MetLife Annual Report 2016

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FY2016 Annual Report · MetLife

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
__________________________

Form 10-K
(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-15787

MetLife, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

200 Park Avenue, New York, N.Y.

(Address of principal
executive offices)

13-4075851

(I.R.S. Employer
Identification No.)

10166-0188

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, par value $0.01

Floating Rate Non-Cumulative Preferred Stock, Series A, par value $0.01

5.375% Senior Notes

5.25% Senior Notes

Name of each exchange on which registered

New York Stock Exchange

Irish Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C, par value $0.01

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter
No
period that the registrant was required to submit and post such files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and

will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See

the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at June 30, 2016 was approximately $43.8

billion. At February 23, 2017, 1,087,256,971 shares of the registrant’s common stock were outstanding.

Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement for the Annual Meeting

of Shareholders to be held on June 13, 2017, to be filed by the registrant with the Securities and Exchange Commission pursuant to Regulation 14A
not later than 120 days after the year ended December 31, 2016.

DOCUMENTS INCORPORATED BY REFERENCE

Business

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Table of Contents

Part I

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

Selected Financial Data

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

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure

Controls and Procedures

Other Information

Directors, Executive Officers and Corporate Governance

Executive Compensation

Part III

Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

Part IV

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 7A.

Item 8.

Item 9.

Item 9A.

Item 9B.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Exhibits and Financial Statement Schedules

Signatures

Exhibit Index

Page

190

199

386

388

391

392

393

E-1

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As used in this Form 10-K, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation

incorporated in 1999, its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results
of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or
forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current
facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and
terms of similar meaning, or are tied to future periods, in connection with a discussion of future operating or financial performance.
In particular, these include statements relating to future actions, prospective services or products, future performance or results
of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings,
trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by
known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of
MetLife, Inc., its subsidiaries and affiliates. These statements are based on current expectations and the current economic
environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees
of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements.
Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified
in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission. These factors include: (1) difficult conditions in
the global capital markets; (2) increased volatility and disruption of the global capital and credit markets, which may affect our
ability to meet liquidity needs and access capital, including through our credit facilities, generate fee income and market-related
revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines
in value of specified assets, including assets supporting risks ceded to certain of our captive reinsurers or hedging arrangements
associated with those risks; (3) exposure to global financial and capital market risks, including as a result of the pending
withdrawal of the United Kingdom from the European Union, other disruption in Europe and possible withdrawal of one or
more countries from the Euro zone; (4) impact on us of comprehensive financial services regulation reform, including potential
regulation of MetLife, Inc. as a non-bank systemically important financial institution, or otherwise; (5) numerous rulemaking
initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact how
we conduct our business, including those compelling the liquidation of certain financial institutions; (6) regulatory, legislative
or tax changes relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products
or services, or increase the cost or administrative burdens of providing benefits to employees; (7) adverse results or other
consequences from litigation, arbitration or regulatory investigations; (8) unanticipated developments that could delay, prevent
or otherwise adversely affect the separation of Brighthouse Financial; (9) our ability to address difficulties, unforeseen liabilities,
asset impairments, or rating agency actions arising from (a) business acquisitions and integrating and managing the growth of
such acquired businesses, (b) dispositions of businesses via sale, initial public offering, spin-off or otherwise, including failure
to achieve projected operational benefit from such transactions and any restrictions, liabilities, losses or indemnification
obligations arising from any transitional services or tax arrangements related to the separation of any business, or from the failure
of such a separation to quality for any intended tax-free treatment; (c) entry into joint ventures, or (d) legal entity reorganizations;
(10) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions;
including any separated business’ incurrence of debt in connection with such a separation; (11) investment losses and defaults,
and changes to investment valuations; (12) changes in assumptions related to investment valuations, deferred policy acquisition
costs, deferred sales inducements, value of business acquired or goodwill; (13) impairments of goodwill and realized losses or
market value impairments to illiquid assets; (14) defaults on our mortgage loans; (15) the defaults or deteriorating credit of other
financial institutions that could adversely affect us; (16) economic, political, legal, currency and other risks relating to our
international operations, including with respect to fluctuations of exchange rates; (17) downgrades in our claims paying ability,
financial strength or credit ratings; (18) a deterioration in the experience of the closed block established in connection with the
reorganization of Metropolitan Life Insurance Company; (19) availability and effectiveness of reinsurance, hedging or
indemnification arrangements, as well as any default or failure of counterparties to perform; (20) differences between actual
claims experience and underwriting and reserving assumptions; (21) ineffectiveness of risk management policies and procedures;
(22) catastrophe losses; (23) increasing cost and limited market capacity for statutory life insurance reserve financings;
(24) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the
development of new products by new and existing competitors, and for personnel; (25) 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 any adjustment for nonperformance risk; (26) legal,
regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (27) MetLife,

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Inc.’s and its subsidiary holding companies’ primary reliance, as holding companies, on dividends from its subsidiaries to meet
its free cash flow targets and debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries
to pay such dividends; (28) the possibility that MetLife, Inc.’s Board of Directors may influence the outcome of stockholder
votes through the voting provisions of the MetLife Policyholder Trust; (29) changes in accounting standards, practices and/or
policies; (30) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee
benefits; (31) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of
others; (32) difficulties in marketing and distributing products through our distribution channels; (33) provisions of laws and
our incorporation documents may delay, deter or prevent takeovers and corporate combinations involving MetLife; (34) the
effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities,
or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems,
cyber- or other information security systems and management continuity planning; (35) any failure to protect the confidentiality
of client information; (36) the effectiveness of our programs and practices in avoiding giving our associates incentives to take
excessive risks; and (37) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the U.S. Securities
and Exchange Commission.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife,
Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc.
makes on related subjects in reports to the U.S. Securities and Exchange Commission.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibit Index — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements

included as exhibits to this Annual Report on Form 10-K.

Part I

Item 1. Business

Index to Business

Table of Contents

Business Overview

Segments and Corporate & Other

Policyholder Liabilities

Underwriting and Pricing

Reinsurance Activity

Regulation

Company Ratings

Competition

Employees

Executive Officers

Trademarks

Available Information

Page

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Business Overview

As used in this Form 10-K, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation

incorporated in 1999, its subsidiaries and affiliates.

We have grown to become a global provider of life insurance, annuities, employee benefits and asset management. Through
our subsidiaries and affiliates, we hold leading market positions in the United States, Japan, Latin America, Asia, Europe and
the Middle East.

We are also one of the largest institutional investors in the United States with a $518.3 billion general account portfolio
invested primarily in investment grade corporate bonds, structured finance securities, mortgage loans and U.S. Treasury and
agency securities, as well as real estate and corporate equity, at December 31, 2016.

Our well-recognized brand, leading market positions, competitive and innovative product offerings and financial strength
and expertise should help drive future growth and enhance shareholder value, building on a long history of fairness, honesty
and integrity. Over the course of the next several years, we will pursue our refreshed enterprise strategy, focusing on transforming
the Company to become more digital, driving efficiencies and innovation to achieve competitive advantage, and simplified,
decreasing the costs and risks associated with our highly complex industry to customers and shareholders. One MetLife remains
at the center of everything we do: collaborating, sharing best practices, and putting the enterprise first. Digital and simplified
are the key enablers of our new strategic cornerstones, all of which satisfy the criteria of our Accelerating Value strategic initiative
by offering customers truly differentiated value propositions that allow us to establish clear competitive advantages and ultimately
drive higher levels of free cash flow:

Optimize value and risk

Focus on in-force and new business opportunities using Accelerating Value analysis

Optimize cash and value

Balance risk across MetLife

–

Drive operational excellence

–

Become a more efficient, high performance organization

Focus on the customer with a disciplined approach to unit cost improvement

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Strengthen distribution advantage

–

Transform our distribution channels to drive productivity and efficiency through digital enablement, improved
customer persistency and deeper customer relationships

Deliver the right solutions for the right customers

–

Use customer insights to deliver differentiated value propositions - products, services and experiences to win the
right customers and earn their loyalty

MetLife is organized into six segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); MetLife
Holdings; and Brighthouse Financial. In addition, the Company reports certain of its results of operations in Corporate & Other.
See “— Segments and Corporate & Other,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Executive Summary — Other Key Information” and Note 2 of the Notes to the Consolidated Financial Statements
for further information on the Company’s segments and Corporate & Other. Management continues to evaluate the Company’s
segment performance and allocated resources and may adjust related measurements in the future to better reflect segment
profitability.

In the United States, we provide a variety of insurance and financial services products, including life, dental, disability,

property & casualty, guaranteed interest, stable value and annuities to both individuals and groups.

Outside the United States, we provide life, medical, dental, credit and other accident & health insurance, as well as annuities,
endowment and retirement & savings products to both individuals and groups. We believe these businesses will continue to
grow more quickly than our United States businesses.

Our current initiative to separate Brighthouse Financial (comprised of a substantial portion of our former Retail segment,
as well as certain portions of our former Corporate Benefit Funding segment and Corporate & Other (the “Separation”)) should
enable both companies to compete more effectively, achieve strong operational and financial performance, and create long-term
value for our shareholders. See “— Other Key Information.”

Revenues derived from any customer did not exceed 10% of consolidated premiums, universal life and investment-type
product policy fees and other revenues for the years ended December 31, 2016, 2015 and 2014. Financial information, including
revenues, expenses, operating earnings, and total assets by segment, as well as premiums, universal life and investment-type
product policy fees and other revenues by major product groups, is provided in Note 2 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 — Non-GAAP and Other Financial Disclosures” for definitions of such measures.

For financial information related to revenues, total assets, and goodwill balances by geographic region, see Notes 2 and 11

of the Notes to the Consolidated Financial Statements.

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Other Key Information

On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. Additionally, on July 21, 2016, MetLife,
Inc. announced that following the Separation, the separated business will be rebranded as “Brighthouse Financial.” On October
5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. (“Brighthouse”), filed a registration statement on Form 10
(the “Form 10”) with the U.S. Securities and Exchange Commission (“SEC”). On December 6, 2016, Brighthouse filed an
amendment to its registration statement on Form 10 with the SEC. The information statement filed as an exhibit to the Form 10
disclosed that the Company intends to include MetLife Insurance Company USA (“MetLife USA”), New England Life Insurance
Company (“NELICO”), First MetLife Investors Insurance Company (“FMLI”), MetLife Advisers, LLC and certain captive
reinsurance companies in the proposed separated business and distribute at least 80.1% of the shares of Brighthouse’s common
stock on a pro rata basis to the holders of MetLife, Inc. common stock. The ultimate form and timing of the Separation will be
influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate
and pursue structural alternatives for the proposed Separation. MetLife expects that the life insurance closed block and the life
and annuity business sold through Metropolitan Life Insurance Company (“MLIC”) will not be a part of Brighthouse Financial.
The Separation remains subject to certain conditions, including, among others, obtaining final approval from the MetLife, Inc.
Board of Directors, receipt of a favorable ruling from the Internal Revenue Service (“IRS”) and an opinion from MetLife’s tax
advisor regarding certain U.S. federal income tax matters, insurance and other regulatory approvals, and an SEC declaration of
the effectiveness of the Form 10.

In July 2016, MetLife, Inc. completed the sale to Massachusetts Mutual Life Insurance Company (“MassMutual”) of its
U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and
outstanding shares of MetLife’s affiliated broker-dealer, MetLife Securities, Inc. (“MSI”), a wholly-owned subsidiary of MetLife,
Inc. (the “U.S. Retail Advisor Force Divestiture”) for $291 million. MassMutual assumed all of the liabilities related to such
assets that arise or occur at or after the closing of the sale. As part of the transactions, MetLife, Inc. and MassMutual entered
into a product development agreement under which MetLife’s U.S. retail business will be the exclusive developer of certain
annuity products to be issued by MassMutual. In the MassMutual purchase agreement, MetLife, Inc. agreed to indemnify
MassMutual for certain claims, liabilities and breaches of representations and warranties up to limits described in the purchase
agreement. See Note 3 of the Notes to the Consolidated Financial Statements for further information.

On December 18, 2014, the Financial Stability Oversight Council (“FSOC”) designated MetLife, Inc. as a non-bank
systemically important financial institution (“non-bank SIFI”) subject to regulation by the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”) and the Federal Reserve Bank of New York (collectively with the Federal Reserve
Board, the “Federal Reserve”) and the Federal Deposit Insurance Corporation (the “FDIC”), as well as to enhanced supervision
and prudential standards. On March 30, 2016, the D.C. District Court ordered that the designation of MetLife, Inc. as a non-
bank SIFI by the FSOC be rescinded. On April 8, 2016, the FSOC appealed the D.C. District Court’s order to the United States
Court of Appeals for the District of Columbia, and oral argument was heard on October 24, 2016. If the FSOC prevails on appeal
or designates MetLife, Inc. as systemically important as part of its ongoing review of non-bank financial companies, MetLife,
Inc. could once again be subject to regulation as a non-bank SIFI. See “— Regulation — U.S. Regulation — Potential Regulation
as a Non-Bank SIFI.”

Prior to January 1, 2016, certain international subsidiaries had a fiscal year cutoff of November 30th. Accordingly, the
Company’s consolidated financial statements reflect the assets and liabilities of such subsidiaries as of November 30, 2015 and
the operating results of such subsidiaries for the years ended November 30, 2015 and 2014. Effective January 1, 2016, the
Company converted its Japan operations to calendar year-end reporting. The elimination of a one-month reporting lag of a
subsidiary is considered a change in accounting principle and requires retrospective application. While the Company believes
that eliminating the lag in the reporting of its Japan operations was preferable in order to consistently reflect events, economic
conditions and global trends on the financial statements, the Company determined that it was impracticable to apply the effects
of the lag elimination to financial reporting periods prior to January 1, 2015. The effect of not retroactively applying this change
in accounting, however, was not material to the 2015 or 2016 consolidated financial statements. Therefore, the Company reported
the cumulative effect of the change in accounting principle in net income for the year ended December 31, 2016 and did not
retrospectively apply the effects of this change to prior periods. See Note 2 of the Notes to the Consolidated Financial Statements.

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Segments and Corporate & Other

U.S.

Product Overview

Our businesses in the U.S. segment offer a broad range of protection products and services aimed at serving the financial
needs of our customers throughout their lives. These products are sold to corporations and their respective employees, other
institutions and their respective members, as well as individuals. Our U.S. segment is organized into three businesses: Group
Benefits, Retirement and Income Solutions and Property & Casualty.

Group Benefits

We have built a leading position in the United States group insurance market through long-standing relationships with

many of the largest corporate employers in the United States.

Our Group Benefits insurance products and services include life, dental, group short- and long-term disability, individual
disability, accidental death and dismemberment (“AD&D”), critical illness, vision and accident & health coverages, as well
as prepaid legal plans. We also sell administrative services-only (“ASO”) arrangements to some employers. Under such
ASO arrangements, the employer is at risk, as we have not issued an insurance policy. We pay claims funded by the employer
and perform other administrative services on behalf of the employer.

The major products offered by our Group Benefits business are as follows:

Variable Life. Variable life products provide insurance coverage through a contract that gives the policyholder flexibility
in investment choices and, depending on the product, in premium payments and coverage amounts, with certain guarantees.
Most importantly, with variable life products, premiums and account balances can be directed by the policyholder into a
variety of separate account investment options or directed to the Company’s general account. In the separate account
investment options, the policyholder bears the entire risk of the investment results. We collect specified fees for the
management of the investment options. The policyholder’s cash value reflects the investment return of the selected investment
options, net of management fees and insurance-related and other charges. In some instances, third-party money management
firms manage these investment options. With some products, by maintaining a certain premium level, policyholders may
have the advantage of various guarantees that may protect the death benefit from adverse investment experience.

Universal Life. Universal life products provide insurance coverage on the same basis as variable life, except that
premiums, and the resulting accumulated balances, are allocated only to the Company’s general account. We credit premiums
to an account maintained for the policyholder. Premiums are credited net of specified expenses. Interest is credited to the
policyholder’s account at interest rates we determine, subject to specified minimums. Specific charges are made against the
policyholder’s account for the cost of insurance protection and for expenses. With some products, by maintaining a certain
premium level, policyholders may have the advantage of various guarantees that may protect the death benefit from adverse
investment experience.

Term Life. Term life products provide a guaranteed benefit upon the death of the insured for a specified time period in
return for the periodic payment of premiums. Specified coverage periods range from one year to 30 years, but in no event
are they longer than the period over which premiums are paid. Death benefits may be level over the period or decreasing.
Premiums may be guaranteed at a level amount for the coverage period or may be non-level and non-guaranteed. Term
insurance products are sometimes referred to as pure protection products, in that there are typically no savings or investment
elements. Term contracts expire without value at the end of the coverage period when the insured party is still living.

Dental. Dental products provide insurance and ASO arrangements that assist employees, retirees and their families in
maintaining oral health while reducing out-of-pocket expenses and providing superior customer service. Dental plans include
the Preferred Dentist Program and the Dental Health Maintenance Organization.

Disability. Group and individual disability products provide a benefit in the event of the disability of the insured. In
most instances, this benefit is in the form of monthly income paid until the insured reaches age 65. In addition to income
replacement, the product may be used to provide for the payment of business overhead expenses for disabled business
owners or mortgage payment protection.

Retirement and Income Solutions

The Retirement and Income Solutions business provides funding and financing solutions that help institutional customers
mitigate and manage liabilities primarily associated with their qualified, nonqualified and welfare employee benefit programs
using a spectrum of life and annuity-based insurance and investment products.

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The major products offered by our Retirement and Income Solutions business are as follows:

Stable Value Products. We offer general account guaranteed interest contracts, separate account guaranteed interest
contracts, and trust guaranteed interest contracts used to support the stable value option of defined contribution plans. We
also offer private floating rate funding agreements that are used for money market funds, securities lending cash collateral
portfolios and short-term investment funds.

General account guaranteed interest contracts are designed to provide stable value investment options within tax-
qualified defined contribution plans. Traditional general account guaranteed interest contracts integrate a general account
fixed maturity investment with a general account guarantee of liquidity at contract value for participant transactions.

Separate account guaranteed interest contracts are available to defined contribution plan sponsors. These contracts
integrate market value returns on separate account investments with a general account guarantee of liquidity at contract
value to the extent the separate account assets are not sufficient. The contracts do not have a fixed maturity date and are
terminable by each party on notice.

Private floating rate funding agreements are generally privately-placed, unregistered investment contracts issued as
general account obligations. Interest is credited based on an external index, generally the three-month London Interbank
Offered Rate (“LIBOR”). Contracts may contain put provisions (of 90 days or longer) that allow for the contractholder to
receive the account balance prior to the stated maturity date.

Pension Risk Transfers. We offer general account and separate account annuity products, generally in connection with
the termination of defined benefit pension plans. These risk transfer products include single premium buyouts that allow
for full or partial transfers of pension liabilities.

General account annuity products include nonparticipating contracts. Under nonparticipating contracts, group annuity
benefits may be purchased for retired and terminated employees or employees covered under terminating or ongoing pension
plans. Both immediate and deferred annuities may be purchased by a single premium at issue. There are generally no cash
surrender rights, with some exceptions including certain contracts that include liabilities for cash balance pension plans.

Separate account annuity products include both participating and non-participating contracts. Under participating
contracts, group annuity benefits are purchased for retired, terminated, or active employees covered under active or
terminated pension plans. Both immediate and deferred fixed annuities are purchased with a single premium. Under some
contracts, additional annuities may be periodically purchased at then current purchase rates. The assets supporting the
guaranteed benefits for each contract are held in a separate account. Some contracts require the contractholder to make
periodic payments to cover investment and insurance expenses. The Company fully guarantees benefit payments and is
ultimately responsible for all benefit payments. The non-participating contracts have economic features similar to our general
account product, but offer the added protection of an insulated separate account. Under U.S. GAAP, these annuity contracts
are treated as general account products.

Institutional Income Annuities. These general account contracts are available for purchasing guaranteed payout annuities
for employees upon retirement or termination of employment. These annuities can be either life contingent or non-life
contingent. These annuities are nonparticipating, do not provide for any loan or cash surrender value and, with few exceptions,
do not permit future considerations.

Torts and Settlements. We offer innovative strategies for complex litigation settlements, primarily structured settlement

annuities.

Structured settlement annuities are customized annuities designed to serve as an alternative to a lump sum payment in
a lawsuit initiated because of personal injury, wrongful death, or a workers’ compensation claim or other claim for damages.
Surrenders are generally not allowed, although commutations are permitted in certain circumstances. Guaranteed payments
consist of life contingent annuities, term certain annuities and lump sums.

Capital Markets Investment Products. Products we offer include funding agreements, funding agreement-backed notes

and funding agreement-backed commercial paper.

Funding agreement-backed notes are part of a medium term note program, under which funding agreements are issued
to a special-purpose trust that issues marketable notes in U.S. dollars or foreign currencies. The proceeds of the issuance
of a series of notes are used by the trust to acquire a funding agreement with matching interest and maturity payment terms
from the Company. The notes are underwritten and marketed by major investment banks’ broker-dealer operations and are
sold to institutional investors.

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Funding agreement-backed commercial paper is issued by a special purpose limited liability company which deposits
the proceeds under a master funding agreement issued to it by MLIC or MetLife USA. The commercial paper receives the
same short-term credit rating as MLIC or MetLife USA and is marketed by major investment banks’ broker-dealer operations.
The program allows for funding agreement-backed commercial paper to be issued in U.S. dollars or foreign currencies.
Due to the Separation, the MetLife USA program is inactive. Future issuances within MetLife USA will be subject to
management’s discretion.

Through the Federal Home Loan Bank (“FHLB”) advance program, funding agreements have been issued by certain
of our insurance subsidiaries to various branches of the FHLB. The branch of the FHLB which owns the funding agreements
is determined by the insurance company’s state of domicile.

Through the Federal Agricultural Mortgage Corporation (“Farmer Mac”) program, funding agreements have been
issued by a subsidiary of Farmer Mac, as well as to certain special purpose entities (“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.

Other Products and Services. We offer specialized life insurance products and funding agreements designed specifically
to provide solutions for funding postretirement benefits and company-, bank- or trust-owned life insurance used to finance
nonqualified benefit programs for executives.

Property & Casualty

The Property & Casualty business offers personal and commercial lines of property and casualty insurance, including
private passenger automobile, homeowners’ and personal excess liability insurance. In addition, Property & Casualty offers
small business owners property, liability and business interruption insurance.

The major products offered by our Property & Casualty business are as follows:

Auto Insurance. Auto insurance policies provide coverage for private passenger automobiles, utility automobiles and
vans, motorcycles, motor homes, antique or classic automobiles and trailers. We also offer traditional coverage such as
liability, uninsured motorist, no fault or personal injury protection, as well as collision and comprehensive insurance.

Homeowners’ Insurance. Homeowners’ insurance policies provide protection for homeowners, renters, condominium
owners and residential landlords against losses arising out of damage to dwellings and contents from a wide variety of perils,
as well as coverage for liability arising from ownership or occupancy. Other insurance includes personal excess liability
(protection against losses in excess of amounts covered by other liability insurance policies), and coverage for recreational
vehicles and boat owners. Most of our homeowners’ policies are traditional insurance policies for dwellings, providing
protection for loss on a “replacement cost” basis. These policies also provide additional coverage for reasonable, normal
living expenses incurred by policyholders that have been displaced from their homes.

Business Owners’ Insurance. Business owners insurance provides property, liability and business interruption insurance

for small business owners arising out of damages to property and/or business interruption from a variety of perils.

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Operations

Sales Distribution

In the U.S, we market our products and services through various distribution channels. Our Group Benefits and
Retirement and Income Solutions products are sold via sales forces primarily comprising MetLife employees. Personal
lines property & casualty insurance products are directly marketed to employees at their employer’s worksite. Personal and
commercial lines property & casualty insurance products are also marketed and sold to individuals and small business
owners by independent agents and property & casualty specialists through a direct marketing channel.

Group Benefits Distribution

Group Benefits distributes its products and services through a sales force that is segmented by the size of the target
customer. Marketing representatives sell either directly to corporate and other group customers or through an intermediary,
such as a broker or consultant. In addition, voluntary products are sold by specialists. Employers have been emphasizing
voluntary products and, as a result, we have increased our focus on communicating and marketing to employees in order
to further foster sales of those products.

We have entered into several operating joint ventures and other arrangements with third parties to expand opportunities
to market and distribute Group Benefits products and services. We also sell our Group Benefits products and services
through sponsoring organizations and affinity groups and provide life and dental coverage to certain employees of the
U.S. Government.

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Retirement and Income Solutions Distribution

Retirement and Income Solutions distributes its products and services through dedicated sales teams and relationship
managers. Products may be sold directly to benefit plan sponsors and advisors or through brokers, consultants or other
intermediaries. In addition, these sales professionals work with individual, group and global distribution areas to better
reach and service customers, brokers, consultants and other intermediaries.

Property & Casualty Distribution

Property & Casualty products are marketed and sold through independent agents, property & casualty specialists and

association/affinity organizations.

We are a leading provider of personal lines property & casualty insurance products offered to employees at their
employer’s worksite. Marketing representatives market personal lines property & casualty insurance products to
employers through a variety of means, including broker referrals and cross-selling to group customers. Once permitted
by the employer, MetLife commences marketing efforts to employees, enabling them to purchase coverage and to request
payroll deduction over the telephone.

We also offer commercial property & casualty products through a variety of sponsored relationships, including
association/affinity organizations. Marketing representatives market commercial property & casualty insurance products
to small business owners through a variety of means including broker referrals and members of third party professional
organizations. Once permitted by the sponsoring organization, MetLife commences marketing to small business owners,
enabling them to purchase coverage directly over the internet and/or telephone.

Asia

Product Overview

Our Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and

their respective employees, which include the following major products:

Life Insurance. We offer both traditional and non-traditional life insurance products, such as whole and term life,

endowments, universal and variable life, as well as group products.

Accident & Health Insurance. We offer personal accident and supplemental health products, hospital indemnity, medical
reimbursement plans, and coverage for serious medical conditions. Our largest markets are Japan, Korea and China. In addition,
we offer individual and group major medical coverage in select markets.

Retirement and Savings Products. We offer both fixed and variable annuity products in select markets.

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Operations

We operate in 10 countries throughout Asia, with our largest operation in Japan. We also maintain a representative office

in Myanmar, an innovation center in Singapore and a data analytics center of excellence in Malaysia.

Sales Distribution

Our Asia operations are geographically diverse with developed and emerging markets. We market our products and
services through a multi-channel, digitally-enabled distribution strategy, including career agency, bancassurance, direct
marketing, brokerage, other third-party distribution and e-commerce.

