’s credit ratings were
to fall below that specific investment grade credit rating, it would be in violation of these provisions, and the counterparties to the derivative
instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments
that are in a net liability position after considering the effect of netting agreements.

these arrangements also include credit-contingent provisions that provide for a reduction of

The following table presents the estimated fair value of the Company’s over-the-counter derivatives that are in a net liability position after
considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The
table also presents the incremental collateral that the Company would be required to provide if there was a one notch downgrade in the
Company’s credit rating at the reporting date or if the Company’s credit rating sustained a downgrade to a level that triggered full overnight
collateralization or termination of the derivative position at the reporting date. Derivatives that are not subject to collateral agreements are not
included in the scope of this table.

Estimated
Fair Value(1) of
Derivatives in Net
Liability Position

Estimated
Fair Value of
Collateral
Provided:

Fair Value of Incremental Collateral
Provided Upon:

One Notch
Downgrade
in the
Company’s
Credit
Rating

Downgrade in the
Company’s Credit Rating
to a Level that Triggers
Full Overnight
Collateralization or
Termination
of the Derivative Position

Fixed Maturity
Securities(2)

Cash(3)

December 31, 2010:
Derivatives subject to credit-contingent provisions . . .

Derivatives not subject to credit-contingent

$1,167

$1,024

provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,189

$1,024

December 31, 2009:

Derivatives subject to credit-contingent provisions . . .

$1,163

$1,017

Derivatives not subject to credit-contingent

provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48

42

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,211

$1,059

(In millions)

$ —

43

$43

$ —

—

$ —

$99

—

$99

$90

—

$90

$231

—

$231

$218

—

$218

(1) After taking into consideration the existence of netting agreements.
(2)

Included in fixed maturity securities in the consolidated balance sheets. The counterparties are permitted by contract to sell or repledge
this collateral.

F-68

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(3)

Included in premiums, reinsurance and other receivables in the consolidated balance sheets.
Without considering the effect of netting agreements, the estimated fair value of the Company’s over-the-counter derivatives with credit-
contingent provisions that were in a gross liability position at December 31, 2010 was $1,742 million. At December 31, 2010, the Company
provided securities collateral of $1,024 million in connection with these derivatives. In the unlikely event that both: (i) the Company’s credit
rating was downgraded to a level that triggers full overnight collateralization or termination of all derivative positions; and (ii) the Company’s
netting agreements were deemed to be legally unenforceable, then the additional collateral that the Company would be required to provide to
its counterparties in connection with its derivatives in a gross liability position at December 31, 2010 would be $718 million. This amount does
not consider gross derivative assets of $575 million for which the Company has the contractual right of offset.

The Company also has exchange-traded futures and options, which require the pledging of collateral. At December 31, 2010 and 2009,
the Company pledged securities collateral for exchange-traded futures and options of $40 million and $50 million, respectively, which is
included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. At December 31, 2010
and 2009, the Company provided cash collateral for exchange-traded futures and options of $662 million and $562 million, respectively,
which is included in premiums, reinsurance and other receivables.

Embedded Derivatives
The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as
derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and
certain GMIBs; ceded reinsurance contracts of guaranteed minimum benefits related to GMABs and certain GMIBs; and funding agreements
with equity or bond indexed crediting rates.

The following table presents the estimated fair value of the Company’s embedded derivatives at:

December 31,

2010

2009

(In millions)

Net embedded derivatives within asset host contracts:

Ceded guaranteed minimum benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 185
(57)
Options embedded in debt or equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net embedded derivatives within asset host contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128

$

$

76
(37)

39

Net embedded derivatives within liability host contracts:

Direct guaranteed minimum benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,556

$1,500

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78

5

Net embedded derivatives within liability host contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,634

$1,505

The following table presents changes in estimated fair value related to embedded derivatives:

Years Ended December 31,

2010

2009

2008

(In millions)

Net derivative gains (losses)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(387)
8
Policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

$1,758
$ (114)

$(2,650)
182
$

(1) The valuation of guaranteed minimum benefits includes an adjustment for nonperformance risk. Included in net derivative gains (losses),
($96) million, ($1,932) million and $2,994 million for the years ended
in connection with this adjustment, were gains (losses) of
December 31, 2010, 2009 and 2008, respectively. Net derivative gains (losses) for the year ended December 31, 2010 included a
loss of $955 million relating to a refinement for estimating nonperformance risk in fair value measurements implemented at June 30, 2010.
See Note 5.

MetLife, Inc.

F-69

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

5. Fair Value

Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions

or valuation methodologies may have a material effect on the estimated fair value amounts.

Assets and Liabilities Measured at Fair Value

Recurring Fair Value Measurements
The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected
the FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are
summarized as follows:

December 31, 2010

Fair Value Measurements at Reporting Date Using

Quoted Prices in
Active Markets for
Identical Assets
and Liabilities
(Level 1)

Significant Other
Observable Inputs
(Level 2)

(In millions)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Assets
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury, agency and government guaranteed securities . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . . . . . . . . . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . .

$

—
—
274
149
14,602
—
—
—
—

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . .

15,025

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trading and other securities:

Actively Traded Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FVO general account securities . . . . . . . . . . . . . . . . . . . . . . . .
FVO contractholder-directed unit-linked investments . . . . . . . . . . .
FVO securities held by consolidated securitization entities . . . . . . .

Total trading and other securities . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term investments(1)

Mortgage loans:
Mortgage loans held by consolidated securitization entities . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale(2)

Total mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MSRs(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets — investment funds . . . . . . . . . . . . . . . . . . .
Derivative assets:(4)

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity market contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

832
—

832

—
—
6,270
—

6,270
3,026

—
—

—
—
373

131
2
—
23

$ 85,419
62,401
43,037
40,092
18,623
19,664
10,142
10,083
3

289,464

1,094
507

1,601

453
54
10,789
201

11,497
4,681

6,840
2,486

9,326
—
121

3,583
1,711
125
1,757

$ 7,149
5,777
1,422
3,159
79
1,011
4,148
46
4

$ 92,568
68,178
44,733
43,400
33,304
20,675
14,290
10,129
7

22,795

327,284

268
905

1,173

10
77
735
—

822
858

—
24

24
950
—

39
74
50
282

2,194
1,412

3,606

463
131
17,794
201

18,589
8,565

6,840
2,510

9,350
950
494

3,753
1,787
175
2,062

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net embedded derivatives within asset host contracts(5)
Separate account assets(6)

156
—
25,660

7,176
—
155,589

445
185
2,088

7,777
185
183,337

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$51,342

$479,455

$29,340

$560,137

F-70

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Fair Value Measurements at Reporting Date Using

December 31, 2010

Quoted Prices in
Active Markets for
Identical Assets
and Liabilities
(Level 1)

Significant Other
Observable Inputs
(Level 2)

(In millions)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Liabilities
Derivative liabilities:(4)

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity market contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net embedded derivatives within liability host contracts(5) . . . . . . . . .
Long-term debt of consolidated securitization entities . . . . . . . . . . . .
Trading liabilities(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

35
—
—
10

45
—
—
46

91

$

1,598
1,372
101
1,174

4,245
11
6,636
—

$

125
1
6
140

272
2,623
184
—

$

1,758
1,373
107
1,324

4,562
2,634
6,820
46

$ 10,892

$ 3,079

$ 14,062

See “— Variable Interest Entities” in Note 3 for discussion of CSEs included in the table above.

December 31, 2009

Fair Value Measurements at Reporting Date Using

Quoted Prices in
Active Markets for
Identical Assets
and Liabilities
(Level 1)

Significant Other
Observable Inputs
(Level 2)

(In millions)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Assets
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury, agency and government guaranteed securities . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . . . . . . . . . . . . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

—
—
—
306
10,951
—
—
—
—

$ 65,493
32,738
42,180
11,240
14,459
15,483
10,450
7,139
13

$ 6,694
5,292
1,840
401
37
139
2,712
69
6

$ 72,187
38,030
44,020
11,947
25,447
15,622
13,162
7,208
19

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,257

199,195

17,190

227,642

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trading and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MSRs(3)
Derivative assets(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net embedded derivatives within asset host contracts(5) . . . . . . . . . . . . .
Separate account assets(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

490
—

490

1,886
5,650
—
—
103
—
17,601

995
359

1,354

415
2,500
2,445
—
5,600
—
129,545

136
1,104

1,240

83
23
25
878
430
76
1,895

1,621
1,463

3,084

2,384
8,173
2,470
878
6,133
76
149,041

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$36,987

$341,054

$21,840

$399,881

Liabilities
Derivative liabilities(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net embedded derivatives within liability host contracts(5)
. . . . . . . . . . . .
Trading liabilities(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

51
—
106

157

$

3,990
(26)
—

$

74
1,531
—

$

4,115
1,505
106

$

3,964

$ 1,605

$

5,726

MetLife, Inc.

F-71

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because
certain short-term investments are not measured at estimated fair value (e.g., time deposits, etc.), and therefore are excluded from the
tables presented above.

(2) Mortgage loans held-for-sale as presented in the tables above differ from the amount presented in the consolidated balance sheets as

these tables only include residential mortgage loans held-for-sale measured at estimated fair value on a recurring basis.

(3) MSRs are presented within other invested assets in the consolidated balance sheets.
(4) Derivative assets are presented within other invested assets in the consolidated balance sheets and derivative liabilities are presented
within other liabilities in the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation
in the consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant
Unobservable Inputs (Level 3) tables which follow. At December 31, 2010 and 2009, certain non-derivative hedging instruments of
$185 million and $0, respectively, which are carried at amortized cost, are included with the liabilities total in Note 4 but excluded from
derivative liabilities in the tables above as they are not derivative instruments.

(5) Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables in the
consolidated balance sheets. Net embedded derivatives within liability host contracts are presented primarily within policyholder
account balances in the consolidated balance sheets. At December 31, 2010, fixed maturity securities and equity securities also
included embedded derivatives of $5 million and ($62) million, respectively. At December 31, 2009, fixed maturity securities and equity
securities included embedded derivatives of $0 and ($37) million, respectively.

(6) Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset
by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account
liabilities are set equal to the estimated fair value of separate account assets.

(7) Trading liabilities are presented within other liabilities in the consolidated balance sheets.

The methods and assumptions used to estimate the fair value of financial
Fixed Maturity Securities, Equity Securities, Trading and Other Securities and Short-term Investments
When available, the estimated fair value of the Company’s fixed maturity, equity and trading and other securities are based on quoted
prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and
valuation of these securities does not involve management judgment.

instruments are summarized as follows:

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation
methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other
similar techniques. The inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit
standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity and
management’s assumptions regarding estimated duration, liquidity and estimated future cash flows. Accordingly, the estimated fair values
are based on available market information and management’s judgments about financial

instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price
transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such
observable inputs include benchmarking prices for similar assets in active markets, quoted prices in markets that are not active and
observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain
types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated
fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These
unobservable inputs can be based in large part on management judgment or estimation and cannot be supported by reference to market
activity. Even though unobservable, these inputs are assumed to be consistent with what other market participants would use when pricing
such securities and are considered appropriate given the circumstances.

The estimated fair value of FVO securities held by CSEs is determined on a basis consistent with the methodologies described herein for
fixed maturity securities and equity securities. As discussed in Note 1, the Company adopted new guidance effective January 1, 2010 and
consolidated certain securitization entities that hold securities that have been accounted for under the FVO and classified within trading and
other securities.

The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company’s

securities holdings.

Mortgage Loans
Mortgage loans presented in the tables above consist of commercial mortgage loans held by CSEs and residential mortgage loans
held-for-sale for which the Company has elected the FVO and which are carried at estimated fair value. As discussed in Note 1, the Company
adopted new guidance effective January 1, 2010 and consolidated certain securitization entities that hold commercial mortgage loans. See
“— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for
a discussion of the methods and assumptions used to estimate the fair value of these financial

instruments.

MSRs
Although MSRs are not financial

instruments, the Company has included them in the preceding table as a result of its election to carry
MSRs at estimated fair value. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes
of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Other Invested Assets — Investment Funds
The estimated fair value of these investment funds is determined on a basis consistent with the methodologies described herein for trading

and other securities.

Derivatives
The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives and interest
rate forwards to sell certain to be announced securities, or through the use of pricing models for over-the-counter derivatives. The
determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and
inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations
can be affected by changes in interest rates, foreign currency exchange rates, financial
indices, credit spreads, default risk (including the
counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be
derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates,
foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on
inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated
by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation
assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit
curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation.
Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and are assumed to be
consistent with what other market participants would use when pricing such instruments.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter
derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting
agreements and collateral arrangements. The Company values its derivative positions using the standard swap curve which includes a
spread to the risk free rate. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with the standard
swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit
risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in
part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The
evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed
more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material
effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

Embedded Derivatives Within Asset and Liability Host Contracts
Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees and equity or bond indexed
crediting rates within certain funding agreements. Embedded derivatives are recorded in the consolidated financial statements at estimated
fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefit guarantees. GMWBs, GMABs and certain GMIBs
are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in
estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances
in the consolidated balance sheets.

The fair value of these guarantees is estimated using the present value of future benefits minus the present value of future fees using
actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation
methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable
risk free rates, currency exchange rates and observable and estimated implied volatilities.

The valuation of these guarantee liabilities includes adjustments for nonperformance risk and for a risk margin related to non-capital market
inputs. Both of these adjustments are captured as components of the spread which, when combined with the risk free rate, is used to
discount the cash flows of the liability for purposes of determining its fair value.

The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the
secondary market for the Holding Company’s debt, including related credit default swaps. These observable spreads are then adjusted, as
necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to the Holding
Company.

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a
market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium
persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment,
including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than
expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices,
market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding
policyholder behavior, mortality and risk margins related to non-capital market inputs may result in significant fluctuations in the estimated fair
value of the guarantees that could materially affect net income.

The Company ceded the risk associated with certain of the GMIB and GMAB described above. These reinsurance contracts contain
embedded derivatives which are included in premiums, reinsurance and other receivables in the consolidated balance sheets with changes
in estimated fair value reported in net derivative gains (losses) or policyholder benefits and claims depending on the statement of operations

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

classification of the direct risk. The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with
that described previously for the guarantees directly written by the Company.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk
(commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that
aggregated and evaluated data, including historical recovery rates of insurance companies, as well as policyholder behavior observed over
the past two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the way in
which its insurance subsidiaries incorporate expected recovery rates into the nonperformance risk adjustment for purposes of estimating the
fair value of investment-type contracts and embedded derivatives within insurance contracts. The Company recognized a loss of $577 mil-
lion, net of DAC and income tax, relating to implementing the refinement at June 30, 2010. The refinement reduced both basic and diluted net
income available to MetLife, Inc.’s common shareholders per common share by $0.65 for the year ended December 31, 2010.

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on
the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability.
The estimated fair value of the underlying assets is determined as described above in “— Fixed Maturity Securities, Equity Securities, Trading
and Other Securities and Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds
withheld hosts, in other liabilities in the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains
(losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the
estimated fair value of these embedded derivatives that could materially affect net income.

The estimated fair value of the embedded equity and bond indexed derivatives contained in certain funding agreements is determined
using market standard swap valuation models and observable market inputs, including an adjustment for nonperformance risk. The estimated
fair value of these embedded derivatives are included, along with their funding agreements host, within policyholder account balances with
changes in estimated fair value recorded in net derivative gains (losses). Changes in equity and bond indices, interest rates and the
Company’s credit standing may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially
affect net income.

Separate Account Assets
Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheets. The
estimated fair value of separate account assets is based on the estimated fair value of the underlying assets owned by the separate account.
Assets within the Company’s separate accounts include: mutual
funds, fixed maturity securities, equity securities, mortgage loans,
derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. See “— Valuation
Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion
of the methods and assumptions used to estimate the fair value of these financial

instruments.

Long-term Debt of CSEs
The Company has elected the FVO for the long-term debt of CSEs, which are carried at estimated fair value. See “— Valuation Techniques
and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the
methods and assumptions used to estimate the fair value of these financial

instruments.

Trading Liabilities
Trading liabilities are recorded at estimated fair value with subsequent changes in estimated fair value recognized in net investment
income. The estimated fair value of trading liabilities is determined on a basis consistent with the methodologies described in “— Fixed
Maturity Securities, Equity Securities and Trading and Other Securities.”

Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and
Liabilities

A description of the significant valuation techniques and inputs to the determination of estimated fair value for the more significant asset

and liability classes measured at fair value on a recurring basis is as follows:

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The
use of quoted prices for identical assets and matrix pricing or other similar techniques are examples of market approaches, while the use of
discounted cash flow methodologies is an example of the income approach. The Company attempts to maximize the use of observable inputs
and minimize the use of unobservable inputs in selecting whether the market or income approach is used.

While certain investments have been classified as Level 1 from the use of unadjusted quoted prices for identical investments supported by
high volumes of trading activity and narrow bid/ask spreads, most investments have been classified as Level 2 because the significant inputs
used to measure the fair value on a recurring basis of the same or similar investment are market observable or can be corroborated using
market observable information for the full term of the investment. Level 3 investments include those where estimated fair values are based on
significant unobservable inputs that are supported by little or no market activity and may reflect our own assumptions about what factors
market participants would use in pricing these investments.

Level 1 Measurements:

Fixed Maturity Securities, Equity Securities, Trading and Other Securities and Short-term Investments
These securities are comprised of U.S. Treasury, agency and government guaranteed fixed maturity securities, foreign government
securities, RMBS — principally to-be-announced securities, exchange traded common stock, exchange traded mutual
fund interests
included in equity securities, exchange traded registered mutual fund interests included in trading and other securities and short-term money
market securities, including U.S. Treasury bills. Valuation of these securities is based on unadjusted quoted prices in active markets that are
readily and

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

regularly available. Contractholder-directed unit-linked investments reported within trading and other securities include certain registered
mutual fund interests priced using daily NAV provided by the fund managers.

Derivative Assets and Derivative Liabilities
These assets and liabilities are comprised of exchange-traded derivatives, as well as interest rate forwards to sell certain to be announced
securities. Valuation of these assets and liabilities is based on unadjusted quoted prices in active markets that are readily and regularly
available.

Separate Account Assets
These assets are comprised of securities that are similar in nature to the fixed maturity securities, equity securities and short-term
investments referred to above; and certain exchange-traded derivatives, including financial futures and owned options. Valuation is based on
unadjusted quoted prices in active markets that are readily and regularly available.

Level 2 Measurements:

Fixed Maturity Securities, Equity Securities, Trading and Other Securities and Short-term Investments
This level

includes fixed maturity securities and equity securities priced principally by independent pricing services using observable
inputs. Trading and other securities and short-term investments within this level are of a similar nature and class to the Level 2 securities
described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also
similar to those described below. Contractholder-directed unit-linked investments reported within trading and other securities include certain
mutual fund interests without readily determinable fair values given prices are not published publicly. Valuation of these mutual funds is based
upon quoted prices or reported NAV provided by the fund managers, which were based on observable inputs.

These securities are principally valued using the market and income approaches.
U.S. corporate and foreign corporate securities.
Valuation is based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use
standard market observable inputs such as a benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration,
and trades of identical or comparable securities. Investment grade privately placed securities are valued using a discounted cash flow
methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including
market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that
incorporate the credit quality and industry sector of the issuer. This level also includes certain below investment grade privately placed
fixed maturity securities priced by independent pricing services that use observable inputs.
Structured securities comprised of RMBS, CMBS and ABS.
These securities are principally valued using the market approach.
Valuation is based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively
traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity,
rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage
ratios and issuance-specific information including, but not limited to: collateral type, payment terms of the underlying assets, payment
priority within the tranche, structure of the security, deal performance and vintage of loans.
These securities are principally valued using the market approach.
U.S. Treasury, agency and government guaranteed securities.
Valuation is based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques using
standard market observable inputs such as benchmark U.S. Treasury yield curve, the spread off the U.S. Treasury curve for the identical
security and comparable securities that are actively traded.
Foreign government and state and political subdivision securities.
These securities are principally valued using the market approach.
Valuation is based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark
U.S. Treasury or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including
those within the same sub-sector or with a similar maturity or credit rating.
Common and non-redeemable preferred stock.
These securities are principally valued using the market approach where market
quotes are available but are not considered actively traded. Valuation is based principally on observable inputs including quoted prices in
markets that are not considered active.

Mortgage Loans Held by CSEs
These commercial mortgage loans are principally valued using the market approach. The principal market for these commercial
loan
portfolios is the securitization market. The Company uses the quoted securitization market price of the obligations of the CSEs to determine
the estimated fair value of these commercial loan portfolios. These market prices are determined principally by independent pricing services
using observable inputs.

Mortgage Loans Held-For-Sale
Residential mortgage loans held-for-sale are principally valued using the market approach and valued primarily using readily available
observable pricing for similar loans or securities backed by similar loans. The unobservable adjustments to such prices are insignificant.

Derivative Assets and Derivative Liabilities
This level

includes all types of derivative instruments utilized by the Company with the exception of exchange-traded derivatives and
interest rate forwards to sell certain to be announced securities included within Level 1 and those derivative instruments with unobservable
inputs as described in Level 3. These derivatives are principally valued using an income approach.

Interest rate contracts.
Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield

curve, LIBOR basis curves, and repurchase rates.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve,

LIBOR basis curves, and interest rate volatility.

Foreign currency contracts.
Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield

curve, LIBOR basis curves, currency spot rates, and cross currency basis curves.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve,

LIBOR basis curves, currency spot rates, cross currency basis curves, and currency volatility.

Credit contracts.
Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield

curve, credit curves, and recovery rates.

Equity market contracts.
Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield

curve, spot equity index levels, and dividend yield curves.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve,

spot equity index levels, dividend yield curves, and equity volatility.

Embedded Derivatives Contained in Certain Funding Agreements
These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize

significant inputs that may include the swap yield curve and the spot equity and bond index level.

Separate Account Assets
These assets are comprised of investments that are similar in nature to the fixed maturity securities, equity securities, short-term
investments and derivatives referred to above. Also included are certain mutual funds and hedge funds without readily determinable fair
values given prices are not published publicly. Valuation of the mutual funds and hedge funds is based upon quoted prices or reported NAV
provided by the fund managers.

Long-term Debt of CSEs
The estimated fair value of the long-term debt of the Company’s CSEs is based on quoted prices when traded as assets in active markets
or, if not available, based on market standard valuation methodologies, consistent with the Company’s methods and assumptions used to
estimate the fair value of comparable fixed maturity securities.

Level 3 Measurements:

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described above. However, if
key inputs are unobservable, or if the investments are less liquid and there is very limited trading activity, the investments are generally
classified as Level 3. The use of independent non-binding broker quotations to value investments generally indicates there is a lack of liquidity
or the general lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in
Level 3.

Fixed Maturity Securities, Equity Securities, Trading and Other Securities and Short-term Investments
This level includes fixed maturity securities and equity securities priced principally by independent broker quotations or market standard
valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable
market data. Trading and other securities and short-term investments within this level are of a similar nature and class to the Level 3 securities
described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also
similar to those described below.

U.S. corporate and foreign corporate securities.
These securities, including financial services industry hybrid securities classified
within fixed maturity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix
pricing or other similar techniques that utilize unobservable inputs or cannot be derived principally from, or corroborated by, observable
market data, including illiquidity premiums and spread adjustments to reflect industry trends or specific credit-related issues. Valuations
may be based on independent non-binding broker quotations. Generally, below investment grade privately placed or distressed
securities included in this level are valued using discounted cash flow methodologies which rely upon significant, unobservable inputs
and inputs that cannot be derived principally from, or corroborated by, observable market data.
These securities are principally valued using the market approach.
Structured securities comprised of RMBS, CMBS and ABS.
Valuation is based primarily on matrix pricing or other similar techniques that utilize inputs that are unobservable or cannot be derived
principally from, or corroborated by, observable market data, or are based on independent non-binding broker quotations. Below
investment grade securities and ABS supported by sub-prime mortgage loans included in this level are valued based on inputs including
quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in
Level 2, and certain of these securities are valued based on independent non-binding broker quotations.
Foreign government and state and political subdivision securities.
These securities are principally valued using the market approach.
Valuation is based primarily on matrix pricing or other similar techniques, however these securities are less liquid and certain of the inputs
are based on very limited trading activity.
Common and non-redeemable preferred stock.
These securities, including privately held securities and financial services industry
hybrid securities classified within equity securities, are principally valued using the market and income approaches. Valuations are based
primarily on matrix pricing or other similar techniques using inputs such as comparable credit rating and issuance structure. Equity
securities valuations determined with discounted cash flow methodologies use inputs such as earnings multiples based on comparable

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

public companies, and industry-specific non-earnings based multiples. Certain of these securities are valued based on independent
non-binding broker quotations.

Mortgage Loans
Mortgage loans include residential mortgage loans held-for-sale for which pricing for similar loans or securities backed by similar loans is

not observable and the estimated fair value is determined using unobservable independent broker quotations or valuation models.

MSRs
MSRs, which are valued using an income approach, are carried at estimated fair value and have multiple significant unobservable inputs
including assumptions regarding estimates of discount rates, loan prepayments and servicing costs. Sales of MSRs tend to occur in private
transactions where the precise terms and conditions of the sales are typically not readily available and observable market valuations are
limited. As such, the Company relies primarily on a discounted cash flow model to estimate the fair value of the MSRs. The model requires
inputs such as type of loan (fixed vs. variable and agency vs. other), age of loan, loan interest rates and current market interest rates that are
generally observable. The model also requires the use of unobservable inputs including assumptions regarding estimates of discount rates,
loan prepayments and servicing costs.

Derivative Assets and Derivative Liabilities
These derivatives are principally valued using an income approach. Valuations of non-option-based derivatives utilize present value
techniques, whereas valuations of option-based derivatives utilize option pricing models. These valuation methodologies generally use the
same inputs as described in the corresponding sections above for Level 2 measurements of derivatives. However, these derivatives result in
Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or
corroborated by, observable market data.

Interest rate contracts.
Non-option-based — Significant unobservable inputs may include pull

through rates on interest

rate lock commitments and the

extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR

basis curves, and interest rate volatility.

Foreign currency contracts.
Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve,
LIBOR basis curves and cross currency basis curves. Certain of these derivatives are valued based on independent non-binding broker
quotations.

Option-based — Significant unobservable inputs may include currency correlation and the extrapolation beyond observable limits of the

swap yield curve, LIBOR basis curves, cross currency basis curves and currency volatility.

Credit contracts.
Non-option-based — Significant unobservable inputs may include credit correlation, repurchase rates, and the extrapolation beyond
observable limits of the swap yield curve and credit curves. Certain of these derivatives are valued based on independent non-binding broker
quotations.

Equity market contracts.
Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.
Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and

equity volatility. Certain of these derivatives are valued based on independent non-binding broker quotations.

Guaranteed Minimum Benefit Guarantees
These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which
utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives
result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally
from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable
limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability
in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.

Reinsurance Ceded on Certain Guaranteed Minimum Benefit Guarantees
These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which
utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives
result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally
from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable
limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability
in policyholder behavior and mortality, counterparty credit spreads and cost of capital for purposes of calculating the risk margin.

Embedded Derivatives Within Funds Withheld Related to Certain Ceded Reinsurance
These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize
significant inputs that may include the swap yield curve and the fair value of assets within the reference portfolio. These embedded derivatives
result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally
from, or corroborated by, observable market data. Significant unobservable inputs generally include: the fair value of certain assets within the

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market
data.

Separate Account Assets
These assets are comprised of investments that are similar in nature to the fixed maturity securities, equity securities and derivatives
referred to above. Separate account assets within this level also include mortgage loans and other limited partnership interests. The
estimated fair value of mortgage loans is determined by discounting expected future cash flows, using current interest rates for similar loans
with similar credit risk. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the
partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of
the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

Long-term Debt of CSEs
The estimated fair value of the long-term debt of the Company’s CSEs are priced principally through independent broker quotations or
market standard valuation methodologies using inputs that are not market observable or cannot be derived from or corroborated by
observable market data.

Transfers between Levels 1 and 2:

During the year ended December 31, 2010, transfers between Levels 1 and 2 were not significant.

Transfers into or out of Level 3:

Overall, transfers into and/or out of Level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred
into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases
significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted
prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant
input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or
more significant input(s) becoming observable. Transfers into and/or out of any level are assumed to occur at the beginning of the period.
Significant transfers into and/or out of Level 3 assets and liabilities for the year ended December 31, 2010 are summarized below.

During the year ended December 31, 2010, fixed maturity securities transfers into Level 3 of $1,736 million and separate account assets
transfers into Level 3 of $46 million, resulted primarily from current market conditions characterized by a lack of trading activity, decreased
liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade). These current market conditions have
resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated
fair value principally for certain private placements included in U.S. and foreign corporate securities and certain CMBS.

During the year ended December 31, 2010, fixed maturity securities transfers out of Level 3 of $1,683 million and separate account assets
transfers out of Level 3 of $234 million, resulted primarily from increased transparency of both new issuances that subsequent to issuance
and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company
was able to corroborate pricing received from independent pricing services with observable inputs or increases in market activity and
upgraded credit ratings primarily for certain U.S. and foreign corporate securities, RMBS and ABS.

F-78

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs

is as follows:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/Unrealized
Gains (Losses) included in:

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements(3)

(In millions)

Transfer Into
Level 3 (4)

Transfer Out
of Level 3 (4)

Balance,
December 31,

Year Ended December 31, 2010:

Assets:

Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . $ 6,694

$

9

$ 277

$ (415)

$ 898

$ (314)

$ 7,149

Foreign corporate securities . . . . . . . . . . . . . . . . . . .

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign government securities . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,292

1,840

401

37

139

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,712

State and political subdivision securities . . . . . . . . . . .

Other fixed maturity securities . . . . . . . . . . . . . . . . . .

69

6

(19)

27

1

—

(5)

(53)

—

1

323

63

(93)

2

89

411

(2)

2

304

(303)

2,965

(6)

684

1,286

9

(5)

501

87

40

46

132

32

—

—

(624)

(292)

(155)

—

(28)

(240)

(30)

—

5,777

1,422

3,159

79

1,011

4,148

46

4

Total fixed maturity securities . . . . . . . . . . . . . . . . . $17,190

$ (39)

$1,072

$4,519

$1,736

$(1,683)

$22,795

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . $

136

Non-redeemable preferred stock . . . . . . . . . . . . . . . .

1,104

Total equity securities . . . . . . . . . . . . . . . . . . . . . $ 1,240

Trading and other securities:

Actively Traded Securities . . . . . . . . . . . . . . . . . . . . $

FVO general account securities . . . . . . . . . . . . . . . . .

FVO contractholder-directed unit-linked investments . . . .

Total trading and other securities . . . . . . . . . . . . . . $

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . $

Mortgage loans held-for-sale . . . . . . . . . . . . . . . . . . . $

32

51

—

83

23

25

MSRs(5), (6)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

878

Net derivatives:(7)

$

5

46

$ 51

$ —

8

(15)

$ (7)

$

2

$ (2)

$ (79)

$

$

7

12

19

$ 128

(250)

$ (122)

$

$

1

—

1

$

$

(9)

(7)

$

268

905

(16)

$ 1,173

$ —

$

(22)

$ —

$ —

—

—

(1)

750

$ —

$ 727

$

37

—

37

$

(9)

$ —

$ —

$ 842

$ —

$ 151

$ —

$

10

$ —

(18)

—

$

(18)

$ —

$

(9)

$ —

$

$

$

$

$

$

10

77

735

822

858

24

950

(86)

73

44

142

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . $

Foreign currency contracts . . . . . . . . . . . . . . . . . . .

Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . .

Equity market contracts . . . . . . . . . . . . . . . . . . . . .

7

108

42

199

$ 37

$ (107)

$

42

4

(88)

2

13

11

(23)

(57)

(15)

20

$ —

$ —

—

—

—

(22)

—

—

Total net derivatives . . . . . . . . . . . . . . . . . . . . . . $

356

$ (5)

$

(81)

$

(75)

$ —

$

(22)

$

173

Separate account assets(8)

. . . . . . . . . . . . . . . . . . . . $ 1,895

$139

$ —

$ 242

$

46

$ (234)

$ 2,088

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/Unrealized
(Gains) Losses included in:

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements(3)

(In millions)

Transfer Into
Level 3(4)

Transfer Out
of Level 3(4)

Balance,
December 31,

Year Ended December 31, 2010:

Liabilities:

Net embedded derivatives(9) . . . . . . . . . . . . . . . . . . . . $1,455

Long-term debt of consolidated securitization entities(10)

. . $ —

Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —

$335

$ (48)

$ —

$226

$ —

$ —

$422

$232

$ —

$—

$—

$—

$—

$—

$—

$2,438

$ 184

$ —

MetLife, Inc.

F-79

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/Unrealized
Gains (Losses) included in:

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements(3)

Transfer Into
and/or Out
of Level 3 (4)

Balance,
December 31,

(In millions)

Year Ended December 31, 2009:

Assets:

Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,498

Foreign corporate securities . . . . . . . . . . . . . . . . . . . . . . . . . .