Japan’s multi-channel distribution strategy consists of captive agents, independent agents, bancassurance, direct
marketing and brokers. While face-to-face channels continue to be core to Japan’s business, other channels, including
bancassurance and direct marketing, are a critical part of Japan’s distribution strategy. Our Japan operation has maintained
its position in bancassurance due to its strong distribution relationship with Japan’s mega banks, trust banks and various
regional banks, as well as with the Japan Post. The direct marketing channel is supported by an industry-leading marketing
platform, state-of-the-art call center infrastructure and its own campaign management system. Our direct marketing
operations, the largest of which is in Japan, deploy both broadcast marketing approaches (e.g. direct response TV and web-
based lead generation) and traditional direct marketing techniques such as inbound and outbound telemarketing.

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Outside of Japan, our distribution strategies differ by market but generally utilize a combination of captive agents,
bancassurance relationships, direct marketing and e-commerce. Throughout the region, our Asia operation leverages its
expertise in direct marketing operations management to conduct its own campaigns and provide those direct marketing
capabilities to third-party sponsors. It also leverages its proprietary data analytics center of excellence in Malaysia for
improved customer insights and lead enhancement. While not a significant part of the region’s overall business, sales of
group life and pension business are primarily achieved through independent brokers and an employee sales force.

Latin America

Product Overview

Our Latin America segment offers a broad range of products to both individuals and corporations, as well as other

institutions and their respective employees, which include the following major products:

Life Insurance. We offer universal, variable and term life products. For a description of these products, see “— U.S. —

Product Overview—Group Benefits.”

Retirement and Savings Products. We offer fixed annuities and pension products. Fixed annuities provide for both asset
accumulation and asset distribution needs. Fixed annuities do not allow the same investment flexibility provided by variable
annuities, but provide guarantees related to the preservation of principal and interest credited. Deposits made into deferred
annuity contracts are allocated to the Company’s general account and are credited with interest at rates we determine, subject
to specified minimums. The minimum guarantee is for the whole period of the policy, and the credited rates are a function of
the earned rates, subject to the minimum guarantee. Fixed income annuities provide a guaranteed monthly income for a
specified period of years and/or for the life of the annuitant. Our savings oriented pension products are offered under a
mandatory privatized social security system.

In addition to other various products discussed within the U.S. segment, Latin America also engages in the following

businesses:

Accident & Health Insurance. We offer group and individual major medical, accidental, and supplemental health products,
including accidental death and disability, medical reimbursement, hospital indemnity and medical coverage for serious medical
conditions.

Credit Insurance. We offer credit insurance policies designed to fulfill certain loan obligations in the event of the

policyholder’s death.

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Operations

In Latin America, our largest operations are in Mexico and Chile.

Sales Distribution

In Latin America, we market our products and services through a multi-distribution strategy which varies by geographic

region and stage of market development.

Latin America’s distribution channels include captive agents, direct marketing (“sponsored and direct to customer”),
large multinational brokers and small and medium-sized brokers, direct and group sales forces (mostly for group policies
without broker intermediaries), and worksite marketing. The region has an exclusive and captive agency distribution network
which also sells a variety of individual life, accident & health, and pension products. In the direct marketing channel, we
work with sponsors and telesales representatives selling mainly accident & health and individual life products directly to
consumers. We currently work with active brokers with registered sales of group and individual life, accident & health,
group medical, dental and pension products.

EMEA

Product Overview

Our EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions

and their respective employees, which include the following major products:

Life Insurance. We offer both traditional and non-traditional life insurance products, such as whole and term life,

endowments and variable life products. We offer group term life programs in most markets.

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Accident & Health Insurance. We offer individual and group personal accident and supplemental health products,
including AD&D, hospital indemnity, scheduled medical reimbursement plans, and coverage for serious medical conditions. In
addition, we offer individual and group major medical coverage in select markets.

Retirement and Savings Products. We offer fixed annuity products and pension products, including group pension programs
in select markets. In Romania, we offer through a specialized pension company a savings oriented pension product under the
mandatory privatized social security systems.

Credit Insurance. We offer credit insurance policies designed to fulfill certain obligations in the event of the policyholder’s

death.

Operations

We operate in several countries across EMEA, with our largest operations in the Gulf, United Kingdom (“U.K.”) and

Turkey.

Sales Distribution

Our EMEA operations are geographically diverse with a mix of developed and emerging markets. We hold leading
positions in several markets in the Middle East and Central & Eastern Europe, and focus on attractive niche segments in
more developed markets. Emerging markets represent a significant part of the region’s overall earnings. Our businesses in
EMEA employ a multi-channel distribution strategy, including captive and independent agency, bancassurance and direct-
to-consumer.

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MetLife Holdings

Product Overview

Our MetLife Holdings segment consists of operations relating to products and businesses that we no longer actively
market in the United States. These products and businesses include variable, universal, term and whole life, as well as variable,
fixed and index-linked annuities. Our MetLife Holdings segment also includes our discontinued long-term care business and
the assumed reinsurance of certain variable annuity products from our former operating joint venture in Japan.

The major products within our MetLife Holdings segment are as follows:

Variable, Universal and Term Life. These life products are similar to those offered by our Group Benefits business,
except that these products were marketed to individuals through various retail distribution channels. For a description of
these products, see “— U.S. — Product Overview — Group Benefits.”

Whole Life. Whole life products provide a benefit upon the death of the insured in return for the periodic payment of
a fixed premium over a predetermined period. Premium payments may be required for the entire life of the contract period,
to a specified age or period, and may be level or change in accordance with a predetermined schedule. Whole life insurance
includes policies that provide a participation feature in the form of dividends. Policyholders may receive dividends in cash,
or apply them to increase death benefits, increase cash values available upon surrender or reduce the premiums required to
maintain the contract in-force.

Variable Annuities. Variable annuities provide for both asset accumulation and asset distribution needs. Variable
annuities allow the contractholder to allocate deposits into various investment options in a separate account, as determined
by the contractholder. The risks associated with such investment options are borne entirely by the contractholder, except
where guaranteed minimum benefits are involved. In certain variable annuity products, contractholders may also choose to
allocate all or a portion of their account to the Company’s general account and are credited with interest at rates we determine,
subject to specified minimums. In addition, contractholders may also elect certain minimum death benefit and minimum
living benefit guarantees for which additional fees are charged and where asset allocation restrictions may apply.

Fixed and Indexed-Linked Annuities. Fixed annuities provide for both asset accumulation and asset distribution needs.
Fixed annuities do not allow the same investment option flexibility provided by variable annuities, but provide guarantees
related to the preservation of principal and interest credited. Deposits made into deferred annuity contracts are allocated to
the Company’s general account and are credited with interest at rates we determine, subject to specified minimums. Credited
interest rates may be guaranteed not to change for certain limited periods of time, ranging from one to 10 years. Fixed
income annuities provide a guaranteed monthly income for a specified period of years and/or for the life of the annuitant.
Additionally, the Company has issued indexed-linked annuities which allow the contractholder to participate in returns from
equity indices.

Long-term Care. Long-term care products provide protection against the potentially high costs of long-term health care
services. They generally pay benefits to insureds who need assistance with activities of daily living or have a cognitive
impairment. Although we discontinued the sale of these products in 2010, we continue to service our existing inforce
policyholders.

Brighthouse Financial

Product Overview

Our Brighthouse Financial segment offers a broad range of products and services which include variable, fixed, index-
linked and income annuities, as well as variable, universal, term and whole life products. These products and services are
actively marketed through various third party retail distribution channels in the United States. In addition, the Brighthouse
Financial segment includes certain run-off businesses which are not actively marketed.

The major products offered by our Brighthouse Financial segment are as follows:

Variable Annuities, Fixed Annuities, Index-Linked Annuities and Whole Life. These products are similar to those
described in MetLife Holdings, except that these products are actively marketed through various third party retail distribution
channels. For a description of these products, see “— MetLife Holdings — Product Overview.”

Income Annuities. Fixed income annuities provide a guaranteed monthly income for a specified period of years and/

or for the life of the annuitant.

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Variable, Universal and Term Life. These products are similar to those offered by our Group Benefits business, except
that these products are actively marketed through various third party retail distribution channels. For a description of these
products, see “— U.S. — Product Overview — Group Benefits.”

Sales Distribution

We distribute our annuity and life insurance products through a diverse network of independent distribution partners. Our
partners include over 475 national and regional brokerage firms, banks, other financial institutions and financial planners, in
connection with the sale of our annuity products, and general agencies, financial advisors, brokerage general agencies and
financial intermediaries, in connection with the distribution of our life insurance products. Until July 2016, we also distributed
the aforementioned products through our MetLife Premier Client Group. See Note 3 of the Notes to the Consolidated Financial
Statements for further information regarding the U.S. Retail Advisor Force Divestiture.

Corporate & Other

Overview

Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments,
including external integration and disposition costs, internal resource costs for associates committed to acquisitions and
dispositions, enterprise-wide strategic initiative restructuring charges and various start-up businesses (including expatriate
benefits insurance and the investment management business through which the Company offers fee-based investment
management services to institutional clients, as well as the direct to consumer portion of the U.S. Direct business). Corporate &
Other also includes interest expense related to the majority of the Company’s outstanding debt and expenses associated with
certain legal proceedings and income tax audit issues. In addition, Corporate & Other includes the elimination of intersegment
amounts, which generally relate to affiliated reinsurance and intersegment loans, which bear interest rates commensurate with
related borrowings.

Policyholder Liabilities

We establish, and carry 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. Our liabilities for future policy benefits and claims are established based on estimates by
actuaries of how much we will need to pay for future benefits and claims. For life insurance and annuity products, we calculate
these liabilities based on assumptions and estimates, including estimated premiums to be received over the assumed life of the
policy, the timing of the event covered by the insurance policy, the amount of benefits or claims to be paid and the investment
returns on the investments we make with the premiums we receive. We establish liabilities for claims and benefits based on
assumptions and estimates of losses and liabilities incurred. Amounts for actuarial liabilities are computed and reported on the
consolidated financial statements in conformity with GAAP. For more details on policyholder liabilities see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates —
Liability for Future Policy Benefits” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Policyholder Liabilities.”

Pursuant to applicable insurance laws and regulations, MetLife, Inc.’s insurance subsidiaries, including affiliated captive
reinsurers, establish statutory reserves, reported as liabilities, to meet their obligations on their respective policies. These statutory
reserves are established in amounts sufficient to meet policy and contract obligations, when taken together with expected future
premiums and interest at assumed rates. Statutory reserves and actuarial liabilities for future policy benefits generally differ
based on accounting guidance.

U.S. state insurance laws and regulations require certain MetLife entities to submit to superintendents of insurance, with
each annual report, an opinion and memorandum of a “qualified actuary” that the statutory reserves and related actuarial amounts
recorded in support of specified policies and contracts, and the assets supporting such statutory reserves and related actuarial
amounts, make adequate provision for their statutory liabilities with respect to these obligations. See “— Regulation — U.S.
Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy Analysis.”

Insurance regulators in many of the non-U.S. countries in which we operate require certain MetLife entities to prepare a
sufficiency analysis of the reserves presented in the locally required regulatory financial statements, and to submit that analysis
to the regulatory authorities. See “— Regulation — International Regulation.”

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Underwriting and Pricing

Our Global Risk Management Department (“GRM”) contains a dedicated unit, the primary responsibility of which is the
development of product pricing standards and independent pricing and underwriting oversight for MetLife’s insurance businesses.
Further important controls around management of underwriting and pricing processes include regular experience studies to
monitor assumptions against expectations, formal new product approval processes, periodic updates to product profitability
studies and the use of reinsurance to manage our exposures, as appropriate. See “— Reinsurance Activity.”

Underwriting

Underwriting generally involves an evaluation of applications by a professional staff of underwriters and actuaries, who
determine the type and the amount of insurance risk that we are willing to accept. We employ detailed underwriting policies,
guidelines and procedures designed to assist the underwriter to properly assess and quantify such risks before issuing policies
to qualified applicants or groups.

Insurance underwriting considers not only an applicant’s medical history, but also other factors such as financial profile,
foreign travel, vocations and alcohol, drug and tobacco use. Group underwriting generally evaluates the risk characteristics of
each prospective insured group, although with certain voluntary products and for certain coverages, members of a group may
be underwritten on an individual basis. We generally perform our own underwriting; however, certain policies are reviewed by
intermediaries under guidelines established by us. Generally, we are not obligated to accept any risk or group of risks from, or
to issue a policy or group of policies to, any employer or intermediary. Requests for coverage are reviewed on their merits and
a policy is not issued unless the particular risk or group has been examined and approved in accordance with our underwriting
guidelines.

The underwriting conducted by our remote underwriting offices and intermediaries, as well as our corporate underwriting
office, is subject to periodic quality assurance reviews to maintain high standards of underwriting and consistency. Such offices
are also subject to periodic external audits by reinsurers with whom we do business.

We have established oversight of the underwriting process that facilitates quality sales and serves the needs of our customers,
while supporting our financial strength and business objectives. Our goal is to achieve the underwriting, mortality and morbidity
levels reflected in the assumptions in our product pricing. This is accomplished by determining and establishing underwriting
policies, guidelines, philosophies and strategies that are competitive and suitable for the customer, the agent and us.

For our Property & Casualty business, our underwriting function has six principal aspects: evaluating potential voluntary
and worksite employer accounts and independent agencies; establishing guidelines for the binding of risks; reviewing coverage
bound by agents; underwriting potential insureds, on a case by case basis, presented by agents outside the scope of their binding
authority; pursuing information necessary in certain cases to enable issuance of a policy within our guidelines; and ensuring
that renewal policies continue to be written at rates commensurate with risk. Subject to very few exceptions, agents in each of
the distribution channels have binding authority for risks which fall within our published underwriting guidelines. Risks falling
outside the underwriting guidelines may be submitted for approval to the underwriting department; alternatively, agents in such
a situation may call the underwriting department to obtain authorization to bind the risk themselves. In most states, we generally
have the right within a specified period (usually the first 60 days) to cancel any policy.

We continually review our underwriting guidelines in light of applicable regulations and to ensure that our policies remain

competitive and supportive of our marketing strategies and profitability goals.

Pricing

Product pricing reflects our pricing standards, which are consistent for our global businesses. GRM, as well as regional
finance and product teams are responsible for pricing and oversight for all of our insurance businesses. Product pricing is based
on the expected payout of benefits calculated through the use of assumptions for mortality, morbidity, expenses, persistency and
investment returns, as well as certain macroeconomic factors, such as inflation. Investment-oriented products are priced based
on various factors, which may include investment return, expenses, persistency and optionality and possible variability of results.
For certain products, pricing may include prospective and retrospective experience rating features. Prospective experience rating
involves the evaluation of past experience for the purpose of determining future premium rates and we bear all prior year gains
and losses. Retrospective experience rating also involves the evaluation of past experience for the purpose of determining the
actual cost of providing insurance for the customer; however, the contract includes certain features that allow us to recoup certain
losses or distribute certain gains back to the policyholder based on actual prior years’ experience.

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Rates for group benefit products are based on anticipated earnings and expenses for the book of business being underwritten.
Renewals are generally reevaluated annually or biannually and are re-priced to reflect actual experience on such products.
Products offered by Retirement and Income Solutions are priced on demand. Pricing reflects expected investment returns, as
well as mortality, longevity and expense assumptions appropriate for each product. This business is generally nonparticipating
and illiquid, as policyholders have few or no options or contractual rights to cash values.

Rates for individual life insurance products are highly regulated and generally must be approved by the regulators of the
jurisdictions in which the product is sold. Generally, such products are renewed annually and may include pricing terms that are
guaranteed for a certain period of time. Individual disability income products are based on anticipated results for the occupation
being underwritten. Fixed and variable annuity products are also highly regulated and approved by the respective regulators.
Such products generally include penalties for early withdrawals and policyholder benefit elections to tailor the form of the
product’s benefits to the needs of the opting policyholder. We periodically reevaluate the costs associated with such options and
will periodically adjust pricing levels on our guarantees. Further, from time to time, we may also reevaluate the type and level
of guarantee features currently being offered.

For our Property & Casualty business, our ability to set and change rates is subject to regulatory oversight. Rates for our
major lines of property & casualty insurance are based on our proprietary database, rather than relying on rating bureaus. We
determine prices in part from a number of variables specific to each risk. The pricing of personal lines insurance products takes
into account, among other things, the expected frequency and severity of losses, the costs of providing coverage (including the
costs of acquiring policyholders and administering policy benefits and other administrative and overhead costs such as
reinsurance), competitive factors and profit considerations. The major pricing variables for personal lines insurance include
characteristics of the insured property, such as age, make and model or construction type, as well as characteristics of the insureds,
such as driving record and loss experience, and the insured’s personal financial management. As a condition of our license to
do business in each state, we, like all other personal lines insurers, are required to write or share the cost of private passenger
automobile and homeowners insurance for higher risk individuals who would otherwise be unable to obtain such insurance.
This “involuntary” market, also called the “shared market,” is governed by the applicable laws and regulations of each state,
and policies written in this market are generally written at rates higher than standard rates and typically afford less coverage.

We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain

competitive and supportive of our marketing strategies and profitability goals.

Reinsurance Activity

We enter into reinsurance agreements primarily as a purchaser of reinsurance for our various insurance products and also
as a provider of reinsurance for some insurance products issued by third parties. We participate in reinsurance activities in order
to limit losses, minimize exposure to significant risks, and provide additional capacity for future growth. We enter into various
agreements with reinsurers that cover individual risks, group risks or defined blocks of business, primarily on a coinsurance,
yearly renewable term, excess or catastrophe excess basis. These reinsurance agreements spread risk and minimize the effect
of losses. The extent of each risk retained by us depends on our evaluation of the specific risk, subject, in certain circumstances,
to maximum retention limits based on the characteristics of coverages. We also cede first dollar mortality risk under certain
contracts. In addition to reinsuring mortality risk, we reinsure other risks, as well as specific coverages. We obtain reinsurance
for capital requirement purposes and also when the economic impact of the reinsurance agreement makes it appropriate to do
so.

Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse us for the ceded amount in the event a
claim is paid. Cessions under reinsurance agreements do not discharge our obligations as the primary insurer. In the event that
reinsurers do not meet their obligations under the terms of the reinsurance agreements, reinsurance recoverable balances could
become uncollectible.

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We reinsure our business through a diversified group of well-capitalized, highly rated reinsurers. We analyze recent trends
in arbitration and litigation outcomes in disputes, if any, with our reinsurers. We monitor ratings and evaluate the financial
strength of our 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. We generally secure large reinsurance recoverable balances with various forms of collateral, including
secured trusts, funds withheld accounts and irrevocable letters of credit. Additionally, we enter into reinsurance agreements for
risk and capital management purposes with several affiliated captive reinsurers. Captive reinsurers are affiliated insurance
companies licensed under specific provisions of insurance law of their respective jurisdictions, such as the Special Purpose
Financial Captive law adopted by several states including Vermont and Delaware, and have a very narrow business plan that
specifically restricts the majority or all of their activity to reinsuring business from their affiliates. See “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital
— Affiliated Captive Reinsurance Transactions.”

U.S.

For our Group Benefits business, we generally retain most of the risk and only cede particular risk on certain client

arrangements. The majority of our reinsurance activity within this business relates to the following client agreements:

• Employer sponsored captive programs: through these programs, employers buy a group life insurance policy with the

condition that a portion of the risk is reinsured back to a captive insurer sponsored by the client.

• Risk-sharing agreements: through these programs, clients require that we reinsure a portion of the risk back to third

parties, such as minority-owned reinsurers.

• Multinational pooling: through these agreements, employers buy many group insurance policies which are aggregated

in a single insurer via reinsurance.

The risks ceded under these agreements are generally quota shares of group life and disability policies. The cessions vary

from 50% to 90% of all the risks of the policies.

For our Property & Casualty business, we purchase reinsurance to manage our exposure to large losses (primarily catastrophe
losses) and to protect statutory surplus. We cede losses and premiums based upon the exposure of the policies subject to
reinsurance. To manage exposure to large property & casualty losses, we purchase property catastrophe, casualty and property
per risk excess of loss reinsurance protection.

For our Retirement and Income Solutions business, we have periodically engaged in reinsurance activities on an opportunistic

basis. There were no such transactions during the periods presented.

Asia, Latin America and EMEA

For certain of our life insurance products, we currently reinsure risks in excess of $5 million to external reinsurers on a
yearly renewable term basis. We may also reinsure certain risks with external reinsurers depending upon the nature of the risk
and local regulatory requirements.

For selected large corporate clients, we reinsure 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, we cede
and assume 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.

We also have reinsurance agreements in-force that reinsure a portion of the living and death benefit guarantees issued in
connection with variable annuity products. Under these agreements, we pay reinsurance fees associated with the guarantees
collected from policyholders, and receive reimbursement for benefits paid or accrued in excess of account values, subject to
certain limitations.

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MetLife Holdings

For our life products, we have historically reinsured the mortality risk primarily on an excess of retention basis or on a quota
share basis. We currently reinsure 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring
mortality risk as described above, we reinsure 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,
we may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount we retain. We also assume
portions of the risk associated with certain whole life policies issued by an affiliate and reinsure certain term life policies and
universal life policies with secondary death benefit guarantees to an affiliate. We evaluate our reinsurance programs routinely
and may increase or decrease our retention at any time.

For annuities, we reinsure 100% of the living and death benefit guarantees issued in connection with certain variable annuities
issued since 2004 to an affiliate and portions of the living and death benefit guarantees issued in connection with our variable
annuities issued prior to 2004 to affiliated and unaffiliated reinsurers. Under these reinsurance agreements, we pay a reinsurance
premium generally based on fee associated with the guarantees collected from policyholders, and receive reimbursement for
benefits paid or accrued in excess of account values, subject to certain limitations. We also assume 100% of certain variable
annuity risks issued by certain affiliates.

In addition, for our other products we have a reinsurance agreement in-force to reinsure the living and death benefit guarantees
issued in connection with certain variable annuity products. Under this agreement, we receive reinsurance fees associated with
the guarantees collected from policyholders, and provide reimbursement for benefits paid or accrued in excess of account values,
subject to certain limitations.

Brighthouse Financial

For our life products, we have historically reinsured the mortality risk primarily on an excess of retention basis or on a quota
share basis. We currently reinsure 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring
mortality risk as described above, we reinsure 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,
we may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount we retain. We also reinsure
portions of the risk associated with certain whole life policies to an affiliate and we assume certain term life policies and universal
life policies with secondary death benefit guarantees issued by an affiliate. We evaluate our reinsurance programs routinely and
may increase or decrease our retention at any time.

For annuities, we reinsure portions of the living and death benefit guarantees issued in connection with our variable annuities
to unaffiliated reinsurers. Under these reinsurance agreements, we pay a reinsurance premium generally based on fees associated
with the guarantees collected from policyholders, and receive reimbursement for benefits paid or accrued in excess of account
values, subject to certain limitations. We reinsure 100% of certain variable annuity risks to an affiliate. We also assume 100%
of the living and death benefit guarantees issued in connection with certain variable annuities issued by certain affiliates.

In addition, for our other products we reinsure through 100% quota share reinsurance agreements certain run-off long-term

care and workers’ compensation business written by MetLife USA.

Catastrophe Coverage

We have exposure to catastrophes which could contribute to significant fluctuations in our results of operations. We use
excess reinsurance agreements, under which the direct writing company reinsures risk in excess of a specific dollar value for
each policy within a class of policies, to provide greater diversification of risk and minimize exposure to larger risks. Such excess
reinsurance agreements include retention reinsurance agreements and quota share reinsurance agreements. Retention reinsurance
agreements provide for a portion of a risk to remain with the direct writing company, and quota share reinsurance agreements
provide for the direct writing company to transfer a fixed percentage of all risks of a class of policies. Our life insurance products,
particularly group life, subject us to catastrophe risk which we do not reinsure other than through our ongoing mortality reinsurance
program which transfers risk at the individual policy level. Currently, for Asia, Latin America and EMEA, we purchase catastrophe
coverage to insure risks within certain countries deemed by management to be exposed to the greatest catastrophic risks. For
all of our other segments, we use excess of retention and quota share reinsurance agreements to provide greater diversification
of risk and minimize exposure to larger risks.

Reinsurance Recoverables

For information regarding ceded reinsurance recoverable balances, included in premiums, reinsurance and other receivables

on the consolidated balance sheets, see Note 6 of the Notes to the Consolidated Financial Statements.

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Regulation

Overview

U.S. Regulation

Insurance Regulation

ERISA Considerations

Index to Regulation

Potential Regulation as a Non-Bank SIFI

Consumer Protection Laws

Regulation of Over-the-Counter Derivatives

Securities, Broker-Dealer and Investment Adviser Regulation

Environmental Considerations

Unclaimed Property

International Regulation

Solvency Regimes

Global Systemically Important Insurers

Japan

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Overview

In the U.S., our life insurance companies are regulated primarily at the state level, with some products and services also
subject to federal regulation. In addition, MetLife, Inc. and its U.S. insurance subsidiaries are subject to regulation under the
insurance holding company laws of various U.S. jurisdictions. Furthermore, some of MetLife’s operations, products and services
are subject to consumer protection laws, securities, broker-dealer and investment adviser regulations, environmental and
unclaimed property laws and regulations, and to the Employee Retirement Income Security Act of 1974 (“ERISA”). If MetLife,
Inc. were re-designated as a non-bank SIFI, it could also be subject to regulation by the Federal Reserve and the FDIC. See
“— U.S. Regulation.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) effected the most far-reaching overhaul
of financial regulation in the United States in decades. However, President Trump and the majority party have expressed goals
to dismantle or roll back Dodd-Frank. See “— U.S. Regulation” and “Risk Factors — Regulatory and Legal Risks — Our
Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and In Supervisory and Enforcement
Policies May Reduce Our Profitability and Limit Our Growth” for the discussion of Dodd-Frank.

Our international insurance operations are principally regulated by insurance regulatory authorities in the jurisdictions in
which they are located or operate. In addition, our investment and pension companies outside of the U.S. are subject to oversight
by the relevant securities, pension and other authorities of the countries in which the companies operate. Our non-U.S. insurance
businesses are also subject to current and developing solvency regimes which impose various capital and other requirements.
As a global systemically important insurer (“G-SII”), MetLife, Inc. may also become subject to additional capital requirements.
See “— International Regulation.”

U.S. Regulation

Insurance Regulation

State insurance regulation generally aims at supervising and regulating insurers, with the goal of protecting policyholders
and ensuring that insurance companies remain solvent. Insurance regulators have increasingly sought information about the
potential impact of activities in holding company systems as a whole, and some jurisdictions have adopted laws and regulations
enhancing “group-wide” supervision, as supported by the National Association of Insurance Commissioners’ (“NAIC”)
Solvency Modernization Initiative. See “— NAIC” for information regarding group-wide supervision.