5,944

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign government securities . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Treasury, agency and government guaranteed securities . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

595

408

88

260

$(429)

(330)

31

(40)

—

(36)

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,452

(121)

State and political subdivision securities . . . . . . . . . . . . . . . . . . .

Other fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . .

123

40

—

1

$ 939

1,517

105

54

(1)

53

578

7

—

$(1,358)

$

44

$ 6,694

(511)

1,199

6

(29)

(44)

(212)

(19)

(35)

(1,328)

(90)

(27)

(21)

(94)

15

(42)

—

5,292

1,840

401

37

139

2,712

69

6

Total fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . $17,408

$(924)

$3,252

$(1,003)

$(1,543)

$17,190

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

105

Non-redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . .

1,274

$

(2)

(357)

Total equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,379

$(359)

Trading and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Mortgage loans held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . $

MSRs(5), (6)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

175

100

177

191

Net derivatives(7)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,547

Separate account assets(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,758

$ 16

$ (21)

$

(3)

$ 172

$(273)

$(213)

$

6

486

$ 492

$ —

$ —

$ —

$ —

$

(11)

$ —

$

23

(254)

$ (231)

$

$

4

(45)

(41)

$

136

1,104

$ 1,240

$ (108)

$ —

$

$

$

$

$

(51)

2

515

97

485

$

(5)

$ (151)

$ —

$(2,004)

$

$

$

$

$

83

23

25

878

356

$ (135)

$ 1,895

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/Unrealized
(Gains) Losses included in:

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements(3)

Transfer Into
and/or Out
of Level 3(4)

Balance,
December 31,

(In millions)

Year Ended December 31, 2009:

Liabilities:

Net embedded derivatives(9)

. . . . . . . . . . . . . . . . . . . . . . . . . . . $2,929

$(1,602)

$(15)

$143

$—

$1,455

F-80

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance,
December 31, 2007

Impact of
Adoption(11)

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

(In millions)

Total Realized/Unrealized
Gains (Losses) included in:

Purchases,
Sales,
Issuances and
Settlements(3)

Transfer Into
and/or Out
of Level 3 (4)

Balance,
December 31,

Year Ended December 31, 2008:

Assets:

Fixed maturity securities:

U.S. corporate securities . . . . . . . . .

$ 8,368

$—

$ 8,368

$ (696)

Foreign corporate securities . . . . . . . .

RMBS . . . . . . . . . . . . . . . . . . . . .

Foreign government securities . . . . . .

U.S. Treasury, agency and government

guaranteed securities . . . . . . . . . .

CMBS . . . . . . . . . . . . . . . . . . . . .

7,228

1,423

785

80

539

ABS . . . . . . . . . . . . . . . . . . . . . .

4,490

State and political subdivision

securities . . . . . . . . . . . . . . . . .

Other fixed maturity securities . . . . . .

124

289

(8)

—

—

—

—

—

—

—

7,220

1,423

785

80

539

4,490

124

289

(12)

4

19

—

(72)

(125)

—

1

$(1,758)

(2,873)

(218)

(101)

(1)

(136)

(1,136)

(8)

(41)

$ 859

(57)

(204)

(295)

3

2

(740)

45

(209)

$ 725

1,666

(410)

—

6

(73)

(37)

(38)

—

$ 7,498

5,944

595

408

88

260

2,452

123

40

Total fixed maturity securities . . . . . .

$23,326

$ (8)

$23,318

$ (881)

$(6,272)

$(596)

$1,839

$17,408

Equity securities:

Common stock . . . . . . . . . . . . . . .

$

183

Non-redeemable preferred stock . . . . .

2,188

Total equity securities . . . . . . . . . .

$ 2,371

Trading and other securities . . . . . . . . .

Short-term investments . . . . . . . . . . . .

Mortgage loans held-for-sale . . . . . . . .

MSRs(5), (6)

. . . . . . . . . . . . . . . . . .

Net derivatives(7)

. . . . . . . . . . . . . . .

$

$

$

$

$

183

179

—

—

789

Separate account assets(8)

. . . . . . . . .

$ 1,464

$—

—

$—

$ 8

$—

$—

$—

$ (1)

$—

$

183

$

(2)

$

(12)

2,188

(195)

(466)

$ 2,371

$ (197)

$ (478)

$

$

$

$

$

191

179

—

—

788

$ 1,464

$

(26)

$ —

$

4

$ (149)

$1,729

$ (129)

$ —

$ —

$ —

$ —

$ —

$ —

$ (46)

(242)

$(288)

$ 18

$ (79)

$ 171

$ 340

$ 29

$ 90

$

$

$

(18)

(11)

(29)

(8)

$ —

$

2

$ —

$

1

$ 333

$

105

1,274

$ 1,379

$

$

$

$

175

100

177

191

$ 2,547

$ 1,758

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance,
December 31, 2007

Impact of
Adoption(11)

Balance,
January 1, Earnings(1), (2)

Other
Comprehensive
Income (Loss)

(In millions)

Total Realized/Unrealized
(Gains) Losses included in:

Purchases,
Sales,
Issuances and
Settlements(3)

Transfer Into
and/or Out
of Level 3(4)

Balance,
December 31,

Year Ended December 31, 2008:

Liabilities:

Net embedded derivatives(9)

.

.

.

.

.

.

.

.

.

.

.

.

.

.

. .

.

$278

$(24)

$254

$2,500

$81

$94

$—

$2,929

(1) Amortization of premium/discount is included within net investment income which is reported within the earnings caption of total gains
(losses). Impairments charged to earnings on securities and certain mortgage loans are included within net investment gains (losses)
which are reported within the earnings caption of total gains (losses); while changes in estimated fair value of certain mortgage loans and
MSRs are recorded in other revenues. Lapses associated with embedded derivatives are included with the earnings caption of total
gains (losses).

(2)

Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(3) The amount reported within purchases, sales, issuances and settlements is the purchase/issuance price (for purchases and issuances)
and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased/issued or sold/settled. Items
purchased/issued and sold/settled in the same period are excluded from the rollforward. For embedded derivatives, attributed fees are
included within this caption along with settlements, if any. Purchases, sales, issuances and settlements for the year ended Decem-
ber 31, 2010 include financial
instruments acquired from ALICO as follows: fixed maturity securities $5,435 million, equity securities
$68 million, trading and other securities $582 million, short-term investments $216 million, net derivatives ($10) million, separate
account assets $244 million and net embedded derivatives ($116) million.

(4) Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers into and/or out of Level 3

occurred at the beginning of the period. Items transferred into and out in the same period are excluded from the rollforward.

(5) The additions and reductions (due to loan payments and sales) affecting MSRs were $330 million and ($179) million, respectively, for the
year ended December 31, 2010. The additions and reductions (due to loan payments) affecting MSRs were $628 million and

MetLife, Inc.

F-81

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

($113) million, respectively, for the year ended December 31, 2009. The additions and reductions (due to loan payments) affecting
MSRs were $350 million and ($10) million, respectively, for the year ended December 31, 2008.

(6) The changes in estimated fair value due to changes in valuation model inputs or assumptions and other changes in estimated fair value
affecting MSRs were ($79) million, $172 million and ($149) million for the years ended December 31, 2010, 2009 and 2008,
respectively.

(7) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

(8)

Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose
liability is reflected within separate account liabilities.

(9) Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

(10) The long-term debt at January 1, 2010 of the CSEs is reported within the purchases, sales, issuances and settlements activity column of

the rollforward.

(11) The impact of adoption of fair value measurement guidance represents the amount recognized in earnings resulting from a change in
estimate for certain Level 3 financial instruments held at January 1, 2008. The net impact of adoption on Level 3 assets and liabilities
presented in the table above was a $23 million increase to net assets. Such amount was also impacted by an increase to DAC of
$17 million. The impact of this adoption on RGA — not reflected in the table above as a result of the inclusion of RGA in discontinued
operations — was a net increase of $2 million (i.e., a decrease in Level 3 net embedded derivative liabilities of $17 million, offset by a
DAC decrease of $15 million) for a total increase of $42 million in Level 3 net assets. This increase of $42 million, offset by a $12 million
reduction in the estimated fair value of Level 2 freestanding derivatives, resulted in a total net impact of adoption of $30 million.

F-82

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The tables below summarize both realized and unrealized gains and losses due to changes in estimated fair value recorded in earnings for

Level 3 assets and liabilities:

Year Ended December 31, 2010:
Assets:

Fixed maturity securities:

Total Gains and Losses

Classification of Realized/Unrealized Gains
(Losses) included in Earnings

Net
Investment
Income

Net
Investment
Gains
(Losses)

Net
Derivative
Gains
(Losses)

Other
Revenues

(In millions)

Policyholder
Benefits and
Claims

Other
Expenses

Total

U.S. corporate securities . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . .

$ 22
15

$ (13)
(34)

$ —
—

$ —
—

RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign government securities . . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and political subdivision securities . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . .

36

6
1

37

—
1

(9)

(5)
(6)

(90)

—
—

—

—
—

—

—
—

—

—
—

—

—
—

$—
—

—

—
—

—

—
—

$—
—

—

—
—

—

—
—

$

9
(19)

27

1
(5)

(53)

—
1

Total fixed maturity securities . . . . . . . . . . . . .

$118

$(157)

$ —

$ —

$—

$—

$ (39)

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . .

$ —
—

$ —

Trading and other securities:

Actively Traded Securities . . . . . . . . . . . . . . . . . .
FVO general account securities . . . . . . . . . . . . . .

$ —
8

FVO contractholder-directed unit-linked

investments . . . . . . . . . . . . . . . . . . . . . . . . . .

(15)

Total trading and other securities . . . . . . . . . . .

$ (7)

Short-term investments . . . . . . . . . . . . . . . . . . . .

Mortgage loans held-for-sale . . . . . . . . . . . . . . . .

MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives:

$

2

$ —

$ —

$

5
46

$ 51

$ —
—

—

$ —

$ —

$ —

$ —

$ —
—

$ —

$ —
—

—

$ —

$ —

$ —

$ —

$ —
—

$ —

$ —
—

—

$ —

$ —

$ (2)

$(79)

Interest rate contracts . . . . . . . . . . . . . . . . . . .

$ —

$ —

$ 36

$ 1

Foreign currency contracts . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . .

Equity market contracts . . . . . . . . . . . . . . . . . .

—
—

—

—
—

—

46
4

(88)

—
—

—

Total net derivatives . . . . . . . . . . . . . . . . . . .

$ —

$ —

$

(2)

$ 1

Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . . .

Long-term debt of consolidated securitization

$ —

$ —

$(343)

$ —

entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$ 48

$ —

$ —

$—
—

$—

$—
—

—

$—

$—

$—

$—

$—

—
—

—

$—

$ 8

$—

$—
—

$—

$—
—

—

$—

$—

$—

$—

$

5
46

$ 51

$ —
8

(15)

(7)

2

(2)

$

$

$

$ (79)

$—

$ 37

(4)
—

—

42
4

(88)

$ (4)

$

(5)

$—

$—

$(335)

$ 48

MetLife, Inc.

F-83

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Total Gains and Losses
Classification of Realized/Unrealized Gains
(Losses) included in Earnings

Net
Investment
Income

Net
Investment
Gains
(Losses)

Net
Derivative
Gains
(Losses)

Other
Revenues
(In millions)

Policyholder
Benefits and
Claims

Other
Expenses

Total

Year Ended December 31, 2009:
Assets:
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . .
Other fixed maturity securities . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . .

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . .

Trading and other securities . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale . . . . . . . . . . . . . . .
MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . .

$ 15
(4)
30
12
1
8
—
1

$ 63

$ —
—

$ —

$ 16
$ —
$ —
$ —
$(13)

$ —

Net
Investment
Income

$(444)
(326)
1
(52)
(37)
(129)
—
—

$(987)

$

(2)
(357)

$(359)

$ —
$ (21)
$ —
$ —
$ —

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ (225)

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ (3)
$172
$ (33)

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ —

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
$—
$—
$—
$ (2)

$ (429)
(330)
31
(40)
(36)
(121)
—
1

$ (924)

$

(2)
(357)

$ (359)

16
$
(21)
$
$
(3)
$ 172
$ (273)

$ —

$1,716

$ —

$(114)

$—

$1,602

Total Gains and Losses

Classification of Realized/Unrealized Gains
(Losses) included in Earnings
Net
Derivative
Gains
(Losses)

Policyholder
Benefits and
Claims

Other
Revenues

Net
Investment
Gains
(Losses)

Year Ended December 31, 2008:
Assets:
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . .
Other fixed maturity securities . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . .

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . .

Trading and other securities . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale . . . . . . . . . . . . . . .
MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . .

F-84

(In millions)

$ 15
123
3
27
4
4
(1)
1

$176

$ —
—

$ —

$ (26)
$
1
$ —
$ —
$103

$ (711)
(135)
1
(8)
(76)
(129)
1
—

$ —
—
—
—
—
—
—
—

$(1,057)

$ —

$

(2)
(195)

$ —
—

$ (197)

$ —

$ —
$
(1)
$ —
$ —
$ —

$ —
$ —
$ —
$ —
$ 1,587

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$
4
$(149)
$ 39

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ —

$ —

$ —

$(2,682)

$ —

$182

Other
Expenses

Total

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
$—
$—
$—
$—

$—

$ (696)
(12)
4
19
(72)
(125)
—
1

$ (881)

$

(2)
(195)

$ (197)

(26)
$
$ —
$
4
$ (149)
$ 1,729

$(2,500)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The tables below summarize the portion of unrealized gains and losses, due to changes in estimated fair value, recorded in earnings for

Level 3 assets and liabilities that were still held at the respective time periods:

Changes in Unrealized Gains (Losses)
Relating to Assets and Liabilities Held at December 31, 2010

Net
Investment
Income

Net
Investment
Gains
(Losses)

Net
Derivative
Gains
(Losses)

Other
Revenues

(In millions)

Policyholder
Benefits and
Claims

Other
Expenses

Total

Year Ended December 31, 2010:
Assets:
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . . .
Other fixed maturity securities . . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . . .

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . .

Trading and other securities:

Actively Traded Securities . . . . . . . . . . . . . . . . .
FVO general account securities . . . . . . . . . . . . .
FVO contractholder-directed unit-linked

$ 13
15
36
10
1
36
—
1

$112

$ —
—

$ —

$ —
12

investments . . . . . . . . . . . . . . . . . . . . . . . .

(15)

Total trading and other securities . . . . . . . . . . .

$ (3)

Short-term investments . . . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale . . . . . . . . . . . . . . . .
MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives:

Interest rate contracts . . . . . . . . . . . . . . . . . . .
Foreign currency contracts . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . .
Equity market contracts . . . . . . . . . . . . . . . . . .

Total net derivatives . . . . . . . . . . . . . . . . . . .

Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . . .
Long-term debt of consolidated securitization

$
2
$ —
$ —

$ —
—
—
—

$ —

$ (44)
(43)
—
—
(6)
(52)
—
—

$(145)

$

$

(2)
(3)

(5)

$ —
—

—

$ —

$ —
$ —
$ —

$ —
—
—
—

$ —

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
—

—

$ —

$ —
$ —
$ —

$ 36
45
6
(82)

$

5

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
—

—

$ —

$ —
$ (2)
$(28)

$ 5
—
—
—

$ 5

$ —

$ —

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
—

—

$—

$—
$—
$—

$—
—
—
—

$—

$ 8

$—

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
—

—

$—

$—
$—
$—

$—
—
—
—

$—

$—

$—

$ (31)
(28)
36
10
(5)
(16)
—
1

$ (33)

$

$

(2)
(3)

(5)

$ —
12

(15)

$

(3)

2
$
$
(2)
$ (28)

$ 41
45
6
(82)

$ 10

$(355)

$ 48

entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$ 48

$ —

$ —

$ —

$(363)

MetLife, Inc.

F-85

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Year Ended December 31, 2009:
Assets:
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . .
Other fixed maturity securities . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . .

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . .

Trading and other securities . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale . . . . . . . . . . . . . . .
MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . .

Year Ended December 31, 2008:
Assets:
Fixed maturity securities:

U.S. corporate securities . . . . . . . . . . . . . . . .
Foreign corporate securities . . . . . . . . . . . . . .
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government securities . . . . . . . . . . . . .
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ABS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and political subdivision securities . . . . . .
Other fixed maturity securities . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . .

Equity securities:

Common stock . . . . . . . . . . . . . . . . . . . . . .
Non-redeemable preferred stock . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . .

Trading and other securities . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . .
Mortgage loans held-for-sale . . . . . . . . . . . . . . .
MSRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivatives . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Net embedded derivatives . . . . . . . . . . . . . . . . .

F-86

Changes in Unrealized Gains (Losses)
Relating to Assets and Liabilities Held at December 31, 2009

Net
Investment
Income

Net
Investment
Gains
(Losses)

Net
Derivative
Gains
(Losses)

Other
Revenues

(In millions)

Policyholder
Benefits and
Claims

Other
Expenses

Total

$ 18
(3)
30
11
1
8
—
1

$ 66

$ —
—

$ —

$ 15
$ —
$ —
$ —
$(13)

$(412)
(176)
6
—
(61)
(136)
—
—

$(779)

$

(1)
(168)

$(169)

$ —
$
1
$ —
$ —
$ —

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ (194)

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ (3)
$147
5
$

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ —

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
$—
$—
$—
$ (2)

$ (394)
(179)
36
11
(60)
(128)
—
1

$ (713)

$

(1)
(168)

$ (169)

$
15
$
1
(3)
$
$ 147
$ (204)

$ —

$ —

$1,697

$ —

$(114)

$—

$1,583

Changes in Unrealized Gains (Losses)
Relating to Assets and Liabilities Held at December 31, 2008

Net
Investment
Income

Net
Investment
Gains
(Losses)

Net
Derivative
Gains
(Losses)

Other
Revenues

(In millions)

Policyholder
Benefits and
Claims

Other
Expenses

Total

$ 12
117
4
23
4
3
(1)
1

$163

$ —
—

$ —

$ (17)
$ —
$ —
$ —
$114

$(497)
(125)
—
—
(69)
(102)
—
—

$(793)

$

(1)
(163)

$(164)

$ —
$ —
$ —
$ —
$ —

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ 1,504

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$
3
$(150)
$ 38

$ —
—
—
—
—
—
—
—

$ —

$ —
—

$ —

$ —
$ —
$ —
$ —
$ —

$ —

$ —

$(2,779)

$ —

$182

$—
—
—
—
—
—
—
—

$—

$—
—

$—

$—
$—
$—
$—
$—

$—

$ (485)
(8)
4
23
(65)
(99)
(1)
1

$ (630)

$

(1)
(163)

$ (164)

$
(17)
$ —
$
3
$ (150)
$ 1,656

$(2,597)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

FVO Mortgage Loans Held-For-Sale
The following table presents residential mortgage loans held-for-sale carried under the FVO at:

December 31,

2010

2009

(In millions)

Unpaid principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,473

$2,418

Excess of estimated fair value over unpaid principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . .

37

52

Carrying value at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,510

$2,470

Loans in non-accrual status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Loans more than 90 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Loans in non-accrual status or more than 90 days past due, or both — difference between

2

3

aggregate estimated fair value and unpaid principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . $

(1)

$

$

$

4

2

(2)

Residential mortgage loans held-for-sale accounted for under the FVO are initially measured at estimated fair value. Interest income on
residential mortgage loans held-for-sale is recorded based on the stated rate of the loan and is recorded in net investment income. Gains and
losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales are recognized in other revenues.
Such changes in estimated fair value for these loans were due to the following:

Years Ended
December 31,

2010

2009

2008

(In millions)

Instrument-specific credit risk based on changes in credit spreads for non-agency loans and

adjustments in individual

loan quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1)

$ (2)

$—

Other changes in estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

487

600

55

Total gains (losses) recognized in other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $486

$598

$55

FVO Consolidated Securitization Entities
As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company elected fair value accounting for the
following assets and liabilities held by CSEs: commercial mortgage loans, securities and long-term debt. Information on the estimated fair
value of the securities classified as trading and other securities is presented in Note 3. The following table presents these commercial
mortgage loans carried under the FVO at:

Unpaid principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess of estimated fair value over unpaid principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . .

Carrying value at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2010

(In millions)

$6,636
204

$6,840

The following table presents the long-term debt carried under the FVO related to both the commercial mortgage loans and securities

classified as trading and other securities at:

Contractual principal balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Excess of estimated fair value over contractual principal balance . . . . . . . . . . . . . . . . . . . . . . . . .

Carrying value at estimated fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2010
(In millions)

$6,619

201

$6,820

Interest income on both commercial mortgage loans and securities classified as trading and other securities held by CSEs is recorded in
net
Interest expense on long-term debt of CSEs is recorded in other expenses. Gains and losses from initial
investment
measurement, subsequent changes in estimated fair value and gains or losses on sales of both the commercial mortgage loans and
long-term debt are recognized in net investment gains (losses), which is summarized in Note 3.

income.

Non-Recurring Fair Value Measurements
Certain assets are measured at estimated fair value on a non-recurring basis and are not included in the tables presented above. The

amounts below relate to certain investments measured at estimated fair value during the period and still held at the reporting dates.

MetLife, Inc.

F-87

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

2010

Years Ended December 31,

2009

2008

Carrying
Value Prior to
Measurement

Estimated
Fair
Value After
Measurement

Net
Investment
Gains
(Losses)

Carrying
Value Prior to
Measurement

Estimated
Fair
Value After
Measurement

Net
Investment
Gains
(Losses)

Carrying
Value Prior to
Measurement

Estimated
Fair
Value After
Measurement

Net
Investment
Gains
(Losses)

(In millions)

$179
35

$214

$ 35

$ 33

$164
33

$197

$ 23

$

8

$(15)
(2)

$(17)

$(12)

$(25)

$294
9

$303

$915

$175

$202
8

$210

$561

$ 93

$ (92)
(1)

$ (93)

$(354)

$ (82)

$257
42

$299

$242

$ —

$188
32

$220

$137

$ —

$ (69)
(10)

$ (79)

$(105)

$ —

Mortgage loans:(1)

Held-for-investment
. . . . .
Held-for-sale . . . . . . . . .

Mortgage loans, net . . . .

Other limited partnership

. . . . . . . . . .

interests(2)
Real estate joint
ventures(3)

. . . . . . . . . .

(1) Mortgage loans — The impaired mortgage loans presented above were written down to their estimated fair values at the date the
impairments were recognized and are reported as losses above. Subsequent improvements in estimated fair value on previously impaired
loans recorded through a reduction in the previously established valuation allowance are reported as gains above. Estimated fair values
for impaired mortgage loans are based on observable market prices or, if the loans are in foreclosure or are otherwise determined to be
collateral dependent, on the estimated fair value of the underlying collateral, or the present value of the expected future cash flows.
Impairments to estimated fair value and decreases in previous impairments from subsequent improvements in estimated fair value
represent non-recurring fair value measurements that have been categorized as Level 3 due to the lack of price transparency inherent in
the limited markets for such mortgage loans.

(2) Other limited partnership interests — The impaired investments presented above were accounted for using the cost method. Impair-
ments on these cost method investments were recognized at estimated fair value determined from information provided in the financial
statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value
represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency
inherent in the market for such investments. This category includes several private equity and debt funds that typically invest primarily in a
diversified pool of investments across certain investment strategies including domestic and international leveraged buyout funds; power,
energy, timber and infrastructure development funds; venture capital funds; below investment grade debt and mezzanine debt funds. The
estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’
capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying
investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds
will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $34 million at December 31, 2010.

(3) Real estate joint ventures — The impaired investments presented above were accounted for using the cost method. Impairments on
these cost method investments were recognized at estimated fair value determined from information provided in the financial statements
of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-
recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the
market for such investments. This category includes several real estate funds that typically invest primarily in commercial real estate. The
estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’
capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying
investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds
will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $6 million at December 31, 2010.

F-88

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Fair Value of Financial Instruments
Amounts related to the Company’s financial

instruments that were not measured at fair value on a recurring basis, were as follows:

December 31, 2010

Assets
Mortgage loans:(1)

Held-for-investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mortgage loans, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate joint ventures(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests(2)

Short-term investments(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other invested assets(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Premiums, reinsurance and other receivables(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities

Policyholder account balances(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . . . . . . . .
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separate account liabilities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments(4)

Notional
Amount

Carrying
Value

(In millions)

Estimated
Fair
Value

$ 52,215

$ 54,006

$

811

$

811

$ 53,026

$ 54,817

$ 11,914

$ 13,406

$
$

$

$

451
1,539

822

1,490

$ 13,046
4,381
$

$

$

3,752

466

$
$

$

$

482
1,619

822

1,490

$ 13,046
4,381
$

$

$

4,048

453

$146,927

$152,850

$ 27,272
$ 10,316

$ 27,272
$ 10,371

$

306

$

306

$ 20,734
5,297
$

$ 21,892
4,757
$

$

3,191

$

3,461

$
2,777
$ 42,160

$
2,777
$ 42,160

Mortgage loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,754
Commitments to fund bank credit facilities, bridge loans and private corporate bond investments . . . $2,437

$
$

— $
— $

(17)
—

MetLife, Inc.

F-89

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

December 31, 2009

Assets
Mortgage loans:(1)

Notional
Amount

Carrying
Value

(In millions)

Estimated
Fair
Value

Held-for-investment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$48,181

$46,315

Held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

258

258

Mortgage loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate joint ventures(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other limited partnership interests(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term investments(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other invested assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Premiums, reinsurance and other receivables(2)
Other assets(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities

Policyholder account balances(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . . . . . . . . .

Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Collateral financing arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Junior subordinated debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities(2)

Separate account liabilities(2)
Commitments (4)
Mortgage loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,220

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commitments to fund bank credit facilities, bridge loans and private corporate bond investments . . . . $1,261

$48,439

$46,573

$10,061

$11,294

$
115
$ 1,571

$
127
$ 1,581

$

201

$

201

$ 1,241
$10,112

$ 1,284
$10,112

$ 3,173

$ 3,173

$ 3,375
425
$

$ 3,532
440
$

$97,131
$24,196

$96,735
$24,196

$10,211

$10,300

$
912
$13,185

$
912
$13,831

$ 5,297

$ 2,877

$ 3,191
$ 1,788

$ 3,167
$ 1,788

$32,171

$32,171

$

$

— $

— $

(48)

(52)

(1) Mortgage loans held-for-investment as presented in the tables above differ from the amount presented in the consolidated balance
sheets because these tables do not include commercial mortgage loans held by CSEs. Mortgage loans held-for-sale as presented in the
tables above differ from the amount presented in the consolidated balance sheets because these tables do not include residential
mortgage loans held-for-sale accounted for under the FVO.

(2) Carrying values presented herein differ from those presented in the consolidated balance sheets because certain items within the
instruments. Financial statement captions excluded from the table

respective financial statement caption are not considered financial
above are not considered financial

instruments.

(3) Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because
these tables do not include short-term investments that meet the definition of a security, which are measured at estimated fair value on a
recurring basis.

(4) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities.

The methods and assumptions used to estimate the fair value of financial
The assets and liabilities measured at estimated fair value on a recurring basis include: fixed maturity securities, equity securities, trading
and other securities, mortgage loans held by CSEs, mortgage loans held-for-sale accounted for under the FVO, MSRs, derivative assets and
liabilities, net embedded derivatives within asset and liability host contracts, separate account assets, long-term debt of CSEs and trading
liabilities. These assets and liabilities are described in the section “— Recurring Fair Value Measurements” and, therefore, are excluded from
the tables above. The estimated fair value for these financial

instruments approximates carrying value.

instruments are summarized as follows:

Mortgage Loans
These mortgage loans are principally comprised of commercial and agricultural mortgage loans, which are originated for investment
purposes and are primarily carried at amortized cost. Residential mortgage and consumer loans are generally purchased from third parties for

F-90

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

investment purposes and are principally carried at amortized cost, while those originated for sale and not carried under the FVO are carried at
the lower of cost or estimated fair value. The estimated fair values of these mortgage loans are determined as follows:

Mortgage loans held-for-investment. — For commercial and agricultural mortgage loans held-for-investment and carried at amortized
cost, estimated fair value was primarily determined by estimating expected future cash flows and discounting them using current interest
rates for similar mortgage loans with similar credit risk. For residential mortgage loans held-for-investment and carried at amortized cost,
estimated fair value was primarily determined from observable pricing for similar loans.
Mortgage loans held-for-sale. — Certain mortgage loans previously classified as held-for-investment have been designated as
held-for-sale. For these mortgage loans, estimated fair value is determined using independent broker quotations or, when the mortgage
loan is in foreclosure or otherwise determined to be collateral dependent, the fair value of the underlying collateral
is estimated using
internal models. For residential mortgage loans originated for sale, the estimated fair value is determined principally from observable
market pricing or from internal models.

Policy Loans
For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of
similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed applying a weighted-
average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity
determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are
discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash
surrender value of the underlying insurance policy. The estimated fair value for policy loans with variable interest rates approximates carrying
value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a
material change in estimated fair value due to changes in market interest rates.

Real Estate Joint Ventures and Other Limited Partnership Interests
Real estate joint ventures and other limited partnership interests included in the preceding tables consist of those investments accounted
for using the cost method. The remaining carrying value recognized in the consolidated balance sheets represents investments in real estate
carried at cost less accumulated depreciation, or real estate joint ventures and other limited partnership interests accounted for using the
equity method, which do not meet the definition of financial

instruments for which fair value is required to be disclosed.

The estimated fair values for other limited partnership interests and real estate joint ventures accounted for under the cost method are
generally based on the Company’s share of the NAV as provided in the financial statements of the investees. In certain circumstances,
management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments.

Short-term Investments
Certain short-term investments do not qualify as securities and are recognized at amortized cost in the consolidated balance sheets. For
these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that
estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure
there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required.

Other Invested Assets
Other invested assets within the preceding tables are principally comprised of an investment in a funding agreement, funds withheld,

various interest-bearing assets held in foreign subsidiaries and certain amounts due under contractual

indemnifications.

The estimated fair value of the investment in funding agreements is estimated by discounting the expected future cash flows using current
market rates and the credit risk of the note issuer. For funds withheld and the various interest-bearing assets held in foreign subsidiaries, the
Company evaluates the specific facts and circumstances of each instrument to determine the appropriate estimated fair values. These
estimated fair values were not materially different from the recognized carrying values.

Cash and Cash Equivalents
Due to the short-term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest
rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and
cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient
solvency in the case of depository institutions, and the Company has determined additional adjustment is not required.

Accrued Investment Income
Due to the short term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in
interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the
Company has monitored the credit quality of the issuers and has determined additional adjustment is not required.

Premiums, Reinsurance and Other Receivables
Premiums, reinsurance and other receivables in the preceding tables are principally comprised of certain amounts recoverable under
reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions and
amounts receivable for securities sold but not yet settled.

Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial
instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding tables. Amounts recoverable
under ceded reinsurance contracts, which the Company has determined do not transfer sufficient risk such that they are accounted for using
the deposit method of accounting, have been included in the preceding tables. The estimated fair value is determined as the present value of
expected future cash flows under the related contracts, which were discounted using an interest rate determined to reflect the appropriate
credit standing of the assuming counterparty.

MetLife, Inc.

F-91

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The amounts on deposit for derivative settlements essentially represent the equivalent of demand deposit balances and amounts due for
securities sold are generally received over short periods such that the estimated fair value approximates carrying value. In light of recent
market conditions, the Company has monitored the solvency position of the financial institutions and has determined additional adjustments
are not required.

Other Assets
Other assets in the preceding tables is a receivable for cash paid to an unaffiliated financial

institution under the MetLife Reinsurance
Company of Charleston (“MRC”) collateral financing arrangement as described in Note 12. With the exception of the receivable for cash paid
to the unaffiliated financial institution, other assets are not considered financial instruments subject to disclosure. Accordingly, the amount
presented in the preceding tables represents the receivable for the cash paid to the unaffiliated financial institution under the MRC collateral
financing arrangement for which the estimated fair value was determined by discounting the expected future cash flows using a discount rate
that reflects the credit rating of the unaffiliated financial

institution.

Policyholder Account Balances
Policyholder account balances in the tables above include investment contracts. Embedded derivatives on investment contracts and
certain variable annuity guarantees accounted for as embedded derivatives are included in this caption in the consolidated financial
statements but excluded from this caption in the tables above as they are separately presented in “— Recurring Fair Value Measurements.”
The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the
consolidated balance sheets represents those amounts due under contracts that satisfy the definition of insurance contracts and are not
considered financial

instruments.

The investment contracts primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed
term payout annuities and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate
future cash flows using current market risk-free interest rates and adding a spread to reflect the nonperformance risk in the liability.

Payables for Collateral Under Securities Loaned and Other Transactions
The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related
agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market
interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional
consideration for changes in nonperformance risk are necessary.

Bank Deposits
Due to the frequency of interest rate resets on customer bank deposits held in money market accounts, the Company believes that there is
minimal risk of a material change in interest rates such that the estimated fair value approximates carrying value. For time deposits, estimated
fair values are estimated by discounting the expected cash flows to maturity using a discount rate based on an average market rate for
certificates of deposit being offered by a representative group of large financial

institutions at the date of the valuation.

long-term debt, collateral

Short-term and Long-term Debt, Collateral Financing Arrangements and Junior Subordinated Debt Securities
The estimated fair value for short-term debt approximates carrying value due to the short-term nature of these obligations. The estimated
fair values of
financing arrangements and junior subordinated debt securities are generally determined by
discounting expected future cash flows using market rates currently available for debt with similar remaining maturities and reflecting the
credit risk of the Company, including inputs when available, from actively traded debt of the Company or other companies with similar types of
borrowing arrangements. Risk-adjusted discount rates applied to the expected future cash flows can vary significantly based upon the
specific terms of each individual arrangement, including, but not limited to: subordinated rights; contractual interest rates in relation to current
market rates; the structuring of the arrangement; and the nature and observability of the applicable valuation inputs. Use of different risk-
adjusted discount rates could result in different estimated fair values.

The carrying value of long-term debt presented in the table above differs from the amounts presented in the consolidated balance sheets

as it does not include capital

leases which are not required to be disclosed at estimated fair value.

Other Liabilities
Other liabilities included in the tables above reflect those other liabilities that satisfy the definition of financial

instruments subject to
disclosure. These items consist primarily of interest and dividends payable; amounts due for securities purchased but not yet settled; and
amounts payable under certain assumed reinsurance treaties accounted for as deposit type treaties. The Company evaluates the specific
terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from
the carrying values.

Separate Account Liabilities
Separate account liabilities included in the preceding tables represent those balances due to policyholders under contracts that are
classified as investment contracts. The remaining amounts presented in the consolidated balance sheets represent those contracts
classified as insurance contracts, which do not satisfy the definition of financial

instruments.

Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the
Company such that the death benefit is equal to the account balance; funding agreements related to group life contracts; and certain
contracts that provide for benefit funding.

Separate account liabilities are recognized in the consolidated balance sheets at an equivalent value of the related separate account
assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized investment gains and losses,
are fully offset by corresponding amounts credited to the contractholders’ liability which is reflected in separate account liabilities. Since
separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as

F-92

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

described in the section “— Recurring Fair Value Measurements,” the Company believes the value of those assets approximates the
estimated fair value of the related separate account liabilities.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond
Investments
The estimated fair values for mortgage loan commitments that will be held for investment and commitments to fund bank credit facilities,
bridge loans and private corporate bonds that will be held for investment reflected in the above tables represent the difference between the
discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and
the principal amounts of the commitments.

6. Deferred Policy Acquisition Costs and Value of Business Acquired

Information regarding DAC and VOBA is as follows:

DAC

VOBA

Total

(In millions)

Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,260

$ 3,550

$17,810

Capitalizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,092
—

—
(5)

3,092
(5)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,352

3,545

20,897

Amortization related to:

Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(489)

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,460)

Total amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,949)

Unrealized investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,753

Effect of foreign currency translation and other . . . . . . . . . . . . . . . . . . . . . . . . .

(503)

(32)

(508)

(540)

599

(113)

(521)

(2,968)

(3,489)

3,352

(616)

Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,653

3,491

20,144

Capitalizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,019

—

3,019

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,672

3,491

23,163

Amortization related to:

Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

625

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,754)

Total amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,129)

Unrealized investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,314)

Effect of foreign currency translation and other . . . . . . . . . . . . . . . . . . . . . . . . .

163

87

(265)

(178)

(505)

56

712

(2,019)

(1,307)

(2,819)

219

Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,392

2,864

19,256

Capitalizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,343

—

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

9,210

3,343

9,210

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,735

12,074

31,809

Amortization related to:

Net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(108)
(2,247)

Total amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,355)

Unrealized investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign currency translation and other . . . . . . . . . . . . . . . . . . . . . . . . .

(1,258)
97

(16)
(494)

(510)

(125)
(351)

(124)
(2,741)

(2,865)

(1,383)
(254)

Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,219

$11,088

$27,307

See Note 2 for a description of acquisitions and dispositions.
The estimated future amortization expense allocated to other expenses for the next five years for VOBA is $1,661 million in 2011,

$1,373 million in 2012, $1,128 million in 2013, $959 million in 2014 and $816 million in 2015.

Amortization of DAC and VOBA is attributed to both investment gains and losses and to other expenses for the amount of gross margins or
profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of
DAC and VOBA that would have been amortized if such gains and losses had been recognized.

MetLife, Inc.

F-93

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Information regarding DAC and VOBA by segment and reporting unit is as follows:

DAC

VOBA
December 31,

Total

2010

2009

2010

2009

2010

2009

(In millions)

U.S. Business:

Insurance Products:

Group life . . . . . . . . . . . . . . . . . . . . . . . . . . $

25

$

27

$

— $ — $

25

$

27

Individual
life . . . . . . . . . . . . . . . . . . . . . . . .
Non-medical health . . . . . . . . . . . . . . . . . . .

Total

Insurance Products . . . . . . . . . . . . . . .

Retirement Products . . . . . . . . . . . . . . . . . . . .
Corporate Benefit Funding . . . . . . . . . . . . . . . .

Auto & Home . . . . . . . . . . . . . . . . . . . . . . . . .

7,257
965

8,247

4,706
74

190

Total U.S. Business . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,217
3,000

Banking, Corporate & Other . . . . . . . . . . . . . . . . .

2

8,129
942

9,098

4,612
72

181

13,963
2,426

3

833
—

833

1,094
1

—

1,928
9,159

1

1,005
—

1,005

1,412
2

—

2,419
444

1

8,090
965

9,080

5,800
75

190

15,145
12,159

3

9,134
942

10,103

6,024
74

181

16,382
2,870

4

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . $16,219

$16,392

$11,088

$2,864

$27,307

$19,256

7. Goodwill
Goodwill

is the excess of cost over the estimated fair value of net assets acquired. Information regarding goodwill

is as follows:

Balance at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,047

$5,008

$4,814

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,959

Effect of foreign currency translation and other

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

(225)

—

39

256

(62)

Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,781

$5,047

$5,008

Information regarding allocated goodwill by segment and reporting unit is as follows:

December 31,

2010

2009

2008

(In millions)

December 31,

2010

2009

(In millions)

U.S. Business:

Insurance Products:

Group life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2

$

2

Individual

life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,263

1,263

Non-medical health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

149

149

Total

Insurance Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retirement Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporate Benefit Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auto & Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,414

1,692

900
157

1,414

1,692

900
157

Total U.S. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,163

4,163

International:

Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Europe and the Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

International

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Banking, Corporate & Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229

72

38

339

470

214

160

40

414

470

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,972

$5,047

The above table does not include goodwill of $6,809 million at December 31, 2010, associated with ALICO which has not yet been

allocated to a reporting unit due to the timing of the Acquisition. See Note 2 for a description of acquisitions and dispositions.

F-94

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

As described in more detail in Note 1, the Company performed its annual goodwill impairment tests during the third quarter of 2010 based

upon data at June 30, 2010. The tests indicated that goodwill was not impaired.

Management continues to evaluate current market conditions that may affect the estimated fair value of the Company’s reporting units to
assess whether any goodwill impairment exists. Continued deteriorating or adverse market conditions for certain reporting units may have a
significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill.

8.

Insurance

Insurance Liabilities
Insurance liabilities were as follows:

U.S. Business:

Insurance Products:

Future Policy
Benefits

Policyholder Account
Balances
December 31,

Other Policy-Related
Balances

2010

2009

2010

2009

2010

2009

(In millions)

Group life . . . . . . . . . . . . . . . . . . . . . . $

2,717

$

2,981

$

9,175

$

8,985

$ 2,454

$2,411

Individual
life . . . . . . . . . . . . . . . . . . . .
Non-medical health . . . . . . . . . . . . . . . .

Total

Insurance Products . . . . . . . . . . .

Retirement Products . . . . . . . . . . . . . . . . .
Corporate Benefit Funding . . . . . . . . . . . . .

Auto & Home . . . . . . . . . . . . . . . . . . . . .

56,533
13,686

72,936

8,829
39,187

3,036

55,291
12,738

71,010

8,226
37,377

2,972

19,731
501

29,407

46,517
57,773

—

18,632
501

28,118

46,855
55,522

—

Total U.S. Business . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . .

123,988
43,587

Banking, Corporate & Other

. . . . . . . . . . . . .

5,798

119,585
10,830

5,464

133,697
77,281

42

130,495
8,128

50

2,752
625

2,911
616

5,831

5,938

146
184

171

6,332
9,051

423

122
197

184

6,441
1,637

368

Total . . . . . . . . . . . . . . . . . . . . . . . $173,373

$135,879

$211,020

$138,673

$15,806

$8,446

Value of Distribution Agreements and Customer Relationships Acquired
Information regarding VODA and VOCRA, which are reported in other assets, was as follows:

Years Ended
December 31,

2010

2009

2008

(In millions)

Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 792

$822

$706

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign currency translation and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

356

(42)
(12)

—

(34)
4

144

(25)
(3)

Balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,094

$792

$822

The estimated future amortization expense allocated to other expenses for the next five years for VODA and VOCRA is $63 million in 2011,
$74 million in 2012, $80 million in 2013, $84 million in 2014 and $82 million in 2015. See Note 2 for a description of acquisitions and
dispositions.

Sales Inducements
Information regarding deferred sales inducements, which are reported in other assets, was as follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Balance at January 1,
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $841
157

$711
193

$ 677
176

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(80)

(63)

(142)

Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $918

$841

$ 711

Separate Accounts
Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $149.2 billion
and $121.4 billion at December 31, 2010 and 2009, respectively, for which the policyholder assumes all
investment risk, and separate
accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled
$34.1 billion and $27.6 billion at December 31, 2010 and 2009, respectively. The latter category consisted primarily of funding agreements

MetLife, Inc.

F-95

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

and participating close-out contracts. The average interest rate credited on these contracts was 3.32% and 3.35% at December 31, 2010
and 2009, respectively.

Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges)
are reflected in the Company’s revenues as universal life and investment-type product policy fees and totaled $3.2 billion, $2.6 billion and
$3.2 billion for the years ended December 31, 2010, 2009 and 2008, respectively.

The Company’s proportional

interest in separate accounts was included in the consolidated balance sheets as follows at:

December 31,

2010

2009

(In millions)

Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $257

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 74

$11

$57
$ 2

For the years ended December 31, 2010, 2009 and 2008, there were no investment gains (losses) on transfers of assets from the general

account to the separate accounts.

Obligations Under Funding Agreements
The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to
certain SPEs that have issued either debt securities or commercial paper for which payment of interest and principal
is secured by such
funding agreements. During the years ended December 31, 2010, 2009 and 2008, the Company issued $34.1 billion, $28.6 billion and
respectively, of such funding agreements. At
$20.9 billion,
December 31, 2010 and 2009, funding agreements outstanding, which are included in policyholder account balances, were $27.2 billion
and $23.3 billion, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $0.6 billion, $0.7 billion and $1.1 billion, respectively.

respectively, and repaid $30.9 billion, $32.0 billion and $19.8 billion,

MetLife Insurance Company of Connecticut (“MICC”) is a member of the FHLB of Boston and held $70 million of common stock of the
FHLB of Boston at both December 31, 2010 and 2009, which is included in equity securities. MICC has also entered into funding agreements
with the FHLB of Boston in exchange for cash and for which the FHLB of Boston has been granted a blanket lien on certain MICC assets,
including RMBS, to collateralize MICC’s obligations under the funding agreements. MICC maintains control over these pledged assets, and
may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified
collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by MICC, the FHLB of Boston’s recovery on the
collateral is limited to the amount of MICC’s liability to the FHLB of Boston. The amount of MICC’s liability for funding agreements with the FHLB
of Boston was $100 million and $326 million at December 31, 2010 and 2009, respectively, which is included in policyholder account
balances. The advances on these funding agreements are collateralized by mortgage-backed securities with estimated fair values of
$211 million and $419 million at December 31, 2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008,
interest credited on the funding agreements, which is included in interest credited to policyholder account balances, was $1 million,
$6 million and $15 million, respectively.

Metropolitan Life Insurance Company (“MLIC”) is a member of the FHLB of NY and held $890 million and $742 million of common stock of
the FHLB of NY at December 31, 2010 and 2009, respectively, which is included in equity securities. MLIC has also entered into funding
agreements with the FHLB of NY in exchange for cash and for which the FHLB of NY has been granted a lien on certain MLIC assets, including
RMBS to collateralize MLIC’s obligations under the funding agreements. MLIC maintains control over these pledged assets, and may use,
commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is
sufficient to satisfy the collateral maintenance level. Upon any event of default by MLIC, the FHLB of NY’s recovery on the collateral is limited to
the amount of MLIC’s liability to the FHLB of NY. The amount of the MLIC’s liability for funding agreements with the FHLB of NY was $12.6 billion
and $13.7 billion at December 31, 2010 and 2009, respectively, which is included in policyholder account balances. The advances on these
agreements were collateralized by mortgage-backed securities with estimated fair values of $14.2 billion and $15.1 billion at December 31,
2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $276 million, $333 million and $229 million, respectively.

During 2010, MetLife Investors Insurance Company (“MLIIC”) and General American Life Insurance Company (“GALIC”) became members
of the Federal Home Loan Bank of Des Moines (“FHLB of Des Moines) and each held $10 million of common stock of the FHLB of Des Moines
at December 31, 2010, which is included in equity securities. MLIIC and GALIC had no funding agreements with the FHLB of Des Moines at
December 31, 2010.

MLIC and MICC have each issued funding agreements to certain SPEs that have issued debt securities for which payment of interest and
principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and principal by
Farmer Mac, a federally chartered instrumentality of the United States. The obligations under these funding agreements are secured by a
pledge of certain eligible agricultural real estate mortgage loans and may, under certain circumstances, be secured by other qualified
collateral. The amount of the Company’s liability for funding agreements issued to such SPEs was $2.8 billion and $2.5 billion at December 31,
2010 and 2009, respectively, which is included in policyholder account balances. The obligations under these funding agreements are
collateralized by designated agricultural real estate mortgage loans with estimated fair values of $3.2 billion and $2.9 billion at December 31,
2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $135 million, $132 million and $132 million, respectively.

F-96

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Liabilities for Unpaid Claims and Claim Expenses
Information regarding the liabilities for unpaid claims and claim expenses relating to property and casualty, group accident and non-

medical health policies and contracts, which are reported in future policy benefits and other policy-related balances, is as follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Balance at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,219

$ 8,260

$ 7,836

Less: Reinsurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

547

1,042

955

Net balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,672

7,218

6,881

Acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

583

—

—

Incurred related to:

Current year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,482
(75)

6,569
(152)

6,263
(353)

Total

incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,407

6,417

5,910

Paid related to:
Current year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,050)

(2,102)

(3,972)

(1,991)

(3,861)

(1,712)

Total paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,152)

(5,963)

(5,573)

Net balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Add: Reinsurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,510

2,198

7,672

547

7,218

1,042

Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,708

$ 8,219

$ 8,260

During 2010, 2009 and 2008, as a result of changes in estimates of insured events in the respective prior year, claims and claim
adjustment expenses associated with prior years decreased by $75 million, $152 million and $353 million, respectively, due to a reduction in
prior year automobile bodily injury and homeowners’ severity, reduced loss adjustment expenses, improved loss ratio for non-medical health
claim liabilities and improved claim management.

Guarantees
The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than total
deposits made to the contract less any partial withdrawals (“return of net deposits”); and (ii) the highest contract value on a specified
anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial withdrawals
plus a minimum return (“anniversary contract value” or “minimum return”). The Company also issues annuity contracts that apply a lower rate
of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize
(“two tier annuities”). These guarantees include benefits that are payable in the event of death, maturity or at annuitization.

The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a

secondary guarantee or a guaranteed paid-up benefit.

MetLife, Inc.

F-97

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts is as follows:

December 31,

2010

2009

In the
Event of Death

At
Annuitization

In the
Event of Death

At
Annuitization

(In millions)

Annuity Contracts(1)
Return of Net Deposits

Separate account value . . . . . . . . . . . . . . . . . . . . . . . .

$ 55,753

Net amount at risk(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Average attained age of contractholders . . . . . . . . . . . . .

Anniversary Contract Value or Minimum Return

$

6,194 (3)

$

$

390

$ 41,125

289 (4)

$

4,585 (3)

62 years

67 years

62 years

N/A

N/A
N/A

Separate account value . . . . . . . . . . . . . . . . . . . . . . . .
Net amount at risk(2) . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 92,041
$

5,297 (3)

$ 55,668
$

6,373 (4)

$ 78,808
$

9,039 (3)

$ 40,234
$

7,361 (4)

Average attained age of contractholders . . . . . . . . . . . . .

62 years

61 years

61 years

61 years

Two Tier Annuities
General account value . . . . . . . . . . . . . . . . . . . . . . . . .

Net amount at risk(2) . . . . . . . . . . . . . . . . . . . . . . . . . .

Average attained age of contractholders . . . . . . . . . . . . .

N/A

N/A

N/A

$

$

280

49 (5)

62 years

N/A

N/A

N/A

$

$

282

50 (5)

61 years

December 31,

2010

2009

Secondary
Guarantees

Paid-Up
Guarantees

Secondary
Guarantees

Paid-Up
Guarantees

(In millions)

Universal and Variable Life Contracts(1)

Account value (general and separate account) . . . . . . . . . . . $ 11,015
Net amount at risk(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . $156,432 (3)

$
4,102
$ 26,851 (3)

$
9,483
$150,905 (3)

$
4,104
$ 28,826 (3)

Average attained age of policyholders . . . . . . . . . . . . . . . .

52 years

58 years

52 years

57 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) The net amount at risk is based on the direct and assumed amount at risk (excluding ceded reinsurance).
(3) The net amount at risk for guarantees of amounts in the event of death is defined as the current GMDB in excess of the current account

balance at the balance sheet date.

(4) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity
payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account
balance.

(5) The net amount at risk for two tier annuities is based on the excess of the upper tier, adjusted for a profit margin, less the lower tier.

F-98

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Information regarding the liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life

contracts is as follows:

Annuity Contracts

Guaranteed
Death
Benefits

Guaranteed
Annuitization
Benefits

Universal and Variable
Life Contracts

Secondary
Guarantees

Paid-Up
Guarantees

Total

(In millions)

Direct

Balance at January 1, 2008 . . . . . . . . . . . . . . . . . .
Incurred guaranteed benefits . . . . . . . . . . . . . . . .

$ 80
267

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2008 . . . . . . . . . . . . . . .
Incurred guaranteed benefits . . . . . . . . . . . . . . . .

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2009 . . . . . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . .

Incurred guaranteed benefits . . . . . . . . . . . . . . . .

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

(96)

251
118

(201)

168
46

149

(91)

$ 78
325

—

403
(1)

—

402
110

111

—

$ 152
119

$121
19

$ 431
730

—

271
233

—

504
2,952

536

(1)

—

140
34

—

174
—

24

—

(96)

1,065
384

(201)

1,248
3,108

820

(92)

Balance at December 31, 2010 . . . . . . . . . . . . . . .

$ 272

$623

$3,991

$198

$5,084

Ceded

Balance at January 1, 2008 . . . . . . . . . . . . . . . . . .
Incurred guaranteed benefits . . . . . . . . . . . . . . . .

$

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2008 . . . . . . . . . . . . . . .
Incurred guaranteed benefits . . . . . . . . . . . . . . . .

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2009 . . . . . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . .

Incurred guaranteed benefits . . . . . . . . . . . . . . . .

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

6
18

(16)

8
26

(28)

6
30

18

(15)

$

4
(4)

$

—

—
—

—

—
—

(1)

—

55
25

—

80
102

—

182
—

412

—

$ 75
15

$ 140
54

—

90
32

—

122
—

17

—

(16)

178
160

(28)

310
30

446

(15)

Balance at December 31, 2010 . . . . . . . . . . . . . . .

$ 39

$ (1)

$ 594

$139

$ 771

Net

Balance at January 1, 2008 . . . . . . . . . . . . . . . . . .

$ 74

Incurred guaranteed benefits . . . . . . . . . . . . . . . .
Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2008 . . . . . . . . . . . . . . .

Incurred guaranteed benefits . . . . . . . . . . . . . . . .
Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

Balance at December 31, 2009 . . . . . . . . . . . . . . .

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . .
Incurred guaranteed benefits . . . . . . . . . . . . . . . .

Paid guaranteed benefits . . . . . . . . . . . . . . . . . .

249
(80)

243

92
(173)

162

16
131

(76)

$ 74

329
—

403

(1)
—

402

110
112

—

$

97

94
—

191

131
—

322

2,952
124

(1)

$ 46

$ 291

4
—

50

2
—

52

—
7

—

676
(80)

887

224
(173)

938

3,078
374

(77)

Balance at December 31, 2010 . . . . . . . . . . . . . . .

$ 233

$624

$3,397

$ 59

$4,313

MetLife, Inc.

F-99

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows:

December 31,

2010

2009

(In millions)

Fund Groupings:

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 59,546
40,199
Balanced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$48,852
31,011

Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Money Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,539

1,584
2,192

7,166

2,104
1,865

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $113,060

$90,998

9. Reinsurance

The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional

capacity for future growth.

For its individual life insurance products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis
or a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $1 million for most products and reinsures up to
90% of the mortality risk for certain other products. In addition to reinsuring mortality risk as described above, the Company reinsures other
risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks
with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in
excess of the amount the Company retains. The Company evaluates its reinsurance programs routinely and may increase or decrease its
retention at any time.

For other policies within the Insurance Products segment, the Company generally retains most of the risk and only cedes particular risks on

certain client arrangements.

The Company’s Retirement Products segment reinsures a portion of the living and death benefit guarantees issued in connection with its
variable annuities. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on fees associated with
the guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values, subject to
certain limitations.

The Company’s Corporate Benefit Funding segment periodically engages in reinsurance activities, as considered appropriate. The impact

of these activities on the financial results of this segment has not been significant.

The Company’s Auto & Home segment purchases reinsurance to manage its exposure to large losses (primarily catastrophe losses) and
to protect statutory surplus. The Company cedes to reinsurers a portion of losses and premiums based upon the exposure of the policies
subject to reinsurance. To manage exposure to large property and casualty losses, the Company utilizes property catastrophe, casualty and
property per risk excess of loss agreements.

For its life insurance products within the International segment, the Company reinsures, depending on the product, risks above the
corporate retention limit of up to $5 million to external reinsurers on a yearly renewable term basis. The Company’s international businesses
may also reinsure certain risks with external reinsurers depending upon the nature of the risk and local regulatory requirements. The
Company’s International segment reinsures, for selected large corporate customers, its group employee benefits or credit insurance
business with various client-affiliated reinsurance companies, covering policies issued to the employees or customers of the clients.
Additionally, the Company cedes and assumes risk with other insurance companies when either company requires a business partner with
the appropriate local
licensing to issue certain types of policies in certain countries. In these cases, the assuming company typically
underwrites the risks, develops the products and assumes most or all of the risk. The Company’s International segment also has reinsurance
agreements in force that reinsure a portion of the living and death benefit guarantees issued in connection with its variable annuities. Under
these agreements, the Company pays reinsurance fees associated with the guarantees collected from policyholders, and receives
reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations.

The Company also reinsures, through 100% quota share reinsurance agreements, certain long-term care and workers’ compensation

business written by MICC. These are run-off businesses which have been included within Banking, Corporate & Other.

The Company has exposure to catastrophes, which could contribute to significant fluctuations in the Company’s results of operations.
The Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize
exposure to larger risks. For its International segment, the Company currently purchases catastrophe coverage to insure risks within certain
countries deemed by management to be exposed to the greatest catastrophic risks.

The Company reinsures its business through a diversified group of well-capitalized, highly rated reinsurers. The Company analyzes recent
trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial
strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is
evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these
analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts,
funds withheld accounts and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for
uncollectible reinsurance, which at December 31, 2010 and 2009, were immaterial.

The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds
withheld accounts and irrevocable letters of credit. The Company had $5.5 billion and $4.4 billion of unsecured unaffiliated reinsurance
recoverable balances at December 31, 2010 and 2009, respectively.

F-100

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

At December 31, 2010, the Company had $13.1 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $10.0 billion, or
76%, were with the Company’s five largest unaffiliated ceded reinsurers, including $3.6 billion of which were unsecured. At December 31,
2009, the Company had $11.7 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $9.2 billion, or 79%, were with the
Company’s five largest unaffiliated ceded reinsurers, including $3.0 billion of which were unsecured.

The Company has reinsured with an unaffiliated third-party reinsurer, 49.25% of the closed block through a modified coinsurance
agreement. The Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has
offset the modified coinsurance deposit with the deposit recoverable.

The amounts in the consolidated statements of operations include the impact of reinsurance. Information regarding the effect of

reinsurance is as follows:

Premiums:

Years Ended December 31,

2010

2009
(In millions)

2008

Direct premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,923
1,377
Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$27,472
1,313

$27,058
1,466

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,906)

(2,325)

(2,610)

Net premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,394

$26,460

$25,914

Universal life and investment-type product policy fees:

Direct universal

life and investment-type product policy fees . . . . . . . . . . . . . . . . $ 6,630

$ 5,790

$ 5,909

Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

(731)

106

(693)

79

(607)

Net universal

life and investment-type product policy fees . . . . . . . . . . . . . . . . $ 6,037

$ 5,203

$ 5,381

Other revenues:

Direct other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,256

$ 2,264

$ 1,481

Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
72

1
64

—
105

Net other revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,328

$ 2,329

$ 1,586

Policyholder benefits and claims:

Direct policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,762
1,275
Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$30,363
1,024

$29,772
1,235

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,492)

(3,051)

(3,570)

Net policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,545

$28,336

$27,437

Interest credited to policyholder account balances:

Direct interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . $ 4,923

$ 4,846

$ 4,787

Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

—

3

—

1

—

Net interest credited to policyholder account balances . . . . . . . . . . . . . . . . . . $ 4,925

$ 4,849

$ 4,788

Policyholder dividends:

Direct policyholder dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,486
17
Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 1,650
13

$ 1,751
5

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(17)

(13)

(5)

Net policyholder dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,486

$ 1,650

$ 1,751

Other expenses:

Direct other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,911

$10,602

$12,107

Reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reinsurance ceded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116

(224)

100

(146)

57

(217)

Net other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,803

$10,556

$11,947

MetLife, Inc.

F-101

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The amounts in the consolidated balance sheets include the impact of reinsurance. Information regarding the effect of reinsurance is as

follows:

Assets:

Total
Balance
Sheet

December 31, 2010

Assumed

Ceded

(In millions)

Total, Net of
Reinsurance

Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . $ 19,830
27,307
Deferred policy acquisition costs and value of business acquired . . . . .

$ 722
176

$13,561
(179)

$

5,547
27,310

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47,137

$ 898

$13,382

$ 32,857

Liabilities:

Future policy benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $173,373
211,020
Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,074
2,237

$

Other policy-related balances . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,806

20,386

265

608

(65)
—

506

2,703

$171,364
208,783

15,035

17,075

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $420,585

$5,184

$ 3,144

$412,257

Total
Balance
Sheet

December 31, 2009

Assumed

Ceded

(In millions)

Total, Net of
Reinsurance

Assets:

Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . $ 16,752

$ 550

$12,274

$

3,928

Deferred policy acquisition costs and value of business acquired . . . . .

19,256

190

(206)

19,272

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,008

$ 740

$12,068

$ 23,200

Liabilities:

Future policy benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $135,879
138,673
Policyholder account balances . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,000
1,321

$

Other policy-related balances . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,446

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,989

257

364

(43)
—

494

2,489

$133,922
137,352

7,695

13,136

Total

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $298,987

$3,942

$ 2,940

$292,105

Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded
using the deposit method of accounting. The deposit assets on ceded reinsurance were $2,530 million and $2,564 million at December 31,
2010 and 2009, respectively. The deposit liabilities for assumed reinsurance were $47 million and $52 million at December 31, 2010 and
2009, respectively.

10. Closed Block

On April 7, 2000 (the “Demutualization Date”), 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
(the “Superintendent”) approving MLIC’s plan of reorganization, as amended (the “Plan”). On the Demutualization Date, MLIC established a
closed block for the benefit of holders of certain individual life insurance policies of MLIC. Assets have been allocated to the closed block in an
amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed
block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to,
provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in
effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience
changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current
dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience.

The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed
block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the
closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was
assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less
than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been
continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not
be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be
made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-
force. The expected life of the closed block is over 100 years.

F-102

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to
the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders
as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date
(adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the estimated maximum future
earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed
block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over
time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of
dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block are greater
than the expected cumulative earnings of the closed block, the Company will pay the excess of the actual cumulative earnings of the closed
block over the expected cumulative earnings to closed block policyholders as additional policyholder dividends unless offset by future
unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess
recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block are less than the
expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company
may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative
earnings equal the expected cumulative earnings.

Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses,
directly impact the policyholder dividend obligation. The policyholder dividend obligation increased to $876 million at December 31, 2010,
from zero at December 31, 2009, as a result of recent unrealized gains in the closed block. 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.

MetLife, Inc.

F-103

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Information regarding the closed block liabilities and assets designated to the closed block was as follows:

December 31,

2010

2009

(In millions)

Closed Block Liabilities

Future policy benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $43,456
316
Other policy-related balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$43,576
307

Policyholder dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policyholder dividend obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

579

876
178

627

615

—
—

576

Total closed block liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46,032

45,074

Assets Designated to the Closed Block

Investments:

Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $27,067 and
$27,129, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,768

27,375

Equity securities available-for-sale, at estimated fair value (cost: $110 and $204, respectively) . .

Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate and real estate joint ventures held-for-investment

. . . . . . . . . . . . . . . . . . . . . . .

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102

6,253
4,629

328

1
729

218

6,200
4,538

321

1
463

Total

investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,810

39,116

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Premiums, reinsurance and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current income tax recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236
518

95

—

474

241
489

78

112

612

Total assets designated to the closed block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,133

40,648

Excess of closed block liabilities over assets designated to the closed block . . . . . . . . . . . . . . .

3,899

4,426

Amounts included in accumulated other comprehensive income (loss):

Unrealized investment gains (losses), net of income tax of $594 and $89, respectively . . . . . . .

1,101

166

Unrealized gains (losses) on derivative instruments, net of income tax of $5 and ($3),

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allocated to policyholder dividend obligation, net of income tax of ($307) and $0, respectively . .

Total amounts included in accumulated other comprehensive income (loss) . . . . . . . . . . . . . .

10
(569)

542

(5)
—

161

Maximum future earnings to be recognized from closed block assets and liabilities . . . . . . . . . . . $ 4,441

$ 4,587

Information regarding the closed block policyholder dividend obligation was as follows:

Years Ended
December 31,

2010

2009

2008

(In millions)

Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $—

$ 789

Change in unrealized investment and derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . .

876

—

(789)

Balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $876

$—

$ —

F-104

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Information regarding the closed block revenues and expenses was as follows:

Years Ended December 31,

2010

2009
(In millions)

2008

Revenues

Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,461
2,294
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,708
2,197

$2,787
2,248

Net investment gains (losses):

Other-than-temporary impairments on fixed maturity securities . . . . . . . . . . . . . . . . . .
Other-than-temporary impairments on fixed maturity securities transferred to other

comprehensive income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total net investment gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivative gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(32)

(107)

—

71

39
(27)

40

327

260
(128)

(94)

—

(19)

(113)
29

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,767

5,037

4,951

Expenses
Policyholder benefits and claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policyholder dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,115

1,235

199

3,329

1,394

203

3,393

1,498

217

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,549

4,926

5,108

Revenues, net of expenses before provision for income tax expense (benefit) . . . . . . . . .
Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218
72

111
36

(157)
(68)

Revenues, net of expenses and provision for income tax expense (benefit) . . . . . . . . . . . $ 146

$

75

$

(89)

The change in the maximum future earnings of the closed block was as follows:

Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,441
Less:

(In millions)

$4,587

$4,518

Closed block adjustment(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

144

—

Balance at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,587

4,518

4,429

Change during year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (146)

$

(75)

$

89

Years Ended December 31,

2010

2009

2008

(1) The closed block adjustment represents an intra-company reallocation of assets which affected the closed block. The adjustment had no

impact on the Company’s consolidated financial statements.
MLIC charges the closed block with federal income taxes, state and local premium taxes and other additive state or local taxes, as well as
investment management expenses relating to the closed block as provided in the Plan. MLIC also charges the closed block for expenses of
maintaining the policies included in the closed block.