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Each of MetLife’s insurance subsidiaries operating in the United States is licensed and regulated in each U.S. jurisdiction
where it conducts insurance business. The extent of such regulation varies, but most jurisdictions have laws and regulations
governing the financial aspects and business conduct of insurers. State laws in the U.S. grant insurance regulatory authorities
broad administrative powers with respect to, among other things:

•

licensing companies and agents to transact business;

calculating the value of assets to determine compliance with statutory requirements;

• mandating certain insurance benefits;

•

regulating certain premium rates;

reviewing and approving certain policy forms, including required policyholder disclosures;

regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales
practices, distribution arrangements and payment of inducements, and identifying and paying to the states benefits and
other property that is not claimed by the owners;

regulating advertising;

protecting privacy;

establishing statutory capital and reserve requirements and solvency standards;

specifying the conditions under which a ceding company can take credit for reinsurance in its statutory financial
statements (i.e., reduce its reserves by the amount of reserves ceded to a reinsurer);

fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life
insurance policies and annuity contracts;

adopting and enforcing suitability standards with respect to the sale of annuities and other insurance products;

approving changes in control of insurance companies;

restricting the payment of dividends and other transactions between affiliates; and

regulating the types, amounts and valuation of investments.

Each insurance subsidiary is required to file reports, generally including detailed annual financial statements, with
insurance regulatory authorities in each of the jurisdictions in which it does business, and its operations and accounts are
subject to periodic examination by such authorities. These subsidiaries must also file, and in many jurisdictions and in some
lines of insurance obtain regulatory approval for, rules, rates and forms relating to the insurance written in the jurisdictions
in which they operate.

State and federal insurance and securities regulatory authorities and other state law enforcement agencies and attorneys
general from time to time make inquiries regarding compliance by MetLife, Inc. and its insurance subsidiaries with insurance,
securities and other laws and regulations regarding the conduct of our insurance and securities businesses. We cooperate with
such inquiries and take corrective action when warranted. See Note 21 of the Notes to the Consolidated Financial Statements.

Holding Company Regulation

Insurance holding company laws and regulations vary from jurisdiction to jurisdiction, but generally require a controlled
insurance company (i.e., insurers that are subsidiaries of insurance holding companies) to register with state regulatory
authorities and to file with those authorities certain reports, including information concerning its capital structure, ownership,
financial condition, certain intercompany transactions and general business operations. The NAIC adopted revisions to the
NAIC Insurance Holding Company System Model Act (“Model Holding Company Act”) and the Insurance Holding
Company System Model Regulation (“Regulation”) in December 2010 and December 2014. The Model Holding Company
Act and Regulation serve as a basis for action by the states. See “— NAIC” for further information on the Model Holding
Company Act and Regulation.

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State insurance statutes also typically place restrictions and limitations on the amount of dividends or other distributions
payable by insurance company subsidiaries to their parent companies, as well as on transactions between an insurer and its
affiliates. Dividends in excess of prescribed limits and transactions above a specified size between an insurer and its affiliates
require the approval of the insurance regulator in the insurer’s state of domicile. See “Management’s Discussion and Analysis
of Financial Condition and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquidity and
Capital Sources — Dividends from Subsidiaries.” See also “Dividend Restrictions” in Note 16 of the Notes to the
Consolidated Financial Statements for further information regarding such limitations, as well as an amendment to the New
York Insurance Law permitting MLIC to pay stockholder dividends to MetLife, Inc. in any calendar year without prior
insurance regulatory clearance under one of two alternative formulations during 2016 and going forward.

Federal Initiatives

Although the insurance business in the United States is primarily regulated by the states, federal initiatives often have
an impact on our business in a variety of ways. From time to time, federal measures are proposed which may significantly
affect the insurance business. These areas include financial services regulation, securities regulation, derivatives regulation,
pension regulation, health care regulation, privacy, tort reform legislation and taxation. In addition, various forms of direct
and indirect federal regulation of insurance have been proposed from time to time, including proposals for the establishment
of an optional federal charter for insurance companies. See “— Health Care Regulation,” “Risk Factors — Regulatory and
Legal Risks — Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Affect our
Profitability as a Provider of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products” and “Risk
Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes
in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.”

Dodd-Frank effected the most far-reaching overhaul of financial regulation in the United States in decades. The full
impact of Dodd-Frank on us will depend on whether MetLife, Inc. again becomes subject to supervision and regulation as
a non-bank SIFI, as well as the adoption and implementation of final rules for insurance non-bank SIFIs required or permitted
by Dodd-Frank, a number of which remain to be completed. Additionally, President Trump and the majority party have
expressed goals to dismantle or roll back Dodd-Frank and President Trump has issued an Executive Order that calls for a
comprehensive review of Dodd-Frank in light of certain enumerated core principles of financial system regulation. We are
not able to predict with certainty whether any such proposal would have a material effect on our business operations and
cannot currently identify all of the risks or opportunities, if any, that may be posed to our businesses as a result of changes
to, or legislative replacements for, Dodd-Frank. See “Risk Factors — Regulatory and Legal Risks — Our Insurance and
Brokerage Businesses Are Highly Regulated, and Changes in Regulation and In Supervisory and Enforcement Policies May
Reduce Our Profitability and Limit Our Growth.”

Dodd-Frank established the Federal Insurance Office (“FIO”) within the Department of the Treasury, which has the
authority to participate in the negotiations of international insurance agreements with foreign regulators for the U.S., as
well as to collect information about the insurance industry and recommend prudential standards. While not having a general
supervisory or regulatory authority over the business of insurance, the director of this office performs various functions
with respect to insurance, including serving as a non-voting member of the FSOC and making recommendations to the
FSOC regarding insurers to be designated for more stringent regulation. On December 12, 2013, the FIO issued a report,
mandated by Dodd-Frank, which, among other things, urged the states to modernize and promote greater uniformity in
insurance regulation. However, the report also discussed potential federal solutions if states failed to modernize and improve
regulation and some of the report’s recommendations, for instance, favored a greater federal role in monitoring financial
stability and identifying issues or gaps in the regulation of large national and internationally active insurers.

Dodd-Frank also includes provisions that may impact the investments and investment activities of MetLife, Inc. and
its subsidiaries, including the federal regulation of such activities. Until the various final regulations are promulgated pursuant
to Dodd-Frank, and perhaps for some time thereafter, the full impact of Dodd-Frank on such activities will remain unclear.
Such provisions and regulations include, but are not limited to, the potential application of enhanced prudential standards
and capital requirements, including additional quantitative limits with respect to proprietary trading and sponsoring or
investing in hedge funds or private equity funds, to non-bank SIFIs, all of which could potentially affect MetLife, Inc. See
“— Potential Regulation as a Non-Bank SIFI.” However, following the transition occurring in the United States government
and the priorities of the Trump Administration, we cannot predict with certainty whether any such regulations will be
adopted. See “Risk Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated,
and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our
Growth” for information regarding the Trump Administration’s expressed goals to dismantle or roll back Dodd-Frank.

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Health Care Regulation

The Patient Protection and Affordable Care Act (“PPACA”), signed into law on March 23, 2010, and The Health Care
and Education Reconciliation Act of 2010, signed into law on March 30, 2010 (together, the “Affordable Care Act”), impose
obligations on MetLife as an enterprise, and as a provider of non-medical health insurance benefits and as a purchaser of
certain of these products. In 2014, we became subject to an excise tax called the “health insurer fee,” the cost of which is
primarily passed on to group purchasers of certain of our dental and vision insurance products. Additionally, with respect
to dental insurance products sold to groups with 50 or fewer employees, we have changed certain of our product offerings
in response to the Affordable Care Act. The cost of these product changes will also be reflected in our pricing of such
products. The Affordable Care Act and its related regulations have already resulted in increased and unpredictable costs to
provide certain products and may have additional adverse effects. See “Risk Factors — Regulatory and Legal Risks —
Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Affect our Profitability as a Provider
of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products.” It has also harmed our competitive
position, as the Affordable Care Act has a disparate impact on our products compared to products offered by our not-for-
profit competitors.

On July 14, 2014, the District of Columbia (“DC”) adopted a law that imposes an assessment on health insurers doing
business in DC, including those that issue non-medical health-related products that are not subject to regulation under the
Affordable Care Act. While the financial impact to the Company of DC’s action will be minimal, if other states decide to
adopt this model, there could be an impact on product pricing and sales. Currently 16 states and DC have created their own
public healthcare exchanges. One other state (Connecticut) has levied an assessment and other states may also consider
levying assessments on both medical and non-medical health insurers to fund their healthcare exchanges. On June 25, 2015,
the U.S. Supreme Court, in the King v. Burwell decision, upheld the payment of tax credits to individuals who purchase
coverage in states that have a federally facilitated exchange rather than a state exchange. Had the Supreme Court not upheld
this payment, it is likely more states would have been compelled to create their own exchanges and possibly assess insurers
for the fees of running these exchanges.

The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 also includes certain
provisions for defined benefit pension plan funding relief. As part of our Retirement and Income Solutions business, we
offer general account and separate account group annuity products that enable a plan sponsor to transfer these risks, often
in connection with the termination of defined benefit pension plans. See “Risk Factors — Regulatory and Legal Risks —
Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Affect our Profitability as a Provider
of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products” for further information regarding the
potential effect of such regulation.

Guaranty Associations and Similar Arrangements

Most of the U.S. jurisdictions in which our insurance subsidiaries are admitted to transact business require life, health
and property & casualty insurers doing business within the jurisdiction to participate in guaranty associations, which are
organized to pay certain contractual insurance benefits owed pursuant to insurance policies issued by impaired, insolvent
or failed insurers, or those that may become impaired, insolvent or fail, for example, following the occurrence of one or
more catastrophic events. 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 is engaged. Some states permit member insurers to recover assessments paid through
full or partial premium tax offsets.

In the past five years, the aggregate assessments levied against MetLife have not been material. We have established
liabilities for guaranty fund assessments that we consider adequate. See Note 21 of the Notes to the Consolidated Financial
Statements for additional information on the guaranty association assessments.

Insurance Regulatory Examinations and Other Activities

As part of their regulatory oversight process, state insurance departments conduct periodic detailed examinations of
the books, records, accounts, and business practices of insurers domiciled in their states. State insurance departments also
have the authority to conduct examinations of non-domiciliary insurers that are licensed in their states. Except as otherwise
disclosed in Note 21 of the Notes to the Consolidated Financial Statements, during the years ended December 31, 2016,
2015 and 2014, MetLife did not receive any material adverse findings resulting from state insurance department examinations
of its insurance subsidiaries.

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Regulatory authorities in a small number of states, Financial Industry Regulatory Authority (“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, MetLife USA, NELICO, General American Life Insurance Company (“GALIC”), FMLI, and
MSI, a broker-dealer which was part of the U.S. Retail Advisor Force Divestiture. These investigations have focused on
the conduct of particular financial services representatives, the sale of unregistered or unsuitable products, the misuse of
client assets, and sales and replacements of annuities and certain riders on such annuities. 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. We may continue to receive, and may resolve, further investigations and actions on these
matters in a similar manner. See Note 21 of the Notes to the Consolidated Financial Statements.

In addition, claims payment practices by insurance companies have received increased scrutiny from regulators. See
Note 21 of the Notes to the Consolidated Financial Statements for further information regarding retained asset accounts
and unclaimed property inquiries and related litigation and sales practices claims.

We also received an inquiry relating to licensing. See Note 21 of the Notes to the Consolidated Financial Statements
for further information regarding the settlement of a licensing matter with the New York State Department of Financial
Services (the “NYDFS”) and the District Attorney, New York County, and a related amendment to the New York Insurance
Law.

The International Association of Insurance Supervisors (“IAIS”) has encouraged U.S. insurance supervisors, such as
the NYDFS, to establish Supervisory Colleges for U.S.-based insurance groups with international operations, including
MetLife, to facilitate cooperation and coordination among the insurance groups’ supervisors and to enhance the member
regulators’ understanding of an insurance group’s risk profile. In September 2016, a Supervisory College meeting was
chaired by the NYDFS and attended by MetLife’s key U.S. and international regulators. We have not received any reports
or recommendations from the Supervisory College meeting, and we do not expect any outcome of the meeting to have a
material adverse effect on our business.

Policy and Contract Reserve Adequacy Analysis

Annually, our U.S. insurance subsidiaries, including affiliated captive reinsurers, are required to conduct an analysis
of the adequacy of all statutory reserves. In each case, a qualified actuary must submit an opinion which states that the
statutory reserves make adequate provision, according to accepted actuarial standards of practice, for the anticipated cash
flows required by the contractual obligations and related expenses of the U.S. insurance subsidiary. The adequacy of the
statutory reserves is considered in light of the assets held by the insurer with respect to such reserves and related actuarial
items including, but not limited to, the investment earnings on such assets, and the consideration anticipated to be received
and retained under the related policies and contracts. The Company may increase reserves in order to submit an opinion
without qualification. Since the inception of this requirement, our U.S. insurance subsidiaries which are required by their
states of domicile to provide these opinions have provided such opinions without qualifications.

NAIC

The NAIC is an organization, the mission of which is to assist state insurance regulatory authorities in serving the
public interest and achieving the insurance regulatory goals of its members, the state insurance regulatory officials. Through
the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate their
regulatory oversight. The NAIC provides standardized insurance industry accounting and reporting guidance through its
Accounting Practices and Procedures Manual (the “Manual”), which states have largely adopted by regulation. However,
statutory accounting principles continue to be established by individual state laws, regulations and permitted practices,
which may differ from the Manual. Changes to the Manual or modifications by the various state insurance departments may
impact the statutory capital and surplus of MetLife, Inc.’s U.S. insurance subsidiaries.

The Model Holding Company Act and Regulation include a requirement that the ultimate controlling person of a U.S.
insurer file an annual enterprise risk report with the lead state of the insurance holding company system identifying risks
likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding
company system as a whole. To date, all of the states where MetLife has domestic insurers have enacted a version of the
revised Model Holding Company Act, including the enterprise risk reporting requirement. In December 2014, the NAIC
adopted amendments to the Model Holding Company Act that would authorize state insurance commissioners to act as
global group-wide supervisors for internationally active insurance groups, as well as other insurers that choose to opt in for
the group-wide supervision. The amendments create a selection process for the group-wide supervisor, extend confidentiality
protection to communications with the group-wide supervisor, and outline the duties of the group-wide supervisor. To date,
a number of jurisdictions have adopted laws and regulations enhancing group-wide supervision.

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The NAIC has concluded its “Solvency Modernization Initiative,” which was designed to review the U.S. financial
regulatory system and all aspects of financial regulation affecting insurance companies. Though broad in scope, the NAIC’s
Solvency Modernization Initiative focused on: (1) capital requirements; (2) corporate governance and risk management;
(3) group supervision; (4) statutory accounting and financial reporting; and (5) reinsurance. In furtherance of this initiative,
the NAIC adopted the Corporate Governance Annual Filing Model Act and Regulation at its August 2014 meeting. The
model, which requires insurers to make an annual confidential filing regarding their corporate governance policies, has
been adopted in approximately ten states. In addition, in September 2012, the NAIC adopted the Risk Management and
Own Risk and Solvency Assessment Model Act (“ORSA Model Act”), which has been enacted by our insurance subsidiaries’
domiciliary states. The ORSA Model Act requires that insurers maintain a risk management framework and conduct an
internal own risk and solvency assessment of the insurer’s material risks in normal and stressed environments. The assessment
must be documented in a confidential annual summary report, a copy of which must be made available to regulators as
required or upon request. MetLife, Inc. has submitted on behalf of the enterprise an Own Risk and Solvency Assessment
(“ORSA”) summary report to the NYDFS annually since this requirement became effective.

In December 2012, the NAIC approved a new valuation manual containing a principle-based approach to the calculation
of life insurance reserves. Principle-based reserving is designed to better address reserving for products, including the current
generation of products for which the current formulaic basis for reserve determination does not work effectively. The
principle-based approach became effective on January 1, 2017 in the states where it had been adopted, to be followed by a
three-year phase-in period (at the option of insurance companies on a product-by-product basis) for new business since it
was enacted into law by the required number of state legislatures. To date, principle-based reserving has been adopted by
all of the states where our insurance subsidiaries are domiciled, except in New York where the NYDFS has publicly stated
its intention to implement this approach beginning in January 2018, subject to a working group of the NYDFS establishing
the necessary reserves safeguards, and in Massachusetts where the legislature is considering legislation in this area.

In 2015, the NAIC commenced an initiative to study variable annuity solvency regulations, with the goal of curtailing
the use of variable annuity captives. In connection with this study, the NAIC engaged a third-party consultant to develop
recommendations in 2016. The NAIC has asked the third-party consultant to conduct an additional study and develop new
recommendations in 2017. The NAIC will consider the 2017 recommendations, which, if adopted, would apply to insurers’
existing and new business and likely would materially change the sensitivity of the balance sheet (including reserve and
capital requirements) to capital markets. It is not possible to predict whether the amount of reserves or capital required to
support our variable annuity contracts would increase or decrease if any such 2017 recommendations are adopted, nor is it
possible to predict the extent to which any such recommendations would affect the effectiveness and design of our risk
mitigation and hedging programs. Furthermore, no assurances can be given to whether any such recommendations will be
adopted or to the timing of any such adoption.

We cannot predict the capital and reserve impacts or compliance costs, if any, that may result from the above initiatives,
or what impact these initiatives will have on our business, financial condition or results of operations, although after the
Separation, principle-based reserving will have less of an impact, given our discontinuance of retail life sales.

Surplus and Capital; Risk-Based Capital

Insurers are required to maintain their capital and surplus at or above minimum levels prescribed by the laws of their
respective jurisdictions. Regulators have discretionary authority, in connection with the continued licensing of our U.S.
insurance subsidiaries, to limit or prohibit an insurer’s sales to policyholders if, in their judgment, the regulators determine
that such insurer has not maintained the minimum surplus or capital or that the further transaction of business will be
hazardous to policyholders. Most of our U.S. insurance subsidiaries are subject to risk-based capital (“RBC”) requirements
that were developed by the NAIC and adopted by their respective states of domicile. RBC is based on a formula calculated
by applying factors to various asset, premium, claim, expense and statutory reserve items. The formula takes into account
the risk characteristics of the insurer and is calculated on an annual basis. The major categories of risk involved are asset
risk, insurance risk, interest rate risk, market risk and business risk. 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. 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. As of the date of
the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital of each of
our subsidiaries subject to these requirements was in excess of each of those RBC levels. See “Statutory Equity and Income”
in Note 16 of the Notes to the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and Capital Resources — The Company — Capital — Statutory Capital
and Dividends.”

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While not required by or filed with insurance regulators, we calculate internally defined combined RBC
ratios (“Combined RBC Ratios”), which are determined by dividing the sum of total adjusted capital for MetLife, Inc.’s
principal U.S. insurance subsidiaries, excluding American Life Insurance Company (“American Life”), by the sum of
company action level RBC for such subsidiaries. We calculate Combined RBC Ratios based on NAIC capital and reserving
requirements (“NAIC-Based Combined RBC Ratios”). We also calculate Combined RBC Ratios derived from the statutory-
basis financial statements as filed with insurance regulators (“Statement-Based Combined RBC Ratios”), which include
additional reserve and capital requirements as required by the NYDFS for the Company’s New York domiciled insurance
subsidiaries.

Our NAIC-Based Combined RBC Ratios were 465% and 537% at December 31, 2016 and 2015, respectively. Our
Statement-Based Combined RBC Ratios were 446% and 513% at December 31, 2016 and 2015, respectively. Lower total
adjusted capital coupled with higher company action level RBC resulted in a decrease of 72 points in the NAIC-Based
Combined RBC Ratio at December 31, 2016 as compared to 2015 and contributed to the decrease of 67 points in the
Statement-Based Combined RBC Ratio at December 31, 2016 as compared to 2015. The decrease in total adjusted capital
is primarily due to dividends paid to MetLife, Inc. and derivative losses exceeding combined statutory operating earnings.
Combined statutory net income of MetLife, Inc.’s U.S. insurance subsidiaries, excluding American Life, was $4.8 billion
(see Note 16 of the Notes to the Consolidated Financial Statements) and $4.6 billion on a statement-basis and NAIC-basis,
respectively, for the year ended December 31, 2016. The increase in combined statutory net income is primarily driven by
a decrease in variable annuity rider reserves.

We are not aware of any NAIC adoptions that would have a material impact on the RBC of our U.S. insurance subsidiaries.

Regulation of Investments

Each of our U.S. insurance subsidiaries is subject to state laws and regulations that require diversification of investment
portfolios and limit the amount of investments that an insurer may have in certain asset categories, such as below investment
grade fixed income securities, real estate equity, other equity investments, and derivatives. Failure to comply with these
laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for
purposes of measuring surplus and, in some instances, would require divestiture of such non-qualifying investments. We
believe that the investments made by each of MetLife, Inc.’s U.S. insurance subsidiaries complied, in all material respects,
with such regulations at December 31, 2016.

New York’s Cybersecurity Regulation

On February 16, 2017, the NYDFS announced the adoption of a new cybersecurity regulation for financial services
institutions, including banking and insurance entities, under its jurisdiction. The new regulations will become effective on
March 1, 2017, and will be implemented in stages commencing 180 days later. Among other things, this new regulation
requires these entities to establish and maintain a cybersecurity program designed to protect consumers’ private data. The
new regulation specifically provides for: (i) controls relating to the governance framework for a cybersecurity program,
including funding and staffing requirements, management oversight, and periodic reporting to senior management; (ii) risk-
based minimum standards for technology systems including access controls, for data protection; (iii) minimum standards
for cyber breach responses, including an incident response plan, preservation of data to respond to such breaches, and notice
to NYDFS of material events; and (iv) identification and documentation of material deficiencies, remediation plans and
annual certifications of regulatory compliance to the NYDFS.

ERISA Considerations

We provide products and services to certain employee benefit plans that are subject to ERISA or the Internal Revenue
Code of 1986, as amended (the “Code”). As such, our activities are subject to the restrictions imposed by ERISA and the
Code, including the requirement under ERISA that fiduciaries must perform their duties solely in the interests of ERISA plan
participants and beneficiaries, and that fiduciaries may not cause a covered plan to engage in certain prohibited transactions.
The applicable provisions of ERISA and the Code are subject to enforcement by the Department of Labor (“DOL”), the Internal
Revenue Service and the Pension Benefit Guaranty Corporation.

The prohibited transaction rules of ERISA and the Code generally restrict the provision of investment advice to ERISA
plans and participants and Individual Retirement Accounts (“IRAs”) if the investment recommendation results in fees paid
to an individual advisor, the firm that employs the advisor or their affiliates that vary according to the investment
recommendation chosen.

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The DOL issued new regulations on April 6, 2016 with an applicable date for most provisions of April 10, 2017. These
regulations substantially expand the definition of “investment advice” and thereby broaden the circumstances under which
MetLife or its representatives, in providing investment advice with respect to ERISA plans, plan participants or IRAs, could
be deemed a fiduciary under ERISA or the Code. Pursuant to the final regulations, certain communications with plans, plan
participants and IRA holders, including the sales of products, and investment management or advisory services, could be
deemed fiduciary investment advice, thus causing increased exposure to fiduciary liability if the distributor does not recommend
what is in the client’s best interests. The DOL also issued amendments to certain of its prohibited transaction exemptions, and
issued a new exemption, that applies more onerous disclosure and contract requirements to, and increases fiduciary
requirements and fiduciary liability exposure in respect of, transactions involving ERISA plans, plan participants and IRAs.
On September 27, 2016, the DOL released Frequently Asked Questions on the new exemption and amendments to certain
existing exemptions, which provide guidance concerning the application and implementation of the new and amended
prohibited transaction exemptions.

We anticipate that we will need to undertake certain additional tasks in order to comply with certain of the exemptions
provided in the DOL regulations, including additional compliance reviews of material shared with distributors, wholesaler
and call center training and product reporting and analysis. However, in light of action by President Trump on February 3,
2017, the applicability date of April 10, 2017 may well be delayed. It is also possible that the substance of the regulation could
be substantially modified or replaced due to the change in Administration. We cannot predict with certainty what other proposals
may be made or what legislation or regulations may be introduced or enacted, or what impact any such legislation or regulations
may have on our business, results of operations and financial condition. See “Risk Factors — Regulatory and Legal Risks —
Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and In Supervisory and
Enforcement Policies May Reduce Our Profitability and Limit Our Growth.

On July 11, 2016, the DOL, the IRS and the Pension Benefit Guaranty Corporation proposed revisions to the Form 5500,
the form used for ERISA annual reporting. The revisions affect employee pension and welfare benefit plans, including our
ERISA plans, and require audits of information, self-directed brokerage account disclosure and additional extensive disclosure.
We cannot predict the effect these proposals will have on our business, if enacted, or what other proposals may be made, what
legislation may be introduced or enacted, or what impact any such legislation may have on our results of operations and
financial condition.

In addition, the DOL has issued a number of regulations that increase the level of disclosure that must be provided to
plan sponsors and participants. The participant disclosure regulations and the regulations which require service providers to
disclose fee and other information to plan sponsors took effect in 2012. In John Hancock Mutual Life Insurance Company v.
Harris Trust and Savings Bank (1993), the U.S. Supreme Court held that certain assets in excess of amounts necessary to
satisfy guaranteed obligations under a participating group annuity general account contract are “plan assets.” Therefore, these
assets are subject to certain fiduciary obligations under ERISA, which requires fiduciaries to perform their duties solely in
the interest of ERISA plan participants and beneficiaries. On January 5, 2000, the Secretary of Labor issued final regulations
indicating, in cases where an insurer has issued a policy backed by the insurer’s general account to or for an employee benefit
plan, the extent to which assets of the insurer constitute plan assets for purposes of ERISA and the Code. The regulations
apply only with respect to a policy issued by an insurer on or before December 31, 1998 (“Transition Policy”). No person will
generally be liable under ERISA or the Code for conduct occurring prior to July 5, 2001, where the basis of a claim is that
insurance company general account assets constitute plan assets. An insurer issuing a new policy that is backed by its general
account and is issued to or for an employee benefit plan after December 31, 1998 will generally be subject to fiduciary
obligations under ERISA, unless the policy is a guaranteed benefit policy.

The regulations indicate the requirements that must be met so that assets supporting a Transition Policy will not be
considered plan assets for purposes of ERISA and the Code. These requirements include detailed disclosures to be made to
the employee benefits plan and the requirement that the insurer must permit the policyholder to terminate the policy on 90
days’ notice and receive without penalty, at the policyholder’s option, either (i) the unallocated accumulated fund balance
(which may be subject to market value adjustment) or (ii) a book value payment of such amount in annual installments with
interest. We have taken and continue to take steps designed to ensure compliance with these regulations.

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Potential Regulation as a Non-Bank SIFI

On December 18, 2014, the FSOC designated MetLife, Inc. as a non-bank SIFI subject to regulation by the Federal
Reserve and the FDIC, as well as to enhanced supervision and prudential standards. On January 13, 2015, MetLife, Inc. filed
an action in the D.C. District Court asking the Court to review and rescind the FSOC’s designation. On March 30, 2016, the
D.C. District Court ordered that the designation of MetLife, Inc. as a non-bank SIFI by the FSOC be rescinded. On April 8,
2016, the FSOC appealed the D.C. District Court’s order to the D.C. Circuit Court of Appeals, and oral argument was heard
on October 24, 2016. If the FSOC prevails on appeal or re-designates MetLife, Inc. as systemically important as part of its
ongoing review of non-bank financial companies, MetLife, Inc. could once again be subject to regulation as a non-bank SIFI.