11. Long-term and Short-term Debt

Long-term and short-term debt outstanding is as follows:

Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.61%-7.72%

5.58% 2011-2045

$16,258

$10,458

Interest Rates

Range

Weighted
Average

Maturity

2010

2009

December 31,

(In millions)

Advances agreements . . . . . . . . . . . . . . . . . . . . .
Surplus notes . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.23%-4.86%
7.63%-7.88%

2.41% 2011-2015
7.85% 2015-2025

3,600
699

Fixed rate notes . . . . . . . . . . . . . . . . . . . . . . . . . 3.76%-15.00%

8.67% 2011-2012

Other notes with varying interest rates . . . . . . . . . . .
lease obligations . . . . . . . . . . . . . . . . . . . .
Capital

Total

long-term debt(1) . . . . . . . . . . . . . . . . . . . . .

Total short-term debt . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.98%-8.00%

7.20% 2013-2030

1,846
698

63

120
35

82

95
32

20,766

13,220

306

912

$21,072

$14,132

MetLife, Inc.

F-105

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) Excludes $6,820 million at December 31, 2010 of long-term debt relating to CSEs. See Note 3.

The aggregate maturities of long-term debt at December 31, 2010 for the next five years and thereafter are $1,405 million in 2011,

$1,520 million in 2012, $1,464 million in 2013, $1,653 million in 2014, $2,365 million in 2015 and $12,358 million thereafter.

Advances agreements and capital lease obligations are collateralized and rank highest in priority, followed by unsecured senior debt which
consists of senior notes, fixed rate notes and other notes with varying interest rates, followed by subordinated debt which consists of junior
subordinated debt securities. Payments of interest and principal on the Company’s surplus notes, which are subordinate to all other
obligations at the operating company level and senior to obligations at the Holding Company, may be made only with the prior approval of the
insurance department of the state of domicile. Collateral financing arrangements are supported by either surplus notes of subsidiaries or
financing arrangements with the Holding Company and, accordingly, have priority consistent with other such obligations.

Certain of the Company’s debt instruments, credit facilities and committed facilities contain various administrative, reporting, legal and

financial covenants. The Company believes it was in compliance with all covenants at both December 31, 2010 and 2009.

Senior Notes — Senior Debt Securities Underlying Equity Units
In connection with the financing of the Acquisition (see Note 2) in November 2010, MetLife, Inc. issued to ALICO Holdings $3,000 million
(estimated fair value of $3,011 million) in three series of Debt Securities, which constitute a part of the Equity Units more fully described in
Note 14. The Debt Securities (Series C, D and E) are subject to remarketing, initially bear interest at 1.56%, 1.92% and 2.46%, respectively
(an average rate of 1.98%), and carry initial maturity dates of June 15, 2023, June 15, 2024 and June 15, 2045, respectively. The interest
rates will be reset in connection with the successful remarketings of the Debt Securities. Prior to the first scheduled attempted remarketing of
the Series C Debt Securities, such Debt Securities will be divided into two tranches equal in principal amount with maturity dates of June 15,
2018 and June 15, 2023. Prior to the first scheduled attempted remarketing of the Series E Debt Securities, such Debt Securities will be
divided into two tranches equal

in principal amount with maturity dates of June 15, 2018 and June 15, 2045.

Senior Notes — Other
In August 2010, in anticipation of the Acquisition, MetLife, Inc. issued senior notes as follows:
(cid:129) $1,000 million senior notes due February 6, 2014, which bear interest at a fixed rate of 2.375%, payable semiannually;
(cid:129) $1,000 million senior notes due February 8, 2021, which bear interest at a fixed rate of 4.75%, payable semiannually;
(cid:129) $750 million senior notes due February 6, 2041, which bear interest at a fixed rate of 5.875%, payable semiannually; and
(cid:129) $250 million floating rate senior notes due August 6, 2013, which bear interest at a rate equal to three-month LIBOR, reset quarterly,

plus 1.25%, payable quarterly.

In connection with these offerings, MetLife, Inc. incurred $15 million of issuance costs which have been capitalized and included in other

assets. These costs are being amortized over the terms of the senior notes.

In May 2009, MetLife, Inc. issued $1,250 million of senior notes due June 1, 2016. The notes bear interest at a fixed rate of 6.75%, payable
semiannually. In connection with the offering, the Holding Company incurred $6 million of issuance costs which have been capitalized and
included in other assets. These costs are being amortized over the term of the notes.

In March 2009, MetLife, Inc. issued $397 million of floating rate senior notes due June 29, 2012 under the FDIC Program. The notes bear
interest at a rate equal to three-month LIBOR, reset quarterly, plus 0.32%. The notes are not redeemable prior to their maturity. In connection
with the offering, the Holding Company incurred $15 million of issuance costs which have been capitalized and included in other assets.
These costs are being amortized over the term of the notes.

In February 2009, MetLife, Inc. remarketed its existing $1,035 million 4.91% Series B junior subordinated debt securities as 7.717% senior
debt securities, Series B, due 2019. In August 2008, the Holding Company remarketed its existing $1,035 million 4.82% Series A junior
subordinated debt securities as 6.817% senior debt securities, Series A, due 2018. Interest on both series of debt securities is payable
semiannually. The Series A and Series B junior subordinated debt securities were originally issued in 2005 in connection with certain common
equity units. See Notes 13 and 14.

Advances from the Federal Home Loan Bank of New York
MetLife Bank is a member of the FHLB of NY and held $187 million and $124 million of common stock of the FHLB of NY at December 31,
2010 and 2009, respectively, which is included in equity securities. MetLife Bank has also entered into advances agreements with the FHLB
of NY whereby MetLife Bank has received cash advances and under which the FHLB of NY has been granted a blanket lien on certain of
MetLife Bank’s residential mortgage loans, mortgage loans held-for-sale, commercial mortgage loans and mortgage-backed securities to
collateralize MetLife Bank’s repayment obligations. Upon any event of default by MetLife Bank, the FHLB of NY’s recovery is limited to the
amount of MetLife Bank’s liability under the advances agreements. The amount of MetLife Bank’s liability for advances from the FHLB of NY
was $3.8 billion and $2.4 billion at December 31, 2010 and 2009, respectively, which is included in long-term debt and short-term debt
depending upon the original tenor of the advance. During the years ended December 31, 2010, 2009 and 2008, MetLife Bank received
advances related to long-term borrowings totaling $2,103 million, $1,280 million and $220 million, respectively, from the FHLB of NY. MetLife
Bank made repayments to the FHLB of NY of $349 million, $497 million and $371 million related to long-term borrowings for the years ended
December 31, 2010, 2009 and 2008, respectively. The advances related to both long-term and short-term debt were collateralized by
residential mortgage loans, mortgage loans held-for-sale, commercial mortgage loans and mortgage-backed securities with estimated fair
values of $7.8 billion and $5.5 billion at December 31, 2010 and 2009, respectively.

Collateralized Borrowing from the Federal Reserve Bank of New York
MetLife Bank is a depository institution that is approved to use the Federal Reserve Bank of New York Discount Window borrowing
privileges. In order to utilize these privileges, MetLife Bank has pledged qualifying loans and investment securities to the Federal Reserve
Bank of New York as collateral. MetLife Bank had no liability for advances from the Federal Reserve Bank of New York at both December 31,
2010 and 2009. The estimated fair value of loan and investment security collateral pledged by MetLife Bank to the Federal Reserve Bank of

F-106

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

New York at December 31, 2010 and 2009 was $1.8 billion and $1.5 billion, respectively. During the years ended December 31, 2009 and
2008, the weighted average interest rate on these advances was 0.26% and 0.79%, respectively. During the year ended December 31, 2009,
the average daily balance of these advances was $1,513 million and these advances were outstanding for an average of 24 days. There were
no such advances during the year ended December 31, 2010.

Short-term Debt
Short-term debt with maturities of one year or less is as follows:

Commercial paper
MetLife Bank, N.A. — Advances agreements with the FHLB of NY . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2010

2009

(In millions)

$

102
190

14

319
585

8

Total short-term debt

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

306

$

912

Average daily balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

687

$ 2,845

Average days outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21 days

16 days

During the years ended December 31, 2010, 2009 and 2008, the weighted average interest rate on short-term debt was 0.35%, 0.42%

and 2.40%, respectively.

Interest Expense
Interest expense related to the Company’s indebtedness included in other expenses was $815 million, $713 million and $554 million for
financing

the years ended December 31, 2010, 2009 and 2008, respectively, and does not
arrangements, junior subordinated debt securities or common equity units. See Notes 12, 13 and 14.

include interest expense on collateral

Credit and Committed Facilities
The Company maintains unsecured credit facilities and committed facilities, which aggregated $4.0 billion and $12.4 billion, respectively,

at December 31, 2010. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements.

Credit Facilities.

The unsecured credit facilities are used for general corporate purposes, to support the borrowers’ commercial paper
programs and for the issuance of letters of credit. Total fees expensed associated with these credit facilities were $17 million, $43 million and
$17 million for the years ended December 31, 2010, 2009 and 2008, respectively. Information on these credit facilities at December 31, 2010
is as follows:

Letter of
Credit
Issuances

Drawdowns

Unused
Commitments

Borrower(s)

Expiration

Capacity

MetLife, Inc. and MetLife Funding, Inc.

. . . . . . .

October 2011

$1,000

$ —

$ —

MetLife, Inc. and MetLife Funding, Inc.

. . . . . . . October 2013 (1)

3,000

1,507

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,000

$1,507

$ —

$1,000

1,493

$2,493

(In millions)

(1) All borrowings under the credit agreement must be repaid by October 2013, except that letters of credit outstanding upon termination may

remain outstanding until October 2014.
Committed Facilities.

The committed facilities are used for collateral for certain of the Company’s affiliated reinsurance liabilities. Total
fees expensed associated with these committed facilities were $92 million, $55 million and $35 million for the years ended December 31,
2010, 2009 and 2008, respectively. Information on these committed facilities at December 31, 2010 is as follows:

Account Party/Borrower(s)

Expiration

Capacity

Letter of
Credit

Issuances Drawdowns

(In millions)

Unused
Commitments

Maturity
(Years)

MetLife, Inc.

. . . . . . . . . . . . . . . . . . August 2011

$

300

$ 300

$ —

$ —

Exeter Reassurance Company Ltd.,

MetLife, Inc., & Missouri Reinsurance
(Barbados), Inc.

. . . . . . . . . . . . . . .

MetLife Reinsurance Company of

June 2016

Vermont & MetLife, Inc.

. . . . . . . . . . December 2020 (1)

Exeter Reassurance Company Ltd.

. . . . December 2027 (1)

MetLife Reinsurance Company of South

500

350

650

490

350

535

—

—

—

Carolina & MetLife, Inc.

. . . . . . . . . .

June 2037

3,500

—

2,797

MetLife Reinsurance Company of

Vermont & MetLife, Inc.

. . . . . . . . . . December 2037 (1)

2,896

1,603

MetLife Reinsurance Company of

Vermont & MetLife, Inc.

. . . . . . . . . . September 2038 (1)

4,250

2,160

—

—

10

—

115

703

1,293

2,090

Total(2)

. . . . . . . . . . . . . . . . . . . . . .

$12,446

$5,438

$2,797

$4,211

—

5

10

17

26

27

27

MetLife, Inc.

F-107

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

(1) The Holding Company is a guarantor under this agreement.
(2) See also Note 24.

As a result of the offerings of certain senior notes (see “— Senior Notes — Other”) and common stock (see Note 18), the commitment
letter for a $5.0 billion senior credit facility, which the Holding Company signed to partially finance the Acquisition, was terminated. During
March 2010, the Holding Company paid $28 million in fees related to this senior credit facility, all of which were expensed during the year
ended December 31, 2010. See Note 19.

12. Collateral Financing Arrangements

Associated with the Closed Block
In December 2007, MLIC reinsured a portion of its closed block liabilities to MRC, a wholly-owned subsidiary of the Company. In
connection with this transaction, MRC issued, to investors placed by an unaffiliated financial
institution, $2.5 billion in aggregate principal
amount of 35-year surplus notes to provide statutory reserve support for the assumed closed block liabilities. Interest on the surplus notes
accrues at an annual rate of 3-month LIBOR plus 0.55%, payable quarterly. The ability of MRC to make interest and principal payments on the
surplus notes is contingent upon South Carolina regulatory approval. At both December 31, 2010 and 2009, the amount of the surplus notes
outstanding was $2.5 billion.

Simultaneous with the issuance of the surplus notes, the Holding Company entered into an agreement with the unaffiliated financial
institution, under which the Holding Company is entitled to the interest paid by MRC on the surplus notes of 3-month LIBOR plus 0.55% in
exchange for the payment of 3-month LIBOR plus 1.12%, payable quarterly on such amount as adjusted, as described below. The Holding
Company may also be required to pledge collateral or make payments to the unaffiliated financial
institution related to any decline in the
estimated fair value of the surplus notes. Any such payments would be accounted for as a receivable and included in other assets on the
Company’s consolidated balance sheets and would not reduce the principal amount outstanding of the surplus notes. Such payments would,
however, reduce the amount of interest payments due from the Holding Company under the agreement. Any payment received from the
unaffiliated financial
institution would reduce the receivable by an amount equal to such payment and would also increase the amount of
interest payments due from the Holding Company under the agreement. In addition, the unaffiliated financial institution may be required to
pledge collateral to the Holding Company related to any increase in the estimated fair value of the surplus notes. During 2008, the Holding
Company paid an aggregate of $800 million to the unaffiliated financial institution relating to declines in the estimated fair value of the surplus
notes. The Holding Company did not receive any payments from the unaffiliated financial institution during 2008. During 2009, on a net basis,
the Holding Company received $375 million from the unaffiliated financial
institution related to changes in the estimated fair value of the
surplus notes. No payments were made or received by the Holding Company during 2010. Since the closing of the collateral financing
arrangement in December 2007, on a net basis, the Holding Company has paid $425 million to the unaffiliated financial institution related to
changes in the estimated fair value of the surplus notes. In addition, at December 31, 2008, the Holding Company had pledged collateral with
an estimated fair value of $230 million to the unaffiliated financial institution. At December 31, 2009, the Holding Company had no collateral
pledged to the unaffiliated financial institution in connection with this agreement. At December 31, 2010, the Holding Company had pledged
collateral with an estimated fair value of $49 million to the unaffiliated financial institution. The Holding Company may also be required to make
a payment to the unaffiliated financial

institution in connection with any early termination of this agreement.

A majority of the proceeds from the offering of the surplus notes was placed in a trust, which is consolidated by the Company, to support
MRC’s statutory obligations associated with the assumed closed block liabilities. During 2007, MRC deposited $2.0 billion into the trust, from
the proceeds of the surplus notes issued in 2007. During 2008, MRC deposited an additional $314 million into the trust. No amount was
deposited into the trust during 2009. During 2010, MRC transferred $497 million out of the trust. At December 31, 2010 and 2009, the
estimated fair value of assets held in trust by the Company was $2.0 billion and $2.4 billion, respectively. The assets are principally invested in
fixed maturity securities and are presented as such within the Company’s consolidated balance sheets, with the related income included
within net investment income in the Company’s consolidated statements of operations. Interest on the collateral financing arrangement is
included as a component of other expenses.

Total interest expense related to the collateral financing arrangement was $36 million, $51 million and $117 million for the years ended

December 31, 2010, 2009 and 2008, respectively.

Associated with Secondary Guarantees
In May 2007, the Holding Company and MRSC, a wholly-owned subsidiary of the Company, entered into a 30-year collateral financing
institution that provides up to $3.5 billion of statutory reserve support for MRSC associated with
arrangement with an unaffiliated financial
reinsurance obligations under intercompany reinsurance agreements. Such statutory reserves are associated with universal life secondary
guarantees and are required under U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation A-XXX). At both
December 31, 2010 and 2009, $2.8 billion had been drawn upon under the collateral financing arrangement. The collateral financing
arrangement may be extended by agreement of the Holding Company and the unaffiliated financial
institution on each anniversary of the
closing.

Proceeds from the collateral financing arrangement were placed in trusts to support MRSC’s statutory obligations associated with the
reinsurance of secondary guarantees. The trusts are VIEs which are consolidated by the Company. The unaffiliated financial
institution is
entitled to the return on the investment portfolio held by the trusts. At December 31, 2010 and 2009, the Company held assets in trust with an
estimated fair value of $3.3 billion and $3.2 billion, respectively, associated with the collateral financing arrangement. The assets are
principally invested in fixed maturity securities and are presented as such within the Company’s consolidated balance sheets, with the related
income included within net investment income in the Company’s consolidated statements of operations. Interest on the collateral financing
arrangement is included as a component of other expenses.

F-108

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

In connection with the collateral financing arrangement, the Holding Company entered into an agreement with the same unaffiliated
financial
institution under which the Holding Company is entitled to the return on the investment portfolio held by the trusts established in
connection with this collateral financing arrangement in exchange for the payment of a stated rate of return to the unaffiliated financial
institution of 3-month LIBOR plus 0.70%, payable quarterly. The collateral financing agreement may be extended by agreement of the Holding
Company and the unaffiliated financial
institution on each anniversary of the closing. The Holding Company may also be required to make
payments to the unaffiliated financial institution, for deposit into the trusts, related to any decline in the estimated fair value of the assets held
by the trusts, as well as amounts outstanding upon maturity or early termination of the collateral financing arrangement. During 2010, no
payments were made or received by the Holding Company. During 2009 and 2008, the Holding Company contributed $360 million and
$320 million, respectively, as a result of declines in the estimated fair value of the assets in the trusts. Cumulatively, since May 2007, the
Holding Company has contributed a total of $680 million as a result of declines in the estimated fair value of the assets in the trusts, all of which
was deposited into the trusts.

In addition, the Holding Company may be required to pledge collateral to the unaffiliated financial

institution under this agreement. At

December 31, 2010 and 2009, the Holding Company had pledged $63 million and $80 million, respectively, under the agreement.

Transaction costs associated with the collateral financing arrangement of $5 million have been capitalized, are included in other assets,
and are being amortized over the period from May 2007, the date the Holding Company entered into the collateral financing arrangement, to
its expiration. Total interest expense related to the collateral financing arrangement was $30 million, $44 million and $107 million for the years
ended December 31, 2010, 2009 and 2008, respectively.

13. Junior Subordinated Debt Securities

Outstanding Junior Subordinated Debt Securities
Outstanding junior subordinated debt securities and trust securities which MetLife, Inc. will exchange for junior subordinated debt

securities prior to redemption or repayment were as follows:

Issuer

Issue Date

Face
Value

Interest
Rate(2)

Scheduled
Redemption Date

(In millions)

Interest Rate
Subsequent to
Scheduled
Redemption
Date(3)

Final
Maturity

Carrying Value
at December 31,

2010

2009

(In millions)

MetLife, Inc.

. . . . . . . . . . . . .

July 2009

$ 500 10.750% August 2039

LIBOR + 7.548% August 2069

$ 500 $ 500

MetLife Capital Trust X(1) . . . . . . April 2008

$ 750

9.250% April 2038

LIBOR + 5.540% April 2068

MetLife Capital Trust IV(1)
MetLife, Inc.

. . . . . December 2007 $ 700
. . . . . . . . . . . . . December 2006 $1,250

7.875% December 2037 LIBOR + 3.960% December 2067
6.400% December 2036 LIBOR + 2.205% December 2066

750

694
1,247

750

694
1,247

$3,191 $3,191

(1) MetLife Capital Trust X and MetLife Capital Trust IV are VIEs which are consolidated in the financial statements of the Company. The
securities issued by these entities are exchangeable surplus trust securities, which will be exchanged for a like amount of the Holding
Company’s junior subordinated debt securities on the scheduled redemption date; mandatorily under certain circumstances, and at any
time upon the Holding Company exercising its option to redeem the securities. The exchangeable surplus trust securities are classified as
junior subordinated debt securities for purposes of financial statement presentation.
(2) Prior to the scheduled redemption date, interest is payable semiannually in arrears.
(3)

In the event the securities are not redeemed on or before the scheduled redemption date, interest will accrue after such date at an annual
rate of 3-month LIBOR plus a margin, payable quarterly in arrears.
In connection with each of the securities described above, the Holding Company may redeem or may cause the redemption of the
securities (i) in whole or in part, at any time on or after the date five years prior to the scheduled redemption date at their principal amount plus
accrued and unpaid interest to, but excluding, the date of redemption, or (ii) in certain circumstances, in whole or in part, prior to the date five
years prior to the scheduled redemption date at their principal amount plus accrued and unpaid interest to, but excluding, the date of
redemption or, if greater, a make-whole price. The Holding Company also has the right to, and in certain circumstances the requirement to,
defer interest payments on the securities for a period up to ten years. Interest compounds during such periods of deferral. If interest is
deferred for more than five consecutive years, the Holding Company is required to use proceeds from the sale of its common stock or
warrants on common stock to satisfy interest payment obligation. In connection with each of the securities described above, the Holding
Company entered into a replacement capital covenant (“RCC”). As part of the RCC, the Holding Company agreed that it will not repay,
redeem, or purchase the securities on or before a date ten years prior to the final maturity date of each issuance, unless, subject to certain
limitations, it has received proceeds during a specified period from the sale of specified replacement securities. The RCC will terminate upon
the occurrence of certain events, including an acceleration of the securities due to the occurrence of an event of default. The RCC is not
intended for the benefit of holders of the securities and may not be enforced by them. The RCC is for the benefit of holders of one or more
other designated series of the Holding Company’s indebtedness (which will initially be its 5.70% senior notes due June 2035). The Holding
Company also entered into a replacement capital obligation which will commence during the six month period prior to the scheduled
redemption date and under which the Holding Company must use reasonable commercial efforts to raise replacement capital to permit
repayment of the securities through the issuance of certain qualifying capital securities.

Issuance costs associated with the issuance of the securities of $5 million and $8 million were incurred during the years ended
December 31, 2009 and 2008, respectively. These issuance costs have been capitalized, are included in other assets, and are amortized
over the period from the issuance date until the scheduled redemption date of the respective issuances. Interest expense on outstanding

MetLife, Inc.

F-109

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

junior subordinated debt securities was $258 million, $231 million and $186 million for the years ended December 31, 2010, 2009 and 2008,
respectively.

Junior Subordinated Debt Securities Underlying Common Equity Units
In June 2005, the Holding Company issued $1,067 million 4.82% Series A and $1,067 million 4.91% Series B junior subordinated debt
securities due no later than February 2039 and February 2040, respectively, for a total of $2,134 million, in exchange for $64 million in trust
common securities of MetLife Capital Trust II (“Series A Trust”) and MetLife Capital Trust III (“Series B Trust”) and, together with the Series A
Trust, (the “Capital Trusts”), both subsidiary trusts of MetLife, Inc., and $2,070 million in aggregate cash proceeds from the sale by the
subsidiary trusts of trust preferred securities, constituting part of the common equity units. The subsidiary trusts each issued $1,035 million of
trust preferred securities and $32 million of trust common securities.

In August 2008, the Series A Trust was dissolved and $32 million of the Series A junior subordinated debt securities were returned to the
Holding Company concurrently with the cancellation of the $32 million of trust common securities of the Series A Trust held by MetLife, Inc.
Upon dissolution of the Series A Trust, the remaining $1,035 million of Series A junior subordinated debt securities were distributed to the
holders of the trust preferred securities and such trust preferred securities were cancelled. In connection with the remarketing transaction in
August 2008, the remaining $1,035 million of MetLife, Inc. Series A junior subordinated debt securities were modified, as permitted by their
terms, to be 6.817% senior debt securities, Series A, due August 2018. The Company did not receive any proceeds from the remarketing.
See also Notes 11, 14 and 18.

In February 2009, the Series B Trust was dissolved and $32 million of the Series B junior subordinated debt securities were returned to the
Holding Company concurrently with the cancellation of the $32 million of trust common securities of the Series B Trust held by MetLife, Inc.
Upon dissolution of the Series B Trust, the remaining $1,035 million of Series B junior subordinated debt securities were distributed to the
holders of the trust preferred securities and such trust preferred securities were cancelled. In connection with the remarketing transaction in
February 2009, the remaining $1,035 million of MetLife, Inc. Series B junior subordinated debt securities were modified, as permitted by their
terms, to be 7.717% senior debt securities, Series B, due February 2019. The Company did not receive any proceeds from the remarketing.
See also Notes 11, 14 and 18.

Interest expense on the junior subordinated debt securities underlying the common equity units was $6 million and $84 million for the years
ended December 31, 2009 and 2008, respectively. There was no interest expense on the junior subordinated debt securities underlying the
common equity units for the year ended December 31, 2010.

14. Common Equity Units

Acquisition of ALICO
In connection with the financing of the Acquisition (see Note 2) in November 2010, MetLife, Inc. issued to ALICO Holdings 40.0 million
Equity Units with an aggregate stated amount at issuance of $3,000 million and an estimated fair value of $3,189 million. Each Equity Unit has
an initial stated amount of $75 per unit and initially consists of: (i) three Purchase Contracts, each of which obligates the holder to purchase,
on a subsequent settlement date, a variable number of shares of MetLife, Inc. common stock, par value $0.01 per share, for a purchase price
of $25 ($75 in the aggregate); and (ii) a 1⁄40 undivided beneficial ownership interest in each of three series of Debt Securities issued by MetLife,
Inc., each series of Debt Securities having an aggregate principal amount of $1,000 million. Distributions on the Equity Units will be made
quarterly, and will consist of contract payments on the Purchase Contracts and interest payments on the Debt Securities, at an aggregate
annual rate of 5.00% of the stated amount at any time. The excess of the estimated fair value of the Equity Units over the estimated fair value of
the Debt Securities (see Note 11), after accounting for the present value of future contract payments recorded in other liabilities, results in a
net decrease to additional paid-in capital of $69 million, representing the fair value of the Purchase Contracts discussed below.

The Equity Units, the Debt Securities and the common stock issuable upon settlement of the Purchase Contracts are subject to the terms
of an investor rights agreement entered into among MetLife, Inc., AIG and ALICO Holdings, which grants to ALICO Holdings certain rights and
sets forth certain agreements with respect to ALICO Holdings’ ownership, voting and transfer of the shares, including minimum holding
periods, restrictions on the number of shares ALICO Holdings can sell at one time, its agreement to vote the common stock in the same
proportion as the common stock voted by all other holders and its agreement not to seek control or influence the Company’s management or
Board of Directors. The Equity Units are not listed on any exchange or inter-dealer quotation system. The Equity Units have been pledged to
secure certain indemnification obligations of ALICO Holdings under the Stock Purchase Agreement. See Note 2.

Purchase Contracts
Settlement of the Purchase Contracts of each series will occur upon the successful remarketing of the related series of Debt Securities, or
upon a final failed remarketing of the related series, as described below under “— Debt Securities.” On each settlement date subsequent to a
successful remarketing, the holder will pay $25 per Equity Unit and MetLife, Inc. will issue to such holder a variable number of shares of its
common stock in settlement of the applicable Purchase Contract. The number of shares to be issued will depend on the average of the daily
volume-weighted average prices of MetLife, Inc.’s common stock during the 20 trading day periods ending on, and including, the third day
prior to the initial scheduled settlement date for each series of Purchase Contracts. The initially-scheduled settlement dates are October 10,
2012 for the Series C Purchase Contracts, September 11, 2013 for the Series D Purchase Contracts and October 8, 2014 for the Series E
Purchase Contracts. If the average value of MetLife, Inc.’s common stock as calculated pursuant to the Stock Purchase Agreement during the
applicable 20 trading day period is less than or equal to $35.42, as such amount may be adjusted (the “Reference Price”), the number of
shares to be issued in settlement of the Purchase Contract will equal $25 divided by the Reference Price, as calculated pursuant to the Stock
Purchase Agreement (the “Maximum Settlement Rate”). If the market value of MetLife, Inc.’s common stock is greater than or equal to
$44.275, as such amount may be adjusted (the “Threshold Appreciation Price”), the number of shares to be issued in settlement of the
Purchase Contract will equal $25 divided by the Threshold Appreciation Price, as so calculated (the “Minimum Settlement Rate”). If the market
value of MetLife, Inc.’s common stock is greater than the Reference Price and less than the Threshold Appreciation Price, the number of
shares to be issued will equal $25 divided by the applicable market value, as so calculated. In the event of an unsuccessful remarketing of any

F-110

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

series of Debt Securities and the postponement of settlement to a later date, the average market value used to calculate the settlement rate
for a particular series will not be recalculated, although certain corporate events may require adjustments to the settlement rate. After
settlement of all the Purchase Contracts, MetLife, Inc. will receive proceeds of $3,000 million and issue between 67.8 million and 84.7 million
shares of its common stock, subject to certain adjustments. The holder of an Equity Unit may, at its option, settle the related Purchase
Contracts before the applicable settlement date. However, upon early settlement, the holder will receive the Minimum Settlement Rate.

Distributions on the Purchase Contracts will be made quarterly at an average annual rate of 3.02%. The value of the Purchase Contracts at
issuance of $247 million was calculated as the present value of the future contract payments and was recorded in other liabilities with an
offsetting decrease in additional paid-in capital. The other liabilities balance will be reduced as contract payments are made. For the year
ended December 31, 2010, no contract payments were made.

Debt Securities
The Debt Securities are senior, unsecured notes of MetLife, Inc. which, in the aggregate, pay quarterly distributions at an initial average
annual rate of 1.98% and are included in long-term debt (see Note 11 for further discussion of terms). The Debt Securities will be initially
pledged as collateral to secure the obligations of each Equity Unit holder under the related Purchase Contracts. Each series of the Debt
Securities will be subject to a remarketing and sold on behalf of participating holders to investors. The proceeds of a remarketing, net of any
related fees, will be applied on behalf of participating holders who so elect to settle any obligation of the holder to pay cash under the related
Purchase Contract on the applicable settlement dates. The initially-scheduled remarketing dates are October 10, 2012 for the Series C Debt
Securities, September 11, 2013 for the Series D Debt Securities and October 8, 2014 for the Series E Debt Securities, subject to delay if
there are one or more unsuccessful remarketings. If the initial attempted remarketing of a series is unsuccessful, up to two additional
remarketing attempts will occur. At the remarketing date, the remarketing agent may reset the interest rate on the Debt Securities, subject to a
reset cap for each of the first two attempted remarketings of each series. If a remarketing is successful, the reset rate will apply to all
outstanding Debt Securities of the applicable tranche of the remarketed series, whether or not the holder participated in the remarketing and
will become effective on the settlement date of such remarketing. If the first remarketing attempt with respect to a series is unsuccessful, the
applicable Purchase Contract settlement date will be delayed for three calendar months, at which time a second remarketing attempt will
occur in connection with settlement. If the second remarketing attempt is unsuccessful, one additional delay may occur on the same basis. If
both additional remarketing attempts are unsuccessful, a “final failed remarketing” will have occurred, and the interest rate on such series of
Debt Securities will not be reset and the holder may put such series of Debt Securities to MetLife, Inc. at a price equal to its principal amount
plus accrued and unpaid interest, if any, and apply the principal amount against the holder’s obligations under the related Purchase Contract.

Earnings Per Common Share

The treasury stock method is used to determine the potential dilution of the Purchase Contracts on earnings per common share. There

was no dilution associated with the Purchase Contracts for the year ended December 31, 2010.

Acquisition of The Travelers Insurance Company

In connection with financing the acquisition of The Travelers Insurance Company on July 1, 2005, the Holding Company distributed and
sold 82.8 million 6.375% common equity units for $2,070 million in proceeds in a registered public offering on June 21, 2005. The common
equity units consisted of interests in trust preferred securities issued by MetLife Capital Trusts II and III, and stock purchase contracts issued
by the Holding Company. The only assets of MetLife Capital Trusts II and III were junior subordinated debt securities issued by the Holding
Company. The common equity units ceased to exist upon the closing of the remarketing of the underlying debt instruments and the settlement
of the stock purchase contracts in August 2008 and February 2009. See Notes 13 and 18.

15.

Income Tax

The provision for income tax from continuing operations was as follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Current:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 141

$ (231)

$

(35)

State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21
203

365

12
236

17

10
623

598

Deferred:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

670

(2,135)

1,056

State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)

153

816

26

77

(6)

(68)

(2,032)

982

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,181

$(2,015)

$1,580

MetLife, Inc.

F-111

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations

was as follows:

Years Ended December 31,

2010

2009

2008

Tax provision at U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,385
Tax effect of:

(In millions)

$(1,517)

$1,771

Tax-exempt investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(242)

(288)

(254)

State and local
income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior year tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign tax rate differential and change in valuation allowance . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9
59

(82)

26
26

17
(26)

(87)

(118)
4

2
53

(58)

65
1

Provision for income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,181

$(2,015)

$1,580

Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred

income tax assets and liabilities consisted of the following:

December 31,

2010

2009

(In millions)

Deferred income tax assets:

Policyholder liabilities and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,169

$3,929

Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,400

Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital

Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net unrealized investment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Litigation-related and government mandated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

664
408

459

—

227
331

871

661
551

401

816

240
276

Less: Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261

217

8,658

7,745

Deferred income tax liabilities:

Investments, including derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net unrealized investment gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,397

7,528

1,253

3,068

1,490
4,342

125

1,434

334

—
4,439

93

10,278

6,300

Net deferred income tax asset (liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,881)

$1,228

loss carryforwards of $1,130 million at December 31, 2010 will expire beginning in 2011. Foreign capital

Domestic net operating loss carryforwards of $2,181 million at December 31, 2010 will expire beginning in 2020. State net operating loss
carryforwards of $123 million at December 31, 2010 will expire beginning in 2011. Foreign net operating loss carryforwards of $2,132 million
at December 31, 2010 were generated in various foreign countries with expiration periods of five years to indefinite expiration. Domestic
capital
loss carryforwards of
$35 million at December 31, 2010 will expire beginning in 2014. Tax credit carryforwards were $459 million at December 31, 2010.
The Company has recorded a valuation allowance related to tax benefits of certain state and foreign net operating and capital
loss
carryforwards and certain foreign unrealized losses. The valuation allowance reflects management’s assessment, based on available
information, that it is more likely than not that the deferred income tax asset for certain foreign net operating and capital loss carryforwards and
certain foreign unrealized losses will not be realized. The tax benefit will be recognized when management believes that it is more likely than
not that these deferred income tax assets are realizable. In 2010, the Company recorded an overall
increase to the deferred tax valuation
allowance of $44 million, comprised of a decrease of $2 million related to certain foreign unrealized losses, an increase of $18 million related
to certain foreign capital loss carryforwards, an increase of $28 million related to certain state and foreign net operating loss carryforwards.
The Company has not provided U.S. deferred taxes on cumulative earnings of certain non-U.S. affiliates and associated companies that
have been reinvested indefinitely. These earnings relate to ongoing operations and have been reinvested in active non-U.S. business

F-112

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

operations. The Company does not intend to repatriate these earnings to fund U.S. operations. Deferred taxes are provided for earnings of
non-U.S. affiliates and associated companies when the Company plans to remit those earnings. At December 31, 2010, the Company has
not made a provision for U.S. taxes on approximately $1,045 million of the excess of the amount for financial reporting over the tax basis of
investments in foreign subsidiaries that are essentially permanent in duration. It is not practicable to estimate the amount of deferred tax
liability related to investments in these foreign subsidiaries.

The Company files income tax returns with the U.S. federal government and various state and local

jurisdictions, as well as foreign
jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in jurisdictions in which the Company has
significant business operations. The income tax years under examination vary by jurisdiction. With a few exceptions, the Company is no
longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2000. In early 2009, the
Company and the IRS completed and substantially settled the audit years of 2000 to 2002. A few issues not settled have been escalated to
the next level, IRS Appeals. In April 2010, the IRS exam of the current audit cycle, years 2003 to 2006 began.

The Company’s liability for unrecognized tax benefits may decrease in the next 12 months pending the outcome of remaining issues, tax-
exempt income and tax credits associated with the 2000 to 2002 IRS audit. A reasonable estimate of the decrease cannot be made at this
time. However, the Company continues to believe that the ultimate resolution of the issues will not result in a material change to its
consolidated financial statements, although the resolution of income tax matters could impact the Company’s effective tax rate for a particular
future period.

The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while

penalties are included in income tax expense.

At December 31, 2010, the Company’s total amount of unrecognized tax benefits was $810 million and the total amount of unrecognized
tax benefits that would affect the effective tax rate, if recognized, was $536 million. The total amount of unrecognized tax benefits increased
by $37 million from December 31, 2009 primarily due to increases for tax positions of prior years offset by reductions for tax positions of prior
years and settlements reached with the IRS. The increases for tax positions of prior years included $169 million from the acquisition of
American Life. Settlements with tax authorities amounted to $59 million, all of which was reclassified to current and deferred income tax
payable, as applicable, with $3 million paid in 2010.

At December 31, 2009, the Company’s total amount of unrecognized tax benefits was $773 million and the total amount of unrecognized
tax benefits that would affect the effective tax rate, if recognized, was $583 million. The total amount of unrecognized tax benefits increased
by $7 million from December 31, 2008 primarily due to additions for tax positions of the current and prior years offset by settlements reached
with the IRS. Settlements with tax authorities amounted to $46 million, of which $44 million was reclassified to current income tax payable and
paid in 2009 and $2 million reduced current income tax expense.

At December 31, 2008, the Company’s total amount of unrecognized tax benefits was $766 million and the total amount of unrecognized
tax benefits that would affect the effective tax rate, if recognized, was $567 million. The total amount of unrecognized tax benefits decreased
by $74 million from December 31, 2007 primarily due to settlements reached with the IRS with respect to certain significant issues involving
demutualization, leasing and tax credits offset by additions for tax positions of the current year. As a result of the settlements, items within the
liability for unrecognized tax benefits, in the amount of $153 million, were reclassified to current and deferred income tax payable, as
applicable, of which $20 million was paid in 2008 and $133 million was paid in 2009.

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

Years Ended
December 31,
2009

(In millions)

2008

2010

Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $773
186
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$766
43

$ 840
11

Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additions for tax positions of current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reductions for tax positions of current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements with tax authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lapses of statutes of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(84)

13

(8)
(59)

(11)

(33)

52

(9)
(46)

—

(51)

147

(22)
(153)

(6)

Balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $810

$773

$ 766

During the year ended December 31, 2010, the Company recognized $39 million in interest expense associated with the liability for
unrecognized tax benefits. At December 31, 2010, the Company had $221 million of accrued interest associated with the liability for
unrecognized tax benefits. The $23 million increase from December 31, 2009 in accrued interest associated with the liability for unrecognized
tax benefits resulted primarily from an increase of $20 million from the acquisition of American Life, along with an increase of $39 million of
interest expense and a $36 million decrease primarily resulting from the aforementioned IRS settlements. Of the $36 million decrease,
$18 million has been reclassified to current income tax payable, of which $2 million was paid in 2010. The remaining $18 million reduced
interest expense.

During the year ended December 31, 2009, the Company recognized $44 million in interest expense associated with the liability for
unrecognized tax benefits. At December 31, 2009, the Company had $198 million of accrued interest associated with the liability for
unrecognized tax benefits. The $22 million increase from December 31, 2008 in accrued interest associated with the liability for unrecognized
interest expense and a $22 million decrease primarily resulting from the
tax benefits resulted from an increase of $44 million of

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

aforementioned IRS settlements. Of the $22 million decrease, $20 million was reclassified to current income tax payable and was paid in
2009. The remaining $2 million reduced interest expense.

During the year ended December 31, 2008, the Company recognized $37 million in interest expense associated with the liability for
unrecognized tax benefits. At December 31, 2008, the Company had $176 million of accrued interest associated with the liability for
unrecognized tax benefits. The $42 million decrease from December 31, 2007 in accrued interest associated with the liability for
unrecognized tax benefits resulted from an increase of $37 million of interest expense and a $79 million decrease primarily resulting from
the aforementioned IRS settlements. Of the $79 million decrease, $78 million was reclassified to current income tax payable in 2008, with
$7 million and $71 million paid in 2008 and 2009, respectively. The remaining $1 million reduced interest expense.

The U.S. Treasury Department and the IRS have indicated that they intend to address through regulations the methodology to be followed
in determining the dividends received deduction (“DRD”), related to variable life insurance and annuity contracts. The DRD reduces the
amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected
amount determined using the federal statutory tax rate of 35%. Any regulations that the IRS ultimately proposes for issuance in this area will be
subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal
and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any
such regulations are unknown at this time. For the years ended December 31, 2010 and 2009, the Company recognized an income tax
benefit of $87 million and $216 million, respectively, related to the separate account DRD. The 2010 benefit included an expense of
$57 million related to a true-up of the 2009 tax return. The 2009 benefit included a benefit of $33 million related to a true up of the 2008 tax
return.

16. Contingencies, Commitments and Guarantees

Contingencies

Litigation
The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate amounts,
including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the
assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit
claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit
plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This
variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over
an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little
relevance to its merits or disposition value.

Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may
normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and
effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented,
whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their
counsel will themselves view the relevant evidence and applicable law.

On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and contingencies to be reflected in
the Company’s consolidated financial statements. The review includes senior legal and financial personnel. Estimates of possible losses or
ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established
when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for
a number of the matters noted below. It is possible that some of the matters could require the Company to pay damages or make other
expenditures or establish accruals in amounts that could not be estimated at December 31, 2010.

Asbestos-Related Claims
MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege
that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. MLIC
has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has
MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing, producing, distributing or selling
asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication
and other activities of one or more of MLIC’s employees during the period from the 1920’s through approximately the 1950’s and allege that
MLIC learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to
liability in these cases. The outcome of most asbestos litigation
disclose those health risks. MLIC believes that it should not have legal
matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the
nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against MLIC. MLIC employs a number of
resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling
individual or groups of claims or lawsuits under appropriate circumstances.

Claims asserted against MLIC have included negligence, intentional tort and conspiracy concerning the health risks associated with
asbestos. MLIC’s defenses (beyond denial of certain factual allegations) include that: (i) MLIC owed no duty to the plaintiffs— it had no special
relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs;
(ii) plaintiffs did not rely on any actions of MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ injuries; (iv) plaintiffs’ exposure occurred
after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the course of the litigation,
certain trial courts have granted motions dismissing claims against MLIC, while other trial courts have denied MLIC’s motions to dismiss.
There can be no assurance that MLIC will receive favorable decisions on motions in the future. While most cases brought to date have settled,
MLIC intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The approximate total number of asbestos personal injury claims pending against MLIC as of the dates indicated, the approximate number
of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos personal
injury claims at or during those years are set forth in the following table:

December 31,

2010

2009

2008

(In millions, except number of
claims)

Asbestos personal
injury claims at year end . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of new claims during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68,513
5,670

68,804
3,910

74,027
5,063

Settlement payments during the year(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

34.9

$

37.6

$

99.0

(1) Settlement payments represent payments made by MLIC during the year in connection with settlements made in that year and in prior
years. Amounts do not include MLIC’s attorneys’ fees and expenses and do not reflect amounts received from insurance carriers.
In 2007, MLIC received approximately 7,161 new claims, ending the year with a total of approximately 79,717 claims, and paid
approximately $28.2 million for settlements reached in 2007 and prior years. In 2006, MLIC received approximately 7,870 new claims, ending
the year with a total of approximately 87,070 claims, and paid approximately $35.5 million for settlements reached in 2006 and prior years. In
2005, MLIC received approximately 18,500 new claims, ending the year with a total of approximately 100,250 claims, and paid approximately
$74.3 million for settlements reached in 2005 and prior years. In 2004, MLIC received approximately 23,900 new claims, ending the year with
a total of approximately 108,000 claims, and paid approximately $85.5 million for settlements reached in 2004 and prior years. In 2003, MLIC
received approximately 58,750 new claims, ending the year with a total of approximately 111,700 claims, and paid approximately
$84.2 million for settlements reached in 2003 and prior years. The number of asbestos cases that may be brought, the aggregate amount
of any liability that MLIC may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year
to year.

The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its
liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict with any certainty the
numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and
severity of disease in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the
law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue
claims against MLIC when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any
possible future adverse verdicts and their amounts.

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the
future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably
possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that
future charges to income may be necessary. While the potential future charges could be material in the particular quarterly or annual periods in
which they are recorded, based on information currently known by management, management does not believe any such charges are likely to
have a material adverse effect on the Company’s financial position.

During 1998, MLIC paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance
policies for asbestos-related claims provided for recovery of losses up to $1.5 billion in excess of a $400 million self-insured retention. The
Company’s initial option to commute the excess insurance policies for asbestos-related claims would have arisen at the end of 2008. On
September 29, 2008, MLIC entered into agreements commuting the excess insurance policies at September 30, 2008. As a result of the
commutation of the policies, MLIC received cash and securities totaling $632 million. Of this total, MLIC received $115 million in fixed maturity
securities on September 26, 2008, $200 million in cash on October 29, 2008, and $317 million in cash on January 29, 2009. MLIC
recognized a loss on commutation of the policies in the amount of $35.3 million during 2008.

In the years prior to commutation, the excess insurance policies for asbestos-related claims were subject to annual and per claim
sublimits. Amounts exceeding the sublimits during 2007, 2006 and 2005 were approximately $16 million, $8 million and $0, respectively.
Amounts were recoverable under the policies annually with respect to claims paid during the prior calendar year. Each asbestos-related
policy contained an experience fund and a reference fund that provided for payments to MLIC at the commutation date if the reference fund
was greater than zero at commutation or pro rata reductions from time to time in the loss reimbursements to MLIC if the cumulative return on
the reference fund was less than the return specified in the experience fund. The return in the reference fund was tied to performance of the
S&P 500 Index and the Lehman Brothers Aggregate Bond Index. A claim with respect to the prior year was made under the excess insurance
policies in each year from 2003 through 2008 for the amounts paid with respect to asbestos litigation in excess of the retention. The foregone
loss reimbursements were approximately $62.2 million with respect to claims for the period of 2002 through 2007. Because the policies were
commuted at September 30, 2008, there will be no claims under the policies or forgone loss reimbursements with respect to payments made
in 2008 and thereafter.

The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably
estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability is based on its estimation of the following elements, as
informed by the facts presently known to it, its understanding of current law and its past experiences: (i) the probable and reasonably
estimable liability for asbestos claims already asserted against MLIC, including claims settled but not yet paid; (ii) the probable and reasonably
estimable liability for asbestos claims not yet asserted against MLIC, but which MLIC believes are reasonably probable of assertion; and
(iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying MLIC’s analysis of the adequacy of its
recorded liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to
defend claims.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

MLIC reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing
external
literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and
considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include
bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving
serious disease, the number of new claims filed against it and other defendants and the jurisdictions in which claims are pending. As
previously disclosed, in 2002 MLIC increased its recorded liability for asbestos-related claims by $402 million from approximately $820 million
to $1,225 million. Based upon its regular reevaluation of its exposure from asbestos litigation, MLIC has updated its liability analysis for
asbestos-related claims through December 31, 2010.

Regulatory Matters
The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners;
state attorneys general or other state governmental authorities; federal regulators, including the SEC; federal governmental authorities,
including congressional committees; and the Financial
Industry Regulatory Authority (“FINRA”) seeking a broad range of information. The
issues involved in information requests and regulatory matters vary widely. The Company cooperates in these inquiries.

Attorneys general

from 50 states and several state banking and mortgage regulators announced a multistate joint investigation of
mortgage servicers to determine whether inaccurate affidavits or other documents were submitted in support of foreclosure proceedings.
MetLife Bank, and specifically its mortgage servicing department within MetLife Home Loans, received requests for information from some of
these state attorneys general and other regulators. Also, the Acting Comptroller of the Currency disclosed in testimony before Congress that
14 mortgage servicing businesses affiliated with banking organizations, including that of MetLife Bank, have been the subject of an intra-
agency confidential “horizontal examination” of mortgage servicing and foreclosure activities. The Acting Comptroller also testified that
federal banking regulators expect to issue administrative enforcement orders to such businesses and to seek civil money penalties. The
Acting Comptroller’s testimony also indicated that other federal agencies, including the Department of Justice and the Federal Trade
Commission, were examining potential actions with respect to such businesses. MetLife is cooperating with its regulators in connection with
their review of these matters but cannot predict the outcome of these matters. It is possible that additional state or federal regulators or
legislative bodies may pursue similar investigations or make related inquiries. Management believes that the Company’s financial statements
as a whole will not be materially affected by the MetLife Bank regulatory matters.

United States of America v. EME Homer City Generation, L.P., et al. (W.D. Pa., filed January 4, 2011). On January 4, 2011, the United
States commenced a civil action in United States District Court for the Western District of Pennsylvania against EME Homer City Generation
L.P. (“EME Homer City”), Homer City OL6 LLC, and other defendants regarding the operations of the Homer City Generating Station, an
electricity generating facility. Homer City OL6 LLC, an entity owned by MLIC, is a passive investor with a noncontrolling interest in the
electricity generating facility, which is solely operated by the lessee, EME Homer City. The complaint seeks injunctive relief and assessment of
civil penalties for alleged violations of the federal Clean Air Act and Pennsylvania’s State Implementation Plan. The alleged violations were the
subject of Notices of Violations (“NOVs”) that the Environmental Protection Agency (“EPA”) issued to EME Homer City, Homer City OL6 LLC,
and others in June 2008 and May 2010. On January 7, 2011, the United States District Court for the Western District of Pennsylvania granted
the motion by the Pennsylvania Department of Environmental Protection and the State of New York to intervene in the lawsuit as additional
plaintiffs. On January 7, 2011, two plaintiffs filed a putative class action titled Scott Jackson and Maria Jackson v. EME Homer City Generation
L.P., et. al. in the United States District Court for the Western District of Pennsylvania on behalf of a putative class of persons who have
allegedly incurred damage to their persons and/or property because of the violations alleged in the action brought by the United States.
Homer City OL6 LLC is a defendant in this action. EME Homer City has acknowledged its obligation to indemnify Homer City OL6 LLC for any
claims relating to the NOVs.

In the Matter of Chemform, Inc. Site, Pompano Beach, Broward County, Florida.

In July 2010, the EPA advised MLIC that it believed
payments were due under two settlement agreements, known as “Administrative Orders on Consent,” that New England Mutual Life
Insurance Company (“New England Mutual”) signed in 1989 and 1992 with respect to the cleanup of a Superfund site in Florida (the
“Chemform Site”). The EPA originally contacted MLIC (as successor to New England Mutual) and a third party in 2001, and advised that they
owed additional clean-up costs for the Chemform Site. The matter was not resolved at that time. The EPA is requesting payment of an amount
under $1 million from MLIC and a third party for past costs and for future environmental testing costs at the Chemform Site.

Regulatory authorities in a small number of states and FINRA, and occasionally the SEC, have had investigations or inquiries relating to
sales of individual life insurance policies or annuities or other products by MLIC, MICC, New England Life Insurance Company and GALIC, and
the four Company broker-dealers, which are MetLife Securities, Inc. (“MSI”), New England Securities Corporation, Walnut Street Securities,
Inc. and Tower Square Securities, Inc. These investigations often focus on the conduct of particular financial services representatives and the
sale of unregistered or unsuitable products or the misuse of client assets. Over the past several years, these and a number of investigations
by other regulatory authorities were resolved for monetary payments and certain other relief, including restitution payments. The Company
may continue to resolve investigations in a similar manner. The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for these sales practices-related investigations or inquiries.

Retained Asset Account Matters
The New York Attorney General announced on July 29, 2010 that his office had launched a major fraud investigation into the life insurance
industry for practices related to the use of retained asset accounts as a settlement option for death benefits and that subpoenas requesting
comprehensive data related to retained asset accounts had been served on MetLife and other insurance carriers. The Company received the
subpoena on July 30, 2010. The Company also has received requests for documents and information from U.S. congressional committees
and members as well as various state regulatory bodies, including the New York Insurance Department. It is possible that other state and
federal regulators or legislative bodies may pursue similar investigations or make related inquiries. Management cannot predict what effect
any such investigations might have on the Company’s earnings or the availability of the Company’s retained asset account known as the Total
Control Account (“TCA”), but management believes that the Company’s consolidated financial statements taken as a whole would not be

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

materially affected. Management believes that any allegations that information about the TCA is not adequately disclosed or that the accounts
are fraudulent or otherwise violate state or federal

laws are without merit.

MLIC is a defendant in lawsuits related to the TCA. The lawsuits include claims of breach of contract, breach of a common law fiduciary
duty or a quasi-fiduciary duty such as a confidential or special relationship, or breach of a fiduciary duty under the Employee Retirement
Income Security Act of 1974 (“ERISA”).

Clark, et al. v. Metropolitan Life Insurance Company (D. Nev., filed March 28, 2008).

This putative class action lawsuit alleges breach of
contract and breach of a common law fiduciary and/or quasi-fiduciary duty arising from use of the TCA to pay life insurance policy death
benefits. As damages, plaintiffs seek disgorgement of the difference between the interest paid to the account holders and the investment
earnings on the assets backing the accounts. In March 2009, the court granted in part and denied in part MLIC’s motion to dismiss,
dismissing the fiduciary duty and unjust enrichment claims but allowing a breach of contract claim and a special or confidential relationship
claim to go forward. On September 9, 2010, the court granted MLIC’s motion for summary judgment. On September 20, 2010, plaintiff filed a
Notice of Appeal to the United States Court of Appeals for the Ninth Circuit.

Faber, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., filed December 4, 2008).

This putative class action lawsuit alleges that
MLIC’s use of the TCA as the settlement option under group life insurance policies violates MLIC’s fiduciary duties under ERISA. As damages,
plaintiffs seek disgorgement of the difference between the interest paid to the account holders and the investment earnings on the assets
backing the accounts. On October 23, 2009, the court granted MLIC’s motion to dismiss with prejudice. On November 24, 2009, plaintiffs
filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit.

Keife, et al. v. Metropolitan Life Insurance Company (D. Nev., filed in state court on July 30, 2010 and removed to federal court on
September 7, 2010). This putative class action lawsuit raises a breach of contract claim arising from MLIC’s use of the TCA to pay life
insurance benefits under the Federal Employees’ Group Life Insurance program. As damages, plaintiffs seek disgorgement of the difference
between the interest paid to the account holders and the investment earnings on the assets backing the accounts. In September 2010,
plaintiffs filed a motion for class certification of the breach of contract claim, which the court has stayed. On November 22, 2010, MLIC filed a
motion to dismiss.

Other U.S. Litigation
Travelers Ins. Co., et al. v. Banc of America Securities LLC (S.D.N.Y., filed December 13, 2001). On January 6, 2009, after a jury trial, the
district court entered a judgment in favor of The Travelers Insurance Company, now known as MICC, in the amount of approximately
$42 million in connection with securities and common law claims against the defendant. On May 14, 2009, the district court issued an opinion
and order denying the defendant’s post judgment motion seeking a judgment in its favor or, in the alternative, a new trial. On July 20, 2010, the
United States Court of Appeals for the Second Circuit issued an order affirming the district court’s judgment in favor of MICC and the district
court’s order denying defendant’s post-trial motions. On October 14, 2010, the Second Circuit issued an order denying defendant’s petition
for rehearing of its appeal. On October 20, 2010, the defendant paid MICC approximately $42 million, which represents the judgment amount
due to MICC. This lawsuit is now fully resolved.

Roberts, et al. v. Tishman Speyer Properties, et al. (Sup. Ct., N.Y. County, filed January 22, 2007).

This lawsuit was filed by a putative
class of market rate tenants at Stuyvesant Town and Peter Cooper Village against parties including Metropolitan Tower Life Insurance
Company (“MTL”) and Metropolitan Insurance and Annuity Company. Metropolitan Insurance and Annuity Company has merged into MTL and
no longer exists as a separate entity. These tenants claim that MTL, as former owner, and the current owner improperly deregulated
apartments while receiving J-51 tax abatements. The lawsuit seeks declaratory relief and damages for rent overcharges. Although the
tenants allege over $200 million in damages in the complaint, MTL strongly disputes the tenants’ damages amounts. In October 2009, the
New York State Court of Appeals issued an opinion denying MTL’s motion to dismiss the complaint. The lawsuit has returned to the trial court
where MTL continues to vigorously defend against the claims. The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for this lawsuit. It is reasonably possible that the Company’s total
exposure may be greater than the liability currently accrued and that future charges to income may be necessary. Management believes that
the Company’s financial statements as a whole will not be materially affected by any such future charges.

Thomas, et al. v. Metropolitan Life Ins. Co., et al. (W.D. Okla., filed January 31, 2007). A putative class action complaint was filed against
MLIC and MSI. Plaintiffs asserted legal theories of violations of the federal securities laws and violations of state laws with respect to the sale
of certain proprietary products by the Company’s agency distribution group. Plaintiffs sought rescission, compensatory damages, interest,
punitive damages and attorneys’ fees and expenses. In August 2009, the district court granted defendants’ motion for summary judgment.
On February 2, 2011, the United States Court of Appeals for the Tenth Circuit affirmed the judgment of the district court granting MLIC’s and
MSI’s summary judgment motion.

Sales Practices Claims. Over the past several years, the Company has faced numerous claims, including class action lawsuits, alleging
improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek
substantial damages, including punitive and treble damages and attorneys’ fees. The Company continues to vigorously defend against the
claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable
and reasonably estimable losses for sales practices matters.

International Litigation
Sun Life Assurance Company of Canada v. Metropolitan Life Ins. Co. (Super. Ct., Ontario, October 2006).

In 2006, Sun Life Assurance
Company of Canada (“Sun Life”), as successor to the purchaser of MLIC’s Canadian operations, filed this lawsuit in Toronto, seeking a
declaration that MLIC remains liable for “market conduct claims” related to certain individual life insurance policies sold by MLIC and that have
been transferred to Sun Life. Sun Life had asked that the court require MLIC to indemnify Sun Life for these claims pursuant to indemnity
provisions in the sale agreement for the sale of MLIC’s Canadian operations entered into in June of 1998. In January 2010, the court found
that Sun Life had given timely notice of its claim for indemnification but, because it found that Sun Life had not yet incurred an indemnifiable
loss, granted MLIC’s motion for summary judgment. Both parties appealed. In September 2010, Sun Life notified MLIC that a purported class

MetLife, Inc.

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Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

action lawsuit was filed against Sun Life in Toronto, Kang v. Sun Life Assurance Co. (Super. Ct., Ontario, September 2010), alleging sales
practices claims regarding the same individual policies sold by MLIC and transferred to Sun Life. Sun Life contends that MLIC is obligated to
indemnify Sun Life for some or all of the claims in this lawsuit. MLIC is currently not a party to the Kang v. Sun Life lawsuit.

Italy Fund Redemption Suspension Complaints and Litigation. As a result of suspension of withdrawals and diminution in value in certain
funds offered within certain unit-linked policies sold by the Italian branch of Alico Life International, Ltd. (“ALIL”), a number of policyholders
invested in those funds have either commenced or threatened litigation against ALIL, alleging misrepresentation, inadequate disclosures and
other related claims. These policyholders contacted ALIL beginning in July 2009 alleging that the funds operated at variance to the published
prospectus and that prospectus risk disclosures were allegedly wrong, unclear, and misleading. The limited number of lawsuits that have
been filed to date have either been resolved or are proceeding through litigation. In March 2010, ALIL learned that the public prosecutor in
Milan had opened a formal investigation into the actions of ALIL employees, as well as of employees of ALIL’s major distributor, based upon a
policyholder complaint. The complaint filed by the policyholder has now been withdrawn. ALIL is cooperating with the Italian and Irish
regulatory authorities, which have jurisdiction in connection with this matter. The Stock Purchase Agreement includes a provision pursuant to
which the Holding Company and certain related parties may seek indemnification for liabilities in excess of an agreed upon amount arising out
of certain specified policyholder claims and governmental investigations in connection with the above-mentioned unit-linked policies. See
also “Indemnification Assets and Contingent Consideration” in Note 2.

Summary
Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those
discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the
Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lending bank, employer, investor,
investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make
inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

It is not possible to predict the ultimate outcome or provide reasonable ranges of potential losses of all pending investigations and legal
proceedings. In some of the matters referred to previously, very large and/or indeterminate amounts, including punitive and treble damages,
are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse
effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the
outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or
indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome
in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated net income or cash flows in
particular quarterly or annual periods.

Insolvency Assessments
Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to
participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired,
insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the
basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed
insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. In addition,
Japan has established a Policyholder Protection Commission as a contingency to protect policyholders against the insolvency of life
insurance companies in Japan through assessments to companies licensed to provide life insurance.

Assets and liabilities held for insolvency assessments were as follows:

December 31,

2010

2009

(In millions)

Other Assets:

Premium tax offset for future undiscounted assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55

$54

Premium tax offsets currently available for paid assessments . . . . . . . . . . . . . . . . . . . . . . . . . . .

Receivable for reimbursement of paid assessments (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

6

9

4

$69

$67

Other Liabilities:

Insolvency assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $94

$86

(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement.

Assessments levied against the Company were $4 million, $2 million and $2 million for the years ended December 31, 2010, 2009 and

2008, respectively.

Argentina
The Argentine economic, regulatory and legal environment, including interpretations of laws and regulations by regulators and courts, is
legal or governmental actions related to pension reform, fiduciary responsibilities, performance guarantees and tax

uncertain. Potential
rulings could adversely affect the results of the Company.

In 2007, pension reform legislation in Argentina was enacted which relieved the Company of its obligation to provide death and disability
policy coverages and resulted in the elimination of related insurance liabilities. The reform reinstituted the government’s pension plan system
and allowed for pension participants to transfer their future contributions to the government pension plan system.

F-118

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Although it no longer received compensation, the Company continued to be responsible for managing the funds of those participants that
transferred to the government system. This change resulted in the establishment of a liability for future servicing obligations and the
elimination of the Company’s obligations under death and disability policy coverages. During 2008, the future servicing obligation was
reduced by $23 million, net of income tax, when information regarding the level of participation in the government pension plan became fully
available.

In September 2008, the Argentine Supreme Court ruled against the validity of the 2002 Pesification Law enacted by the Argentine
government. This ruling applied to certain social security pension annuity contractholders that had filed a lawsuit against the 2002 Pesification
Law. The annuity contracts impacted by this ruling, which were deemed peso denominated under the 2002 Pesification Law, are now
considered to be U.S. dollar denominated obligations of the Company. The applicable contingent liabilities were then adjusted and refined to
be consistent with this ruling. The impact of the refinements resulting from the change in these contingent liabilities and the associated future
policyholder benefits was an increase to net income of $34 million, net of income tax, during the year ended December 31, 2008.

In October 2008, the Argentine government announced its intention to nationalize private pensions and, in December 2008, the Argentine
government nationalized the private pension system seizing the underlying investments of participants which were being managed by the
Company. With this action, the Company’s pension business in Argentina ceased to exist and the Company eliminated certain assets and
liabilities held in connection with the pension business. Deferred acquisition costs, deferred tax assets, and liabilities — primarily the liability
for future servicing obligation referred to above — were eliminated and the Company incurred severance costs associated with the
termination of employees. The impact of the elimination of assets and liabilities and the incurral of severance costs was an increase to
net income of $6 million, net of income tax, during the year ended December 31, 2008.

In March 2009, in light of market developments resulting from the Supreme Court ruling contrary to the Pesification Law and the
implementation by the Company of a program to allow the contractholders that had not filed a lawsuit to convert to U.S. dollars the social
security annuity contracts denominated in pesos by the Pesification Law, the Company further reduced the outstanding contingent liabilities
by $108 million, net of income tax, which was partially offset by the establishment of contingent liabilities from the implementation of the
program to convert these contracts to U.S. dollars of $13 million, net of income tax, resulting in a decrease to net loss of $95 million, net of
income tax, for the year ended December 31, 2009.

Further governmental or legal actions are possible in Argentina. Such actions may impact the level of existing liabilities or may create
additional obligations or benefits to the Company’s operations in Argentina. Management has made its best estimate of its obligations based
upon information currently available; however, further governmental or legal actions could result in changes in obligations which could
materially impact the amounts presented within the consolidated financial statements.

Commitments

Leases
In accordance with industry practice, certain of the Company’s income from lease agreements with retail tenants are contingent upon the
level of the tenants’ revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office
space, information technology and other equipment. Future minimum rental and sublease income, and minimum gross rental payments
relating to these lease agreements are as follows:

Rental
Income

Sublease
Income

(In millions)

Gross
Rental
Payments

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$444
$375

$331

$286
$236

$724

$18
$17

$16

$10
$ 6

$44

$366
$280

$237

$167
$136

$965

During 2008, the Company moved certain of its operations in New York from Long Island City, Queens to Manhattan. As a result of this
movement of operations and current market conditions, which precluded the Company’s immediate and complete sublet of all unused space
in both Long Island City and Manhattan, the Company incurred a lease impairment charge of $38 million which is included within other
expenses in Banking, Corporate & Other. The impairment charge was determined based upon the present value of the gross rental payments
less sublease income discounted at a risk-adjusted rate over the remaining lease terms which range from 15-20 years. The Company has
made assumptions with respect to the timing and amount of future sublease income in the determination of this impairment charge. During
2009, pending sublease deals were impacted by the further decline of market conditions, which resulted in an additional lease impairment
charge of $52 million. See Note 19 for discussion of $28 million of such charges related to restructuring. Additional impairment charges could
be incurred should market conditions deteriorate further or last for a period significantly longer than anticipated.

Commitments to Fund Partnership Investments
The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded
commitments were $3.8 billion and $4.1 billion at December 31, 2010 and 2009, respectively. The Company anticipates that these amounts
will be invested in partnerships over the next five years.

MetLife, Inc.

F-119

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Mortgage Loan Commitments
The Company has issued interest rate lock commitments on certain residential mortgage loan applications totaling $2.5 billion and
$2.7 billion at December 31, 2010 and 2009, respectively. The Company intends to sell the majority of these originated residential mortgage
loans. Interest rate lock commitments to fund mortgage loans that will be held-for-sale are considered derivatives and their estimated fair
value and notional amounts are included within interest rate forwards in Note 4.

The Company also commits to lend funds under certain other mortgage loan commitments that will be held-for-investment. The amounts

of these mortgage loan commitments were $3.8 billion and $2.2 billion at December 31, 2010 and 2009, respectively.

Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments
The Company commits to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of

these unfunded commitments were $2.4 billion and $1.3 billion at December 31, 2010 and 2009, respectively.

Guarantees
In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties
pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other
transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific
liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or
covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties
in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often
subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable
statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual
limitation ranging from less than $1 million to $800 million, with a cumulative maximum of $1.6 billion, while in other cases such limitations are
not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to
determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely
the Company will have to make any material payments under these indemnities, guarantees, or commitments.

In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its
agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to
limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that
could become due under these indemnities in the future.

The Company has also guaranteed minimum investment returns on certain international retirement funds in accordance with local laws.
Since these guarantees are not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to
determine the maximum potential amount that could become due under these guarantees in the future.

During the year ended December 31, 2010, the Company did not record any additional

liabilities for indemnities, guarantees and
commitments. The Company’s recorded liabilities were $5 million at both December 31, 2010 and 2009, for indemnities, guarantees and
commitments.

17. Employee Benefit Plans

Pension and Other Postretirement Benefit Plans
The Subsidiaries sponsor and/or administer various qualified and non-qualified defined benefit pension plans and other postretirement
employee benefit plans covering employees and sales representatives who meet specified eligibility requirements. Pension benefits are
provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits that are primarily based upon
years of credited service and final average earnings. The cash balance formula primarily utilizes hypothetical or notional accounts which credit
participants with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually based upon the average
annual rate of interest on 30-year U.S. Treasury securities, for each account balance. At December 31, 2010, the majority of active
participants were accruing benefits under the cash balance formula; however, approximately 90% of the Subsidiaries’ obligations result from
benefits calculated with the traditional formula. The U.S. non-qualified pension plans provide supplemental benefits in excess of limits
applicable to a qualified plan.

The Subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance benefits for retired
employees. Employees of the Subsidiaries who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and
service criteria while working for one of the Subsidiaries may become eligible for these other postretirement benefits, at various levels, in
accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total costs of postretirement
medical benefits. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits.

In connection with the Acquisition, domestic American Life employees who became employees of certain Subsidiaries (including those
who remained employees of companies acquired in the Acquisition) were credited with service recognized by AIG for purposes of determining
eligibility under the pension plans with respect to benefits earned under the pension plans subsequent to the closing date of the Acquisition.
Additionally, in connection with the Acquisition, the Company acquired certain pension plans sponsored by American Life. As of the end of

the year, these plans had liabilities of approximately $595 million and assets of approximately $97 million.

Measurement dates used for all of the Subsidiaries’ defined benefit pension and other postretirement benefit plans correspond with the

fiscal year ends of sponsoring Subsidiaries, which are December 31 for most Subsidiaries and November 30 for American Life.

F-120

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Obligations, Funded Status and Net Periodic Benefit Costs

Pension
Benefits

Other
Postretirement
Benefits

December 31,

2010

2009

2010

2009

(In millions)

Change in benefit obligations:

Benefit obligations at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,649
180

Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$6,041
170

Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Acquisition, settlements and curtailments . . . . . . . . . . . . . . . . . . . . . . . .

Change in benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prescription drug subsidy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

399

—
271

639

1
—

(420)

—

395

—
421

12

(6)
—

(384)

—

$1,847
17

113

34
73

—

(80)
12

(154)

(17)

$1,632
22

125

30
351

—

(167)
12

(158)

—

Benefit obligations at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,719

6,649

1,845

1,847

Change in plan assets:

Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,770
716

5,559
525

1,121
102

1,011
137

Acquisition and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97

—
325

(420)

—

—

—
70

(384)

—

—

34
95

(140)

(12)

—

2
4

(33)

—

Fair value of plan assets at end of year

. . . . . . . . . . . . . . . . . . . . . . . . .

6,488

5,770

1,200

1,121

Funded status at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,231)

$ (879)

$ (645)

$ (726)

Amounts recognized in the consolidated balance sheets consist of:

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112
(1,343)

$ — $ — $ —
(726)

(879)

(645)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,231)

$ (879)

$ (645)

$ (726)

Accumulated other comprehensive (income) loss:

Net actuarial
Prior service costs (credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,092
20

$2,267
25

$ 400
(285)

$ 388
(288)

Accumulated other comprehensive (income) loss . . . . . . . . . . . . . . . . . . .

2,112

2,292

Deferred income tax (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(738)

(811)

115

(40)

100

(36)

Accumulated other comprehensive (income) loss, net of income tax . . . . . . . $ 1,374

$1,481

$

75

$

64

The aggregate projected benefit obligation and aggregate fair value of plan assets for the pension benefit plans were as follows:

Qualified Plans

Non-Qualified
Plans

December 31,

Total

2010

2009

2010

2009

2010

2009

(In millions)

Aggregate fair value of plan assets . . . . . . . . . . . . . . . . . . $6,484

$5,770

$

4

$ — $ 6,488

$5,770

Aggregate projected benefit obligations . . . . . . . . . . . . . . .

6,835

5,862

884

787

7,719

6,649

Over (under) funded . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (351)

$

(92)

$(880)

$(787)

$(1,231)

$ (879)

The accumulated benefit obligations for all defined benefit pension plans were $7,320 million and $6,321 million at December 31, 2010

and 2009, respectively.

MetLife, Inc.

F-121

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The aggregate pension accumulated benefit obligation and aggregate fair value of plan assets for pension benefit plans with accumulated

benefit obligations in excess of plan assets was as follows:

Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,436

Accumulated benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,307

Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106

$798

$714

$

1

Information for pension and other postretirement benefit plans with a projected benefit obligation in excess of plan assets were as follows:

December 31,

2010

2009

(In millions)

Pension
Benefits

Other
Postretirement
Benefits

December 31,

2010

2009

2010

2009

(In millions)

Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,803

$6,580

$1,845

$1,847

Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 461

$5,700

$1,200

$1,121

Net periodic pension costs and net periodic other postretirement benefit plan costs are comprised of the following:

i)

ii)

Service Costs — Service costs are the increase in the projected (expected) pension benefit obligation resulting from benefits
payable to employees of the Subsidiaries on service rendered during the current year.
Interest Costs on the Liability — Interest costs are the time value adjustment on the projected (expected) pension benefit
obligation at the end of each year.

iii) Settlement and Curtailment Costs — The aggregate amount of net gains (losses) recognized in net periodic benefit costs due to
settlements and curtailments. Settlements result from actions that relieve/eliminate the plan’s responsibility for benefit obligations
or risks associated with the obligations or assets used for the settlement. Curtailments result from an event that significantly
reduces/eliminates plan participants’ expected years of future services or benefit accruals.

iv) Expected Return on Plan Assets — Expected return on plan assets is the assumed return earned by the accumulated pension and

v)

other postretirement fund assets in a particular year.
Amortization of Net Actuarial Gains (Losses) — Actuarial gains and losses result from differences between the actual experience
and the expected experience on pension and other postretirement plan assets or projected (expected) pension benefit obligation
during a particular period. These gains and losses are accumulated and, to the extent they exceed 10% of the greater of the PBO
or the fair value of plan assets, the excess is amortized into pension and other postretirement benefit costs over the expected
service years of the employees.

vi) Amortization of Prior Service Costs — These costs relate to the recognition of increases or decreases in pension and other
postretirement benefit obligation due to amendments in plans or initiation of new plans. These increases or decreases in obligation
are recognized in accumulated other comprehensive income (loss) at the time of the amendment. These costs are then amortized
to pension and other postretirement benefit costs over the expected service years of the employees affected by the change.

F-122

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in other compre-

hensive income (loss) were as follows:

Pension
Benefits

Other
Postretirement
Benefits

Years Ended December 31,
2009

2008

2010

2009

2008

2010

(In millions)

Net Periodic Benefit Costs:

Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 180 $ 170 $ 164 $ 17 $ 22 $ 21

Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399

395

379 113

125 103

Settlement and curtailment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

17

Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(450)
Amortization of net actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . 196

(439)
227

Amortization of prior service costs (credit)

. . . . . . . . . . . . . . . . . . . . . . . .

7

10

—

(517)
24

15

1

(79)
38

(83)

— —

(72)
42

(36)

(86)
(1)

(37)

Net periodic benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Net periodic benefit costs of subsidiary at date of disposal . . . . . . . . . . . . —

380
—

65

7
1 —

81 —
— —

Total net periodic benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

380

66

7

81 —

Other Changes in Plan Assets and Benefit Obligations Recognized in

Other Comprehensive Income (Loss):

Net actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

310 1,561

50

283 259

Prior service costs (credit)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net actuarial gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .

1
(196)

(10)
(227)

Amortization of prior service (costs) credit

. . . . . . . . . . . . . . . . . . . . . . . .

(7)

(10)

(19)
(24)

(15)

Total recognized in other comprehensive income (loss)

. . . . . . . . . . . . . .

(180)

63 1,503

(80)
(38)

(167)
(42)

36

83

15

36
1

37

110 333

Total recognized in net periodic benefit costs and other comprehensive

income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 160 $ 443 $1,569 $ 22 $ 191 $333

For the year ended December 31, 2010, included within other comprehensive income (loss) were other changes in plan assets and benefit
obligations associated with pension benefits of ($180) million and other postretirement benefits of $15 million for an aggregate reduction in
other comprehensive income (loss) of ($165) million before income tax and ($96) million, net of income tax.

The estimated net actuarial (gains) losses and prior service costs (credit) for the pension plans that will be amortized from accumulated

other comprehensive income (loss) into net periodic benefit costs over the next year are $176 million and $5 million, respectively.

The estimated net actuarial (gains) losses and prior service costs (credit) for the defined benefit other postretirement benefit plans that will
be amortized from accumulated other comprehensive income (loss) into net periodic benefit costs over the next year are $34 million and
($108) million, respectively.

The Medicare Modernization Act of 2003 created various subsidies for sponsors of retiree drug programs. Two common ways of providing
subsidies were the Retiree Drug Subsidy (“RDS”) and Medicare Part D Prescription Drug Plans (“PDP”). From 2006 through 2010, the
Company applied for and received the RDS each year. The RDS program provides the subsidy through cash payments made by Medicare to
the Company, resulting in smaller net claims paid by the Company. A summary of the reduction to the APBO and the related reduction to the
components of net periodic other postretirement benefits plan costs resulting from receipt of the RDS is presented below. As of January 1,
2011, as a result of changes made under the Patient Protection and Affordable Care Act of 2010, the Company will no longer apply for the
RDS. Instead it has joined PDP and will indirectly receive Medicare subsidies in the form of smaller gross benefit payments for prescription
drug coverage.

Cumulative reduction in other postretirement benefits obligations:

Balance at January 1,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 247

$317

$299

Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3
16

Net actuarial gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(255)

Prescription drug subsidy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)

2
16

(76)

(12)

5
20

3

(10)

Balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $247

$317

December 31,

2010

2009

2008

(In millions)

MetLife, Inc.

F-123

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Years Ended
December 31,

2010

2009

2008

(In millions)

Reduction in net periodic other postretirement benefit costs:

Service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3

Interest costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of net actuarial gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

10

Total reduction in net periodic benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29

$ 2

16

11

$29

$ 5

20

—

$25

The Company received subsidies of $8 million, $12 million and $12 million for the years ended December 31, 2010, 2009 and 2008,

respectively.

Assumptions

Assumptions used in determining benefit obligations were as follows:

Pension
Benefits

Other
Postretirement
Benefits

2010

2009

2010

2009

December 31,

Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . .

5.80%

6.25%

5.80%

Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . 3.5%-7.5% 2.0%-7.5%

N/A

6.25%

N/A

Assumptions used in determining net periodic benefit costs were as follows:

Pension Benefits

2010

2009

December 31,
2008

Other Postretirement
Benefits

2010

2009

2008

Weighted average discount rate . . . . . . . . . . . . .

6.25%

6.60%

6.65%

6.25% 6.60% 6.65%

Weighted average expected rate of return on plan

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.00%

8.25%

8.25%

7.20% 7.36% 7.33%

Rate of compensation increase . . . . . . . . . . . . . . 3.5%-7.5% 3.5%-7.5% 3.5%-8%

N/A

N/A

N/A

The weighted average discount rate for most plans is determined annually based on the yield, measured on a yield to worst basis, of a
hypothetical portfolio constructed of high quality debt instruments available on the valuation date, which would provide the necessary future
cash flows to pay the aggregate projected benefit obligation when due.

The weighted average expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the
plans invest, weighted by target allocation percentages. Anticipated future performance is based on long-term historical returns of the plan
assets by sector, adjusted for the Subsidiaries’ long-term expectations on the performance of the markets. While the precise expected return
is to hold this long-term assumption
derived using this approach will fluctuate from year to year, the policy of most of the Subsidiaries’
constant as long as it remains within reasonable tolerance from the derived rate.

The weighted average expected return on plan assets for use in that plan’s valuation in 2011 is currently anticipated to be 7.25% for

pension benefits and postretirement medical benefits and 5.25% for postretirement life benefits.

The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:

Pre-and Post-Medicare eligible

claims . . . . . . . . . . . . . . . . . . . .

7.8% in 2011, gradually decreasing
each year until 2083 reaching the
ultimate rate of 4.4%.

8.2% in 2010, gradually decreasing
each year until 2079 reaching the
ultimate rate of 4.1%.

2010

2009

December 31,

Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A one-percentage point

change in assumed healthcare costs trend rates would have the following effects:

Effect on total of service and interest costs components . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of accumulated postretirement benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . .

One Percent
Increase

One Percent
Decrease

(In millions)

$ 8

$86

$

(8)

$(104)

Plan Assets
Most Subsidiaries have issued group annuity and life insurance contracts supporting the pension and other postretirement benefit plans

assets, which are invested primarily in separate accounts.

F-124

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The underlying assets of the separate accounts are principally comprised of cash and cash equivalents, short-term investments, fixed

maturity and equity securities, mutual funds, real estate, private equity investments and hedge funds investments.

The comparative presentation of the 2009 plan assets has been realigned to conform to the 2010 presentation to disclose the estimated

fair value of the underlying assets of each separate account at the security level.

The pension and postretirement plan assets and liabilities measured at estimated fair value on a recurring basis were determined as

described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:

Pension Benefits

Fair Value Measurements at
Reporting Date Using

Other Postretirement Benefits

Fair Value Measurements at
Reporting Date Using

December 31, 2010

Quoted
Prices
In Active
Markets
for
Identical
Assets and
Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Quoted
Prices
In Active
Markets
for
Identical
Assets and
Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

(In millions)

Assets

Fixed maturity securities:

Corporate . . . . . . . . . . . . . . . . .

$ —

$1,528

$ 49

$1,577

$ —

$ 67

$ 4

$

Federal agencies . . . . . . . . . . . . .

Foreign bonds . . . . . . . . . . . . . . .
Municipals . . . . . . . . . . . . . . . . .

Preferred stocks . . . . . . . . . . . . .

U.S. government bonds . . . . . . . .

Total fixed maturity securities . . . .

—

1
—

—

650

651

175

222
137

4

136

2,202

Equity securities:

Common stock — domestic . . . . . .
Common stock — foreign . . . . . . .

1,410
469

Total equity securities . . . . . . . .

1,879

Money market securities . . . . . . . . . .
Pass-through securities . . . . . . . . . .

Derivative securities . . . . . . . . . . . .

Short-term investments . . . . . . . . . .
Other invested assets . . . . . . . . . . .

Other receivables . . . . . . . . . . . . . .

Securities receivable . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . .

200
—

3

(9)
16

—

—
—

93
35

128

100
321

(5)

105
63

39

70
—

—

4
—

—

—

53

240
—

240

—
2

11

—
471

—

—
8

175

227
137

4

786

2,906

1,743
504

2,247

300
323

9

96
550

39

70
8

—

—
—

—

82

82

359
77

436

1
—

—

8
—

—

—
—

15

19
37

—

—

138

3
—

3

1
73

—

443
—

3

2
—

—

—
1

—

—

5

—
—

—

—
6

—

—
—

—

—
—

71

15

19
38

—

82

225

362
77

439

2
79

—

451
—

3

2
—

Total assets . . . . . . . . . . . . .

$2,740

$3,023

$785

$6,548

$527

$663

$11

$1,201

Liabilities

Securities payable . . . . . . . . . . . . .

$ —

Total

liabilities . . . . . . . . . . . .

$ —

$

$

60

60

Total assets and liabilities . . .

$2,740

$2,963

$ —

$ —

$785

$

$

60

60

$ —

$ —

$

$

1

1

$6,488

$527

$662

$ —

$ —

$11

$

$

1

1

$1,200

MetLife, Inc.

F-125

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Pension Benefits

Fair Value Measurements at
Reporting Date Using

Other Postretirement Benefits

Fair Value Measurements at
Reporting Date Using

December 31, 2009

Quoted
Prices
In Active
Markets
for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Quoted
Prices
In Active
Markets
for
Identical
Assets
(Level 1)

(In millions)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Estimated
Fair
Value

Assets

Fixed maturity securities:

Corporate . . . . . . . . . . . . . . . . . . . .
Federal agencies . . . . . . . . . . . . . . .

$ — $1,458
140

(41)

$ 68
—

$1,526
99

$ —
—

Foreign bonds . . . . . . . . . . . . . . . . .

Municipals . . . . . . . . . . . . . . . . . . . .
Preferred stocks . . . . . . . . . . . . . . . .

U.S. government bonds . . . . . . . . . . .

U.S. treasury notes . . . . . . . . . . . . . .

Total fixed maturity securities . . . . . .

1

—
—

319

—

279

Equity securities:

Common stock — domestic . . . . . . . .
Common stock — foreign . . . . . . . . . .

1,565
393

Total equity securities . . . . . . . . . . .

1,958

Money market securities . . . . . . . . . . . .
Pass-through securities . . . . . . . . . . . . .

Derivative securities . . . . . . . . . . . . . . .

Short-term investments . . . . . . . . . . . . .
Other invested assets . . . . . . . . . . . . . .

72
1

3

2
13

195

56
2

50

—

1,901

238
—

238

56
376

—

115
—

5

—
—

—

—

73

241
—

241

—
69

—

—
373

201

56
2

369

—

2,253

2,044
393

2,437

128
446

3

117
386

—

—
—

45

12

57

342
72

414

12
—

—

—
—

$ 48
30

6

21
—

—

—

105

6
—

6

1
75

—

442
—

$—
—

$

—

—
—

—

—

—

—
—

—

—
9

—

—
—

48
30

6

21
—

45

12

162

348
72

420

13
84

—

442
—

Total assets . . . . . . . . . . . . . . . .

$2,328

$2,686

$756

$5,770

$483

$629

$ 9

$1,121

The pension and other postretirement benefit plan assets are categorized into the three-level fair value hierarchy, as defined in Note 1,
based upon the priority of the inputs to the respective valuation technique. The following summarizes the types of assets included within the
three-level fair value hierarchy presented in the table above.

Level 1 This category includes investments in liquid securities, such as cash, short-term money market and bank time deposits,

expected to mature within a year.

Level 2 This category includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The
estimated fair value of such separate account is based upon reported NAV provided by fund managers and this value represents
the amount at which transfers into and out of the respective separate account are effected. These separate accounts provide
reasonable levels of price transparency and can be corroborated through observable market data.
Certain separate accounts are invested in investment partnerships designated as hedge funds. The values for these separate
accounts is determined monthly based on the NAV of the underlying hedge fund investment. Additionally, such hedge funds
generally contain lock out or other waiting period provisions for redemption requests to be filled. While the reporting and
redemption restrictions may limit the frequency of trading activity in separate accounts invested in hedge funds, the reported
NAV, and thus the referenced value of the separate account, provides a reasonable level of price transparency that can be
corroborated through observable market data. Directly held investments are primarily invested in U.S. and foreign government
and corporate securities.

Level 3 This category includes separate accounts that are invested in real estate and private equity investments that provide little or no
price transparency due to the infrequency with which the underlying assets trade and generally require additional time to
liquidate in an orderly manner. Accordingly, the values for separate accounts invested in these alternative asset classes are
based on inputs that cannot be readily derived from or corroborated by observable market data.

F-126

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a recurring basis using

significant unobservable (Level 3) inputs is as follows:

Total Realized/Unrealized
Gains (Losses) included in:

Balance,
January 1,

Earnings

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements

(In millions)

Transfer Into
Level 3

Transfer Out
of Level 3

Balance,
December 31,

Year Ended December 31, 2010:

Pension:
Fixed maturity securities:

Corporate . . . . . . . . . . . . . . . . . . . . .

$ 68

$ —

$ 7

Foreign bonds . . . . . . . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . .

Equity securities:

Common stock — domestic . . . . . . . . . .

Total equity securities . . . . . . . . . . . .

Pass-through securities . . . . . . . . . . . . . .
Derivative securities(1) . . . . . . . . . . . . . . .

Other invested assets . . . . . . . . . . . . . . .

Real estate(1)

. . . . . . . . . . . . . . . . . . . .

5

73

241

241

69
—

373

—

—

—

—

—

(11)
3

78

—

1

8

(2)

(2)

14
(3)

(4)

—

$(17)

(2)

(19)

1

1

(71)
(1)

24

—

$ 4

—

4

—

—

2
12

—

8

$(13)

—

(13)

—

—

(1)
—

—

—

$ 49

4

53

240

240

2
11

471

8

Total pension assets . . . . . . . . . . . .

$756

$ 70

$13

$(66)

$26

$(14)

$785

Other postretirement:

Fixed maturity securities:

Corporate . . . . . . . . . . . . . . . . . . . . .
Municipals . . . . . . . . . . . . . . . . . . . . .

$ —
—

Total fixed maturity securities . . . . . . . .

Pass-through securities . . . . . . . . . . . . . .

Total other postretirement assets . . . .

$

—

9

9

$ —
—

—

(4)

$ (4)

Total assets . . . . . . . . . . . . . . . .

$765

$ 66

$ 1
—

1

1

$ 2

$15

$ —
—

—

(1)

$ (1)

$(67)

$ 3
1

4

1

$ 5

$31

$ —
—

—

—

$ —

$(14)

$

4
1

5

6

$ 11

$796

(1) Derivative securities and real estate transfers into Level 3 are due to the Acquisition and are not related to the changes in Level 3

classification at the security level.

MetLife, Inc.

F-127

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Total Realized/Unrealized
Gains (Losses) included in:

Balance,
January 1,

Earnings

Other
Comprehensive
Income (Loss)

Purchases,
Sales,
Issuances and
Settlements

Transfer Into
and/or Out
of Level 3

Balance,
December 31,

(In millions)

Year Ended December 31, 2009:

Pension:

Fixed maturity securities:

Corporate . . . . . . . . . . . . . . . .
Foreign bonds . . . . . . . . . . . . .

$

Total fixed maturity securities . .

Equity securities:

Common stock — domestic . . . .

Total equity securities . . . . . . .

Pass-through securities . . . . . . . . .

Derivative securities . . . . . . . . . . .

Other invested assets . . . . . . . . . .

57
4

61

460

460

80

40

392

$ (5)
(1)

(6)

—

—

(2)

36

4

$ 21
5

26

(232)

(232)

8

(39)

(59)

$ (3)
(3)

(6)

13

13

(24)

(37)

36

Total pension assets . . . . . .

$1,033

$ 32

$(296)

$(18)

Other postretirement:

Pass-through securities . . . . . . . . .

Total other postretirement

assets . . . . . . . . . . . . . .

$

$

13

13

Total assets . . . . . . . . . . .

$1,046

$ 15

$(17)

$ 17

$(17)

$ 17

$(279)

$ (4)

$ (4)

$(22)

$ (2)
—

(2)

—

—

7

—

—

$ 5

$—

$—

$ 5

$ 68
5

73

241

241

69

—

373

$756

$

$

9

9

$765

The U.S. Subsidiaries provide employees with benefits under various ERISA benefit plans. These include qualified pension plans,
postretirement medical plans and certain retiree life insurance coverage. The assets of the Subsidiaries’ qualified pension plans are held in
insurance group annuity contracts, and the vast majority of the assets of the postretirement medical plan and backing the retiree life coverage
are held in insurance contracts. All of these contracts are issued by Company insurance affiliates, and the assets under the contracts are held
in insurance separate accounts that have been established by the Company. The insurance contract provider engages investment
management firms (“Managers”) to serve as sub-advisors for the separate accounts based on the specific investment needs and requests
identified by the plan fiduciary. These Managers have portfolio management discretion over the purchasing and selling of securities and other
investment assets pursuant to the respective investment management agreements and guidelines established for each insurance separate
account. The assets of the qualified pension plans and postretirement medical plans (the “Invested Plans”) are well diversified across multiple
asset categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given asset category
or with any given Manager.

The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with investment
policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters. Specifically, investment
policies are oriented toward (i) maximizing the Invested Plan’s funded status; (ii) minimizing the volatility of the Invested Plan’s funded status;
(iii) generating asset returns that exceed liability increases; and (iv) targeting rates of return in excess of a custom benchmark and industry
standards over appropriate reference time periods. These goals are expected to be met through identifying appropriate and diversified asset
classes and allocations, ensuring adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and
managing the Invested Plan’s investments. Independent investment consultants are periodically used to evaluate the investment risk of
Invested Plan’s assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and management
strategies and to recommend asset allocations.

Certain foreign subsidiaries sponsor defined benefit plans that cover employees and sales representatives who meet specified eligibility
requirements. Pension benefits are provided utilizing either a traditional formula or cash balance formula, similar to the U.S. plans discussed
above. The investment objectives are also similar, subject to local regulations. Generally, these international pension plans invest directly in
high quality equity and fixed maturity securities. The assets of the foreign pension plans are comprised of cash and cash equivalents, equity
and fixed maturity securities, real estate and hedge fund investments.

Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of an asset or asset
class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an asset, asset class, interest rates
or any other financial variable. Derivatives are also prohibited for use in creating exposures to securities, currencies, indices or any other
financial variable that are otherwise restricted.

F-128

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The tables below summarize the actual weighted average allocation by major asset class for the Invested Plans:

Defined Benefit Plan Postretirement Medical

Postretirement Life

Actual Allocation

Year Ended December 31, 2010:

Asset Class:
Fixed maturity securities (target range)

. . . . . . . . . . . . . .

50% to 80%

20% to 50%

Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal agency . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Municipals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. government bonds . . . . . . . . . . . . . . . . . . . . . .

Total fixed maturity securities . . . . . . . . . . . . . . . . . .

24%

3
3

2

12

44%

9%

2
3

5

11

30%

Equity securities (target range)

. . . . . . . . . . . . . . . . . . .

0% to 40%

50% to 80%

Common stock — domestic . . . . . . . . . . . . . . . . . . . .
Common stock — foreign . . . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . .

Money market securities . . . . . . . . . . . . . . . . . . . . . . .
Pass-through securities . . . . . . . . . . . . . . . . . . . . . . . .

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .

Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securities receivable . . . . . . . . . . . . . . . . . . . . . . . . . .

27%
8

35%

5%
5

1

8
1

1

48%
10

58%

—
10

1

—
1

—

—

—

—
—

—

—

—

—

—
—

—

—
—

100%

—
—

—

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

100%

100%

100%

Defined Benefit Plan Postretirement Medical

Postretirement Life

Actual Allocation

Year Ended December 31, 2009:

Asset Class:
Fixed maturity securities (target range)

. . . . . . . . . . . . . .

35% to 55%

10% to 40%

Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26%

Federal agency . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Municipals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. government bonds . . . . . . . . . . . . . . . . . . . . . .
U.S. treasury notes . . . . . . . . . . . . . . . . . . . . . . . . .

2
4

1

6
—

Total fixed maturity securities . . . . . . . . . . . . . . . . . .

39%

7%

4
1

3

7
2

24%

Equity securities (target range)

. . . . . . . . . . . . . . . . . . .
Common stock — domestic . . . . . . . . . . . . . . . . . . . .

25% to 45%
35%

50% to 80%
51%

Common stock — foreign . . . . . . . . . . . . . . . . . . . . .

Total equity securities . . . . . . . . . . . . . . . . . . . . . .

Money market securities . . . . . . . . . . . . . . . . . . . . . . .

Pass-through securities . . . . . . . . . . . . . . . . . . . . . . . .

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .
Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . .

7

42%

2%

8

2
7

11

62%

2%

12

—
—

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . .

100%

100%

The target ranges in the tables above are forward-looking.

—

—

—
—

—

—
—

—

—
—

—

—

—

—

100%
—

100%

Expected Future Contributions and Benefit Payments
It is the Subsidiaries’ practice to make contributions to the qualified pension plan to comply with minimum funding requirements of ERISA.
In accordance with such practice, no contributions were required for both of the years ended December 31, 2010 and 2009. No contributions
will be required for 2011. The Subsidiaries made discretionary contributions of $255 million to the qualified pension plan during the year

MetLife, Inc.

F-129

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

ended December 31, 2010. The Subsidiaries made no discretionary contributions to the qualified pension plan during the year ended
December 31, 2009. The Subsidiaries expect to make additional discretionary contributions to the qualified pension plan of $175 million in
2011.

Benefit payments due under the non-qualified pension plans are primarily funded from the Subsidiaries’ general assets as they become
due under the provision of the plans. These payments totaled $70 million and $57 million for the years ended December 31, 2010 and 2009,
respectively. These payments are expected to be at approximately the same level

in 2011.

Postretirement benefits, other than those provided under qualified pension plans, are either: (i) not vested under law; (ii) a non-funded
obligation of the Subsidiaries; or (iii) both. Current regulations do not require funding for these benefits. The Subsidiaries use their general
assets, net of participant’s contributions, to pay postretirement medical claims as they come due in lieu of utilizing any plan assets. Total
payments equaled $154 million and $158 million for the years ended December 31, 2010 and 2009, respectively.

The Subsidiaries expect to make contributions of $120 million, net of participant’s contributions, towards benefit obligations (other than
those under qualified pension plans) in 2011. As noted previously, the Subsidiaries no longer expect to receive the RDS under the Medicare
Modernization Act of 2003 to partially offset payment of such benefits. Instead, the gross benefit payments that will be made under the PDP
will already reflect subsidies.

Gross benefit payments for the next ten years, which reflect expected future service where appropriate, are expected to be as follows:

Pension
Benefits

Other
Postretirement
Benefits

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 446

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 454

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 463
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 486

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500

2016-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,789

$120

$121

$122
$123

$124

$631

(In millions)

Additional Information
As previously discussed, most of the assets of the pension and other postretirement benefit plans are held in group annuity and life
insurance contracts issued by the Subsidiaries. Total revenues from these contracts recognized in the consolidated statements of operations
were $46 million, $45 million and $42 million for the years ended December 31, 2010, 2009 and 2008, respectively, and included policy
investment income (loss),
charges and net investment income from investments backing the contracts and administrative fees. Total
including realized and unrealized gains (losses), credited to the account balances was $767 million, $725 million and ($1,090) million for the
years ended December 31, 2010, 2009 and 2008, respectively. The terms of these contracts are consistent in all material respects with
those the Subsidiaries offer to unaffiliated parties that are similarly situated.

Savings and Investment Plans
The Subsidiaries sponsor savings and investment plans for substantially all Company employees under which a portion of employee
contributions are matched. The Subsidiaries contributed $86 million, $93 million and $70 million for the years ended December 31, 2010,
2009 and 2008, respectively.

18. Equity

Preferred Stock
There are 200,000,000 authorized shares of preferred stock, of which 6,857,000 shares were designated for issuance of convertible

preferred stock in connection with the financing of the Acquisition. See “— Convertible Preferred Stock” below.

The Holding Company has outstanding 24 million shares of Floating Rate Non-Cumulative Preferred Stock, Series A (the “Series A
preferred shares”) with a $0.01 par value per share, and a liquidation preference of $25 per share, for aggregate proceeds of $600 million.
The Holding Company has outstanding 60 million shares of 6.50% Non-Cumulative Preferred Stock, Series B (the “Series B preferred

shares”), with a $0.01 par value per share, and a liquidation preference of $25 per share, for aggregate proceeds of $1.5 billion.

The Series A and Series B preferred shares (the “Preferred Shares”) rank senior to the Convertible Preferred Stock and the common stock
with respect to dividends and liquidation rights. Dividends on the Preferred Shares are not cumulative. Holders of the Preferred Shares will be
entitled to receive dividend payments only when, as and if declared by the Holding Company’s Board of Directors or a duly authorized
committee of the Board. If dividends are declared on the Series A preferred shares, they will be payable quarterly, in arrears, at an annual rate
of the greater of: (i) 1.00% above 3-month LIBOR on the related LIBOR determination date; or (ii) 4.00%. Any dividends declared on the
Series B preferred shares will be payable quarterly, in arrears, at an annual fixed rate of 6.50%. Accordingly, in the event that dividends are not
declared on the Preferred Shares for payment on any dividend payment date, then those dividends will cease to accrue and be payable. If a
dividend is not declared before the dividend payment date, the Holding Company has no obligation to pay dividends accrued for that dividend
period whether or not dividends are declared and paid in future periods. No dividends may, however, be paid or declared on the Holding
Company’s common stock — or any other securities ranking junior to the Preferred Shares — unless the full dividends for the latest
completed dividend period on all Preferred Shares, and any parity stock, have been declared and paid or provided for.