Regulation of MetLife, Inc. as a non-bank SIFI could materially and adversely affect our business. For example, the
Federal Reserve Board has issued an advance notice of proposed rulemaking but not yet finally determined the enhanced
capital requirements that would apply to insurance non-bank SIFIs. If MetLife, Inc. were re-designated as a non-bank SIFI,
those capital requirements may adversely affect our ability to compete with other insurers that are not subject to those
requirements, and our ability to issue guarantees could be constrained. In addition, if re-designated as a non-bank SIFI, MetLife,
Inc. would need to obtain Federal Reserve approval before directly or indirectly acquiring, merging or consolidating with a
financial company having more than $10 billion of assets or acquiring 5% or more of any voting class of securities of a bank
or bank holding company and, depending on the extent of the combined company’s liabilities, would be subject to additional
restrictions regarding its ability to merge. The Federal Reserve would also have the right to require any of our insurance
companies, or insurance company affiliates, to take prompt action to correct any financial weaknesses.

Together with other large financial institutions and non-bank SIFIs, if MetLife, Inc. were re-designated as a non-bank
SIFI, it would be subject to a number of Dodd-Frank requirements including responsibility to pay certain assessments and
other charges (i) equal to the total expenses the Federal Reserve Board thinks is necessary for its supervision of bank holding
companies and non-bank SIFIs, and (ii) in connection with the Financial Research Fund within the U.S. Department of Treasury
that funds the Office of Financial Research, an agency established by Dodd-Frank to improve the quality of financial data
available to policymakers and facilitate more robust and sophisticated analysis of the financial system. See “Risk Factors —
Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation
and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth — U.S. Regulation —
Potential Regulation of MetLife, Inc. as a Non-Bank SIFI.” See also “Risk Factors — Regulatory and Legal Risks — Our
Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement
Policies May Reduce Our Profitability and Limit Our Growth” for information regarding the Trump Administration’s expressed
goals to dismantle or roll back Dodd-Frank.

Enhanced Prudential Standards for Non-Bank SIFIs

The Federal Reserve Board has indicated that it plans to apply enhanced prudential standards, including enhanced
capital requirements, governance, risk management and liquidity requirements, to non-bank SIFIs by rule or order. Once
capital requirements for non-bank SIFIs are determined, non-bank SIFIs will be required to undergo three stress tests each
year. Companies will be required to take the results of the stress tests into consideration in their annual capital planning and
resolution and recovery planning. Non-bank SIFIs are also required to submit a resolution plan (annually and upon change
of circumstances) setting forth how the company could be resolved under the Bankruptcy Code in the event of material
financial distress. A failure to submit a “credible” resolution plan could result in the imposition of a variety of measures,
including additional capital, leverage, or liquidity requirements, and forced divestiture of assets or operations.

In addition, if MetLife, Inc. were re-designated as a non-bank SIFI and if it were determined that MetLife, Inc. posed
a substantial threat to U.S. financial stability, the applicable federal regulators would have the right to require it to take one
or more other mitigating actions to reduce that risk.

Following the transition occurring in the United States government and the priorities of the Trump Administration,
however, we cannot predict with certainty whether any such regulations will be adopted, nor how they might apply to
MetLife, Inc. were it to be re-designated as a non-bank SIFI. See “Risk Factors — Regulatory and Legal Risks — Our
Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement
Policies May Reduce Our Profitability and Limit Our Growth” for information regarding the Trump Administration’s
expressed goals to dismantle or roll back Dodd-Frank.

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Orderly Liquidation Authority

Under the provisions of Dodd-Frank relating to the resolution or liquidation of certain types of financial institutions,
if MetLife, Inc. or another financial institution were to become insolvent or were in danger of defaulting on its obligations,
it could be compelled to undergo liquidation with the FDIC as receiver. For this new regime to be applicable, a number of
determinations would have to be made, including that a default by the affected company would have serious adverse effects
on financial stability in the U.S. While under this new regime an insurance company would be resolved in accordance with
state insurance law, if the FDIC were to be appointed as the receiver for another type of company (including an insurance
holding company such as MetLife, Inc.), the liquidation of that company would occur under the provisions of the new
liquidation authority, and not under the Bankruptcy Code, which ordinarily governs liquidations. The FDIC’s purpose under
the liquidation regime is to mitigate the systemic risks the institution’s failure poses, which is different from that of a
bankruptcy trustee under the Bankruptcy Code. In such a liquidation, the holders of such company’s debt could in certain
respects be treated differently than under the Bankruptcy Code. As required by Dodd-Frank, the FDIC has established rules
relating to the priority of creditors’ claims and the potentially dissimilar treatment of similarly situated creditors. These
provisions could apply to some financial institutions whose outstanding debt securities we hold in our investment portfolios.
Dodd-Frank also provides for the assessment of bank holding companies with assets of $50 billion or more and non-bank
SIFIs to cover the costs of liquidating any financial company subject to the new liquidation authority.

Volcker Rule

Under the Volcker Rule, Dodd-Frank authorizes through rulemaking additional capital requirements and quantitative
limits on proprietary trading and sponsoring or investing in funds (hedge funds and private equity funds) that rely on certain
exemptions from the Investment Company Act of 1940, as amended (the “Investment Company Act”), by a non-bank SIFI.
Regulations defining and governing such requirements and limits on non-bank SIFIs have not been proposed and were not
addressed in the final regulations issued on December 10, 2013 implementing the Volcker Rule for insured depository
institutions and their affiliates (“Volcker Rule Regulations”). After designation as a non-bank SIFI, a non-bank SIFI will
have a two-year period, subject to further extension by the Federal Reserve Board, to conform to any such requirements
and limits that may be set forth in final regulations applicable to non-bank SIFIs. Subject to safety and soundness
determinations as part of rulemaking that could require additional capital requirements and quantitative limits, Dodd-Frank
provides that the exemptions under the Volcker Rule also are available to exempt any additional capital requirements and
quantitative limits on non-bank SIFIs. The Volcker Rule Regulations provide an exemption, subject to certain requirements,
for trading activities and fund sponsorship and investments by a regulated insurance company and its affiliates solely for
the general account or separate account of such insurance company. Until final regulations applicable to non-bank SIFIs
have been promulgated, it is unclear whether MetLife, Inc., were it to be re-designated as a non-bank SIFI, would have to
alter any of its future activities to comply.

Consumer Protection Laws

Numerous federal and state laws affect MetLife, Inc.’s earnings and activities, including federal and state consumer
protection laws. As part of Dodd-Frank, Congress established the Consumer Financial Protection Bureau (“CFPB”) to supervise
and regulate institutions that provide certain financial products and services to consumers. Although the consumer financial
services subject to the CFPB’s jurisdiction generally exclude insurance business of the kind in which we engage, the CFPB
does have authority to regulate non-insurance consumer services we provide.

In August 2013, MetLife Bank, National Association (“MetLife Bank”) merged with and into MetLife Home Loans LLC
(“MLHL”), its former subsidiary, with MLHL as the surviving, non-bank entity. The sole purpose of MLHL is to wind-down
the limited remaining activities and fulfill remaining obligations and duties of MetLife Bank, some of which subject MLHL
to certain federal consumer financial protection laws and certain state laws.

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Regulation of Over-the-Counter Derivatives

Dodd-Frank includes a framework of regulation of the over-the-counter (“OTC”) derivatives markets which requires
clearing of certain types of transactions currently traded OTC and imposes additional costs, including new reporting and
margin requirements, and will likely impose additional regulation on the Company, including new capital requirements. Our
costs of risk mitigation are increasing under Dodd-Frank. For example, Dodd-Frank imposes requirements, including the
requirement to pledge initial margin (i) for “OTC-cleared” transactions (OTC derivatives that are cleared and settled through
central clearing counterparties), and (ii) for “OTC-bilateral” transactions (OTC derivatives that are bilateral contracts between
two counterparties) entered into after the phase-in period; these requirements will likely be applicable to us in September 2020
as the Office of the Comptroller of the Currency, the Federal Reserve Board, FDIC, Farm Credit Administration and Federal
Housing Finance Agency (collectively, the “Prudential Regulators”) and the U.S. Commodity Futures Trading Commission
(“CFTC”) adopted final margin requirements for non-centrally cleared derivatives during the fourth quarter of 2015, which
are broadly consistent with the requirements published by the Bank of International Settlements and International Organization
of Securities. These increased margin requirements, combined with increased capital charges for our counterparties and central
clearinghouses with respect to non-cash collateral, will likely require increased holdings of cash and highly liquid securities
with lower yields causing a reduction in income and less favorable pricing for OTC-cleared and OTC-bilateral transactions.
Centralized clearing of certain OTC derivatives exposes us to the risk of a default by a clearing member or clearinghouse with
respect to our cleared derivative transactions. We use derivatives to mitigate a wide range of risks in connection with our
businesses, including the impact of increased benefit exposures from certain of our annuity products that offer guaranteed
benefits. We have always been subject to the risk that hedging and other management procedures might prove ineffective in
reducing the risks to which insurance policies expose us or that unanticipated policyholder behavior or mortality, combined
with adverse market events, could produce economic losses beyond the scope of the risk management techniques employed.
Any such losses could be increased by higher costs of writing derivatives (including customized derivatives) and the reduced
availability of customized derivatives that might result from the implementation of Dodd-Frank and comparable international
derivatives regulations.

Dodd-Frank also expanded the definition of “swap” and mandated the SEC and CFTC (collectively, the “Commissions”)
to study whether “stable value contracts” should be treated as swaps. Pursuant to the new definition and the Commissions’
interpretive regulations, products offered by our insurance subsidiaries other than stable value contracts might also be treated
as swaps, even though we believe otherwise. Should such products become regulated as swaps, we cannot predict how the
rules would be applied to them or the effect on such products’ profitability or attractiveness to our clients.

See “Risk Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated,
and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth”
for information regarding the Trump Administration’s expressed goals to dismantle or roll back Dodd-Frank.

Securities, Broker-Dealer and Investment Adviser Regulation

Some of our subsidiaries and their activities in offering and selling variable insurance products as well as certain fixed
interest rate or index-linked contracts are subject to extensive regulation under the federal securities laws administered by the
SEC. These subsidiaries issue variable annuity contracts and variable life insurance policies through separate accounts that
are registered with the SEC as investment companies under the Investment Company Act. Each registered separate account
is generally divided into sub-accounts, each of which invests in an underlying mutual fund which is itself a registered investment
company under the Investment Company Act. In addition, the variable annuity contracts and variable life insurance policies
issued by these registered separate accounts are registered with the SEC under the Securities Act of 1933 (“Securities Act”).
One subsidiary also issues fixed interest rate or index-linked contracts with features that require them to be registered as
securities under the Securities Act. Other subsidiaries are registered with the SEC as broker-dealers under the Securities
Exchange Act of 1934 (“Exchange Act”), and are members of, and subject to regulation by, FINRA. Further, some of our
subsidiaries are registered as investment advisers with the SEC under the Investment Advisers Act of 1940, as amended, and
are also registered as investment advisers in various states, as applicable. Certain variable contract separate accounts sponsored
by our subsidiaries are exempt from registration, but may be subject to other provisions of the federal securities laws.

Federal and state securities regulatory authorities and FINRA from time to time make inquiries and conduct examinations
regarding compliance by MetLife, Inc. and its subsidiaries with securities and other laws and regulations. We cooperate with
such inquiries and examinations and take corrective action when warranted.

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Federal and state securities laws and regulations are primarily intended to protect investors in the securities markets and
generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to limit or restrict the
conduct of business for failure to comply with such laws and regulations. We may also be subject to similar laws and regulations
in the foreign countries in which we provide investment advisory services, offer products similar to those described above,
or conduct other activities.

Environmental Considerations

As an owner and operator of real property, we are subject to extensive federal, state and local environmental laws and
regulations. Inherent in such ownership and operation is also the risk that there may be potential environmental liabilities and
costs in connection with any required remediation of such properties. In addition, we hold equity interests in companies that
could potentially be subject to environmental liabilities. We routinely have environmental assessments performed with respect
to real estate being acquired for investment and real property to be acquired through foreclosure. We cannot provide assurance
that unexpected environmental liabilities will not arise. However, based on information currently available to us, we believe
that any costs associated with compliance with environmental laws and regulations or any remediation of such properties will
not have a material adverse effect on our business, results of operations or financial condition.

Unclaimed Property

We are subject to the laws and regulations of states and other jurisdictions concerning identification, reporting and
escheatment of unclaimed or abandoned funds, and are subject to audit and examination for compliance with these requirements.
See Note 21 of the Notes of the Consolidated Financial Statements.

International Regulation

Regulation of our insurance operations outside of the U.S. includes minimum capital, solvency and operational requirements.
The authority of our international operations to conduct business is subject to licensing requirements, permits and approvals,
and these authorizations are subject to modification and revocation. Periodic examinations of insurance company books and
records, financial reporting requirements, market conduct examinations and policy filing requirements are among the techniques
used by regulators to supervise our non-U.S. insurance businesses. We also have investment and pension companies in certain
foreign jurisdictions that provide mutual fund, pension and other financial products and services. Those entities are subject to
securities, investment, pension and other laws and regulations. In some jurisdictions, some of our insurance products are
considered “securities” under local law and may be subject to local securities regulations and oversight by local securities
regulators.

Our international operations are exposed to increased political, legal, financial, operational and other risks. See “Risk
Factors — Risks Related to Our Business — Our International Operations Face Political, Legal, Operational and Other Risks,
Including Exposure to Local and Regional Economic Conditions, That Could Negatively Affect Those Operations or Our
Profitability” and “Risk Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly
Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit
Our Growth.”

On June 23, 2016, the U.K. held a referendum regarding its membership in the European Union (“EU”), resulting in a
narrow vote in favor of leaving the EU. The U.K. Prime Minister, Theresa May, has indicated that she intends to initiate the
withdrawal process by the end of March 2017. The relevant treaty provides that the U.K. and the EU will negotiate a withdrawal
agreement during a maximum two-year period (unless such period is extended by unanimous vote of the other EU member
states). In the meantime, however, the U.K. remains a member of the EU with unchanged rights to access the single EU market
in goods and services. Our U.K. business model utilizes certain rights to operate cross-border insurance and investment operations
which may be modified or eliminated as a result of the U.K. exiting the EU. Operating expenses within our businesses could
increase as a result of uncertainties during the negotiation period and in the event of an eventual U.K. withdrawal.

Other changes in the laws and regulations of jurisdictions that affect our customers and independent sales intermediaries
or their operations also may affect our business relationships with them and their ability to purchase or distribute our products.
Such actions may negatively affect our business in these jurisdictions.

Poland. The Polish Ministry of Economic Development recently proposed the transfer of certain pension fund assets to the
government, the creation of private individual retirement accounts using certain other pension fund assets, and the implementation
of additional pension plan options intended to boost savings and long-term investment. It is premature to predict the impact that
such measures, if implemented, would have on our business in Poland.

Chile. In Chile, in September 2015, a Presidential Advisory Committee issued several recommendations to reform the
pension system. In August 2016, Chilean President Bachelet proposed further changes to the pension system, including the (i)

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creation of a state-owned pension fund which may have the benefit of certain exceptions unavailable to private pension funds,
(ii) implementation of a competitive bidding process for existing customers, which could result in loss of such customers to
funds with lower commissions, and (iii) obligation for pension funds to refund commissions in the event of negative returns,
which could, in turn, cause fund managers to invest in instruments which have lower volatility, but lower returns. These proposals,
if enacted, may have a significant adverse effect on our business in Chile. In fact, the recent unrest in Chile related to such
pension system has already had, and continues to have, an adverse effect on our business in Chile. On July 21, 2016, the Chilean
Pension Funds Superintendency instituted a proceeding to consider the validity of the action taken by the Superintendency in
2015 approving the merger of Administradora de Fondos de Pensiones ProVida, S.A. into a subsidiary of MetLife, Inc., which
was effective on September 1, 2015. On December 13, 2016, the Superintendency upheld the legality of the merger for the third
time.

The European Insurance and Occupational Pensions Authority (“EIOPA”), along with European legislation, requires
European regulators, such as the Central Bank of Ireland (“CBI”), to establish Supervisory Colleges for European Economic
Area (“EEA”)-based insurance groups with significant European operations, including MetLife, to facilitate cooperation and
coordination among the insurance groups’ European supervisors and to enhance the member regulators’ understanding of an
insurance group’s risk profile. An October 2016 Supervisory College was chaired by the CBI and was attended by MetLife’s
key European regulators. We received feedback from such Supervisory College meeting regarding two areas of focus for the
College in 2017, risk management and product governance, and we do not expect the outcome of the meeting to have a material
adverse effect on our business.

Part of our international insurance operations may be subject to assessments, generally based on their proportionate share
of business written in the relevant jurisdiction, for certain obligations to policyholders and claimants resulting from the insolvency
of insurance companies. See “— Japan.” Annually, many of our international insurance operations are required to conduct an
analysis of the sufficiency of all statutory reserves. In most of those cases, a locally qualified actuary must submit an analysis
of the likelihood that the reserves make good and sufficient provision for the associated contractual obligations and related
expenses of the insurer. Local regulatory and actuarial standards for this vary widely; the required implied certainty of the signing
actuary’s opinion varies equally widely.

We expect the scope and extent of regulation outside of the U.S., as well as regulatory oversight, generally, to continue to
increase. The regulatory environment in the countries in which we operate and changes in laws could have a material adverse
effect on our results of operations.

Solvency Regimes

Our insurance business throughout the EEA is subject to Solvency II, which became effective on January 1, 2016, after
an extensive preparatory phase. Solvency II codifies and harmonizes the EU insurance regulation. Capital requirements are
forward-looking and based on the risk profile of each individual insurance company in order to promote comparability,
transparency and competitiveness. In line with the requirements, MetLife entities calculate and report their capital requirement
using a standard formula prescribed by the EU Directive and further regulation by the EIOPA. In addition, as required, the
entities have performed their regular ORSA and submitted their respective annual reports to the Central Bank of Ireland, the
Bank of Greece and the Polish Financial Supervisory Authority by December 31, 2016.

Mexico adopted a reform of its Insurance Law in February 2013. In accordance with this reform, a Solvency II-type
regulatory framework became effective on January 1, 2016 which instituted changes to reserve and capital requirements and
corporate governance and fostered greater transparency. In line with the requirements of the local Solvency II, insurance
companies calculate and report their capital requirement using a standard formula designed by the local regulators (“CNSF”).
In addition, as required, the Company completed and submitted its first ORSA report to the CNSF on October 31, 2016, as
previously approved by the Board of Directors.

In Chile, the law implementing Solvency II-like regulation continues in the studies stage. However, the Chilean insurance
regulator has already issued two resolutions, one for governance, and the other for risk management and control framework
requirements. MetLife Chile has already implemented governance changes and risk policies to comply with these resolutions.
A fourth impact study was completed and submitted in July 2016. On March 31, 2016, the local regulator issued a final
regulation which requires insurance companies to implement a risk appetite framework and produce an ORSA. The first such
report must be submitted to the local regulator no later than September 30, 2017. Even though a formal implementation date
has not yet been set, it is estimated that the new solvency and supervisory regime could be in force between 2018 and 2019.

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In July 2015, the Superintendence of Private Insurance, the Brazilian insurance regulator (“SUSEP”), issued a regulation
establishing (i) a framework for minimum capital requirements based on risk and (ii) criteria for investment activities in
insurance companies. In November 2015, SUSEP issued an additional regulation requiring insurance companies operating in
Brazil to adopt a formal risk management function by the end of 2016 and to implement a formal enterprise risk management
framework in 2017. In December 2016, MetLife Brazil formalized the designation of a local Risk Manager in Brazil in
compliance with local regulation.

In China, the business of our joint venture (as well as the industry) will be impacted by China Risk Oriented Solvency
System (“C-ROSS”), a new risk-based solvency regime. Like Solvency II, C-ROSS focuses on risk management and has three
pillars (strengthen quantitative capital requirements, enhance qualitative supervision and establish a governance and market
discipline process). C-ROSS became effective as of January 1, 2016, and as of the first quarter of 2016, C-ROSS solvency
has become the mandated reporting for the industry.

Global Systemically Important Insurers

The IAIS, an association of insurance supervisors and regulators and a member of the Financial Stability Board (“FSB”),
an international entity established to coordinate, develop and promote regulatory, supervisory and other financial sector policies
in the interest of financial stability, is participating in the FSB’s initiative to identify and manage global systemically important
financial institutions. To this end, the IAIS published a methodology to assess the systemic relevance of global insurers and
a framework of policy measures to be applied to G-SIIs. The IAIS/FSB process is separate from the U.S. FSOC designation
process and MetLife, Inc. remains a G-SII in spite of the rescission of its U.S. non-bank SIFI designation on March 30, 2016.

The global designation process is an annual process and IAIS policy requires that the IAIS evaluate whether updates to
its assessment methodology are necessary every three years. Accordingly, the IAIS published an updated assessment
methodology on June 16, 2016, which was used as the basis for the 2016 assessment of a pool of approximately 50 insurers,
including MetLife, Inc. The new methodology reflects changes in the previous definitions of non-traditional and non-insurance
activity, along with certain other changes in both quantitative and qualitative assessments, most notably introducing greater
transparency into the process. On November 21, 2016, the FSB issued its 2016 list of GSIIs, which included MetLife, Inc.

Current standards call for G-SIIs to be subject to higher loss absorbency requirements (“HLA”). Given the absence of a
common global base on which to calculate HLA for insurers, the FSB directed the IAIS to develop basic capital requirements
(“BCR”). The first version of the IAIS HLA framework was endorsed by the FSB and the G20 in September and November
2015, respectively.

On December 17, 2014, the IAIS released a first exposure draft of its risk-based global insurance capital standard (“ICS”)
which will apply to all internationally active insurance groups, including G-SIIs. A second exposure draft was published for
comment on July 19, 2016. The IAIS expects to publish a draft of an interim version of the ICS in 2017 for further consultation
and refinement by the end of 2019, the target for implementation by individual jurisdictions. It is now anticipated that, before
its expected adoption and implementation in 2019, the BCR will be replaced by the ICS as the basis for HLA requirements.
The date by which the ICS will be finalized has not yet been specified. The IAIS intends to request confidential reporting to
supervisors as of the release of the interim draft of the ICS.

The FSB and IAIS propose that national authorities consider additional requirements for G-SIIs, which include preparation
of a systemic risk management plan, preparation of a recovery and resolution plan, enhanced liquidity planning and
management, more intensive supervision, closer coordination among regulators through global supervisory colleges led by a
regulator with group-wide supervisory authority, and a policy bias that targets non-traditional insurance and non-insurance
activities as transmitters of systemic risk to the financial system. The IAIS proposals would need to be implemented at the
consolidated group level by legislation or regulation in each applicable jurisdiction. As MetLife, Inc. is no longer a U.S. non-
bank SIFI and none of its regulators have proposed implementing the G-SII requirements, the impact on MetLife, Inc. of such
global proposals is uncertain.

Japan

Our operations in Japan are subject to regulation and examination by Japan’s Financial Services Agency (“FSA”). Our
operations in Japan are required to file with the FSA annual reports for each fiscal year (ending March 31) which include
financial statements. These annual reports are not prepared on a U.S. GAAP basis. Similar to the U.S., Japanese law provides
that insurers in Japan must maintain specified solvency standards for the protection of policyholders and to support the financial
strength of licensed insurers. As of December 31, 2016, the date of our most recent regulatory filing in Japan, the solvency
margin ratio of our Japan operations was in excess of four times the 200% solvency margin ratio that would require corrective
action. Most Japanese life insurers maintain a solvency margin ratio well in excess of the legally mandated minimum.

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A portion of the annual earnings of our Japan operations may be repatriated each year, and may further be distributed to
MetLife, Inc. as a dividend. We may determine not to repatriate profits from the Japan operations or to repatriate a reduced
amount in order to maintain or improve the solvency margin of the Japan operations or for other reasons. In addition, the FSA
may 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 our Japan operations or for other reasons.

Our operations in Japan are subject to assessments to cover obligations to policyholders in the event of insolvency of
other insurance companies. Under the Japanese Insurance Business Law, all licensed life insurers in Japan are assessed on an
annual basis by the Life Insurance Policyholders Protection Corporation of Japan. These assessments are aggregated across
all licensed life insurers in Japan and, in the event of a life insurance company insolvency, are used to satisfy certain obligations
to policyholders and claimants of such insolvent company.

Company Ratings

Insurer financial strength ratings represent the opinions of rating agencies, including A.M. Best Company (“A.M. Best”),
Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Global Ratings (“S&P”), regarding the
ability of an insurance company to meet its financial obligations to policyholders and contractholders.

Rating Stability Indicators

Rating agencies use an “outlook statement” of “positive,” “stable,” ‘‘negative’’ or “developing” to indicate a medium- or
long-term trend in credit fundamentals which, if continued, may lead to a rating change. A rating may have a “stable” outlook
to indicate that the rating is not expected to change; however, a “stable” rating does not preclude a rating agency from changing
a rating at any time, without notice. Certain rating agencies assign rating modifiers such as “CreditWatch” or “under review”
to indicate their opinion regarding the potential direction of a rating. These ratings modifiers are generally assigned in connection
with certain events such as potential mergers, acquisitions, dispositions or material changes in a company’s results, in order for
the rating agency to perform its analysis to fully determine the rating implications of the event.

Insurer Financial Strength Ratings

The following insurer financial strength ratings represent each rating agency’s opinion of MetLife, Inc.’s principal insurance
subsidiaries’ ability to pay obligations under insurance policies and contracts in accordance with their terms and are not evaluations
directed toward the protection of investors in MetLife, Inc.’s securities. Insurer financial strength ratings are not statements of
fact nor are they recommendations to purchase, hold or sell any security, contract or policy. Each rating should be evaluated
independently of any other rating.

Our insurer financial strength ratings at the date of this filing are indicated in the following table. Additional information

about financial strength ratings can be found on the websites of the respective rating agencies.