The Holding Company is prohibited from declaring dividends on the Preferred Shares if it fails to meet specified capital adequacy, net
income and equity levels. In addition, under Federal Reserve Bank of New York Board policy, the Holding Company may not be able to pay
dividends if it does not earn sufficient operating income.

F-130

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The Preferred Shares do not have voting rights except in certain circumstances where the dividends have not been paid for an equivalent
of six or more dividend payment periods whether or not those periods are consecutive. Under such circumstances, the holders of the
Preferred Shares have certain voting rights with respect to members of the Board of Directors of the Holding Company.

The Preferred Shares are not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar provisions. The
Preferred Shares are redeemable at the Holding Company’s option in whole or in part, at a redemption price of $25 per Preferred Share, plus
declared and unpaid dividends.

In December 2008, the Holding Company entered into an RCC related to the Preferred Shares. As a part of the RCC, the Holding Company
agreed that it will not repay, redeem or purchase the Preferred Shares on or before December 31, 2018, unless such repayment, redemption
or purchase is made from the proceeds of the issuance of certain capital securities. The RCC is for the benefit of holders of one or more series
of its indebtedness as designated from time to time by the Holding Company. The RCC will terminate upon the occurrence of certain events,
including the date on which there are no series of outstanding eligible debt securities.

In connection with the offering of the Preferred Shares, the Holding Company incurred $57 million of issuance costs which have been

recorded as a reduction of additional paid-in capital.

Information on the declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the Preferred Shares

is as follows:

Declaration Date

Record Date

Payment Date

November 15, 2010 . . . . . November 30, 2010
August 16, 2010 . . . . . . . August 31, 2010
May 17, 2010 . . . . . . . . . May 31, 2010
March 5, 2010 . . . . . . . . February 28, 2010

December 15, 2010
September 15, 2010
June 15, 2010
March 15, 2010

November 16, 2009 . . . . . November 30, 2009
August 17, 2009 . . . . . . . August 31, 2009
May 15, 2009 . . . . . . . . . May 31, 2009
March 5, 2009 . . . . . . . . February 28, 2009

December 15, 2009
September 15, 2009
June 15, 2009
March 16, 2009

November 17, 2008 . . . . . November 30, 2008
August 15, 2008 . . . . . . . August 31, 2008
May 15, 2008 . . . . . . . . . May 31, 2008
March 5, 2008 . . . . . . . . February 29, 2008

December 15, 2008
September 15, 2008
June 16, 2008
March 17, 2008

Dividend

Series A
Per Share

Series A
Aggregate

Series B
Per Share

Series B
Aggregate

(In millions, except per share data)

$0.2527777
$0.2555555
$0.2555555
$0.2500000

$0.2527777
$0.2555555
$0.2555555
$0.2500000

$0.2527777
$0.2555555
$0.2555555
$0.3785745

$0.4062500
$0.4062500
$0.4062500
$0.4062500

$0.4062500
$0.4062500
$0.4062500
$0.4062500

$0.4062500
$0.4062500
$0.4062500
$0.4062500

$ 7
6
7
6

$26

$ 7
6
7
6

$26

$ 7
6
7
9

$29

$24
24
24
24

$96

$24
24
24
24

$96

$24
24
24
24

$96

See Note 24 for information on subsequent dividends declared.

Convertible Preferred Stock
In connection with the financing of the Acquisition (see Note 2) in November 2010, the Holding Company issued to ALICO Holdings
6,857,000 shares of Convertible Preferred Stock with a $0.01 par value per share, a liquidation preference of $0.01 per share and a fair value
of $2,805 million.

The Convertible Preferred Stock will convert into 68,570,000 shares of the Holding Company’s common stock (subject to anti-dilution
adjustments) upon a favorable vote of the Holding Company’s common stockholders. If the Company (i) pays a dividend or makes another
distribution on common stock to all holders of common stock payable, in whole or in part, in shares of common stock; (ii) subdivides or splits
the outstanding shares of common stock into a greater number of shares; or (iii) combines or reclassifies the outstanding shares of common
stock into a smaller number of shares, then the conversion rate will be adjusted by multiplying the conversion rate by the number of shares of
common stock which a person who owns only one share of common stock immediately before the record date or effective date of the
applicable event would own immediately after giving effect to such dividend, distribution, subdivision, split, combination or reclassification. If
a favorable vote of its common stockholders is not obtained by the first anniversary of the Acquisition Date, then the Company must pay
ALICO Holdings approximately $300 million and use reasonable efforts to list the preferred stock on NYSE. The Convertible Preferred Stock
ranks senior to the common stock with respect to dividends and liquidation rights, and holders of the Convertible Preferred Stock will be
entitled to receive dividend payments only when, as and if declared by the Holding Company’s Board of Directors. Under the terms of the
Convertible Preferred Stock, the Board will declare a dividend payment or other distribution on the Convertible Preferred Stock on an as-
converted basis at any time and with the same terms as any dividend or other distribution declared on MetLife, Inc.’s common stock. No
distribution is payable on the Convertible Preferred Stock unless there is a concurrent distribution on the MetLife, Inc. common stock.

The Convertible Preferred Stock does not have voting rights except in certain circumstances when the Convertible Preferred Stock is
listed on the same exchange on which MetLife, Inc.’s common stock is listed, and where the dividends have not been paid notwithstanding
payment of dividends on MetLife, Inc.’s common stock for an equivalent of six or more dividend payment periods whether or not those periods
are consecutive. Under such circumstances, the holders of the Convertible Preferred Stock have certain voting rights with respect to

MetLife, Inc.

F-131

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

members of the Board of Directors of the Holding Company. The Convertible Preferred Stock is not redeemable and is not subject to any
sinking fund, retirement fund, purchase fund or similar provisions.

For purposes of the earnings per common share calculation, the Convertible Preferred Stock is assumed converted into shares of

common stock for both basic and diluted weighted average shares. See Note 20.

Common Stock

Issuances
In connection with the financing of the Acquisition (see Note 2) in November 2010, the Holding Company issued to ALICO Holdings

78,239,712 new shares of its common stock at $40.90 per share with a fair value of $3,200 million.

In anticipation of the Acquisition (see Note 2), in August 2010, the Holding Company issued 86,250,000 new shares of its common stock
at $42.00 per share for gross proceeds of $3,623 million. In connection with the offering of common stock, the Holding Company incurred
$94 million of issuance costs which have been recorded as a reduction of additional paid-in capital.

In February 2009, the Holding Company delivered 24,343,154 shares of newly issued common stock for $1,035 million, and in August
2008 the Holding Company delivered 20,244,549 shares of its common stock from treasury stock also for $1,035 million. Each issuance was
made in connection with the initial settlement of the stock purchase contracts issued as part of the common equity units sold in June 2005, as
described in Note 14.

In October 2008, the Holding Company issued 86,250,000 shares of its common stock at a price of $26.50 per share for gross proceeds
of $2,286 million. Of the shares issued, 75,000,000 shares, with a value of $4,040 million were issued from treasury stock for consideration
of $1,988 million. In connection with the offering of common stock, the Holding Company incurred $60 million of issuance costs which have
been recorded as a reduction of additional paid-in capital.

During the years ended December 31, 2010, 2009 and 2008, 332,121 shares, 861,586 shares and 2,271,188 shares of common stock
were issued from treasury stock for $18 million, $46 million and $118 million, respectively, to satisfy various stock option exercises and other
stock-based awards. During the year ended December 31, 2010, 2,182,174 new shares of common stock were issued for $74 million to
satisfy various stock option exercises and other stock-based awards. There were no new shares of common stock issued to satisfy the
various stock option exercises and other stock-based awards during both of the years ended December 31, 2009 and 2008.

Repurchase Programs
At January 1, 2008, the Company had $511 million remaining under its September 2007 stock repurchase program authorization. In both
January and April 2008, the Company’s Board of Directors authorized additional $1.0 billion common stock repurchase programs. During the
year ended December 31, 2008, the Company repurchased 19,716,418 shares under accelerated share repurchase programs and
1,550,000 shares under open market repurchases for $1,162 million and $88 million, respectively. During the years ended December 31,
2010 and 2009, the Company did not repurchase any shares. At December 31, 2010, the Company had $1,261 million remaining under its
January and April 2008 stock repurchase program authorizations.

Under these authorizations, the Holding Company may purchase its common stock from the MetLife Policyholder Trust, in the open market
(including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act) and in privately
negotiated transactions. Any future common stock repurchases will be dependent upon several factors, including the Company’s capital
position, its liquidity, its financial strength and credit ratings, general market conditions and the market price of MetLife, Inc.’s common stock
compared to management’s assessment of the stock’s underlying value and applicable regulatory, legal and accounting factors. Whether or
not to purchase any common stock and the size and timing of any such purchases will be determined in the Company’s complete discretion.

Other
In September 2008, in connection with the split-off of RGA as described in Note 2, the Holding Company received from MetLife, Inc.
stockholders 23,093,689 shares of MetLife, Inc.’s common stock with a fair market value of $1,318 million and, in exchange, delivered
29,243,539 shares of RGA Class B common stock with a net book value of $1,716 million resulting in a loss on disposition, including
transaction costs, of $458 million.

Dividends
The table below presents declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the common

stock:

Declaration Date

Record Date

Payment Date

Per Share

Aggregate

Dividend

October 26, 2010 . . . . . . . . . . . . . . . . . . . . . . November 9, 2010
October 29, 2009 . . . . . . . . . . . . . . . . . . . . . . November 9, 2009

December 14, 2010
December 14, 2009

October 28, 2008 . . . . . . . . . . . . . . . . . . . . . . November 10, 2008

December 15, 2008

(In millions, except
per share data)

$0.74
$0.74

$0.74

$784(1)
$610

$592

(1)

Includes dividends on Convertible Preferred Stock (see above).

Stock-Based Compensation Plans

Description of Plans for Employees and Agents — General Terms
The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the “2000 Stock Plan”) authorized the granting of awards to employees and
agents in the form of options to buy shares of MetLife, Inc. common stock (“Stock Options”) that either qualify as incentive Stock Options

F-132

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

under Section 422A of the Code or are non-qualified. By December 31, 2009 all awards under the 2000 Stock Plan had either vested or been
forfeited. No awards were made under the 2000 Stock Plan in 2010.

Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the “2005 Stock Plan”), awards granted to employees and agents
may be in the form of Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, Performance Shares or
Performance Share Units, Cash-Based Awards and Stock-Based Awards (each as defined in the 2005 Stock Plan with reference to MetLife,
Inc. common stock).

The aggregate number of shares authorized for issuance under the 2005 Stock Plan is 68,000,000, plus those shares available but not
utilized under the 2000 Stock Plan and those shares utilized under the 2000 Stock Plan that are recovered due to forfeiture of Stock Options.
Each share issued under the 2005 Stock Plan in connection with a Stock Option or Stock Appreciation Right reduces the number of shares
remaining for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than Stock
Options or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. At December 31,
2010, the aggregate number of shares remaining available for issuance pursuant to the 2005 Stock Plan was 40,477,451. Stock Option
exercises and other awards settled in shares are satisfied through the issuance of shares held in treasury by the Company or by the issuance
of new shares.

Compensation expense related to awards under the 2005 Stock Plan is recognized based on the number of awards expected to vest,
which represents the awards granted less expected forfeitures over the life of the award, as estimated at the date of grant. Unless a material
deviation from the assumed forfeiture rate is observed during the term in which the awards are expensed, any adjustment necessary to reflect
differences in actual experience is recognized in the period the award becomes payable or exercisable.

Compensation expense related to awards under the 2005 Stock Plan is principally related to the issuance of Stock Options, Performance
Shares and Restricted Stock Units. The majority of the awards granted each year under the 2005 Stock Plan are made in the first quarter of
each year.

Description of Plans for Directors — General Terms
The MetLife, Inc. 2000 Directors Stock Plan, as amended (the “2000 Directors Stock Plan”) authorized the granting of awards in the form of
MetLife, Inc. common stock, non-qualified Stock Options, or a combination of the foregoing to non-management Directors of MetLife, Inc. As
of December 31, 2009, all awards under the 2000 Directors Stock Plan had either vested or been forfeited. No awards were made under the
2000 Directors Stock Plan in 2010.

Under the MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan (the “2005 Directors Stock Plan”), awards granted may
be in the form of non-qualified Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, or Stock-Based Awards
(each as defined in the 2005 Directors Stock Plan with reference to MetLife, Inc. common stock) to non-management Directors of MetLife,
Inc. The number of shares authorized for issuance under the 2005 Directors Stock Plan is 2,000,000. There were no shares carried forward
from the 2000 Directors Stock Plan to the 2005 Directors Stock Plan. At December 31, 2010, the aggregate number of shares remaining
available for issuance pursuant to the 2005 Directors Stock Plan was 1,808,114. Stock Option exercises and other awards settled in shares
are satisfied through the issuance of shares held in treasury by the Company or by the issuance of new shares.

Compensation expense related to awards under the 2005 Directors Plan is recognized based on the number of shares awarded. The
Stock-Based Awards granted under the 2005 Directors Plan have vested immediately. The majority of the awards granted each year under the
2005 Directors Stock Plan are made in the second quarter of each year.

Compensation Expense Related to Stock-Based Compensation
The components of compensation expense related to stock-based compensation, excluding the insignificant compensation expense

related to the 2005 Directors Stock Plan, is as follows:

Years Ended
December 31,

2010

2009
(In millions)

2008

Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45

$55

$ 51

Performance Shares(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29
10

11
3

70
2

Total compensation expenses related to the Incentive Plans . . . . . . . . . . . . . . . . . . . . . . . . . . $84

$69

$123

Income tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29

$24

$ 43

(1) Performance Shares expected to vest and the related compensation expenses may be further adjusted by the performance factor most

likely to be achieved, as estimated by management, at the end of the performance period.
The following table presents the total unrecognized compensation expense related to stock-based compensation and the expected

weighted average period over which these expenses will be recognized at:

Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Performance Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2010

Expense

(In millions)

$39

$30
$14

Weighted Average
Period

(Years)

1.73

1.74
1.87

MetLife, Inc.

F-133

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Stock Options
Stock Options are the contingent right of award holders to purchase shares of MetLife, Inc. common stock at a stated price for a limited
time. All Stock Options have an exercise price equal to the closing price of MetLife, Inc. common stock reported on the NYSE on the date of
grant, and have a maximum term of ten years. The vast majority of Stock Options granted have become or will become exercisable at a rate of
one-third of each award on each of the first three anniversaries of the grant date. Other Stock Options have become or will become
exercisable on the third anniversary of the grant date. Vesting is subject to continued service, except for employees who are retirement
eligible and in certain other limited circumstances.

A summary of the activity related to Stock Options for the year ended December 31, 2010 is as follows:

Shares Under
Option

Weighted Average
Exercise Price

Outstanding at January 1, 2010 . . . . . . . . . . . . . . . . . . . 30,152,405

Granted(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,683,144

Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,742,003)

Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(154,947)

(236,268)

Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . 32,702,331

$38.51

$35.06

$29.74

$47.78

$34.64

$38.47

Aggregate number of stock options expected to vest at

December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . 31,930,964

$38.62

Exercisable at December 31, 2010 . . . . . . . . . . . . . . . . . 23,405,998

$40.43

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value(1)

(Years)

(In millions)

5.50

$ —

5.30

$195

5.21

4.00

$186

$ 94

(1) The aggregate intrinsic value was computed using the closing share price on December 31, 2010 of $44.44 and December 31, 2009 of

$35.35, as applicable.

(2) The total fair value on the date of the grant was $53 million.

The fair value of Stock Options is estimated on the date of grant using a binomial

lattice model. Significant assumptions used in the
Company’s binomial lattice model, which are further described below, include: expected volatility of the price of MetLife, Inc. common stock;
risk-free rate of return; expected dividend yield on MetLife, Inc. common stock; exercise multiple; and the post-vesting termination rate.
Expected volatility is based upon an analysis of historical prices of MetLife, Inc. common stock and call options on that common stock
traded on the open market. The Company uses a weighted-average of the implied volatility for publicly-traded call options with the longest
remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of
MetLife, Inc.’s common stock. The Company chose a monthly measurement interval for historical volatility as it believes this better depicts the
nature of employee option exercise decisions being based on longer-term trends in the price of the underlying shares rather than on daily
price movements.
The binomial

risk-free rates based on the imputed forward rates for
U.S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates that were used
for options granted during the respective periods.

lattice model used by the Company incorporates different

Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the

valuation date and held constant over the life of the Stock Option.

The binomial

lattice model used by the Company incorporates the contractual term of the Stock Options and then factors in expected
exercise behavior and a post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to
lattice model used by the Company is expressed
termination of employment, to derive an expected life. Exercise behavior in the binomial
using an exercise multiple, which reflects the ratio of exercise price to the strike price of Stock Options granted at which holders of the Stock
Options are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The post-vesting termination rate is
determined from actual historical exercise experience and expiration activity under the Incentive Plans.

F-134

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following table presents the weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, used

to determine the fair value of Stock Options issued:

Years Ended December 31,

2010

2009

2008

Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free rate of return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.35%-5.88% 0.73%-6.67% 1.91%-7.21%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercise multiple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Post-vesting termination rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contractual term (years)
Expected life (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average exercise price of stock options granted . . . . . . . . . .
Weighted average fair value of stock options granted . . . . . . . . . . . . . .

44.39%
1.76
3.70%
10
6
$23.61
$8.37

24.85%
1.73
3.05%
10
6
$59.48
$17.51

34.41%
1.75
3.64%
10
7
$35.06
$11.29

2.11%

3.15%

1.21%

The following table presents a summary of Stock Option exercise activity:

Years Ended
December 31,

2010

2009

2008

(In millions)

Total

intrinsic value of stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22

Cash received from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52

$ 1

$ 8

$36

$45

Tax benefit realized from stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8

$ — $13

Performance Shares
Performance Shares are units that, if they vest, are multiplied by a performance factor to produce a number of final Performance Shares
which are payable in shares of MetLife, Inc. common stock. Performance Shares are accounted for as equity awards, but are not credited with
dividend-equivalents for actual dividends paid on MetLife, Inc. common stock during the performance period. Accordingly, the estimated fair
value of Performance Shares is based upon the closing price of MetLife, Inc. common stock on the date of grant, reduced by the present
value of estimated dividends to be paid on that stock during the performance period.

Performance Share awards normally vest in their entirety at the end of the three-year performance period. Vesting is subject to continued
service, except for employees who are retirement eligible and in certain other limited circumstances. Vested Performance Shares are
multiplied by a performance factor of 0.0 to 2.0 based largely on MetLife, Inc.’s performance in change in annual net operating earnings and
total shareholder return over the applicable three-year performance period compared to the performance of its competitors. A performance
factor of 0.94 was applied for the January 1, 2007 — December 31, 2009 performance period.

The following table presents a summary of Performance Share activity for the year ended December 31, 2010:

Performance
Shares

Weighted Average
Grant Date
Fair Value

Outstanding at January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,493,435

Granted(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,528,065
(58,176)

Payable(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(807,750)

Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,155,574

$38.43

$32.24
$30.06

$60.83

$31.91

Performance Shares expected to vest at December 31, 2010 . . . . . . . . . . . . . . . . . .

3,972,769

$33.40

(1) The total fair value on the date of the grant was $49 million.
(2)

Includes both shares paid and shares deferred for later payment.
Performance Share amounts above represent aggregate initial target awards and do not reflect potential increases or decreases resulting
from the performance factor determined after the end of the respective performance periods. At December 31, 2010, the three year
performance period for the 2008 Performance Share grants was completed, but the performance factor has not yet been calculated. Included
in the immediately preceding table are 824,825 outstanding Performance Shares to which the performance factor will be applied.

Restricted Stock Units
Restricted Stock Units are units that, if they vest, are payable in shares of MetLife, Inc. common stock. Restricted Stock Units are
accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on MetLife, Inc. common stock
during the performance period. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing price of MetLife, Inc.
common stock on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance
period.

The vast majority of Restricted Stock Units normally vest in their entirety on the third anniversary of their grant date. Other Restricted Stock
Units normally vest in their entirety on the fifth anniversary of their grant date. Vesting is subject to continued service, except for employees
who are retirement eligible and in certain other limited circumstances.

MetLife, Inc.

F-135

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

The following table presents a summary of Restricted Stock Unit activity for the year ended December 31, 2010:

Restricted Stock
Units

Weighted Average
Grant Date
Fair Value

Outstanding at January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Granted(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payable(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

393,362

607,200
(31,275)

(32,115)

Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

937,172

Restricted Stock Units expected to vest at December 31, 2010 . . . . . . . . . . . . . .

937,172

$28.05

$32.32
$27.31

$63.32

$29.63

$29.63

(1) The total fair value on the date of the grant was $20 million.
(2)

Includes both shares paid and shares deferred for later payment.

Statutory Equity and Income
Except for American Life, each insurance company’s state of domicile imposes minimum risk-based capital (“RBC”) requirements that
were developed by the NAIC. The formulas for determining the amount of RBC specify various weighting factors that are applied to financial
balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted
capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are
insurance
classified within certain levels, each of which requires specified corrective action. Each of
subsidiaries exceeded the minimum RBC requirements for all periods presented herein.

the Holding Company’s U.S.

American Life does not write business in Delaware or any other domestic state and, as such, is exempt from RBC by Delaware law.
American Life operations are regulated by applicable authorities of the countries in which the company operates and are subject to capital and
solvency requirements in those countries.

The NAIC has adopted the Codification of Statutory Accounting Principles (“Statutory Codification”). Statutory Codification is intended to
standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be
established by individual state laws and permitted practices. The New York Insurance Department (the “Department”) has adopted Statutory
Codification with certain modifications for the preparation of statutory financial statements of insurance companies domiciled in New York.
Modifications by the various state insurance departments may impact the effect of Statutory Codification on the statutory capital and surplus
of the Holding Company’s U.S. insurance subsidiaries.

Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future
policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a
different basis.

In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant
assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting
principles basis and tax basis not expected to reverse and become recoverable within three years. Further, statutory accounting principles do
not give recognition to purchase accounting adjustments.

Statutory net income (loss) of MLIC, a New York domiciled insurer, was $2,066 million, $1,221 million and ($338) million for the years
ended December 31, 2010, 2009 and 2008, respectively. Statutory capital and surplus, to be filed with the Department, was $13.2 billion and
$12.6 billion at December 31, 2010 and 2009, respectively.

Statutory net income of American Life, a Delaware domiciled insurer, of approximately $800 million will be reported in the Statutory Annual
Statement for the year ended December 31, 2010. Statutory capital and surplus, to be filed with the Delaware Insurance Department was
approximately $4.0 billion at December 31, 2010.

Statutory net income of MICC, a Connecticut domiciled insurer, was $668 million, $81 million and $242 million for the years ended
December 31, 2010, 2009 and 2008, respectively. Statutory capital and surplus, to be filed with the Connecticut Insurance Department, was
$5.1 billion and $4.9 billion at December 31, 2010 and 2009, respectively.

Statutory net

income of Metropolitan Property and Casualty Insurance Company (“MPC”), a Rhode Island domiciled insurer, was
$273 million, $266 million and $308 million for the years ended December 31, 2010, 2009 and 2008, respectively. Statutory capital and
surplus, to be filed with the Insurance Department of Rhode Island, was $1.8 billion at both December 31, 2010 and 2009.

Statutory net

income of MTL, a Delaware domiciled insurer, was $151 million, $57 million and $212 million for the years ended
December 31, 2010, 2009 and 2008, respectively. Statutory capital and surplus, to be filed with the Delaware Insurance Department
was $805 million and $867 million at December 31, 2010 and 2009, respectively.

F-136

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Dividend Restrictions
The table below sets forth the dividends permitted to be paid by the respective insurance subsidiary without insurance regulatory approval

and the respective dividends paid:

Company

2011

Permitted w/o
Approval(1)

Metropolitan Life Insurance Company . . . . . . . . . .

American Life Insurance Company (5) . . . . . . . . . .
. . . . . .
MetLife Insurance Company of Connecticut

Metropolitan Property and Casualty Insurance

Company . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metropolitan Tower Life Insurance Company . . . . . .

$1,321

$ 661
$ 517

$ —
80
$

2010

2009

Permitted w/o
Approval(3)

(In millions)

Paid(2)

Permitted w/o
Approval(3)

$1,262

$ 511
$ 659

$ —
93
$

$ —

N/A
$ —

$300
$ —

$552

N/A
$714

$
9
$ 88

Paid (2)

$631 (4)

$ —
$330

$260
$569 (6)

(1) Reflects dividend amounts that may be paid during 2011 without prior regulatory approval. However, because dividend tests may be
based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2011, some or all of such
dividends may require regulatory approval.

Includes securities transferred to the Holding Company of $399 million.

(2) All amounts paid, including those requiring regulatory approval.
(3) Reflects dividend amounts that could have been paid during the relevant year without prior regulatory approval.
(4)
(5) Reflects approximate dividends permitted to be paid and the respective dividends paid since the Acquisition Date. See Note 2.
(6)

Includes shares of an affiliate distributed to the Holding Company as an in-kind dividend of $475 million.
In addition to the amounts presented in the table above, for the years ended December 31, 2010 and 2009, cash dividends in the

aggregate amount of $0 and $215 million, respectively, were paid to the Holding Company.

Under New York State Insurance Law, MLIC is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to the
Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of: (i) 10% of its
surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the
immediately preceding calendar year (excluding realized capital gains). MLIC will be permitted to pay a dividend to the Holding Company in
excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the
Superintendent and the Superintendent does not disapprove the dividend within 30 days of its filing. Under New York State Insurance Law,
the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the
payment of such dividends to its shareholders.

Under Delaware State Insurance Law, each of American Life and MTL is permitted, without prior insurance regulatory clearance, to pay a
stockholder dividend to the Holding Company as long as the amount of the dividend when aggregated with all other dividends in the
preceding 12 months does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding
calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Each
of American Life and MTL will be permitted to pay a dividend to the Holding Company in excess of the greater of such two amounts only if it files
notice of
Insurance (the “Delaware
Commissioner”) and the Delaware Commissioner either approves the distribution of the dividend or does not disapprove the distribution
within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as unassigned funds) as of the last filed annual
statutory statement requires insurance regulatory approval. Under Delaware State Insurance Law, the Delaware Commissioner has broad
discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its
shareholders.

the declaration of such a dividend and the amount

thereof with the Delaware Commissioner of

Under Connecticut State Insurance Law, MICC is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to
its stockholders as long as the amount of such dividends, when aggregated with all other dividends in the preceding 12 months, does not
exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net
gain from operations for the immediately preceding calendar year. MICC will be permitted to pay a dividend in excess of the greater of such
two amounts only if it files notice of its declaration of such a dividend and the amount thereof with the Connecticut Commissioner of Insurance
(the “Connecticut Commissioner”) and the Connecticut Commissioner does not disapprove the payment within 30 days after notice. In
addition, any dividend that exceeds earned surplus (unassigned funds, reduced by 25% of unrealized appreciation in value or revaluation of
assets or unrealized profits on investments) as of the last filed annual statutory statement requires insurance regulatory approval. Under
Connecticut State Insurance Law, the Connecticut Commissioner has broad discretion in determining whether the financial condition of a
stock life insurance company would support the payment of such dividends to its shareholders.

Under Rhode Island State Insurance Law, MPC is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to
the Holding Company as long as the aggregate amount of all such dividends in any twelve-month period does not exceed the lesser of: (i) 10%
of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) net income, not including realized capital gains,
for the immediately preceding calendar year, which may include carry forward net income from the second and third preceding calendar years
excluding realized capital gains and less dividends paid in the second and immediately preceding calendar years. MPC will be permitted to
pay a dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a
dividend and the amount thereof with the Rhode Island Commissioner of Insurance (the “Rhode Island Commissioner”) and the Rhode Island
Commissioner does not disapprove the distribution within 30 days of its filing. Under Rhode Island State Insurance Code, the Rhode Island

MetLife, Inc.

F-137

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Commissioner has broad discretion in determining whether the financial condition of a stock property and casualty insurance company would
support the payment of such dividends to its shareholders.

Other Comprehensive Income (Loss)
The following table sets forth the reclassification adjustments required for the years ended December 31, 2010, 2009 and 2008 in other
comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other
comprehensive income (loss) in the current or prior year:

Years Ended December 31,

2010

2009

2008

Holding gains (losses) on investments arising during the year . . . . . . . . . . . . . . . . . . . . . $10,092
Income tax effect of holding gains (losses)
(3,516)
Reclassification adjustments:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(In millions)

$18,548
(6,243)

$(26,650)
8,989

Recognized holding (gains) losses included in current year income . . . . . . . . . . . . . . . .
Amortization of premiums and accretion of discounts associated with investments . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax effect
Allocation of holding (gains) losses on investments relating to other policyholder amounts . . .
Income tax effect of allocation of holding (gains) losses to other policyholder amounts . . . . .
Unrealized investment loss of subsidiary at date of sale . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax on unrealized investment loss of subsidiary at date of sale . . . . . . . . .

Net unrealized investment gains (losses), net of income tax . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of income tax . . . . . . . . . . . . . . . . . . . . . .
Defined benefit plans adjustment, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) attributable to noncontrolling interests . . . . . . . . . . . .
Other comprehensive income (loss) attributable to noncontrolling interests of subsidiary at

date of disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency translation adjustments attributable to noncontrolling interests of subsidiary

at date of disposal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Defined benefit plans adjustment attributable to noncontrolling interests of subsidiary at date

of disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(143)
(590)
255
(2,813)
980
—
—

4,265
(350)
96

4,011
(5)

—

—

—

1,954
(490)
(493)
(2,979)
1,002
—
—

11,299
63
(102)

11,260
11

—

—

—

2,040
(926)
(377)
4,809
(1,621)
131
(60)

(13,665)
(700)
(1,199)

(15,564)
(10)

150

107

(4)

Other comprehensive income (loss) attributable to MetLife, Inc., excluding cumulative effect

of change in accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,006

11,271

(15,321)

Cumulative effect of change in accounting principle, net of income tax of $27 million,

$40 million and $0 (see Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52

(76)

—

Other comprehensive income (loss) attributable to MetLife, Inc.

. . . . . . . . . . . . . . . . . . . $ 4,058

$11,195

$(15,321)

19. Other Expenses

Information on other expenses was as follows:

Years Ended December 31,

2010

2009

2008

(In millions)

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,584
380
Pension, postretirement & postemployment benefit costs . . . . . . . . . . . . . . . . . . . .

$ 3,402
452

$ 3,299
120

Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,646

3,433

3,384

Volume-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest credited to bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379
137

407
163

354
166

Capitalization of DAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,343)

(3,019)

(3,092)

Amortization of DAC and VOBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on debt and debt issue costs . . . . . . . . . . . . . . . . . . . . . . . . . .

Premium taxes, licenses & fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent, net of sublease income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,801
1,550

514

1,104
307

1,744

1,307
1,044

527

902
385

3,489
1,051

471

949
373

1,553

1,383

Total other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,803

$10,556

$11,947

F-138

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Capitalization of DAC and Amortization of DAC and VOBA
See Note 6 for DAC and VOBA by segment and a rollforward of each including impacts of capitalization and amortization. See also Note 10
for a description of the DAC amortization impact associated with the closed block. Amortization of DAC and VOBA includes amortization of
negative VOBA related to the Acquisition of $64 million for the year ended December 31, 2010. Negative VOBA is recorded in other policy-
related balances (see Note 2) and therefore, the amortization of negative VOBA is an offset to the VOBA amortization in Note 6.

Interest Expense on Debt and Debt Issue Costs
See Notes 11, 12, 13 and 14 for attribution of interest expense by debt issuance. Interest expense on debt and debt issue costs includes
interest expense related to CSEs of $411 million for the year ended December 31, 2010, and $0 for both of the years ended December 31,
2009 and 2008. See Note 3.

Lease Impairments
See Note 16 for description of lease impairments included within other expenses.

Costs Related to the Acquisition
See Note 2 for transaction costs and integration-related expenses related to the Acquisition which were included in other expenses.

Restructuring Charges
In September 2008, the Company began an enterprise-wide cost reduction and revenue enhancement initiative which is expected to be
fully implemented by December 31, 2011. This initiative is focused on reducing complexity, leveraging scale, increasing productivity and
improving the effectiveness of the Company’s operations, as well as providing a foundation for future growth. These restructuring costs were
included in other expenses. As the expenses relate to an enterprise-wide initiative, they were incurred within Banking, Corporate & Other.
Estimated restructuring costs may change as management continues to execute its restructuring plans. Restructuring charges associated
with this enterprise-wide initiative were as follows:

Years Ended
December 31,

Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36

$ 86

$ —

Severance charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in severance charge estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17

(1)
(45)

84

(8)
(126)

109

(8)
(15)

Balance at December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

7

$ 36

$ 86

Restructuring charges incurred in current period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16

$ 76

$101

Total restructuring charges incurred since inception of program . . . . . . . . . . . . . . . . . . . . . . $193

$ 177

$101

2010

2009

2008

(In millions)

For the years ended December 31, 2010, 2009 and 2008, the change in severance charge estimates of ($1) million, ($8) million and
($8) million, respectively, was due to changes in estimates for variable incentive compensation, COBRA benefits, employee outplacement
services and for employees whose severance status changed.