Ratings Structure

American Life Insurance Company

First MetLife Investors Insurance Company

General American Life Insurance Company

MetLife Insurance Company USA

Metropolitan Life Insurance Company

MetLife Insurance K.K. (MetLife Japan)

New England Life Insurance Company

__________________

A.M. Best

Fitch

Moody's

S&P

“A++ (superior)” to
“S (suspended)”

“AAA (exceptionally
strong)” to “C
(distressed)”

“Aaa (highest
quality)” to “C
(lowest rated)”

“AAA (extremely
strong)” to “SD
(Selective Default)”
or “D (Default)”

3rd of 16

A+

2nd of 16

3rd of 16

A+

2nd of 16

AA-

4th of 19

A+

5th of 19

AA-

4th of 19

A+

5th of 21

Aa3

4th of 21

7th of 21

Aa3

4th of 21

3rd of 16

5th of 19

7th of 21

AA-

4th of 22
A+1
5th of 22

AA-

4th of 22
A+1
5th of 22

AA-

4th of 22

AA-

4th of 22
A+1
5th of 22

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NR = Not rated

1 Negative outlook.

Rating agencies may continue to review and adjust our ratings, including in connection with the proposed Separation. See
“— Business Overview — Other Key Information” for further details on the proposed Separation and “Risk Factors — Risks
Related to Our Business — A Downgrade or a Potential Downgrade in Our Financial Strength or Credit Ratings Could Result
in a Loss of Business and Materially Adversely Affect Our Financial Condition and Results of Operations.” See also
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources
— The Company — Capital — Rating Agencies” for an in depth description of the impact of a ratings downgrade.

Competition

We believe that the competition we face is based on a number of factors, including service, product features, scale, price,
financial strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition. We compete globally with
a large number of other insurance companies, as well as non-insurance financial services companies, such as banks, broker-
dealers and asset managers, for individual consumers, employer and other group customers, as well as agents and other distributors
of insurance and investment products. Some of these companies offer a broader array of products, have more competitive pricing
or, with respect to other insurance companies, have higher claims paying ability ratings. In the United States and Japan, we
compete with a large number of domestic and foreign-owned life insurance companies, many of which offer products in categories
on which we focus. Elsewhere, we compete with the foreign insurance operations of large U.S. insurers and with global insurance
groups and local companies. Many of our group insurance products are underwritten annually and, accordingly, there is a risk
that group purchasers may be able to obtain more favorable terms from competitors rather than renewing coverage with us.

We believe that the continued volatility of the financial markets, its impact on the capital position of many competitors, and
subsequent actions by regulators and rating agencies have altered the competitive environment. In particular, we believe that
these factors have highlighted financial strength as the most significant differentiator from the perspective of some customers
and certain distributors. We believe the Company is well positioned to compete in this environment. In particular, since the U.S.
Retail Advisor Force Divestiture, the Company primarily distributes its products through a variety of third-party distribution
channels, including banks and broker-dealers. These distribution partners are currently placing greater emphasis on the financial
strength of the company whose products they sell. An increase in bank and broker-dealer consolidation activity could increase
competition for access to distributors. In addition, the financial market turbulence has highlighted the extent of the risk associated
with certain variable annuity products and has led us, along with many companies in our industry, to re-examine the pricing and
features of the products offered. The effects of current market conditions may also lead to consolidation in the life insurance
industry. Although we cannot predict the ultimate impact of these conditions, we believe that the strongest companies will enjoy
a competitive advantage as a result of the current circumstances.

Competition for employees in our industry is intense, and we need to be able to attract and retain highly skilled people with
knowledge of our business and industry experience to support our business. In selected global markets, we continue to undertake
several initiatives to grow our career agency forces, while continuing to enhance the efficiency and production of our sales
representatives. These initiatives may not succeed in attracting and retaining productive agents. See “— Segments and Corporate
& Other” for information on sales distribution.

Numerous aspects of our business are subject to regulation. Legislative and other changes affecting the regulatory
environment can affect our competitive position within the life insurance industry and within the broader financial services
industry. See “— Regulation.”

Employees

At December 31, 2016, we had approximately 58,000 employees. We believe that our relations with our employees are

satisfactory.

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Executive Officers

Set forth below is information regarding the executive officers of MetLife, Inc.:

Name

Steven A. Kandarian

Age

Position with MetLife and Business Experience
• Chairman of the Board of MetLife, Inc. (January 2012-present) (Director of MetLife, Inc. since 2011)
•

President and Chief Executive Officer (May 2011-present) of MetLife, Inc.

Ricardo A. Anzaldua

•

Executive Vice President and Chief Investment Officer of MetLife, Inc. (April 2005-April 2011)

Executive Vice President and General Counsel of MetLife, Inc. (December 2012-present)

The Hartford Financial Services Group, Inc., an insurance and financial services company (February 2007-
December 2012)

•Associate general counsel and senior vice president, director of commercial and consumer markets law
(October 2010-December 2012)

• Associate general counsel and senior vice president, director of corporate law (February 2007-October 2010);
corporate secretary (February 2008-October 2010)

Steven J. Goulart

•

Executive Vice President and Chief Investment Officer of MetLife, Inc. (May 2011-present)

• Head of the Portfolio Management Unit as Senior Managing Director of MLIC (January 2011-April 2011)

John C.R. Hele

Michel Khalaf

Esther S. Lee

Martin J. Lippert

Maria R. Morris

Christopher G. Townsend

•

Senior Vice President and Treasurer, MetLife, Inc. (July 2009-April 2011)

Executive Vice President and Chief Financial Officer of MetLife, Inc. (September 2012-present)

Executive vice president, chief financial officer and treasurer, Arch Capital Group Ltd., an insurance and
reinsurance company (April 2009-August 2012)

President, EMEA of MetLife, Inc. (November 2011-present)

Executive Vice President of MLIC (January 2011-November 2011)

• Regional President, Middle East, Africa and South Asia, Alico (November 2008-November 2011) (Mr. Khalaf

joined MetLife as a result of the acquisition of ALICO)

•

Executive Vice President and Global Chief Marketing Officer of MetLife, Inc. (January 2015-present)

Senior Vice President, Brand Marketing, Advertising and Sponsorships of AT&T, Inc., a communications
company (August 2011-December 2014)

Senior Vice President, Brand Marketing and Advertising of AT&T, Inc. (June 2009-July 2011)

Executive Vice President and Head of Global Technology and Operations of MetLife, Inc. (November 2011-
present)

Executive Vice President and Head of Global Technology of MetLife, Inc. (September 2011-November 2011)

Executive Vice President and Head of Global Employee Benefits of MetLife, Inc. (November 2011-present)

Executive Vice President, Global Operations, Integration of MetLife, Inc. (September 2011-November 2011)

Executive Vice President, Technology and Operations of MetLife, Inc. (January 2008-September 2011)

President, Asia of MetLife, Inc. (August 2012-present)

• Chief executive officer of the Asia Pacific region, Chartis, a unit of AIG, an insurance and financial services

company (January 2010-April 2012)

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Trademarks

We have a worldwide trademark portfolio that we consider important in the marketing of our products and services, including,
among others, the trademark “MetLife.” We also have the exclusive global license to use the Peanuts® characters in the area of
financial services under an advertising and premium agreement with Peanuts Worldwide, LLC up to December 31, 2019. As a
result of the acquisition of American Life and Delaware American Life Insurance Company (“DelAm”) (collectively, “ALICO”),
we acquired trademarks of American Life, including the “ALICO” trademark. In addition, as a result of our acquisition of
ProVida, we acquired “PROVIDA” and other trademarks. We believe that our rights in our trademarks and under our Peanuts®
characters license are well protected.

Available Information

MetLife files periodic reports, proxy statements and other information with the SEC. Such reports, proxy statements and
other information may be obtained by visiting the Public Reference Room of the SEC at its Headquarters Office, 100 F Street,
N.E., Washington D.C. 20549 or by calling the SEC at 1-202-551-8090 or 1-800-SEC-0330 (Office of Investor Education and
Advocacy). In addition, the SEC maintains an internet website (www.sec.gov) that contains reports, proxy statements, and other
information regarding issuers that file electronically with the SEC, including MetLife, Inc.

MetLife makes available, free of charge, on its website (www.metlife.com) through the Investor Relations web page, its
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to all those reports,
as soon as reasonably practicable after filing (furnishing) such reports to the SEC. MetLife encourages investors to visit the
Investor Relations web page from time to time, where it announces additional financial and other information about it to its
investors, including in press releases, public conference calls and webcasts. The information found on MetLife’s website is not
incorporated by reference into this Annual Report on Form 10-K or in any other report or document MetLife files with the SEC,
and any references to MetLife’s website are intended to be inactive textual references only.

Economic Environment and Capital Markets-Related Risks

Item 1A. Risk Factors

If Difficult Conditions in the Global Capital Markets and the Economy Generally Persist, They May Materially Adversely
Affect Our Business and Results of Operations

Our business and results of operations are materially affected by conditions in the global capital markets and the economy
generally. Stressed conditions, volatility and disruptions in financial asset classes or various markets, including global capital
markets, can have an adverse effect on us, in part because we have a large investment portfolio and our insurance liabilities are
sensitive to changing market factors. Global market factors, including interest rates, credit spreads, equity prices, derivative
prices and availability, real estate markets, foreign currency exchange rates, consumer spending, business investment, government
spending, the volatility and strength of the capital markets, deflation and inflation, all affect our financial condition, as well as
the volume, profitability and results of our business operations and our ability to receive dividends from our insurance subsidiaries
and meet our obligations at MetLife, Inc., either directly or by virtue of their impact on the business and economic environment
generally and on general levels of economic activity, employment and customer behavior specifically. Disruptions in one market
or asset class can also spread to other markets or asset classes. Upheavals in the financial markets can also affect our financial
condition (including our liquidity and capital levels) as a result of mismatched impacts on the value of our assets and our liabilities.
While our diversified business mix and geographically diverse business operations partially mitigate these risks, correlation
across regions, countries and global market factors may reduce the benefits of diversification.

At times throughout the past several years, volatile conditions have characterized financial markets. Significant market
volatility, and government actions taken in response, may exacerbate some of the risks we face. Concerns about the political
and/or economic stability in the U.K., Italy, Mexico, Turkey and Puerto Rico have recently contributed to global market volatility.
This market volatility has affected the performance of various asset classes at various times, and it could continue. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Current
Environment.” Events following the U.K.’s referendum on June 23, 2016 and the uncertainties, including foreign currency
exchange risks, associated with its potential withdrawal from the EU, have contributed to market volatility, both in the United
States and beyond. Such events and uncertainties could contribute to weakening gross domestic product (“GDP”) growth,
primarily in the U.K. and Europe. The magnitude and longevity of the potential negative economic impacts would depend on
the detailed agreements reached by the U.K. and EU as a result of the exit negotiations and negotiations regarding trade and
other arrangements. In addition, the impact on global capital markets, the economy and MetLife of the transition occurring in
the United States government and the priorities of the Trump Administration is uncertain. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Industry Trends — Financial and Economic Environment.” Any
of these factors could have significant adverse effects on the economy and financial markets generally.

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To the extent these uncertain financial market conditions persist, our revenues, reserves and net investment income, as well
as the demand for certain of our products, are likely to remain under pressure. Similarly, sustained periods of low interest rates
and risk asset returns could reduce income from our investment portfolio, increase our liabilities for claims and future benefits,
and increase the cost of risk transfer measures such as hedging, causing our profit margins to erode as a result of reduced income
from our investment portfolio and increase in insurance liabilities. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Industry Trends — Impact of a Sustained Low Interest Rate Environment.” Also, in the
event of extreme prolonged market events, such as the global credit crisis, we could incur significant capital and/or operating
losses due to, among other reasons, losses incurred in our general account and as a result of the impact on us of guarantees,
including increases in liabilities, capital maintenance obligations and/or collateral requirements associated with our affiliated
reinsurers and other similar arrangements. Even in the absence of a market downturn, we are exposed to substantial risk of loss
due to sustained periods of low market returns, low levels of U.S. interest rates, and/or heightened market volatility, which may
also increase the cost and limit the availability of the hedging instruments and other protective measures we take to mitigate
such risk, or increase the cost of our insurance liabilities, which could have a material adverse effect on the statutory capital and
earnings of our insurance subsidiaries, as well as impair our financial strength ratings.

We are a significant writer of variable insurance products and certain other products issued through separate accounts. The
account values of these products decrease as a result of declining equity markets. Lower interest rates generally increase account
values in the near term, but may result in lower returns in fixed income vehicles in the future. Decreases in account values reduce
certain fees generated by these products, cause the amortization of deferred policy acquisition costs (“DAC”) to accelerate, could
increase the level of insurance liabilities we must carry to support such products issued with any associated guarantees and could
require us to provide additional funding to our captive reinsurers.

In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower
business investment and lower consumer spending, the demand for our financial and insurance products could be adversely
affected. Group insurance, in particular, is affected by higher unemployment rates. In addition, we may experience an elevated
incidence of claims, adverse utilization of benefits relative to our best estimate expectations and lapses or surrenders of policies.
Furthermore, our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether.
Such adverse changes in the economy could negatively affect our earnings and capitalization and have a material adverse effect
on our business, results of operations and financial condition.

Difficult conditions in the global capital markets and the economy may continue to raise the possibility of legislative,
judicial, regulatory and other governmental actions. The Trump Administration has released a memorandum that generally
delayed all pending regulations from publication in the Federal Register pending their review and approval by a department or
agency head appointed or designated by President Trump, and has issued an Executive Order that calls for a comprehensive
review of Dodd-Frank. In addition, the Trump Administration has discussed potentially putting in place a tax on goods and
services imported into the United States and the intention to renegotiate certain international trade agreements with other countries,
including the North American Free Trade Agreement (“NAFTA”). We cannot predict with certainty what other proposals may
be made or what legislation or regulations may be introduced or enacted, or what impact any such legislation or regulations may
have on our business, results of operations and financial condition. See “— Regulatory and Legal Risks — Our Insurance and
Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies May
Reduce Our Profitability and Limit Our Growth,” and “— Risks Related to Our Business — Competitive Factors May Adversely
Affect Our Market Share and Profitability” below.

Adverse Global Capital and Credit Market Conditions May Significantly Affect Our Ability to Meet Liquidity Needs, Our
Access to Capital and Our Cost of Capital

The global capital and credit markets may be subject to periods of extreme volatility. Disruptions in capital markets could

cause our liquidity and credit capacity to be limited.

We need liquidity to pay claims and other operating expenses, interest on our debt and dividends on our capital stock,
provide our subsidiaries with cash or collateral, maintain our securities lending activities and replace certain maturing liabilities.
Without sufficient liquidity, we could be forced to curtail our operations and limit our investments, and our business and financial
results may suffer. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity
and Capital Resources.”

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In the event global capital market or other conditions have an adverse impact on our capital and liquidity, or our stress-
testing indicates that such conditions could have such an impact beyond expectations and our current resources do not satisfy
our needs or regulatory requirements, we may have to seek additional financing. The availability of additional financing will
depend on a variety of factors such as the then current market conditions, regulatory considerations, availability of credit to us
and the financial services industry generally, our credit ratings and credit capacity, and the perception of our customers and
lenders regarding our long- or short-term financial prospects if we incur large operating or investment losses or if the level of
our business activity decreases due to a market downturn. Similarly, our access to funds may be impaired if regulatory authorities
or rating agencies take negative actions against us. Our internal sources of liquidity may prove to be insufficient and, in such
case, we may not be able to successfully obtain additional financing on favorable terms, or at all.

Our liquidity requirements may change if, among other things, we are required to return significant amounts of cash collateral
on short notice under securities lending or derivatives agreements or are required to post collateral or make payments related to
declines in market value of specified counterparty credit risk. See “— Investments-Related Risks — Should the Need Arise, We
May Have Difficulty Selling Certain Holdings in Our Investment Portfolio or in Our Securities Lending Program in a Timely
Manner and Realizing Full Value Given Their Illiquid Nature,” “Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Investments — Securities Lending” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity.”

Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital needed to operate
our business, most significantly in our insurance operations. Such market conditions may limit our ability to replace, in a timely
manner, maturing liabilities, satisfy regulatory capital requirements, and access the capital necessary to grow our business. See
“— Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation
and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.” As a result, we may be
forced to delay raising capital, issue different types of securities than we would have otherwise, less effectively deploy such
capital, issue shorter tenor securities than we prefer, or bear an unattractive cost of capital, which could decrease our profitability
and significantly reduce our financial flexibility. Our results of operations, financial condition, cash flows and statutory capital
position could be materially adversely affected by disruptions in the financial markets.

We Are Exposed to Significant Global Financial and Capital Markets Risks Which May Adversely Affect Our Results of
Operations, Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from Period to Period

We are exposed to significant global financial and capital markets risks, including changes in interest rates, credit spreads,
equity prices, real estate markets, foreign currency exchange rates, market volatility, global economic performance in general,
the performance of specific obligors, including governments, included in our investment portfolio, derivatives and other factors
outside our control. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry
Trends — Financial and Economic Environment” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Investments — Current Environment.”

Interest Rate Risk

Some of our products, principally traditional life, universal life, fixed annuities and guaranteed interest contracts, expose
us to the risk that changes in interest rates will reduce our investment margin or “spread,” or the difference between the amounts
that we are required to pay under the contracts in our general account and the rate of return we earn on general account
investments intended to support obligations under such contracts. Our spread is a key component of our net income.

In a low interest rate environment, we may be forced to reinvest proceeds from investments that have matured or have
been prepaid or sold at lower yields, which will reduce our investment margin. Moreover, borrowers may prepay or redeem
the fixed income securities and commercial, agricultural or residential mortgage loans in our investment portfolio with greater
frequency in order to borrow at lower market rates, thereby exacerbating this risk. Although lowering interest crediting rates
can help offset decreases in spreads on some products, our ability to lower these rates is limited to the portion of our in-force
product portfolio that has adjustable interest crediting rates, and could be limited by competition or contractually guaranteed
minimum rates and may not match the timing or magnitude of changes in asset yields. As a result, our spread could decrease
or potentially become negative, which could have a material adverse effect on our results of operations and financial condition.
See “— Risks Related to Our Business — Guarantees Within Certain of Our Products May Decrease Our Earnings, Increase
the Volatility of Our Results, Result in Higher Risk Management Costs and Expose Us to Increased Counterparty Risk.”

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Our expectation for future spreads is an important component in the amortization of DAC and value of business acquired
(“VOBA”). Significantly lower spreads may cause us to accelerate amortization, thereby reducing net income in the affected
reporting period and potentially negatively affecting our credit instrument covenants or rating agency assessment of our
financial condition. In addition, during periods of declining interest rates, life insurance and annuity products may be relatively
more attractive investments to consumers. This could result in increased premium payments on products with flexible premium
features, repayment of policy loans and increased persistency, or a higher percentage of insurance policies remaining in-force
from year to year, during a period when our new investments carry lower returns. A decline in market interest rates could also
reduce our return on investments that do not support particular policy obligations. During periods of sustained lower interest
rates, our reserves for policy liabilities may not be sufficient to meet future policy obligations and may need to be strengthened.
Accordingly, declining and sustained lower interest rates may materially affect our results of operations, financial position,
cash flows, and ability to take dividends from operating insurance companies, as well as significantly reduce our profitability.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact
of a Sustained Low Interest Rate Environment.”

As a global insurance company, we are also affected by the monetary policies of the Federal Reserve Board and of central
banks around the world. Actions resulting from these policies may have an impact on the pricing levels of risk-bearing
investments, and may adversely impact the income we earn on our investments or the level of product sales. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Investments — Current Environment.”

Increases in interest rates could also negatively affect our profitability. In periods of rapidly increasing interest rates, we
may not be able to replace, in a timely manner, the investments in our general account with higher yielding investments needed
to fund the higher crediting rates necessary to keep interest rate sensitive products competitive. We, therefore, may have to
accept a lower credit spread and, thus, lower profitability or face a decline in sales and greater loss of existing contracts and
related assets. In addition, policy loans, surrenders and withdrawals may tend to increase as policyholders seek investments
with higher perceived returns as interest rates rise. This process may result in cash outflows requiring that we sell investments
at a time when the prices of those investments are adversely affected by the increase in interest rates, which may result in
realized investment losses. Unanticipated withdrawals, terminations and substantial policy amendments may cause us to
accelerate the amortization of DAC and VOBA, which reduces net income and potentially negatively affects our credit
instrument covenants and rating agency assessment of our financial condition, and may also cause us to accelerate the
amortization of negative VOBA, which increases net income. An increase in interest rates could also have a material adverse
effect on the value of our investment portfolio, for example, by decreasing the estimated fair values of the fixed income
securities that comprise a substantial portion of our investment portfolio. Finally, an increase in interest rates could result in
decreased fee income associated with a decline in the value of variable annuity account balances invested in fixed income
funds. However, this increase in interest rates would typically cause any guaranteed living benefits to decline in value. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of
a Sustained Low Interest Rate Environment.”

We manage interest rate risk as part of our asset and liability management strategies, which include maintaining an
investment portfolio with diversified maturities that has a weighted average duration that reflects the duration of our estimated
liability cash flow profile. We also use derivatives to mitigate interest rate risk. Although we take measures to manage the
economic risks of investing in a changing interest rate environment, we may not be able to mitigate the interest rate risk of
our fixed income investments relative to our interest rate sensitive liabilities. In addition, asymmetrical and non-economic
accounting may cause material changes to our net income and stockholders’ equity in any given period because our non-
qualified derivatives are recorded at fair value through earnings, while the related hedged items either follow an accrual-based
accounting model, such as insurance liabilities, or are recorded at fair value through other comprehensive income. See Note
9 of the Notes to the Consolidated Financial Statements for the primary reasons why many of the Company’s derivatives do
not qualify for hedge accounting, even though they may be effective economic hedges.

Significant volatility in the markets could cause changes in the risks set forth above which, individually or in tandem,
could have a material adverse effect on our results of operations, financial condition, liquidity or cash flows through realized
investment losses, derivative losses, changes in insurance liabilities, impairments, increased valuation allowances, increases
in reserves for future policyholder benefits, reduced net investment income and changes in unrealized gain or loss positions.

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Credit Spreads

Our exposure to credit spreads primarily relates to market price volatility and cash flow variability associated with changes
in such spreads. Market price volatility can make it difficult to value certain of our securities if trading becomes less frequent,
as was the case, for example, during the financial crisis which commenced in 2008. In such case, valuations may include
assumptions or estimates that may have significant period-to-period changes, which could have a material adverse effect on
our results of operations or financial condition and may require additional reserves. If there is a resumption of significant
volatility in the markets, it could cause changes in credit spreads and defaults and a lack of pricing transparency which,
individually or in tandem, could have a material adverse effect on our results of operations, financial condition, liquidity or
cash flows. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments
— Investment Risks.” An increase in credit spreads relative to U.S. Treasury benchmarks can also adversely affect the cost
of our borrowing should we need to access credit markets.

Equity Risk

Our primary exposure to equity risk relates to the potential for lower earnings associated with certain of our businesses
where fee income is earned based upon the estimated fair value of the assets under management. Downturns and volatility in
equity markets can have a material adverse effect on the revenues and investment returns from our savings and investment
products and services. The retail variable annuity business in particular is highly sensitive to equity markets, and a sustained
weakness or stagnation in the equity markets could decrease revenues and earnings with respect to those products. Furthermore,
certain of our variable annuity products offer guaranteed benefits which increase our potential benefit exposure should equity
markets decline or stagnate. We use derivatives and reinsurance to mitigate the impact of such increased potential benefit
exposures.

We are also exposed to interest rate and equity risk based upon the discount rate and expected long-term rate of return
assumptions associated with our pension and other postretirement benefit obligations. Sustained declines in long-term interest
rates or equity returns likely would have a negative effect on the funded status of these plans.

In addition, we invest a portion of our investments in leveraged buy-out funds, hedge funds and other private equity funds.
The amount and timing of net investment income from such funds tends to be uneven as a result of the performance of the
underlying investments. The timing of distributions from such funds, which depends on particular events relating to the
underlying investments, as well as the funds’ schedules for making distributions and their needs for cash, can be difficult to
predict. As a result, the amount of net investment income from these investments can vary substantially from period to period.
Significant volatility could adversely impact returns and net investment income on these alternative investment classes. In
addition, the estimated fair value of such investments may be impacted by downturns or volatility in equity markets. See
“Quantitative and Qualitative Disclosures About Market Risk.”

Real Estate Risk

Our primary exposure to real estate risk relates to commercial, agricultural and residential real estate. Our exposure to
these risks stems from various factors, including the supply and demand of leasable commercial space, creditworthiness of
tenants and partners, capital markets volatility, interest rate fluctuations, commodity prices and farm incomes, which have
recently been declining. Although we manage credit risk and market valuation risk for our commercial, agricultural and
residential real estate assets through geographic, property type and product type diversification, as well as asset allocation,
general economic conditions in the commercial, agricultural and residential real estate sectors will continue to influence the
performance of these investments. These factors, which are beyond our control, could have a material adverse effect on our
results of operations, financial condition, liquidity or cash flows.

Obligor-Related Risks

Recent country specific volatility due to local economic and/or political concerns has affected the performance of certain
of our investments. We have exposure to such volatility, as we maintain general account investments in such countries to
support our insurance operations and related policyholder liabilities in these countries and we also have exposure through our
global portfolio diversification. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Industry Trends — Financial and Economic Environment” and Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Investments — Current Environment — Selected Country Investments.”

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Our investment portfolio also contains investments in revenue bonds issued under the auspices of U.S. states and
municipalities, and a limited amount of general obligation bonds of U.S. states and municipalities (collectively, “State and
political subdivision securities”). Various U.S. states and municipalities have faced budget deficits and financial difficulties.
The financial difficulties of such U.S. states and municipalities could have an adverse impact on our State and political
subdivision securities and the value of our investment portfolio.

Fixed income securities and mortgage loans represent a significant portion of our investment portfolio. We are subject to
the risk that the issuers, or guarantors, of fixed income securities and mortgage loans we own may default on principal and
interest payments they owe us. We are also subject to the risk that the underlying collateral within asset-backed securities,
including mortgage-backed securities, may default on principal and interest payments causing an adverse change in cash
flows. The occurrence of a major economic downturn, acts of corporate malfeasance, widening mortgage or credit spreads,
or other events that adversely affect the issuers, guarantors or underlying collateral of these securities and mortgage loans
could cause the estimated fair value of our portfolio of fixed income securities and mortgage loans and our earnings to decline
and the default rate of the fixed income securities and mortgage loans in our investment portfolio to increase.

Foreign Currency Exchange Rate Risks

Our primary foreign currency exchange rate risks are described under “— Risks Related to Our Business — Fluctuations
in Foreign Currency Exchange Rates Could Negatively Affect Our Profitability.” Changes in foreign currency exchange rates
can significantly affect our net investment income in any period, and such changes can be substantial. This risk will increase
if a country withdraws from the Euro zone. In such case, the national currency to which such a country may revert will likely
be devalued and contracts using the Euro will need to be renegotiated. Any such devaluation and its related consequences for
our contracts and investments in any such country could be significant and materially adversely affect our operations and
earnings in that country. Any operations we may have in any such withdrawing country could also be materially adversely
affected by legal or governmental actions related to conversion from the Euro to a national currency. See “Quantitative and
Qualitative Disclosures About Market Risk.”

Derivatives Risk

We use the payments we receive from counterparties pursuant to derivative instruments into which we have entered to
offset future changes in the fair value of our assets and liabilities and current or future changes in cash flows. We enter into
a variety of derivative instruments, including options, futures, forwards, and interest rate and credit default swaps with a
number of counterparties. Amounts that we expect to collect under current and future derivatives are subject to counterparty
risk. Our obligations under our products are not changed by our hedging activities and we are liable for our obligations even
if our derivative counterparties do not pay us. Such defaults could have a material adverse effect on our financial condition
and results of operations. Substantially all of our derivatives require us to pledge or receive collateral or make payments related
to any decline in the net estimated fair value of such derivatives executed through a specific broker at a clearinghouse or
entered into with a specific counterparty on a bilateral basis. In addition, ratings downgrades or financial difficulties of
derivative counterparties may require us to utilize additional capital with respect to the impacted businesses.

Summary

Significant volatility in the markets could cause changes in interest rates, declines in equity prices, and the strengthening
or weakening of foreign currencies against the U.S. dollar which, individually or in tandem, could have a material adverse
effect on our results of operations, financial condition, liquidity or cash flows through realized investment losses, derivative
losses, changes in insurance liabilities, impairments, increased valuation allowances, increases in reserves for future
policyholder benefits, reduced net investment income and changes in unrealized gain or loss positions.

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Regulatory and Legal Risks

Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and
Enforcement Policies May Reduce Our Profitability and Limit Our Growth

Our insurance operations and brokerage businesses are subject to a wide variety of insurance and other laws and regulations.
Additionally, Dodd-Frank, discussed further below, effected the most far-reaching overhaul of financial regulation in the United
States in decades. However, President Trump and the majority party have expressed goals to dismantle or roll back Dodd-Frank
and President Trump has issued an Executive Order that calls for a comprehensive review of Dodd-Frank in light of certain
enumerated core principles of financial system regulation. We are not able to predict with certainty whether any such proposal
would have a material effect on our business operations and cannot currently identify all of the risks or opportunities, if any,
that may be posed to our businesses as a result of changes to, or legislative replacements for, Dodd-Frank. See
“Business — Regulation,” as supplemented by discussions of regulatory developments in our subsequently filed Quarterly
Reports on Form 10-Q under the caption “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Industry Trends — Regulatory Developments.”

U.S. Regulation

Insurance Regulation

The NAIC is an organization whose mission is to assist state insurance regulatory authorities in serving the public
interest and achieving the insurance regulatory goals of its members, the state insurance regulatory officials. State insurance
regulators may act independently or adopt regulations proposed by the NAIC. State insurance regulators and the NAIC
regularly re-examine existing laws and regulations applicable to insurance companies and their products. Changes in these
laws and regulations, or in interpretations thereof, can sometimes lead to additional expense for the insurer and, thus, could
have a material adverse effect on our financial condition and results of operations.

In 2015, the NAIC commenced an initiative to study variable annuity solvency regulations, with the goal of curtailing
the use of variable annuity captives. In connection with this study, the NAIC engaged a third-party consultant to develop
recommendations in 2016 regarding reserve and capital requirements. The NAIC plans to ask the third-party consultant to
conduct an additional study and develop new recommendations in 2017. The NAIC will consider the 2017 recommendations
which, if adopted, would apply to insurers’ existing and new business and likely would materially change the sensitivity of
the balance sheet (including reserve and capital requirements) to capital markets. It is not possible to predict whether the
amount of reserves or capital required to support our variable annuity contracts would increase or decrease if any such 2017
recommendations are adopted, nor is it possible to predict the extent to which any such recommendations would affect the
effectiveness and design of our risk mitigation and hedging programs. Furthermore, no assurances can be given as to whether
any such recommendations will be adopted or to the timing of any such adoption.

The NAIC is also studying its RBC factors for bonds, real estate and collateral pledged to support FHLB advances. It

is premature to project the impact of any such adoption.

The NAIC has also been working on the modernization of the calculation of life insurance reserves, including principle-
based reserving, which became operative on January 1, 2017 in those states where it has been adopted, with a three-year
phase-in period, at the option of insurance companies on a product-by-product basis, for new business. To date, principle-
based reserving has been adopted by all of the states where our insurance subsidiaries are domiciled, except in New York
where the NYDFS has publicly stated its intention to implement this approach beginning in January 2018, subject to a
working group of the NYDFS establishing the necessary reserves safeguards, and in Massachusetts where the legislature
is considering legislation in this area. We cannot predict how principle-based reserving will impact the reserves or compliance
costs, if any, of our insurance subsidiaries, although after the Separation, principle-based reserving will have less of an
impact, given our discontinuance of retail life sales. See “Business — Regulation — U.S. Regulation — Insurance Regulation
— NAIC.”

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U.S. Federal Regulation Affecting Insurance

Currently, the business of insurance is primarily regulated at the state level. However, Dodd-Frank established the FIO
within the Department of the Treasury, which has the authority to participate in the negotiations of international insurance
agreements with foreign regulators for the U.S., as well as to collect information about the insurance industry and recommend
prudential standards. On December 12, 2013, the FIO issued a report, mandated by Dodd-Frank, which, among other things,
urged the states to modernize and promote greater uniformity in insurance regulation. The report raised the possibility of a
greater role for the federal government if states do not achieve greater uniformity in their laws and regulations. Following
the transition occurring in the United States government and the priorities of the Trump Administration, we cannot predict
with certainty whether any such legislation or regulatory changes will be adopted, or what impact they will have on our
business, financial condition or results of operations. See “Business — Regulation — U.S. Regulation — Insurance
Regulation — Federal Initiatives.”

Federal legislation and administrative policies can significantly and adversely affect insurance companies, including
policies regarding financial services regulation, securities regulation, derivatives regulation, pension regulation, health care
regulation, privacy, tort reform legislation and taxation. In addition, various forms of direct and indirect federal regulation
of insurance have been proposed from time to time, including proposals for the establishment of an optional federal charter
for insurance companies.

ERISA Considerations

We provide products and services to certain employee benefit plans that are subject to ERISA or the Code. As such,
our activities are subject to the restrictions imposed by ERISA and the Code, including the requirement under ERISA that
fiduciaries must perform their duties solely in the interests of ERISA plan participants and beneficiaries, and those fiduciaries
may not cause a covered plan to engage in certain prohibited transactions. The prohibited transaction rules of ERISA and
the Code generally restrict the provision of investment advice to ERISA plans and participants and IRAs if the investment
recommendation results in fees paid to the individual advisor, the firm that employs the advisor or their affiliates that vary
according to the investment recommendation chosen, unless an exemption or exception is available. Similarly, without an
exemption or exception, fiduciary advisors are prohibited from receiving compensation from third parties in connection
with their advice. ERISA also affects certain of our in-force insurance policies and annuity contracts, as well as insurance
policies and annuity contracts we may sell in the future.

The DOL issued new regulations on April 6, 2016 with an applicable date for most provisions of April 10, 2017. These
regulations substantially expand the definition of “investment advice” and thereby broaden the circumstances under which
MetLife or its representatives, in providing investment advice with respect to ERISA plans, plan participants or IRAs, could
be deemed a fiduciary under ERISA or the Code. Pursuant to the final regulations, certain communications with plans, plan
participants and IRA holders, including the sales of products, and investment management or advisory services, could be
deemed fiduciary investment advice, thus causing increased exposure to fiduciary liability if the distributor does not
recommend what is in the client’s best interests. While the final regulations also provide that, to a limited extent, contracts
sold and advice provided prior to April 10, 2017 do not have to be modified to comply with the new investment advice
regulations, there is lack of clarity surrounding some of the conditions for qualifying for this limited exception. There can
be no assurance that the DOL will agree with our interpretation of the provisions of the new regulations, in which case the
DOL and IRS could assess significant penalties against a portion of products sold prior to April 10, 2017. The assessment
of such penalties could also trigger substantial litigation risk. Any such penalties and related litigation could adversely affect
our results of operations and financial condition.

The DOL also issued amendments to certain of its prohibited transaction exemptions, and issued a new exemption that
applies more onerous disclosure and contract requirements to, and increases fiduciary requirements and fiduciary liability
exposure in respect of, certain transactions involving ERISA plans, plan participants and IRAs.

While we continue to analyze the impact of the final regulations on our business as we plan for their implementation,
we believe they could have an adverse effect on sales of annuity products to ERISA qualified plans such as IRAs through
our independent distribution partners. The new regulations deem advisors, including independent distributors, who sell
fixed index-linked annuities to IRAs, IRA rollovers or 401(k) plans, fiduciaries and prohibit them from receiving
compensation unless they comply with a prohibited transaction exemption. The exemption requires advisors to comply with
impartial conduct standards and may require us to exercise additional oversight of the sales process. Compliance with the
prohibited transaction exemption will likely result in increased regulatory burdens on us and our independent distribution
partners, changes to our compensation practices and product offerings and increased litigation risk, which could adversely
affect our results of operations and financial condition. See “Business — Regulation — U.S. Regulation — ERISA
Considerations.”

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However, in light of action by President Trump on February 3, 2017, the applicability date of April 10, 2017 may well
be delayed. It is also possible that the substance of the regulation could be substantially modified or replaced due to the
change in Administration. We cannot predict with certainty what other proposals may be made or what legislation or
regulations may be introduced or enacted, or what impact any such legislation or regulations may have on our business,
results of operations and financial condition.

Potential Regulation of MetLife, Inc. as a Non-Bank SIFI

On December 18, 2014, the FSOC designated MetLife, Inc. as a non-bank SIFI. On January 13, 2015, MetLife, Inc.
filed an action in the D.C. District Court asking the Court to review and rescind the FSOC’s designation. On March 30,
2016, the D.C. District Court ordered that the designation of MetLife, Inc. as a non-bank SIFI by the FSOC be rescinded.
On April 8, 2016, the FSOC appealed the D.C. District Court’s order to the D.C. Circuit Court of Appeals, and oral argument
was heard on October 24, 2016.

If the FSOC prevails on appeal or re-designates MetLife, Inc. as systemically important as part of its ongoing review
of non-bank financial companies, MetLife, Inc. could once again be subject to regulation that could materially and adversely
affect our business and competitive position. Non-bank SIFIs are supervised by the Federal Reserve Board and subject to
enhanced prudential standards which Dodd-Frank requires the Federal Reserve Board to adopt. These enhanced prudential
standards, include RBC requirements and leverage limits, liquidity requirements, overall risk management requirements,
resolution plan and credit exposure report requirements, and concentration limits. Dodd-Frank also authorizes the Federal
Reserve Board to adopt other standards applicable to non-bank SIFIs, including contingent capital requirements, enhanced
public disclosures, short-term debt limits, and other appropriate standards. In addition, non-bank SIFIs are subject to stress
testing and must pay a variety of assessments, including those relating to any uncovered costs arising in connection with
the resolution of a systemically important financial company, expenses incurred by the Federal Reserve Board in fulfilling
its oversight role, and funding the Office of Financial Research within the U.S. Department of Treasury. The Federal Reserve
Board has not yet fully implemented most of the standards that will apply to non-bank SIFIs. Accordingly, the manner in
which the ultimate standards might apply to MetLife, Inc. were it to be re-designated as a non-bank SIFI and the full impact
of such standards, remains unclear. If MetLife, Inc. were to be re-designated as a non-bank SIFI, however, it is possible
that such regulations could constrain our ability to pay dividends, repurchase common stock or other securities or engage
in other transactions that could affect our capital, or cause us to raise the price of the products we offer, reduce the amount
of risk we take on, or stop offering certain products altogether.

The Trump Administration has released a memorandum that generally delayed all pending regulations from publication
in the Federal Register pending their review and approval by a department or agency head appointed or designated by
President Trump. President Trump has also issued an Executive Order that calls for a comprehensive review of Dodd-Frank
and requires the Secretary of the Treasury to consult with the heads of the member agencies of FSOC to identify any laws,
regulations or requirements that inhibit Federal regulation of the financial system in a manner consistent with the core
principles identified in the Executive Order. We cannot predict with certainty what other proposals may be made or what
legislation or regulations may be introduced or enacted, or what impact any such legislation or regulations may have on
our business, results of operations and financial condition.

On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Executive Summary — Other Key Information — Significant
Events.” There can be no assurance that any actions taken in furtherance of this plan will affect any decision the FSOC may
make to re-designate MetLife, Inc. as a non-bank SIFI. We may consider further structural and other business alternatives
that may be available to us in response to any re-designation of MetLife as a non-bank SIFI, and we cannot predict the
impact that any such alternatives, if implemented, may have on the Company or its security holders. See “Business —
Regulation — U.S. Regulation — Potential Regulation as a Non-Bank SIFI” for additional information regarding potential
regulation of MetLife, Inc. as a non-bank SIFI.

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International Regulation

Our international insurance operations are principally regulated by insurance regulatory authorities in the jurisdictions
in which they are located or operate. A significant portion of our revenues is generated through operations in foreign
jurisdictions, including many countries in early stages of economic and political development. Our international operations
may be materially adversely affected by the actions and decisions of foreign authorities and regulators. See “— Risks Related
to Our Business — Our International Operations Face Political, Legal, Operational and Other Risks, Including Exposure to
Local and Regional Economic Conditions, That Could Negatively Affect Those Operations or Our Profitability.” This may
also impact many of our customers and independent sales intermediaries. Changes in the laws and regulations that affect these
customers and independent sales intermediaries or their operations also may affect our business relationships with them and
their ability to purchase or distribute our products. Accordingly, these changes and actions may negatively affect our business
in these jurisdictions. We expect the scope and extent of regulation outside of the U.S., as well as regulatory oversight, generally,
to continue to increase. The authority of our international operations to conduct business is subject to licensing requirements,
permits and approvals, and these authorizations are subject to modification and revocation. The regulatory environment in
the countries in which we operate and changes in laws could have a material adverse effect on our results of operations. See
“Business — Regulation — International Regulation.”

Solvency Regimes

We are subject to Solvency II which became effective on January 1, 2016 in the EEA, and are subject to Solvency II-
like frameworks in Mexico and China, with other similar solvency standards under development in other markets such as
Brazil and Chile. See “Business — Regulation — International Regulation — Solvency Regimes.” As requirements are
finalized by the regulators, capital requirements might be impacted in a number of jurisdictions. In addition, our legal entity
structure throughout Europe may impact our capital requirements, risk management infrastructure and reporting by country.

Global Systemically Important Insurers

In the wake of the financial crisis, national and international authorities have proposed measures intended to increase
the intensity of regulation of large financial institutions, requiring greater coordination among regulators and efforts to
harmonize regulatory regimes. For example, the IAIS is participating in the FSB’s initiative to identify and manage global
systemically important financial institutions. To this end, the IAIS published a methodology to assess the systemic relevance
of global insurers and a framework of policy measures to be applied to G-SIIs. G-SII designation is an annual process. The
IAIS published revised assessment methodology in June 2016 as the new basis for annual designation and, on this basis,
the FSB again so designated MetLife, Inc. in 2016. While the regulatory standards that would apply to G-SIIs are still being
developed, they may include enhanced capital standards and supervision and other additional requirements that would not
apply to companies that are not G-SIIs. The IAIS proposals would need to be implemented at the consolidated group level
by legislation or regulation in each applicable jurisdiction. As MetLife, Inc. is no longer a U.S. non-bank SIFI and none of
its regulators have proposed implementing the G-SII requirements, the impact on MetLife, Inc. of such global proposals is
uncertain. See “Business — Regulation — International Regulation — Global Systemically Important Insurers.”

General

From time to time, regulators raise issues during examinations or audits of MetLife, Inc.’s regulated subsidiaries that
could, if determined adversely, have a material impact on us. In addition, the interpretations of regulations by regulators may
change and statutes may be enacted with retroactive impact, particularly in areas such as accounting or statutory reserve
requirements. Compliance with applicable laws and regulations is time consuming and personnel-intensive, and changes in
these laws and regulations may materially increase our direct and indirect compliance and other expenses of doing business,
thus having a material adverse effect on our financial condition and results of operations.

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The Dodd-Frank Provisions Compelling the Liquidation of Certain Types of Financial Institutions Could Materially and
Adversely Affect MetLife, Inc., as Such a Financial Institution and as an Investor in Other Such Financial Institutions, as
well as Our Investors

Under provisions of Dodd-Frank, if MetLife, Inc. or another financial institution were to become insolvent or were in danger
of defaulting on its obligations and it was determined that such default would have serious effects on financial stability in the
U.S., it could be compelled to undergo liquidation with the FDIC as receiver. While under this new regime an insurance company
would be resolved in accordance with state insurance law, if the FDIC were appointed as the receiver for another type of a
company (including an insurance holding company such as MetLife, Inc.), liquidation of that company would occur under the
provisions of the new liquidation authority, and not under the Bankruptcy Code, which ordinarily governs liquidations. In an
FDIC-managed liquidation, holders of a company’s debt could in certain respects be treated differently than under the Bankruptcy
Code and similarly-situated creditors could be treated differently. In particular, unsecured creditors and shareholders are intended
to bear the losses of the company being liquidated. These provisions could also apply to financial institutions whose debt securities
we hold in our investment portfolio and could adversely affect our position as a creditor and the value of our holdings.

Dodd-Frank also provides for the assessment of charges against certain financial institutions, including non-bank SIFIs and
bank holding companies and other financial companies with assets of $50 billion or more, to cover the costs of liquidating any
financial company subject to the new liquidation authority. The liquidation authority could increase our funding costs. See
“Business — Regulation — U.S. Regulation — Potential Regulation as a Non-Bank SIFI — Orderly Liquidation Authority.”
See also “— Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory
and Enforcement Policies May Reduce Our Profitability and Limit Our Growth” for information regarding the Trump
Administration’s expressed goals to dismantle or roll back Dodd-Frank.

Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Affect our Profitability as a Provider
of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products

The Affordable Care Act has led to fundamental changes in the way that employers, including us, provide health care benefits
and other forms of compensation to their employees and former employees. In addition to imposing obligations on MetLife as
an enterprise, the Affordable Care Act also imposes requirements on us as a provider of non-medical health insurance benefits
and as a purchaser of certain of these products. See “Business — Regulation — U.S. Regulation — Insurance Regulation —
Health Care Regulation” for information regarding such requirements, including the effect of assessments related to public
healthcare exchanges. The Affordable Care Act or other related regulations or regulatory actions may adversely affect our ability
to continue to offer certain non-medical health and dental insurance products in the same manner as we do today and may
continue to result in increased and unpredictable costs to provide certain products thereby harming our competitive position.

In addition, we employ a substantial number of employees in the United States to whom we offer employment-related
benefits. We also currently provide benefits to certain of our retirees. These benefits are provided under complex plans that are
subject to a variety of regulatory requirements. The Affordable Care Act or related regulations or regulatory actions could
adversely affect our ability to attract, retain and motivate our associates. They could also result in increased or unpredictable
costs to provide employee benefits, and could harm our competitive position if we are subject to fees, penalties, tax provisions
or other limitations in the Affordable Care Act and our competitors are not.

The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 also includes certain provisions
for defined benefit pension plan funding relief. These provisions may impact the likelihood and/or timing of corporate plan
sponsors terminating their plans and/or engaging in transactions to partially or fully transfer pension obligations to an insurance
company. Consequently, this law could indirectly affect the mix of our business, with fewer pension risk transfers and more
non-guaranteed funding products, and adversely impact our results of operations.

Changes in U.S. Federal, State Securities and State Insurance Laws and Regulations May Affect Our Operations and Our
Profitability

Federal and state securities laws and regulations apply to insurance products that are also “securities,” including variable
annuity contracts and variable life insurance policies, as well as certain fixed interest rate or index-linked contracts with features
that require them to be registered as securities (“registered fixed contracts”). As a result, some of MetLife, Inc.’s subsidiaries
and their activities in offering and selling variable insurance contracts and policies are subject to extensive regulation under
these securities laws.

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Federal and state securities laws and regulations are primarily intended to ensure the integrity of the financial markets and
to protect investors in the securities markets, and to protect investment advisory or brokerage clients. These laws and regulations
generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to adopt new rules impacting
new and/or existing products, regulate the issuance, sales and distribution of our products and limit or restrict the conduct of
business for failure to comply with the securities laws and regulations.

As a result of Dodd-Frank, there have been a number of changes proposed or adopted to the laws and regulations that govern
the conduct of our variable and registered fixed insurance products business and the firms that distribute these products. The
future impact of recently adopted revisions to laws and regulations, as well as revisions that are still in the proposal stage, on
the way we conduct our business and the products we sell is unclear. Such impact could adversely affect our operations and
profitability, including increasing the regulatory and compliance burden upon us, resulting in increased costs, or limiting the
type, amount or structure of compensation arrangements into which we may enter with certain of our employees, negatively
impacting our ability to compete with other companies in recruiting and maintaining key personnel. See “Business — Regulation
— U.S. Regulation — ERISA Considerations” and “Business — Regulation — U.S. Regulation — Securities, Broker-Dealer
and Investment Adviser Regulation.” However, following the change of Administration, we cannot predict with certainty whether
any such proposals will be adopted, or what impact adopted revisions will have on our business, financial condition or results
of operations. See “— Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in
Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth” for information regarding the
Trump Administration’s expressed goals to dismantle or roll back Dodd-Frank. We also may be subject to similar laws and
regulations in the foreign countries in which we offer products or conduct other activities similar to those described above. See
“Business — Regulation — International Regulation.”

The global financial crisis has led to significant changes in economic and financial markets that have, in turn, led to a
dynamic competitive landscape for variable and registered fixed product issuers. Our ability to react to rapidly changing market
and economic conditions will depend on the continued efficacy of provisions we have incorporated into our product design
allowing frequent and contemporaneous revisions of key pricing elements and our ability to work collaboratively with federal
securities regulators. Changes in regulatory approval processes, rules and other dynamics in the regulatory process could adversely
impact our ability to react to such changing conditions.

Changes in Tax Laws or Interpretations of Such Laws Could Reduce Our Earnings and Materially Impact Our Operations
by Increasing Our Corporate Taxes and Making Some of Our Products Less Attractive to Consumers

Changes in domestic or foreign tax laws or interpretations of such laws could increase our corporate taxes and reduce our
earnings. For example, in the third quarter of 2015, MetLife, Inc. recorded a $792 million after-tax charge, or $.70 per share,
under accounting guidance for the recognition of tax uncertainties as a result of our consideration of decisions of the U.S. Court
of Appeals for the Second Circuit upholding the disallowance of foreign tax credits claimed by other corporate entities not
affiliated with us (in transactions different from ours), based upon a changed interpretation of the proper method of determining
that a transaction has economic substance. Additionally, global budget deficits make it likely that governments’ need for additional
revenue will result in future tax proposals that will increase our effective tax rate. However, it remains difficult to predict the
timing and effect that future tax law changes could have on our earnings both in the U.S. and in foreign jurisdictions. Such
changes could not only directly impact our corporate taxes but also could adversely impact our products (both life insurance
and retirement plans) by making some of our products less attractive to consumers. A shift away from life insurance and annuity
contracts and other tax-deferred products by our customers would reduce our income from sales of these products, as well as
the asset base upon which we earn investment income and fees, thereby reducing our earnings and potentially affecting the value
of our deferred tax assets.

Additionally, the Trump Administration and Congress have publicly stated that fundamental U.S. tax reform is a priority.
The substance, timing and likelihood of such reform are all uncertain. Such reform could impact the Company’s corporate taxes
and products, whether favorably or adversely. While current tax reform proposals generally include a reduction of the U.S.
corporate tax rate, given the overall U.S. budget deficit it is likely that any tax reform will include provisions which would raise
revenues. Thus, it is not possible to predict with certainty whether the reform would be beneficial or adverse to MetLife, Inc.

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Litigation and Regulatory Investigations Are Increasingly Common in Our Businesses and May Result in Significant
Financial Losses and/or Harm to Our Reputation

We face a significant risk of litigation and regulatory investigations and actions in the ordinary course of operating our
businesses, including the risk of class action lawsuits. Our pending legal and regulatory actions include proceedings specific to
us and others generally applicable to business practices in the industries in which we operate. In connection with our insurance
operations, plaintiffs’ lawyers may bring or are bringing class actions and individual suits alleging, among other things, issues
relating to sales or underwriting practices, claims payments and procedures, product design, disclosure, administration,
investments, denial or delay of benefits and breaches of fiduciary or other duties to customers. Plaintiffs in class action and other
lawsuits against us may seek very large and/or indeterminate amounts, including punitive and treble damages. 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. Material pending litigation
and regulatory matters affecting us and risks to our business presented by these proceedings are discussed in Note 21 of the
Notes to the Consolidated Financial Statements. Updates are provided in the notes to our interim condensed consolidated financial
statements included in our subsequently filed quarterly reports on Form 10-Q, as well as in Part II, Item 1 (“Legal Proceedings”)
of those quarterly reports.

A substantial legal liability or a significant federal, state or other regulatory action against us, as well as regulatory inquiries
or investigations, could harm our reputation, result in material fines or penalties, result in significant legal costs and otherwise
have a material adverse effect on our business, financial condition and results of operations. Even if we ultimately prevail in the
litigation, regulatory action or investigation, our ability to attract new customers, retain our current customers and recruit and
retain employees could be materially and adversely impacted. Regulatory inquiries and litigation may also cause volatility in
the price of stocks of companies in our industry.

Current claims, litigation, unasserted claims probable of assertion, investigations and other proceedings against us could
have a material adverse effect on our business, financial condition or results of operations. It is also possible that related or
unrelated claims, litigation, unasserted claims probable of assertion, investigations and proceedings may be commenced in the
future, and we could become subject to further investigations and have lawsuits filed or enforcement actions initiated against
us. We currently have a market presence in numerous countries and may be subject to additional investigations and lawsuits in
these jurisdictions. Increased regulatory scrutiny and any resulting investigations or proceedings in any of the countries where
we operate could result in new legal actions and precedents and industry-wide regulations that could adversely affect our business,
financial condition and results of operations.

Risks Related to Acquisitions, Dispositions or Other Structural Changes

We May Not Complete the Separation of Brighthouse Financial on the Terms or Timeline Currently Contemplated, if at All

On October 5, 2016, our wholly-owned subsidiary, Brighthouse, filed a registration statement on Form 10 with the SEC in
connection with the previously announced separation of a substantial portion of our former Retail segment, as well as certain
portions of our former Corporate Benefit Funding segment. The Form 10, as amended, reflects our current plan to initiate the
Separation in the form of an initial spin-off of 80.1% of the outstanding common stock of Brighthouse. While we and Brighthouse
are currently preparing for a spin-off transaction, the ultimate form and timing of a separation will be influenced by a number
of factors, including regulatory considerations and economic conditions. We continue to evaluate and pursue structural
alternatives for the proposed Separation. MetLife has initiated the regulatory process for the proposed separation of Brighthouse
Financial. Unanticipated developments could delay, prevent or otherwise adversely affect the currently proposed spin-off of
Brighthouse, including possible problems or delays in obtaining various insurance and other regulatory approvals, tax approvals
(including the failure of such a separation to qualify for any intended tax-free treatment) and disruptions in the capital and
financial markets. In addition, consummation of the currently proposed spin-off will require final approval from our Board of
Directors. Therefore, we cannot assure that we will complete the Separation in the form, on the terms or on the timeline that we
announced, if at all.