In addition to the above charges, the Company has recognized lease charges of $28 million associated with the consolidation of office

space since the inception of the initiative.

Management anticipates further restructuring charges, including severance, lease and asset impairments, will be incurred during the year
ending December 31, 2011. However, such restructuring plans were not sufficiently developed to enable the Company to make an estimate
of such restructuring charges at December 31, 2010.

See Note 2 for discussion of restructuring charges related to the Acquisition.

MetLife, Inc.

F-139

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

20. Earnings Per Common Share

The following table presents the weighted average shares used in calculating basic earnings per common share and those used in

calculating diluted earnings per common share for each income category presented below:

Years Ended December 31,

2010

2009

2008

(In millions, except share and per share data)

Weighted Average Shares:
Weighted average common stock outstanding for basic earnings per

common share (1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

882,436,532

818,462,150

735,184,337

Incremental common shares from assumed:

Stock purchase contracts underlying common equity units (2)
. . . . . . . .
Exercise or issuance of stock-based awards (3) . . . . . . . . . . . . . . . . .

—
7,131,346

—
—

2,043,553
7,557,540

Weighted average common stock outstanding for diluted earnings per

common share(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

889,567,878

818,462,150

744,785,430

Income (Loss) from Continuing Operations:
Income (loss) from continuing operations, net of income tax . . . . . . . . . . . $

2,777

$

(2,319)

$

3,479

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

attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)
122

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

MetLife, Inc.’s common shareholders . . . . . . . . . . . . . . . . . . . . . . $

2,659

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Income (Loss) from Discontinued Operations:
Income (loss) from discontinued operations, net of income tax . . . . . . . . . $

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

attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . .

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

MetLife, Inc.’s common shareholders . . . . . . . . . . . . . . . . . . . . . . . . $

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Net Income (Loss):
Net income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Less: Net income (loss) attributable to noncontrolling interests . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.01

2.99

9

—

9

0.01

0.01

2,786
(4)
122

2,668

3.02

3.00

$

$

$

$

$

$

$

$

$

$

$

(32)
122

(2,409)

(2.94)

(2.94)

41

—

41

0.05

0.05

(2,278)
(32)
122

(2,368)

(2.89)

(2.89)

$

$

$

$

$

$

$

$

$

$

$

(25)
125

3,379

4.60

4.54

(201)

94

(295)

(0.41)

(0.40)

3,278
69
125

3,084

4.19

4.14

(1) For purposes of the earnings per common share calculation, the Convertible Preferred Stock is assumed converted into shares of
common stock for both basic and diluted weighted average shares. See Note 18 for a description of the Convertible Preferred Stock.

(2) See Note 14 for a description of the Company’s common equity units.

(3) For the year ended December 31, 2009, 4,213,700 shares related to the assumed exercise or issuance of stock-based awards have

been excluded from the calculation of diluted earnings per common share as these assumed shares are anti-dilutive.

F-140

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

21. Quarterly Results of Operations (Unaudited)

The unaudited quarterly results of operations for 2010 and 2009 are summarized in the table below:

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2010
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Total revenues .
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.
Total expenses .
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.
Income (loss) from continuing operations, net of income tax .
.
.
Income (loss) from discontinued operations, net of income tax .
.
Net income (loss)
.
.
.
Less: Net income (loss) attributable to noncontrolling interests .
.
.
Net income (loss) attributable to MetLife, Inc.
Less: Preferred stock dividends .
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Net income (loss) available to MetLife, Inc.’s common shareholders
Basic earnings per common share:

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. .

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common shareholders .

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s
.
.
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Income (loss) from discontinued operations, net of income tax, attributable to MetLife,
.
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Net income (loss) attributable to MetLife, Inc.
.
.
Net income (loss) available to MetLife, Inc.’s common shareholders .

Inc.

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. .
. .

Diluted earnings per common share:

.

.

.

common shareholders .

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s
.
.
.
Income (loss) from discontinued operations, net of income tax, attributable to MetLife,
.
.
.
.
.
.
Net income (loss) attributable to MetLife, Inc.
.
.
Net income (loss) available to MetLife, Inc.’s common shareholders .

Inc.

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2009
.
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.
Total revenues .
.
.
Total expenses .
.
.
.
Income (loss) from continuing operations, net of income tax .
.
.
Income (loss) from discontinued operations, net of income tax .
.
.
.
Net income (loss)
.
Less: Net income (loss) attributable to noncontrolling interests .
.
.
Net income (loss) attributable to MetLife, Inc.
Less: Preferred stock dividends .
.
.
.
Net income (loss) available to MetLife, Inc.’s common shareholders
Basic earnings per common share:

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common shareholders .

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s
.
.
.
Income (loss) from discontinued operations, net of income tax, attributable to MetLife,
.
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Net income (loss) attributable to MetLife, Inc.
.
Net income (loss) available to MetLife, Inc.’s common shareholders .

Inc.

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Diluted earnings per common share:

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.

common shareholders .

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s
.
.
.
Income (loss) from discontinued operations, net of income tax, attributable to MetLife,
.
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Net income (loss) attributable to MetLife, Inc.
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Net income (loss) available to MetLife, Inc.’s common shareholders .

Inc.

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March 31,

Three Months Ended
September 30,

June 30,

December 31,

(In millions, except per share data)

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$13,190
$11,999
833
$
1
$
834
$
(1)
$
835
$
30
$
805
$

$

$
$
$

$

$
$
$

0.98

—
1.02
0.98

0.97

—
1.01
0.97

$10,214
$11,176
(585)
$
37
$
(548)
$
(4)
$
(544)
$
30
$
(574)
$

$14,245
$11,875
$ 1,540
7
$
$ 1,547
$
(10)
$ 1,557
$
31
$ 1,526

$

$
$
$

$

$
$
$

1.84

0.01
1.90
1.85

1.83

0.01
1.87
1.84

$ 8,264
$10,640
$ (1,420)
$
2
$ (1,418)
$
(16)
$ (1,402)
$
31
$ (1,433)

$12,444
$12,051
322
$
(2)
$
320
$
4
$
316
$
30
$
286
$

$

$
$
$

$

$
$
$

0.33

—
0.36
0.33

0.32

—
0.36
0.32

$10,238
$11,413
(624)
$
(1)
$
(625)
$
(5)
$
(620)
$
30
$
(650)
$

$ (0.76)

$ (1.74)

$ (0.79)

$
0.05
$ (0.67)
$ (0.71)

$
—
$ (1.71)
$ (1.74)

$
—
$ (0.75)
$ (0.79)

$ (0.76)

$ (1.74)

$ (0.79)

0.05
$
$ (0.67)
$ (0.71)

—
$
$ (1.71)
$ (1.74)

—
$
$ (0.75)
$ (0.79)

$12,838
$12,834
82
$
3
$
85
$
3
$
82
$
31
$
51
$

$

$
$
$

$

$
$
$

0.05

—
0.08
0.05

0.05

—
0.08
0.05

$12,341
$12,162
310
$
3
$
313
$
(7)
$
320
$
31
$
289
$

$

$
$
$

$

$
$
$

0.35

—
0.39
0.35

0.35

—
0.39
0.35

22. Business Segment Information

MetLife is organized into five segments: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home
(collectively, “U.S. Business”) and International. The assets and liabilities of ALICO as of November 30, 2010 and the operating results
of ALICO from the Acquisition Date through November 30, 2010 are included in the International segment. In addition, the Company reports
certain of its results of operations in Banking, Corporate & Other, which includes MetLife Bank and other business activities. For reporting
purposes beginning in 2011, our non-U.S. Business results will be presented within two separate segments: Japan and Other International
Regions.

Insurance Products offers a broad range of protection products and services to individuals and corporations, as well as other institutions
and their respective employees, and is organized into three distinct businesses: Group Life, Individual Life and Non-Medical Health. Group

MetLife, Inc.

F-141

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

life, term life and whole life products. Non-Medical Health products and services include dental

Life insurance products and services include variable life, universal life and term life products. Individual Life insurance products and services
include variable life, universal
insurance,
short- and long-term disability, long-term care and other insurance products. Retirement Products offers asset accumulation and income
products, including a wide variety of annuities. Corporate Benefit Funding offers pension risk solutions, structured settlements, stable value
and investment products and other benefit funding products. Auto & Home provides personal
lines property and casualty insurance,
including private passenger automobile, homeowners and personal excess liability insurance. In the fourth quarter of 2010, management
realigned certain income annuity products within the Company’s segments to better conform to the way it manages and assesses its
business and began reporting such product results in the Retirement Products segment, previously reported in the Corporate Benefit
Funding segment. Accordingly, prior period results for these segments have been adjusted by $29 million and $13 million of operating losses,
net of $15 million and $8 million of income tax benefits, for the years ended December 31, 2009 and 2008, respectively, to reflect such
product reclassifications.

International provides life insurance, accident and health insurance, credit insurance, annuities, endowments and retirement & savings

products to both individuals and groups.

Banking, Corporate & Other contains the excess capital not allocated to the segments, the results of operations of MetLife Bank, various
start-up entities and run-off entities, as well as interest expense related to the majority of the Company’s outstanding debt and expenses
associated with certain legal proceedings and income tax audit issues. Banking, Corporate & Other also includes the elimination of
intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings.

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources.
Consistent with GAAP accounting guidance for segment reporting, it is the Company’s measure of segment performance reported below.
Operating earnings does not equate to income (loss) from continuing operations, net of income tax or net income (loss) as determined in
accordance with GAAP and should not be viewed as a substitute for those GAAP measures. The Company believes the presentation of
operating earnings herein as the Company measures it for management purposes enhances the understanding of its performance by
highlighting the results from operations and the underlying profitability drivers of the businesses.

Operating earnings is defined as operating revenues less operating expenses, net of income tax.
Operating revenues is defined as GAAP revenues (i)

less
amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses); (iii) plus scheduled periodic
settlement payments on derivatives that are hedges of investments but do not qualify for hedge accounting treatment; (iv) plus income from
discontinued real estate operations; (v) less net investment income related to contractholder-directed unit-linked investments; and (vi) plus,
for operating joint ventures reported under the equity method of accounting, the aforementioned adjustments, those identified in the
definition of operating expenses and changes in fair value of hedges of operating joint venture liabilities, all net of income tax.

less net investment gains (losses) and net derivative gains (losses); (ii)

Operating expenses is defined as GAAP expenses (i) less changes in policyholder benefits associated with asset value fluctuations
related to experience-rated contractholder liabilities and certain inflation-indexed liabilities; (ii) less costs related to business combinations
(since January 1, 2009) and noncontrolling interests; (iii) less amortization of DAC and VOBA and changes in the policyholder dividend
obligation related to net investment gains (losses) and net derivative gains (losses); (iv) less interest credited to policyholder account
balances related to contractholder-directed unit-linked investments; and (v) plus scheduled periodic settlement payments on derivatives that
are hedges of policyholder account balances but do not qualify for hedge accounting treatment.

In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization entities that are VIEs as

required under GAAP.

Set forth in the tables below is certain financial

information with respect to the Company’s segments, as well as Banking, Corporate &
Other for the years ended December 31, 2010, 2009 and 2008 and at December 31, 2010 and 2009. The accounting policies of the
segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from
intercompany sales, which are eliminated in consolidation. 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 businesses. As a part of the economic capital process, a portion of net
investment income is credited to the segments based on the level of allocated equity. The Company allocates certain non-recurring items,
such as expenses associated with certain legal proceedings, to Banking, Corporate & Other.

F-142

MetLife, Inc.

1

294

—
(392)

(265)

(362)

306

222

—
—

118

411
219

6,037

17,615

2,328
(392)

(265)

52,717

31,031

4,925

137
(3,343)

2,801

1,550
11,658

48,759

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Operating Earnings

U.S. Business

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto
& Home

Total

International

(In millions)

Banking,
Corporate
& Other

Total

Adjustments

Total
Consolidated

Year Ended December 31, 2010

Revenues

Premiums . . . . . . . . . . . . . . . . $17,200

$

875

$1,938

$2,923 $22,936

$4,447

$

11

$27,394

$ —

$27,394

Universal

life and investment-type

product policy fees . . . . . . . . .

Net investment income . . . . . . . .

Other revenues . . . . . . . . . . . .
Net investment gains (losses) . . . .

Net derivative gains (losses) . . . . .

2,247

6,068

761
—

—

2,234

3,395

220
—

—

226

4,954

246
—

—

—

4,707

209

14,626

1,329

1,703

22
—

—

1,249
—

—

35
—

—

—

992

1,044
—

—

6,036

17,321

2,328
—

—

Total revenues . . . . . . . . . . . .

26,276

6,724

7,364

3,154

43,518

7,514

2,047

53,079

Expenses

Policyholder benefits and claims

and policyholder dividends . . . .

19,075

1,879

4,041

2,021

27,016

3,723

(14)

30,725

Interest credited to policyholder

account balances . . . . . . . . . .

963

1,612

1,445

—

4,020

683

—

4,703

Interest credited to bank

deposits . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . .

Amortization of DAC and VOBA . . .

Interest expense on debt
. . . . . .
Other expenses . . . . . . . . . . . .

—
(841)

966

1
4,080

Total expenses . . . . . . . . . . .

24,244

Provision for income tax expense

—
(1,067)

724

3
2,437

5,588

—
(19)

16

6
460

—
(448)

439

—
769

—
(2,375)

2,145

10
7,746

5,949

2,781

38,562

—
(968)

537

3
2,538

6,516

137
—

1

1,126
1,155

137
(3,343)

2,683

1,139
11,439

2,405

47,483

1,276

(benefit)

. . . . . . . . . . . . . . .

711

397

495

73

1,676

206

(300)

1,582

(401)

1,181

Operating earnings . . . . . . . . $ 1,321

$

739

$ 920

$ 300 $ 3,280

$ 792

$

(58)

4,014

Adjustments to:

Total revenues . . . . . . . . . . . .
Total expenses . . . . . . . . . . .

Provision for income tax

(expense) benefit . . . . . . . . .

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

At December 31, 2010:

(362)
(1,276)

401

$ 2,777

$ 2,777

U.S. Business
Corporate
Benefit
Funding

Retirement
Products

Auto
& Home

Insurance
Products

Total

International

Banking,
Corporate
& Other

Total

(In millions)

Total assets . . . . . . . . . . . . . . . . . . . . . . . $141,366 $177,056 $172,918 $5,541 $496,881 $164,995
Separate account assets . . . . . . . . . . . . . $
9,864
Separate account liabilities . . . . . . . . . . . $

9,567 $107,335 $ 56,571 $ — $173,473 $

9,567 $107,335 $ 56,571 $ — $173,473 $

9,864

$69,030 $730,906
— $183,337
$

$

— $183,337

MetLife, Inc.

F-143

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Operating Earnings

U.S. Business

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto
& Home

Total

International

(In millions)

Banking,
Corporate
& Other

Total

Adjustments

Total
Consolidated

Year Ended December 31, 2009

Revenues

Premiums . . . . . . . . . . . . . . . . $17,168

$

920

$2,264

$2,902 $23,254

$3,187

$

19

$26,460

$ —

$26,460

Universal

life and investment-type

product policy fees . . . . . . . . .

Net investment income . . . . . . . .

Other revenues . . . . . . . . . . . .
Net investment gains (losses) . . . .

Net derivative gains (losses) . . . . .

2,281

5,614

779
—

—

1,712

3,098

173
—

—

176

4,527

238
—

—

—

4,169

180

13,419

1,061

1,193

33
—

—

1,223
—

—

14
—

—

—

477

1,092
—

—

5,230

15,089

2,329
—

—

(27)

(252)

—
(2,906)

(4,866)

5,203

14,837

2,329
(2,906)

(4,866)

Total revenues . . . . . . . . . . . .

25,842

5,903

7,205

3,115

42,065

5,455

1,588

49,108

(8,051)

41,057

Expenses

Policyholder benefits and claims

and policyholder dividends . . . .

19,111

1,950

4,245

1,932

27,238

2,660

4

29,902

Interest credited to policyholder

account balances . . . . . . . . . .

952

1,688

1,632

—

4,272

581

—

4,853

Interest credited to bank

deposits . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . .

Amortization of DAC and VOBA . . .

Interest expense on debt
. . . . . .
Other expenses . . . . . . . . . . . .

—
(873)

725

6
4,206

Total expenses . . . . . . . . . . .

24,127

Provision for income tax expense

—
(1,067)

424

—
2,433

5,428

—
(14)

15

3
456

—
(435)

436

—
764

—
(2,389)

1,600

9
7,859

6,337

2,697

38,589

—
(630)

415

8
1,797

4,831

84

(4)

—
—

(711)

—
69

163
—

3

1,027
1,336

163
(3,019)

2,018

1,044
10,992

2,533

45,953

(562)

29,986

4,849

163
(3,019)

1,307

1,044
11,061

45,391

(benefit)

. . . . . . . . . . . . . . .

573

167

288

96

1,124

161

(617)

668

(2,683)

(2,015)

Operating earnings . . . . . . . . $ 1,142

$

308

$ 580

$ 322 $ 2,352

$ 463

$ (328)

2,487

Adjustments to:

Total revenues . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . .

Provision for income tax (expense)
. . . . . . . . . . . . . . . .

benefit

Income (loss) from

continuing operations, net
of income tax . . . . . . . . . .

At December 31, 2009:

(8,051)
562

2,683

$ (2,319)

$ (2,319)

U.S. Business
Corporate
Benefit
Funding

Retirement
Products

Auto
& Home

Insurance
Products

Total

International

Banking,
Corporate
& Other

Total

(In millions)

Total assets . . . . . . . . . . . . . . . . . . . . . . . $132,720 $154,228 $153,795 $5,517 $446,260
Separate account assets . . . . . . . . . . . . . $
8,838 $ 87,157 $ 45,688 $ — $141,683
Separate account liabilities . . . . . . . . . . . $

8,838 $ 87,157 $ 45,688 $ — $141,683

$33,923
$ 7,358

$59,131 $539,314
— $149,041
$

$ 7,358

$

— $149,041

F-144

MetLife, Inc.

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Operating Earnings

U.S. Business

Insurance
Products

Retirement
Products

Corporate
Benefit
Funding

Auto
&
Home

Total

International

(In millions)

Banking,
Corporate
& Other

Total

Adjustments

Total
Consolidated

Year Ended December 31, 2008

Revenues

Premiums . . . . . . . . . . . . . . . . $16,402

$ 696

$2,348

$2,971 $22,417

$3,470

$

27

$25,914

$ —

$25,914

Universal

life and investment-type

product policy fees . . . . . . . . .

Net investment income . . . . . . . .

Other revenues . . . . . . . . . . . . .
. . . .
Net investment gains (losses)

Net derivative gains (losses) . . . . .

2,171

5,787

819
—

—

1,870

2,624

169
—

—

227

5,615

358
—

—

— 4,268

186

14,212

1,095

1,180

38
—

—

1,384
—

—

18
—

—

—

808

184
—

—

5,363

16,200

1,586
—

—

18

89

—
(2,098)

3,910

5,381

16,289

1,586
(2,098)

3,910

Total revenues . . . . . . . . . . . .

25,179

5,359

8,548

3,195

42,281

5,763

1,019

49,063

1,919

50,982

Expenses

Policyholder benefits and claims

and policyholder dividends . . . .

18,183

1,271

4,398

1,924

25,776

3,185

46

29,007

181

29,188

Interest credited to policyholder

account balances . . . . . . . . . .

930

1,338

2,297

— 4,565

171

7

4,743

Interest credited to bank

deposits . . . . . . . . . . . . . . . .
Capitalization of DAC . . . . . . . . .

Amortization of DAC and VOBA . . .

Interest expense on debt . . . . . . .
Other expenses . . . . . . . . . . . .

—
(849)

743

5
4,196

Total expenses . . . . . . . . . . . .

23,208

Provision for income tax expense

—
(980)

1,356

2
2,101

5,088

—
(18)

29

2
440

—
(444)

454

—
794

—
(2,291)

2,582

9
7,531

7,148

2,728

38,172

—
(798)

381

9
2,079

5,027

166
(3)

5

1,033
699

166
(3,092)

2,968

1,051
10,309

1,953

45,152

(benefit) . . . . . . . . . . . . . . . .

661

91

474

104

1,330

257

(495)

1,092

Operating earnings . . . . . . . . . $ 1,310

$ 180

$ 926

$ 363 $ 2,779

$ 479

$ (439)

2,819

45

—
—

521

—
24

771

488

4,788

166
(3,092)

3,489

1,051
10,333

45,923

1,580

Adjustments to:

Total revenues . . . . . . . . . . . .
Total expenses . . . . . . . . . . . .

Provision for income tax (expense)

benefit . . . . . . . . . . . . . . . . .

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

1,919
(771)

(488)

$ 3,479

$ 3,479

Net investment income is based upon the actual results of each segment’s specifically identifiable asset portfolio 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.
Operating revenues derived from any customer did not exceed 10% of consolidated operating revenues for the years ended Decem-
ber 31, 2010, 2009 and 2008. Operating revenues from U.S. operations were $44.9 billion, $42.8 billion and $42.9 billion for the years ended
December 31, 2010, 2009 and 2008, respectively, which represented 85%, 87% and 87%, respectively, of consolidated operating revenues.

23. Discontinued Operations

Real Estate
The Company actively manages its real estate portfolio with the objective of maximizing earnings through selective acquisitions and
dispositions. Income related to real estate classified as held-for-sale or sold is presented in discontinued operations. These assets are
carried at the lower of depreciated cost or estimated fair value less expected disposition costs. Income from discontinued real estate
operations, net of income tax, was $3 million, $11 million and $13 million for the years ended December 31, 2010, 2009 and 2008,
respectively.

The carrying value of real estate related to discontinued operations was $8 million and $55 million at December 31, 2010 and 2009,

respectively.

MetLife, Inc.

F-145

Notes to the Consolidated Financial Statements — (Continued)

MetLife, Inc.

Operations

Texas Life Insurance Company
During the fourth quarter of 2008, the Holding Company entered into an agreement to sell its wholly-owned subsidiary, Cova, the parent
company of Texas Life, to a third-party and the sale occurred in March 2009. See Note 2. The following table presents the amounts related to
the operations of Cova that have been reflected as discontinued operations in the consolidated statements of operations:

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before provision for income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from operations of discontinued operations, net of income tax . . . . . . . . . . . . . . .

Gain on disposal, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from discontinued operations, net of income tax . . . . . . . . . . . . . . . . . . . . . . . .

Years Ended December 31,

2009

$25
19

6

2

4

28

$32

2008

(In millions)

$134
119

15

4

11

37

$ 48

Reinsurance Group of America, Incorporated
As more fully described in Note 2, the Company completed a tax-free split-off of its majority-owned subsidiary, RGA in September 2008.
The following table presents the amounts related to the operations of RGA that have been reflected as discontinued operations in the
consolidated statements of operations:

Year Ended
December 31, 2008
(In millions)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before provision for income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from discontinued operations, net of income tax, available to MetLife, Inc.’s common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of income tax, attributable to noncontrolling interests . . . .

Loss on disposal, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,952

3,796

156

53

103
94

(458)

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

$ (261)

The operations of RGA included direct policies and reinsurance agreements with MetLife and some of its subsidiaries. These agreements
are generally terminable by either party upon 90 days written notice with respect to future new business. Agreements related to existing
business generally are not terminable, unless the underlying policies terminate or are recaptured. These direct policies and reinsurance
agreements do not constitute significant continuing involvement by the Company with RGA. Included in continuing operations in the
Company’s consolidated statements of operations are amounts related to these transactions, including ceded amounts that reduced
premiums and fees by $158 million and ceded amounts that reduced policyholder benefits and claims by $136 million for the year ended
December 31, 2008 that have not been eliminated as these transactions have continued after the RGA disposition.

24. Subsequent Events

Dividends
On February 18, 2011, the Holding Company announced dividends of $0.2500000 per share, for a total of $6 million, on its Series A
preferred shares, and $0.4062500 per share, for a total of $24 million, on its Series B preferred shares, subject to the final confirmation that it
has met the financial tests specified in the Series A and Series B preferred shares, which the Company anticipates will be made on or about
March 7, 2011. Both dividends will be payable March 15, 2011 to shareholders of record as of February 28, 2011.

Credit Facility
On February 1, 2011, the Holding Company entered into a committed facility with a third-party bank to provide letters of credit for the
benefit of Missouri Reinsurance (Barbados) Inc. (“MoRe”), a captive reinsurance subsidiary, to address its short-term solvency needs based
on guidance from the regulator. This one-year facility provides for the issuance of letters of credit in amounts up to $350 million. Under the
facility, a letter of credit for $250 million was issued on February 2, 2011 and increased to $295 million on February 23, 2011, which
management believes satisfies MoRe’s solvency requirements.

F-146

MetLife, Inc.

(This page intentionally left blank)

BOARD OF DIRECTORS

EXECUTIVE OFFICERS

C. ROBERT HENRIKSON
Chairman of the Board,
President and Chief Executive
Officer

GWENN L. CARR
Executive Vice President,
Office of the Chairman

KATHLEEN A. HENKEL
Executive Vice President,
Human Resources

STEVEN A. KANDARIAN
Executive Vice President and
Chief Investment Officer

NICHOLAS D. LATRENTA
Executive Vice President and
General Counsel

MARIA R. MORRIS
Executive Vice President,
Technology and Operations

WILLIAM J. MULLANEY
President, U.S. Business

WILLIAM J. TOPPETA
President, International

WILLIAM J. WHEELER
Executive Vice President and
Chief Financial Officer

C. ROBERT HENRIKSON
Chairman of the Board,
President and Chief
Executive Officer,
MetLife, Inc.

Chair, Executive Committee
Member, Investment
Committee of Metropolitan
Life Insurance Company

SYLVIA MATHEWS BURWELL
President, Global
Development Program, The
Bill and Melinda Gates
Foundation

Member, Governance and
Corporate Responsibility
Committee and Investment
Committee of Metropolitan
Life Insurance Company

EDUARDO CASTRO-WRIGHT
Vice Chairman, Wal-Mart
Stores, Inc.

Member, Compensation
Committee, Governance and
Corporate Responsibility
Committee, and Investment
Committee of Metropolitan
Life Insurance Company

CHERYL W. GRISÉ (Lead
Director)
Retired Executive Vice
President, Northeast Utilities

Chair, Governance and
Corporate Responsibility
Committee
Member, Audit Committee,
Compensation Committee,
and Executive Committee

HUGH B. PRICE
Visiting Professor of Public
and International Affairs,
Woodrow Wilson School,
Princeton University

Member, Audit Committee
and Compensation
Committee

DAVID SATCHER, M.D., PH.D.
Director, Satcher Health
Leadership Institute and the
Center of Excellence on
Health Disparities,
Morehouse School of
Medicine
Former Surgeon General,
United States

Member, Executive
Committee, Governance and
Corporate Responsibility
Committee, and Investment
Committee of Metropolitan
Life Insurance Company

KENTON J. SICCHITANO
Retired Global Managing
Partner,
PricewaterhouseCoopers LLP

Chair, Audit Committee
Member, Compensation
Committee and Finance and
Risk Policy Committee

LULU C. WANG
Chief Executive Officer,
Tupelo Capital Management
LLC

Member, Finance and Risk
Policy Committee and
Investment Committee of
Metropolitan Life Insurance
Company

R. GLENN HUBBARD, PH.D.
Dean and Russell L. Carson
Professor of Economics and
Finance, Graduate School of
Business,
Columbia University

Chair, Investment Committee
of Metropolitan Life Insurance
Company
Member, Executive
Committee and Finance and
Risk Committee

JOHN M. KEANE
Senior Partner, SCP Partners,
and President, GSI, LLC
General, United States Army
(Retired)

Member, Audit Committee
and Governance and
Corporate Responsibility
Committee

ALFRED F. KELLY, JR.
Retired President, American
Express Company

Chair, Finance and Risk
Committee
Member, Audit Committee
and Compensation
Committee

JAMES M. KILTS
Partner, Centerview Partners
Management, LLC

Chair, Compensation
Committee
Member, Investment
Committee of Metropolitan
Life Insurance Company

CATHERINE R. KINNEY
Retired Group Executive Vice
President, Listings,
Marketing & Branding, NYSE
Euronext

Member, Audit Committee
and Finance and Risk
Committee

86

MetLife, Inc.

CONTACT INFORMATION

Corporate Headquarters
MetLife, Inc.
200 Park Avenue
New York, NY 10166-0188
212-578-2211
www.metlife.com

Transfer Agent/Shareholder Records
For information or assistance regarding shareholder accounts or
dividend checks, please contact MetLife, Inc.’s transfer agent:

BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252-8015
1-800-649-3593
TDD for Hearing Impaired: 800-231-5469
www.bnymellon.com/shareowner/isd

CORPORATE INFORMATION

Corporate Profile

MetLife, Inc. is a leading global provider of insurance, annuities and

employee benefit programs, serving 90 million customers in over
60 countries. Through its subsidiaries and affiliates, MetLife holds

leading market positions in the United States, Japan, Latin

America, Asia Pacific, Europe and the Middle East. For more

information, visit www.metlife.com.

statement

Form 10-K and Other Information
MetLife, Inc. will provide to shareholders without charge,
upon written or oral request, a copy of MetLife,
Inc.’s
Annual Report on Form 10-K (including financial
schedules, but
statements and financial
without exhibits), as amended on Form 10-K/A, for the
fiscal year ended December 31, 2010. MetLife, Inc. will
furnish to requesting shareholders any exhibit
to the
Form 10-K or Form 10-K/A upon the payment of
in
reasonable expenses
furnishing such exhibit. Requests should be directed to
MetLife Investor Relations, MetLife, Inc., 1095 Avenue of
the Americas, New York, New York 10036, via the Internet
by going to http://investor.metlife.com and selecting
“Information Requests,” or by calling 1-800-753-4904.
The Annual Report on Form 10-K and Form 10-K/A may
also be accessed at http://investor.metlife.com by
Filings,”
selecting
“MetLife,
the
website of the U.S. Securities and Exchange Commission
at www.sec.gov.

Information,”
Inc. — View SEC Filings” as well as at

incurred by MetLife,

“Financial

“SEC

Inc.

Dividend Information and Common Stock Performance
MetLife Inc.’s common stock is traded on the New York Stock
Exchange (“NYSE”) under the trading symbol “MET.” MetLife, Inc.
declared an annual dividend of $0.74 per common share on
October 26, 2010 and October 29, 2009. Future common stock
dividend decisions will be determined by MetLife, Inc.’s Board of
Directors after taking into consideration factors such as MetLife,
Inc.’s current earnings, expected medium- and long-term earnings,
financial condition,
regulatory capital position, and applicable
governmental regulations and policies. The payment of dividends

Trustee, MetLife Policyholder Trust
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
302-651-1000
www.wilmingtontrust.com

Additional Resources

Investor Information:
http://investor.metlife.com

Governance Information:
www.metlife.com/corporategovernance

MetLife News:
www.metlife.com/about/press-room

by

regulated

insurance

and other distributions to MetLife, Inc. by its insurance subsidiaries
is
regulations. See
“Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Liquidity and Capital Resources —
and Capital Sources —
The Holding Company — Liquidity
Dividends
to
Consolidated Financial Statements.

and Note 18 of Notes

from Subsidiaries”

laws

and

The following table presents the high and low closing prices for the
the periods
common stock of MetLife,
indicated.

Inc. on the NYSE for

Common Stock
Price

2010

High

First quarter . . . . . . . . . . . . . . . . . . . . $43.34

Second quarter

. . . . . . . . . . . . . . . . . $47.10

Third quarter

. . . . . . . . . . . . . . . . . . . $42.73

Fourth quarter

. . . . . . . . . . . . . . . . . . $44.92

Low

$33.64

$37.76

$36.49

$37.74

Common Stock
Price

2009

High

First quarter . . . . . . . . . . . . . . . . . . . . $35.97

Second quarter

. . . . . . . . . . . . . . . . . $35.50

Third quarter

. . . . . . . . . . . . . . . . . . . $40.83

Fourth quarter

. . . . . . . . . . . . . . . . . . $38.35

Low

$12.10

$23.43

$26.90

$33.22

As of March 1, 2011,
beneficial owners of common stock of MetLife, Inc.

there were approximately 4.4 million

MetLife, Inc.

87

CUMULATIVE TOTAL RETURN
Based upon an initial investment of $100 on December 31, 2005
with dividends reinvested

$150

$100

$50

$0

31-Dec-05

31-Dec-06

31-Dec-07

31-Dec-08

31-Dec-09

31-Dec-10

MetLife Inc.

S&P 500

S&P 500 Insurance

S&P 500 Financials

Source:  Capital IQ 

88

MetLife, Inc.

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MetLife, Inc.
200 Park Avenue
New York, NY 10166-0188
www.metlife.com

0710-6222     
© 2011 Peanuts Worldwide LLC