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In order to position ourselves for the proposed Separation, we are actively pursuing strategic, structural and process
realignment and restructuring actions within our former Retail segment (now, the Brighthouse Financial and MetLife Holdings
segments). These actions could lead to disruption of our operations, loss of, or inability to recruit, key personnel needed to
operate and grow our businesses and complete the proposed Separation, weakening of our internal standards, controls or
procedures, and impairment of our relationship with key customers and counterparties. We have and will continue to incur
significant expenses in connection with the proposed Separation. We also may not achieve certain of the benefits that we expect
to achieve in connection with the Separation, including dividends from Brighthouse to MetLife, Inc., due to, among other things,
the inability of Brighthouse to raise sufficient funds by the incurrence of debt or otherwise, or lower than expected dividends
received by Brighthouse from its subsidiaries. In addition, completion of the proposed Separation will require significant amounts
of our management’s time and effort which may divert management’s attention from operating and growing our remaining
businesses and could adversely affect our business, results of operations and financial condition.

We Could Face Difficulties, Unforeseen Liabilities, Asset Impairments or Rating Actions Arising from Business Acquisitions
or Integrating and Managing Growth of Such Businesses, Dispositions of Businesses, or Legal Entity Reorganizations

We have engaged in dispositions and acquisitions of businesses in the past, and expect to continue to do so in the future.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary — Other
Key Information — Significant Events” for information regarding MetLife, Inc.’s plan to pursue the Separation, as well as the
U.S. Retail Advisor Force Divestiture. Such activity exposes us to a number of risks arising from (i) potential difficulties achieving
projected financial results, including the costs and benefits of integration or deconsolidation; (ii) unforeseen liabilities or asset
impairments; (iii) the scope and duration of rights to indemnification for losses; (iv) the use of capital which could be used for
other purposes; (v) rating agency reactions; (vi) regulatory requirements that could impact our operations or capital requirements;
(vii) changes in statutory or U.S. GAAP accounting principles, practices or policies; and (viii) certain other risks specifically
arising from activities relating to an initial public offering, spin-off, joint venture or legal entity reorganization, including in
connection with the proposed Separation.

The valuation and structure for any transaction reflect our financial projections and other qualitative and quantitative factors.
Every transaction exposes us to the risk that actual results may materially differ from what we have projected. Factors that can
cause our ultimate experience to vary materially from financial projections made at the time we enter into a transaction include,
but are not limited to, macroeconomic, business growth, demographic, policyholder behavior and other actuarial assumptions,
regulatory and political conditions.

Risks Relating to Acquisitions

Our ability to achieve certain financial benefits we anticipate from any acquisitions of businesses will depend in part
upon our ability to successfully integrate such businesses in an efficient and effective manner. We may not be able to integrate
such businesses smoothly or successfully, and the process may take longer than expected. The integration of operations and
differences in organizational culture may require the dedication of significant management resources, which may distract
management’s attention from day-to-day business. If we are unable to successfully integrate the operations of such acquired
businesses, we may be unable to realize the benefits we expect to achieve as a result of such acquisitions and our business
and results of operations may be less than expected.

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The success with which we are able to integrate acquired operations will depend on our ability to manage a variety of

issues, including the following:

• Loss of key personnel or higher than expected employee attrition rates could adversely affect the performance of the

acquired business and our ability to integrate it successfully.

• Customers of the acquired business may reduce, delay or defer decisions concerning their use of its products and services
as a result of the acquisition or uncertainty related to the consummation of the acquisition, including, for example,
potential unfamiliarity with the MetLife brand in regions where we did not have a market presence prior to the acquisition.

•

If the acquired business relies upon independent distributors to distribute its products, these distributors may not continue
to generate the same volume of business for us after the acquisition. Independent distributors may reexamine the scope
of their relationship with the acquired business or us as a result of the acquisition and decide to curtail or eliminate
distribution of our products.

If the acquired business relies on continued distribution access with another party, we are also exposed to the risk of
loss of exclusivity or change in access due to regulatory changes.

Integrating acquired operations with our existing operations may require us to coordinate geographically separated
organizations, address possible differences in corporate culture and management philosophies, merge financial
processes and risk and compliance procedures, combine separate information technology platforms and integrate
operations that were previously closely tied to the former parent of the acquired business or other service providers.

In cases where we or an acquired business operates in certain markets through joint ventures, the acquisition may affect
the continued success and prospects of the joint venture.

• We may incur significant costs in connection with any acquisition and the related integration. The costs and liabilities
actually incurred in connection with an acquisition and subsequent integration process may exceed those anticipated.

There could be unforeseen liabilities or asset impairments, including goodwill impairments, which arise in connection

with the businesses that we may sell or the businesses that we may acquire in the future.

In addition, there may be liabilities or asset impairments that we fail, or are unable, to discover in the course of performing
acquisition-related due diligence investigations. Furthermore, even for obligations and liabilities that we do discover during
the due diligence process, neither the valuation adjustment nor the contractual protections we negotiate may be sufficient to
fully protect us from losses. Although we generally have rights to indemnification for certain losses, our rights may be limited
by survival periods for bringing claims and limitations on the nature and amount of losses we may recover, and we cannot be
certain that indemnification will be, among other things, collectible or sufficient in amount, scope or duration to fully offset
any loss we may suffer. The use of our own funds as consideration in any acquisition would consume capital resources, which
could affect our capital plan and render those funds unavailable for other corporate purposes. We also may not be able to raise
sufficient funds to consummate an acquisition if, for example, we are unable to sell our securities or close related bridge credit
facilities.

Risks Relating to Dispositions

We may from time to time dispose of business or blocks of in-force business through an outright sale, reinsurance
transaction or by alternate means such as a public offering of shares in an independent, publicly traded company or a spin-
off, which would also result in a separate, possibly independent and publicly traded, company. See “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Executive Summary — Other Key Information — Significant
Events” for information on MetLife, Inc.’s announcement of its plan to pursue the Separation, as well as the U.S. Retail Advisor
Force Divestiture. The Separation, depending on the specific form, would be subject to the satisfaction of various conditions
and approvals, including, among other things, approval of any transaction by the MetLife, Inc. Board of Directors, satisfaction
of any applicable requirements of the SEC, and receipt of insurance and other regulatory approvals and other anticipated
conditions. See “— We May Not Complete the Separation of Brighthouse Financial on the Terms or Timeline Currently
Contemplated, If at All.” In addition, transitional services or tax arrangements related to the Separation may impose restrictions,
liabilities, losses or indemnification obligations on us. Furthermore, a distributor has elected to suspend, and other distributors
may elect to suspend, alter, reduce or terminate their distribution relationships with us for various reasons, including uncertainty
related to the proposed Separation, changes in our distribution strategy, adverse developments in our business, adverse rating
agency actions or concerns about market-related risks.

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When we dispose of subsidiaries or operations, we may remain liable to the acquiror or to third parties for certain losses
or costs arising from the divested business or on other bases. We may also not realize the anticipated profit on a disposition
or incur a loss on the disposition. In anticipation of any disposition, we may need to restructure our operations, which could
disrupt such operations and affect our ability to recruit key personnel needed to operate and grow such business pending the
completion of such transaction. In addition, the actions of key employees of the business to be divested could adversely affect
the success of such disposition as they may be more focused on obtaining employment, or the terms of their employment,
than on maximizing the value of the business to be divested. Furthermore, transitional services or tax arrangements related
to any such separation could further disrupt our operations and may impose restrictions, liabilities, losses or indemnification
obligations on us. Depending on its particulars, a separation could increase our exposure to certain risks, such as by decreasing
the diversification of our sources of revenue or by changing the percentage of our revenue being derived from non-U.S.
sources. See “— Risks Related to Our Business — Our International Operations Face Political, Legal, Operational and Other
Risks, Including Exposure to Local and Regional Economic Conditions, That Could Negatively Affect Those Operations or
Our Profitability.” Any such separation could also affect the dividends available to be paid to MetLife, Inc. by the subsidiaries
that are part of such separation. Furthermore, we may be unable to timely dissolve all contractual relationships with the divested
business in the course of the proposed transaction, which may materially adversely affect our ability to realize value from the
disposition. Such restructuring could also adversely affect our internal controls and procedures and impair our relationships
with key customers, distributors and suppliers. An interruption or significant change in certain key relationships could
materially affect our ability to market our products and could have a material adverse effect on our business, operating results
and financial condition. After any such disposition, shares of our Common Stock will represent an investment in a company
different in size and characteristics from the present. These changes may cause some existing shareholders to sell their shares
of our Common Stock, which could, if excessive, cause the market price of our Common Stock to decrease.

Risks Relating to Joint Ventures

We participate in joint ventures, which may also include exclusive or semi-exclusive distribution relationships, in several
countries, including China and India. We may enter into joint ventures with other companies or government sponsored
enterprises in various other international markets, including joint ventures where we may have a lesser degree of control over
the business operations, which may expose us to additional operational, financial, legal or compliance risks. We may be
dependent on a joint venture counterparty for capital, product distribution, local market knowledge, or other resources. Limits
on our ownership levels under local laws or regulations may increase our dependence on joint venture counterparties and
subsequent changes to such laws or regulations may impact how we account for our joint venture ownership interests or
manage the joint venture. Regulations regarding the level of foreign ownership or operations of such entities or limitation on
distribution exclusivity may affect the value of a joint venture. See “— Risks Related to Our Business — Our International
Operations Face Political, Legal, Operational and Other Risks, Including Exposure to Local and Regional Economic
Conditions, That Could Negatively Affect Those Operations or Our Profitability.”

A joint venture may require an investment of considerable management, financial and operational resources to establish
sufficient infrastructure such as underwriting, actuarial, risk management, compliance or other processes. If we are unable to
effectively cooperate with joint venture counterparties, or any joint venture counterparty fails to meets its obligations under
the joint venture arrangement, encounters financial difficulty, or elects to alter, modify or terminate the relationship, we may
be unable to exercise management control or influence over these joint venture operations and our ability to achieve our
objectives and our results of operations may be negatively impacted thereby impairing our investment.

Risks Relating to Legal Entity Reorganizations

In addition, we may reorganize or consolidate the legal entities through which we conduct business. The implementation
of legal entity reorganizations is a complex undertaking and involves a number of risks similar to those outlined above that
are present in the case of an acquisition, including additional costs and expenses, information technology-related delays and
problems, loss of key personnel and distraction of management. Over the past several years, we have pursued two significant
reorganizations. For example, in November 2014, the Company completed the mergers into MetLife USA of certain of its
affiliates and a subsidiary. In 2015, we substantially completed a reorganization of many of our foreign entities under a single
holding company. Many aspects of these transactions are subject to regulatory approvals from a number of different
jurisdictions. We may not obtain needed regulatory approvals in the timeframe anticipated or at all, which could reduce or
prevent us from realizing the anticipated benefits of these transactions. These transactions or the related regulatory approvals
may entail modifications of certain aspects of our operations, the composition of certain of our investment portfolios, and/or
the cost of our derivatives hedging activities, which could result in additional costs or reduce net investment income. These
transactions are often effected to achieve certain operational, capital or tax benefits and to the extent not realized could affect
the ongoing value and financial results of such entities. Any of these risks, if realized, could result in a material adverse effect
on our business, results of operations or financial condition.

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Investments-Related Risks

Should the Need Arise, We May Have Difficulty Selling Certain Holdings in Our Investment Portfolio or in Our Securities
Lending Program in a Timely Manner and Realizing Full Value Given Their Illiquid Nature

There may be a limited market for certain investments we hold in our investment portfolio, making them relatively illiquid.
These include privately-placed fixed maturity securities, certain derivative instruments, mortgage loans, policy loans, leveraged
leases, other limited partnership interests, and real estate equity, such as real estate joint ventures and funds. In recent years,
even some of our very high quality investments experienced reduced liquidity during periods of market volatility or disruption.
If we were forced to sell certain of our investments during periods of market volatility or disruption, market prices may be lower
than our carrying value in such investments. This could result in realized losses which could have a material adverse effect on
our results of operations and financial condition, as well as our financial ratios, which could affect compliance with our credit
instruments and rating agency capital adequacy measures.

Similarly, we loan blocks of our securities to third parties (primarily brokerage firms and commercial banks) through our
securities lending program, including fixed maturity (primarily U.S. government and U.S. government-backed securities) and
equity securities, short-term investments and cash equivalents. Under this program, we obtain collateral, usually cash, at the
inception of a loan and typically purchase securities with the cash collateral. Upon the return to us of these loaned securities,
we must return to the third party the cash collateral we received. If the cash collateral has been invested in securities, we need
to sell the securities. However, in some cases, the maturity of those securities may exceed the term of the related securities on
loan and the estimated fair value of the securities we need to sell may fall below the amount of cash received.

If we are required to return significant amounts of cash collateral under our securities lending program or otherwise need
significant amounts of cash on short notice and we are forced to sell securities, we may have difficulty selling such collateral
that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we
otherwise would have been able to realize under normal market conditions, or both. In the event of a forced sale, accounting
guidance requires the recognition of a loss for securities in an unrealized loss position and may require the impairment of other
securities based on our ability to hold those securities, which would negatively impact our financial condition, as well as our
financial ratios, which could affect compliance with our credit instruments and rating agency capital adequacy measures. In
addition, under stressful capital market and economic conditions, liquidity broadly deteriorates, which may further restrict our
ability to sell securities. Furthermore, if we decrease the amount of our securities lending activities over time, the amount of net
investment income generated by these activities will also likely decline. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Investments” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Securities Lending.”

Our Requirements to Pledge Collateral or Make Payments Related to Declines in Estimated Fair Value of Derivatives
Transactions or Specified Assets in Connection with OTC-Cleared and OTC-Bilateral Transactions May Adversely Affect
Our Liquidity, Expose Us to Central Clearinghouse and Counterparty Credit Risk, and Increase our Costs of Hedging

Substantially all of our derivatives transactions require us to pledge collateral related to any decline in the net estimated
fair value of such derivatives transactions executed through a specific broker at a clearinghouse or entered into with a specific
counterparty on a bilateral basis. Certain derivatives financing transactions require us to pledge collateral or make payments
related to declines in the estimated fair value of the specified assets under certain circumstances to central clearinghouses or our
counterparties. The amount of collateral we may be required to pledge and the payments we may be required to make under our
derivatives transactions may increase under certain circumstances and will increase as a result of the requirement to pledge
initial margin for OTC-cleared transactions and for OTC-bilateral transactions entered into after the phase-in period, which will
likely be applicable to us in September 2020 as a result of the adoption by the Prudential Regulators and the CFTC of final
margin requirements for non-centrally cleared derivatives. Although the final rules allow us to pledge a broad range of non-cash
collateral as initial and variation margin, the Prudential Regulators, CFTC, central clearinghouses and counterparties may restrict
or eliminate certain types of previously eligible collateral or charge us to pledge such non-cash collateral, which would increase
our costs and could adversely affect the liquidity of our investments and the composition of our investment portfolio. See
“Business — Regulation — U.S. Regulation — Regulation of Over-the-Counter Derivatives,” “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity
and Capital Uses — Pledged Collateral,” and Note 9 of the Notes to the Consolidated Financial Statements.

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Gross Unrealized Losses on Fixed Maturity and Equity Securities and Defaults, Downgrades or Other Events May Result
in Future Impairments to the Carrying Value of Such Securities, Resulting in a Reduction in Our Net Income

Fixed maturity and equity securities classified as available-for-sale (“AFS”) securities are reported at their estimated fair
value. Unrealized gains or losses on AFS securities are recognized as a component of other comprehensive income (loss) (“OCI”)
and are, therefore, excluded from net income. In recent periods, as a result of low interest rates, the unrealized gains on our fixed
maturity securities have exceeded the unrealized losses. However, if interest rates rise, our unrealized gains would decrease and
our unrealized losses would increase, perhaps substantially. The accumulated change in estimated fair value of these AFS
securities is recognized in net income when the gain or loss is realized upon the sale of the security or in the event that the decline
in estimated fair value is determined to be other-than-temporary and an impairment charge to earnings is taken. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity
and Equity Securities AFS.”

The occurrence of a major economic downturn, acts of corporate malfeasance, widening credit risk spreads, or other events
that adversely affect the issuers or guarantors of securities or the underlying collateral of structured securities could cause the
estimated fair value of our fixed maturity securities portfolio and corresponding earnings to decline and cause the default rate
of the fixed maturity securities in our investment portfolio to increase. A ratings downgrade affecting issuers or guarantors of
particular securities, or similar trends that could worsen the credit quality of issuers, such as the corporate issuers of securities
in our investment portfolio, could also have a similar effect. With economic uncertainty, credit quality of issuers or guarantors
could be adversely affected. Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that
security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC levels. Levels
of writedowns or impairments are impacted by intent to sell, or our assessment of the likelihood that we will be required to sell,
fixed maturity securities, as well as our intent and ability to hold equity securities which have declined in value until recovery.
Realized losses or impairments on these securities may have a material adverse effect on our net income in a particular quarterly
or annual period.

Our Valuation of Securities and Investments and the Determination of the Amount of Allowances and Impairments Taken
on Our Investments Are Subjective and Include Methodologies, Estimations and Assumptions Which Are Subject to Differing
Interpretations and Market Conditions and, if Changed, Could Materially Adversely Affect Our Results of Operations or
Financial Condition

Fixed maturity, equity, fair value option (“FVO”) and trading securities, as well as short-term investments that are reported
at estimated fair value represent the majority of our total cash and investments. We define fair value generally as the price that
would be received to sell an asset or paid to transfer a liability. 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. During periods of market disruption including periods of significantly rising or high
interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain of our securities if trading becomes
less frequent and/or market data becomes less observable. In addition, in times of financial market disruption, certain asset
classes that were in active markets with significant observable data may become illiquid. In those cases, the valuation process
includes inputs that are less observable and require more subjectivity and management judgment. Valuations may result in
estimated fair values which vary significantly from the amount at which the investments may ultimately be sold. Further, rapidly
changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported
within our consolidated financial statements and the period-to-period changes in estimated fair value could vary significantly.
Decreases in the estimated fair value of securities we hold may have a material adverse effect on our results of operations or
financial condition. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Investments” and Notes 1 and 10 of the Notes to the Consolidated Financial Statements.

The determination of the amount of allowances and impairments varies by investment type and is based upon our 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. We reflect any changes in allowances
and impairments in earnings as such evaluations are revised. However, historical trends may not be indicative of future
impairments or allowances. In addition, any such future impairments or allowances could have a materially adverse effect on
our earnings and financial position. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Summary of Critical Accounting Estimates — Investment Impairments” and Note 8 of the Notes to the Consolidated Financial
Statements.

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Defaults on Our Mortgage Loans and Volatility in Performance May Adversely Affect Our Profitability

Our mortgage loans face default risk and are principally collateralized by commercial, agricultural and residential properties.
We establish valuation allowances for estimated impairments, which are based on loan risk characteristics, historical default
rates and loss severities, real estate market fundamentals and outlooks, as well as other relevant factors. In addition, substantially
all of our commercial and agricultural mortgage loans held-for-investment have balloon payment maturities. An increase in the
default rate of our mortgage loan investments or fluctuations in their performance could have a material adverse effect on our
business, results of operations and financial condition.

Further, any geographic or property type concentration of our mortgage loans may have adverse effects on our investment
portfolio and consequently on our results of operations or financial condition. While we seek to mitigate this risk by having a
broadly diversified portfolio, events or developments that have a negative effect on any particular geographic region or sector
may have a greater adverse effect on the investment portfolio to the extent that the portfolio is concentrated. Moreover, our
ability to sell assets relating to such particular groups of related assets may be limited if other market participants are seeking
to sell at the same time. In addition, legislative proposals that would allow or require modifications to the terms of mortgage
loans could be enacted. We cannot predict whether these proposals will be adopted, or what impact, if any, such proposals or,
if enacted, such laws, could have on our business or investments. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Investments — Mortgage Loans.”

The Defaults or Deteriorating Credit of Other Financial Institutions Could Adversely Affect Us

We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties
in the financial services industry, including brokers and dealers, central clearinghouses, commercial banks, investment banks,
hedge funds and investment funds and other financial institutions. Many of these transactions expose us to credit risk in the
event of default of our counterparty. In addition, with respect to secured transactions, our credit risk may be exacerbated when
the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or
derivative exposure due to us. We also have exposure to these financial institutions in the form of unsecured debt instruments,
non-redeemable and redeemable preferred securities, derivatives, joint venture, hedge fund and equity investments. Further,
potential action by governments and regulatory bodies in response to the financial crisis affecting the global banking system
and financial markets, such as investment, nationalization, conservatorship, receivership and other intervention, whether under
existing legal authority or any new authority that may be created, or lack of action by governments and central banks, as well
as deterioration in the banks’ credit standing, could negatively impact these instruments, securities, transactions and investments
or limit our ability to trade with them. Any such losses or impairments to the carrying value of these investments or other changes
may materially and adversely affect our business and results of operations.

Risks Related to Our Business

Our International Operations Face Political, Legal, Operational and Other Risks, Including Exposure to Local and Regional
Economic Conditions, That Could Negatively Affect Those Operations or Our Profitability

Our international operations face political, legal, financial, operational and other risks. These operations may be materially
adversely affected by the actions and decisions of foreign authorities and regulators, such as through nationalization or
expropriation of assets; the imposition of limits on foreign ownership of local companies which may increase our dependence
on joint venture counterparties and/or impact how we account for our joint venture ownership interests; changes in laws (including
tax laws and regulations), their application or interpretation; political instability (including any resulting economic or trade
sanctions); dividend limitations; price controls; changes in applicable currency; currency exchange controls or other restrictions
that prevent us from transferring funds from these operations out of the countries in which they operate or converting local
currencies we hold into U.S. dollars or other currencies, as well as other adverse actions by foreign governmental authorities
and regulators, such as the retroactive application of new requirements on our current and prior activities or operations and the
imposition of regulations limiting our ability to distribute our products. Such actions may negatively affect our business in these
jurisdictions and could indirectly affect our business in other jurisdictions as well. Some of our foreign insurance operations
are, and are likely to continue to be, in emerging markets where these risks are heightened. For example, proposed reform of
the Chilean pension system, if enacted, may have a significant adverse effect on our business in Chile. See “Business — Regulation
— International Regulation.”

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The Trump Administration has discussed potentially putting in place a tax on goods and services imported into the United
States, including from countries in which we have international operations, such as Mexico. For example, President Trump has
in the past referred to renegotiating NAFTA, which had eliminated most trade tariffs between the United States, Canada and
Mexico. Our business in Mexico is not related to any trade agreements and is tied to the general economy and the growth of the
market. We cannot predict with certainty what proposals may be made in connection with international trade agreements or what
legislation or regulations may be introduced or enacted, or what impact any such legislation or regulations may have on our
business, results of operations and financial condition.

Part of our international insurance operations may be subject to assessments, generally based on their proportionate share
of business written in the relevant jurisdiction, for certain obligations to policyholders and claimants resulting from the insolvency
of insurance companies. We cannot predict the timing and scope of any assessments that may be made in the future, which may
materially affect the results of operations of our international insurance operations in particular quarterly or annual periods. See
“Business — Regulation — International Regulation” and “Quantitative and Qualitative Disclosures About Market Risk,” as
well as “— Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes in
Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.”

We have market presence in numerous countries and increased exposure to risks posed by local and regional economic
conditions. Concerns about the political and/or economic stability in the U.K., Italy, Mexico, Turkey and Puerto Rico have
recently contributed to global market volatility. Lack of legal certainty and stability in these regions exposes our operations there
to increased risk of disruption and to adverse or unpredictable actions by regulators and may make it more difficult for us to
enforce our contracts, which may negatively impact our business in these regions. See “Management’s Discussion and Analysis
of Financial Condition and Results of Operations — Industry Trends — Financial and Economic Environment.”

On June 23, 2016, the U.K. held a referendum regarding its membership in the EU, resulting in a narrow vote in favor of
leaving the EU. The U.K. subsequently indicated that it will initiate the withdrawal process by the end of March 2017. The
member withdrawal provisions in the applicable EU treaty have not been used before so it is unclear how the provisions will
work in practice. Assuming the U.K. initiates the withdrawal process by giving notice that it is withdrawing from the EU, the
relevant treaty provides that the U.K. and the EU will negotiate a withdrawal agreement during a maximum two-year period
(unless such period is extended by unanimous vote of the other EU member states). It is currently anticipated that the withdrawal
agreement would deal with the details of the immediate exit but would not set out final trade arrangements or deal comprehensively
with other potentially significant matters. Upon effectiveness of the withdrawal agreement, or, if no agreement is concluded in
the two-year period, at the end of the period, the U.K. will no longer be a member of the EU. In the meantime, however, the
U.K. remains a member of the EU with unchanged rights to access the single EU market in goods and services. Our U.K. business
model utilizes certain rights to operate cross-border insurance and investment operations which may be modified or eliminated
as a result of the U.K. exiting the EU. Operating expenses within our businesses could increase as a result of uncertainties during
the negotiation period and in the event of an eventual U.K. withdrawal.

We face substantial exposure to the Japanese economy given the size of our business there, and Japan continues to experience
overall sluggish economic performance. Economic slowdowns and volatility may impact other markets where we have a material
presence, including Latin America and Europe. Unfavorable economic conditions could adversely impact the demand for our
products, negatively impact earnings, adversely affect the performance of our investments or result in impairments, all of which
could have a material adverse effect on our business, results of operations and financial condition. See “— Economic Environment
and Capital Markets-Related Risks — If Difficult Conditions in the Global Capital Markets and the Economy Generally Persist,
They May Materially Adversely Affect Our Business and Results of Operations” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations — Investments — Current Environment — Selected Country Investments.”

Furthermore, we rely on local sales forces in these countries and may encounter labor problems resulting from workers’
associations and trade unions in some countries. If our business model is not successful in a particular country, we may lose all
or most of our investment in building and training the sales force in that country.

We are continuing to expand our international operations in certain markets where we operate and in selected new markets.
This may require considerable management time, as well as start-up expenses for market development before any significant
revenues and earnings are generated. The prospects of our business also may be materially and adversely affected if we are not
able to manage the growth of such international operations successfully. There can be no assurance that we will be successful
in managing such future growth. Further, operations in new foreign markets may achieve low margins or may be unprofitable,
and expansion in existing markets may be affected by local political, economic and market conditions. Therefore, as we expand
internationally, we may not achieve expected operating margins and our results of operations may be negatively impacted.

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Fluctuations in Foreign Currency Exchange Rates Could Negatively Affect Our Profitability

We are exposed to risks associated with fluctuations in foreign currency exchange rates against the U.S. dollar resulting
from our holdings of non-U.S. dollar denominated investments, investments in foreign subsidiaries, net income from foreign
operations and issuance of non-U.S. dollar denominated instruments, including guaranteed interest contracts and funding
agreements. In general, the weakening of foreign currencies versus the U.S. dollar will adversely affect the estimated fair value
of our non-U.S. dollar denominated investments, our investments in foreign subsidiaries, and our net income from foreign
operations. In addition, from time to time, various emerging market countries have experienced severe economic and financial
disruptions, including significant devaluations of their currencies. Our exposure to foreign currency exchange rate risk is
exacerbated by our investments in these emerging markets. See “Quantitative and Qualitative Disclosures About Market Risk.”

In addition, certain of our life and annuity products are exposed to foreign exchange rate risk. Payments under these contracts,
depending on the circumstances, may be required to be made in different currencies and may not be the legal tender in the
country whose law governs the particular product. Changes in exchange rate movements and the imposition of capital controls
may also directly impact the liability valuation that may not be entirely hedged. If the currency upon which expected future
payments are made strengthens, the liability valuation may increase, which may result in a reduction of net income.

Historically, we have matched substantially all of our foreign currency denominated liabilities in our foreign subsidiaries
with investments denominated in their respective foreign currency, which limits the effect of currency exchange rate fluctuations
on local operating results; however, fluctuations in such rates affect the translation of these results into our U.S. dollar basis
consolidated financial statements. Although we take certain actions to address this risk, including entering into foreign currency
derivatives, foreign currency exchange rate fluctuations could materially adversely affect our reported results due to unhedged
positions, asymmetrical and non-economic accounting resulting from derivative gains (losses) on non-qualifying hedges, or the
failure of hedges to effectively offset the impact of the foreign currency exchange rate fluctuation. Our reported results could
also be adversely affected if the economy of one or more of our foreign subsidiaries is determined to be “highly inflationary,”
generally defined by a cumulative inflation rate of approximately 100% or more over a three-year period.

We face significant exposure to risks associated with fluctuations in the yen/U.S. dollar exchange rate because we have
substantial operations in Japan and a large portion of our premiums and investment income in Japan are received in yen. Most
claims and expenses associated with our operations in Japan are also paid in yen and we primarily purchase yen-denominated
assets to support yen-denominated policy liabilities. These and other yen-denominated financial statement items are, however,
translated into U.S. dollars for financial reporting purposes. Accordingly, fluctuations in the yen/U.S. dollar exchange rate can
have a significant effect on our reported financial position and results of operations. Our Japan operation does assume some
currency exposure by backing a portion of surplus and yen-denominated liabilities with U.S. dollar assets. Although this represents
risk to our Japan operation, this activity reduces yen exposure at the enterprise level. Additionally, our Japan operation sells U.S.
dollar and Australian dollar life and annuity products to Japanese customers. We may experience elevated levels of early policy
terminations when the Japanese yen weakens against these currencies. While the cost of early policy terminations is offset by
surrender charges, foreign exchange rate fluctuations will impact both our sales volumes and the amount of business we have
in-force.

Due to our significant international operations, during periods when any foreign currency from which we derive our revenues
weakens (strengthens), translating amounts expressed in that currency into U.S. dollars causes fewer (more) U.S. dollars to be
reported. Any unrealized foreign currency translation adjustments (“FCTA”) are reported in accumulated other comprehensive
income (loss) (“AOCI”). The weakening of a foreign currency relative to the U.S. dollar will generally adversely affect the value
of investments in U.S. dollar terms and reduce the level of reserves denominated in that currency.

An Inability to Access Our Credit Facility Could Result in a Reduction in Our Liquidity and Lead to Downgrades in Our
Credit and Financial Strength Ratings

We rely on our unsecured credit facility maintained by MetLife, Inc. and MetLife Funding, Inc. (“MetLife Funding”), an
indirect wholly-owned subsidiary of MetLife, Inc. (the “Credit Facility”), as a potential source of liquidity. The availability of
this Credit Facility, which is currently $4.0 billion but which is expected to decrease to $3.0 billion upon the completion of the
proposed Separation, could be critical to our credit and financial strength ratings and our ability to meet our obligations as they
come due in a market when alternative sources of credit are tight. The Credit Facility contains certain administrative, reporting,
legal and financial covenants, including a requirement to maintain a specified minimum consolidated net worth. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources
— The Company — Liquidity and Capital Sources — Global Funding Sources — Credit and Committed Facilities” and Note 12
of the Notes to the Consolidated Financial Statements.

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Our right to borrow funds under the Credit Facility is subject to the fulfillment of certain important conditions, including
our compliance with all covenants, and our ability to borrow under the Credit Facility is also subject to the continued willingness
and ability of the lenders that are parties to the Credit Facility to provide funds. Our failure to comply with the covenants in the
Credit Facility or fulfill the conditions to borrowings, or the failure of lenders to fund their lending commitments (whether due
to insolvency, illiquidity or other reasons) in the amounts provided for under the terms of the Credit Facility, would restrict our
ability to access the Credit Facility when needed and, consequently, could have a material adverse effect on our financial condition
and results of operations.

We May Need to Fund Deficiencies in Our Closed Block; Assets Allocated to the Closed Block Benefit Only the Holders of
Closed Block Policies

MLIC’s plan of reorganization, as amended, established in connection with its demutualization, required that we establish
and operate an accounting mechanism, known as a closed block, to ensure that the reasonable dividend expectations of
policyholders who own individual participating whole life insurance policies of MLIC in force at the time of the demutualization
are met. We allocated assets to the closed block in an amount that will produce cash flows which, together with anticipated
revenue 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
tax, and to provide for the continuation of the policyholder dividend scales in effect for 1999, if the experience underlying such
scales continues, and for appropriate adjustments in such scales if the experience changes. The closed block assets, the cash
flows generated by the closed block assets and the anticipated revenue from the policies included in the closed block may not
be sufficient to provide for the benefits guaranteed under these policies. If they are not, we must fund the shortfall. Even if they
are sufficient, we may choose, for competitive reasons, to support policyholder dividend payments with our general account
funds.

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. In addition, to the extent that these amounts
are greater than the amounts estimated at the time the closed block was funded, dividends payable in respect of the policies
included in the closed block may be greater than they would be in the absence of a closed block. Any excess earnings will be
available for distribution over time only to closed block policyholders. See Note 7 of the Notes to the Consolidated Financial
Statements.

A Downgrade or a Potential Downgrade in Our Financial Strength or Credit Ratings Could Result in a Loss of Business
and Materially Adversely Affect Our Financial Condition and Results of Operations

Financial strength ratings are published by various Nationally Recognized Statistical Rating Organizations (“NRSROs”)
and similar entities not formally recognized as NRSROs. They indicate the NRSROs’ opinion regarding an insurance company’s
ability to meet contractholder and policyholder obligations, and are important to maintaining public confidence in our products
and our competitive position. See “Business — Company Ratings” for additional information regarding our financial strength
ratings.

Downgrades in our financial strength ratings or changes to our rating outlooks could have a material adverse effect on our

financial condition and results of operations in many ways, including:

•

reducing new sales of insurance products, annuities and other investment products;

adversely affecting our relationships with our sales force and independent sales intermediaries;

• materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders;

•

requiring us to post additional collateral under certain of our financing and derivative transactions;

requiring us to reduce prices for many of our products and services to remain competitive;

providing termination rights for the benefit of our derivative instrument counterparties;

adversely affecting our ability to obtain reinsurance at reasonable prices or at all;

limiting our access to the capital markets;

potentially increasing the cost of debt;

requiring us to post collateral; and

subjecting us to potentially increased regulatory scrutiny.

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In addition to the financial strength ratings of our insurance subsidiaries, various NRSROs also publish credit ratings for
MetLife, Inc. and several of its subsidiaries. Credit ratings indicate the NRSROs’ opinion regarding a debt issuer’s ability to
meet the terms of debt obligations in a timely manner and are important factors in our overall funding profile and ability to
access certain types of liquidity. See Note 9 of the Notes to the Consolidated Financial Statements for information regarding the
impact of a one-notch downgrade with respect to derivative transactions with credit rating downgrade triggers and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company
— Liquidity and Capital Uses — Pledged Collateral” for further information on the impact of a one-notch downgrade. See also
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources
— The Company — Capital — Rating Agencies.”

In view of the difficulties experienced by many financial institutions as a result of the financial crisis and ensuing global
recession, including our competitors in the insurance industry, we believe it is possible that the NRSROs will continue to heighten
the level of scrutiny that they apply to insurance companies, will continue to increase the frequency and scope of their credit
reviews, will continue to request additional information from the companies that they rate, and may adjust upward the capital
and other requirements employed in the models for maintenance of certain ratings levels. Our ratings could be downgraded at
any time and without notice by any NRSRO.

Reinsurance May Not Be Available, Affordable or Adequate to Protect Us Against Losses

As part of our overall risk management strategy, we purchase reinsurance for certain risks underwritten by our various
business segments. While reinsurance agreements generally bind the reinsurer for the life of the business reinsured at generally
fixed pricing, market conditions beyond our control determine the availability and cost of the reinsurance protection for new
business. In certain circumstances, the price of reinsurance for business already reinsured may also increase. For example, for
some of our group businesses under which the policies and related reinsurance are subject to periodic (typically annual) renewal,
prices may increase at any renewal. Also, for most of our traditional life reinsurance agreements, it is common for the reinsurer
to have a right to increase reinsurance rates on in-force business if there is a systematic deterioration of mortality in the market
as a whole. Any decrease in the amount of reinsurance will increase our risk of loss and any increase in the cost of reinsurance
will, absent a decrease in the amount of reinsurance, reduce our earnings. Accordingly, we may be forced to incur additional
expenses for reinsurance or may not be able to obtain sufficient reinsurance on acceptable terms, which could adversely affect
our ability to write future business or result in the assumption of more risk with respect to those policies we issue. See “Business
— Reinsurance Activity” and “— If the Counterparties to Our Reinsurance or Indemnification Arrangements or to the Derivatives
We Use to Hedge Our Business Risks Default or Fail to Perform, We May Be Exposed to Risks We Had Sought to Mitigate,
Which Could Materially Adversely Affect Our Financial Condition and Results of Operations.”

If the Counterparties to Our Reinsurance or Indemnification Arrangements or to the Derivatives We Use to Hedge Our
Business Risks Default or Fail to Perform, We May Be Exposed to Risks We Had Sought to Mitigate, Which Could Materially
Adversely Affect Our Financial Condition and Results of Operations

We use reinsurance, indemnification and derivatives to mitigate our risks in various circumstances. In general, reinsurance,
indemnification and derivatives do not relieve us of our direct liability to our policyholders, even when the reinsurer is liable to
us. Accordingly, we bear credit risk with respect to our reinsurers, indemnitors, counterparties and central clearinghouses. A
reinsurer’s, indemnitor’s, counterparty’s or central clearinghouse’s insolvency, inability or unwillingness to make payments
under the terms of reinsurance agreements, indemnity agreements or derivatives agreements with us or inability or unwillingness
to return collateral could have a material adverse effect on our financial condition and results of operations, including our
liquidity. See “Business — Reinsurance Activity.”

In addition, we use derivatives to hedge various business risks. We enter into a variety of derivatives, including options,
forwards, interest rate, credit default and currency swaps with a number of counterparties on a bilateral basis for uncleared OTC
derivatives and with clearing brokers and central clearinghouses for OTC-cleared derivatives. See “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Derivatives.” If our counterparties, clearing brokers or central
clearinghouses fail or refuse to honor their obligations under these derivatives, our hedges of the related risk will be ineffective.
This risk is more pronounced in light of the stresses suffered by financial institutions over the past few years. Such failure could
have a material adverse effect on our financial condition and results of operations.

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Differences Between Actual Claims Experience and Underwriting and Reserving Assumptions May Adversely Affect Our
Financial Results

Our earnings significantly depend upon the extent to which our actual claims experience is consistent with the assumptions
we use in setting prices for our products and establishing liabilities for future policy benefits and claims. Such amounts are
established based on estimates by actuaries of how much we will need to pay for future benefits and claims. To the extent that
actual claims experience is less favorable than the underlying assumptions we used in establishing such liabilities, we could be
required to reduce DAC and/or VOBA, increase our liabilities and/or incur higher costs.

Due to the nature of the underlying risks and the uncertainty associated with the determination of liabilities for future policy
benefits and claims, we cannot determine precisely the amounts which we will ultimately pay to settle our liabilities. Such
amounts may vary from the estimated amounts, particularly when those payments may not occur until well into the future. We
evaluate our liabilities periodically based on accounting requirements, which change from time to time, the assumptions used
to establish the liabilities, as well as our actual experience. If the liabilities originally established for future benefit payments
prove inadequate, we must increase them and/or reduce associated DAC and/or VOBA. Such adjustments could affect earnings
negatively and have a material adverse effect on our business, results of operations and financial condition. See “Business —
Policyholder Liabilities” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Policyholder Liabilities.” See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Summary of Critical Accounting Estimates — Deferred Policy Acquisition Costs and Value of Business Acquired,”
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting
Estimates — Derivatives,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Results of Operations — Consolidated Results — Year Ended December 31, 2016 Compared with the Year Ended December
31, 2015 — Actuarial Assumption Review” for further information regarding the manner in which policyholder behavior and
other events may differ from our assumptions and, thereby affect our financial results.

Catastrophes May Adversely Impact Liabilities for Policyholder Claims and Reinsurance Availability

Our insurance operations are exposed to the risk of catastrophic events. The extent of losses from a catastrophe is a function
of both the total amount of insured exposure in the area affected by the event and the severity of the event. Most catastrophes
are restricted to small geographic areas; however, hurricanes, earthquakes, tsunamis and man-made catastrophes may produce
significant damage or loss of life or property damage in larger areas, especially those that are heavily populated. Claims resulting
from catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially
reduce our profitability or harm our financial condition. In addition, catastrophic events could harm the financial condition of
issuers of obligations we hold in our investment portfolio, resulting in impairments to these obligations, and the financial condition
of our reinsurers, thereby increasing the probability of default on reinsurance recoveries. Large-scale catastrophes may also
reduce the overall level of economic activity in affected countries which could hurt our business and the value of our investments
or our ability to write new business. It is possible that increases in the value, caused by the effects of inflation or other factors,
and geographic concentration of insured lives or property, could increase the severity of claims we receive from future catastrophic
events.

Our life insurance operations are exposed to the risk of catastrophic mortality, such as a pandemic or other event that causes
a large number of deaths. Significant influenza pandemics have occurred three times in the last century; however, the likelihood,
timing, and severity of a future pandemic cannot be predicted. A significant pandemic could have a major impact on the global
economy or the economies of particular countries or regions, including travel, trade, tourism, the health system, food supply,
consumption, overall economic output and, eventually, on the financial markets. In addition, a pandemic that affected our
employees or the employees of our distributors or of other companies with which we do business could disrupt our business
operations. The effectiveness of external parties, including governmental and non-governmental organizations, in combating
the spread and severity of such a pandemic could have a material impact on the losses we experience. In our group insurance
operations, a localized event that affects the workplace of one or more of our group insurance customers could cause a significant
loss due to mortality or morbidity claims. These events could cause a material adverse effect on our results of operations in any
period and, depending on their severity, could also materially and adversely affect our financial condition.

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Our property & casualty businesses have experienced, and will likely in the future experience, catastrophe losses that may
have a material adverse impact on their business, results of operations and financial condition. Although we make every effort
to limit our exposure to catastrophic risks through volatility management and reinsurance programs, these efforts do not eliminate
all risk. Catastrophes can be caused by various events, including 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. Historically, most of our property & casualty catastrophe-related claims have related to homeowners coverages. However,
catastrophes may also affect other property & casualty coverages. Due to their nature, we cannot predict the incidence, timing
and severity of catastrophes. In addition, changing climate conditions, primarily rising global temperatures, may increase the
frequency and severity of natural catastrophes such as hurricanes, tornadoes and floods.

We have hurricane exposure in coastal sections of the northeastern U.S. (including lower New York, New Jersey, Connecticut,
Rhode Island and Massachusetts), the south Atlantic states (including Virginia, North Carolina, South Carolina, Georgia and
Florida) and the Gulf Coast (including Alabama, Mississippi, Louisiana and Texas). We also have some earthquake exposure,
primarily along the New Madrid fault line in the central U.S. and in the Pacific Northwest.

Consistent with industry practice and accounting standards, we establish liabilities for claims arising from a catastrophe
only after assessing the probable losses arising from the event. We cannot be certain that the liabilities we have established will
be adequate to cover actual claim liabilities. From time to time, states have passed legislation that has the effect of limiting the
ability of insurers to manage risk, such as legislation restricting an insurer’s ability to withdraw from catastrophe-prone areas.
While we attempt to limit our exposure to acceptable levels, subject to restrictions imposed by insurance regulatory authorities,
a catastrophic event or multiple catastrophic events could have a material adverse effect on our business, results of operations
and financial condition.

Most of the jurisdictions in which our U.S. insurance subsidiaries are admitted to transact business require life, health, and
property & casualty insurers doing business within the jurisdiction to participate in guaranty associations. These associations
are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers,
who may become impaired, insolvent or fail, for example, following the occurrence of one or more catastrophic events. 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 is
engaged. In addition, certain states have government owned or controlled organizations providing life, health, and property &
casualty insurance to their citizens. The activities of such organizations could also place additional stress on the adequacy of
guaranty fund assessments. Many of these organizations also have the power to levy assessments similar to those of the guaranty
associations described above. Some states permit member insurers to recover assessments paid through full or partial premium
tax offsets. See “Business — Regulation — U.S. Regulation — Insurance Regulation — Guaranty Associations and Similar
Arrangements” and “Business — Regulation — International Regulation.”

While in the past five years, the aggregate assessments levied against MetLife have not been material, it is possible that a
large catastrophic event could render such guaranty funds inadequate and we may be called upon to contribute additional amounts,
which may have a material impact on our financial condition or results of operations in a particular period. We have established
liabilities for guaranty fund assessments that we consider adequate, but additional liabilities may be necessary. See Note 21 of
the Notes to the Consolidated Financial Statements.

Our ability to manage this risk and the profitability of our property & casualty, health and life insurance businesses depends
in part on our ability to obtain catastrophe reinsurance, which may not be available at commercially acceptable rates in the future.
See “— Reinsurance May Not Be Available, Affordable or Adequate to Protect Us Against Losses.”

Our Statutory Life Insurance Reserve Financings May Be Subject to Cost Increases and New Financings May Be Subject
to Limited Market Capacity

We currently utilize capital markets solutions to finance a portion of our statutory reserve requirements for several products,
including, but not limited to, our level premium term life subject to the NAIC Model Regulation Valuation of Life Insurance
Policies (commonly referred to as XXX), and universal and variable life policies with secondary guarantees (“ULSG”) subject
to NAIC Actuarial Guideline 38 (commonly referred to as AXXX), as well as MLIC’s closed block. While we have financing
facilities in place for certain previously written business, certain of these facilities are subject to cost increases upon the occurrence
of specified ratings downgrades of MetLife or are subject to periodic re-pricing. Any resulting cost increases could negatively
impact our financial results.

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Future capacity for these statutory reserve funding structures in the marketplace is not guaranteed. Currently, state insurance
regulators and the NAIC are investigating the use of captive reinsurers and offshore entities to reinsure insurance risks. See “—
Regulatory and Legal Risks — Our Insurance and Brokerage Businesses are Highly Regulated, and Changes in Regulation and
in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.” Insurance regulators in a few
states, including New York and California, have imposed a moratorium on new reinsurance transactions between life insurers
domiciled in those states and captive reinsurers. If additional state insurance regulators determine to restrict the use of captive
reinsurers for purposes of funding reserve requirements or capacity in the capital markets otherwise becomes unavailable for a
prolonged period of time, thereby hindering our ability to obtain funding for these new structures, our ability to continue the
financing of our statutory reserve requirements for our previously written business in a cost effective manner may be impacted.
After the Separation, statutory life financing will be less of a risk factor, given our discontinuance of retail life sales.

Competitive Factors May Adversely Affect Our Market Share and Profitability

We believe competition amongst insurance companies is based on a number of factors, including service, product features,
scale, price, financial strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition. We compete
globally with a large number of other insurance companies, as well as non-insurance financial services companies, such as banks,
broker-dealers and asset managers, for individual consumers, employers and other group customers and agents and other
distributors of insurance and investment products. Some of these companies offer a broader array of products, have more
competitive pricing or, with respect to other insurance companies, have higher claims paying ability ratings. Some may also
have greater financial resources with which to compete. In some circumstances, national banks that sell annuity products of life
insurers may also have pre-existing customer bases for financial services products. Additionally, many of our group insurance
products are underwritten annually. There is a risk that group purchasers may be able to obtain more favorable terms from
competitors than they could renewing coverage with us. These competitive pressures may adversely affect the persistency of
these and other products, as well as our ability to sell our products in the future. Furthermore, the investment management and
securities brokerage businesses have relatively few barriers to entry and continually attract new entrants. See “Business —
Competition.”

The insurance industry distributes many of its individual products through other financial institutions such as banks and
broker-dealers. An increase in bank and broker-dealer consolidation activity may negatively impact the industry’s sales, and
such consolidation could increase competition for access to distributors, result in greater distribution expenses and impair our
ability to market insurance products to our current customer base or to expand our customer base. Consolidation of distributors
and/or other industry changes may also increase the likelihood that distributors will try to renegotiate the terms of any existing
selling agreements to terms less favorable to us.

In addition, since numerous aspects of our business are subject to regulation, legislative and other changes affecting the
regulatory environment for our business may have, over time, the effect of supporting or burdening some aspects of the financial
services industry more than others. This can affect our competitive position within the life insurance industry and within the
broader financial services industry. See “Business — Regulation,” “— Regulatory and Legal Risks — Our Insurance and
Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies May
Reduce Our Profitability and Limit Our Growth,” and “— Regulatory and Legal Risks — Changes in U.S. Federal, State
Securities and State Insurance Laws and Regulations May Affect Our Operations and Our Profitability.”

If Our Business Does Not Perform Well, We May Be Required to Recognize an Impairment of Our Goodwill or Other Long-
Lived Assets or to Establish a Valuation Allowance Against the Deferred Income Tax Asset, Which Could Adversely Affect
Our Results of Operations or Financial Condition

We perform our goodwill impairment testing 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 under
certain circumstances.

The estimated fair value of the reporting unit is impacted by the performance of the business, which may be adversely
impacted by prolonged market declines. If it is determined that the goodwill has been impaired, we must write down the goodwill
by the amount of the impairment, with a corresponding charge to net income. Such writedowns could have an adverse effect on
our results of operations or financial position. See “Management’s Discussion and Analysis of Financial Condition and Results
of Operations — Summary of Critical Accounting Estimates — Goodwill” and Notes 1 and 11 of the Notes to the Consolidated
Financial Statements.

Long-lived assets, including assets such as real estate, also require impairment testing. This testing is done to determine
whether changes in circumstances indicate that we will be unable to recover the carrying amount of the asset group. Such
writedowns could have a material adverse effect on our results of operations or financial position.

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Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities.
Deferred tax assets are assessed periodically by management to determine if they are realizable. Factors in management’s
determination include the performance of the business including the ability to generate future taxable income. If, based on
available information, it is more likely than not that the deferred income tax asset will not be realized then a valuation allowance
must be established with a corresponding charge to net income. Such charges could have a material adverse effect on our results
of operations or financial position. In addition, changes in the corporate tax rates could affect the value of our deferred tax assets
and may require a write-off of some of those assets. See “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Summary of Critical Accounting Estimates — Income Taxes.”

If Our Business Does Not Perform Well or if Actual Experience Versus Estimates Used in Valuing and Amortizing DAC,
Deferred Sales Inducements (“DSI”) and VOBA Vary Significantly, We May Be Required to Accelerate the Amortization
and/or Impair the DAC, DSI and VOBA Which Could Adversely Affect Our Results of Operations or Financial Condition

We incur significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly
to the successful acquisition of new and renewal insurance business are deferred and referred to as DAC. Bonus amounts credited
to certain policyholders, either immediately upon receiving a deposit or as excess interest credits for a period of time, are deferred
and referred to as DSI. VOBA 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. DAC, DSI and VOBA related to fixed and variable universal life and deferred annuity contracts are amortized
in proportion to actual and expected future gross profits and for most participating contracts in proportion to actual and expected
future gross margins. The amount of future gross profit or margin is dependent principally on investment returns in excess of
the amounts credited to policyholders, mortality, morbidity, persistency, interest crediting rates, dividends paid to policyholders,
expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as
inflation. Of these factors, we anticipate that investment returns are most likely to impact the rate of amortization of DAC for
the aforementioned contracts.

If actual gross profits or margins are less than originally expected, then the amortization of such costs would be accelerated
in the period the actual experience is known and would result in a charge to net income. Significant or sustained equity market
declines could result in an acceleration of amortization of DAC, DSI and VOBA related to variable annuity and variable universal
life contracts, resulting in a charge to net income. Such adjustments could have a material adverse effect on our results of
operations or financial condition. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Industry Trends — Impact of a Sustained Low Interest Rate Environment” for a discussion of how significantly lower spreads
may cause us to accelerate amortization, thereby reducing net income in the affected reporting period.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical
Accounting Estimates — Deferred Policy Acquisition Costs and Value of Business Acquired” and Note 1 of the Notes to the
Consolidated Financial Statements for further consideration of DAC and VOBA.

Guarantees Within Certain of Our Products May Decrease Our Earnings, Increase the Volatility of Our Results, Result in
Higher Risk Management Costs and Expose Us to Increased Counterparty Risk

Certain of our variable annuity products include guaranteed benefits, including guaranteed minimum death benefits
(“GMDBs”), guaranteed minimum withdrawal benefits (“GMWBs”), guaranteed minimum accumulation benefits (“GMABs”),
and guaranteed minimum income benefits (“GMIBs”). Certain of our interest rate sensitive products include a minimum crediting
rate feature which could be guaranteed for a period of time or life time of the policies. These guarantees are designed to protect
policyholders against significant downturns in equity markets and interest rates. Any such periods of significant and sustained
downturns in equity markets, increased equity volatility, or reduced interest rates could result in an increase in the valuation of
our liabilities associated with those products. An increase in these liabilities would result in a decrease in our net income.

We use derivatives and other risk management strategies to hedge the economic exposure inherent in these liabilities. These
economically effective hedges do not always qualify for hedge accounting treatment, and, as result, such non-qualifying
derivatives may introduce volatility in the results of our operations, including net income, to the extent the financial measurement
of the hedged liability does not fully reflect the sensitivity to the underlying economic exposure.

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We also use derivatives and other risk management strategies to directly mitigate the volatility in net income associated
with certain of these liabilities that are measured at fair value. These strategies involve the use of reinsurance and derivatives,
which may not be completely effective. For example, in the event that reinsurers, derivative counterparties or central
clearinghouses are unable or unwilling to pay, we remain liable for the guaranteed benefits. See “— If the Counterparties to Our
Reinsurance or Indemnification Arrangements or to the Derivatives We Use to Hedge Our Business Risks Default or Fail to
Perform, We May Be Exposed to Risks We Had Sought to Mitigate, Which Could Materially Adversely Affect Our Financial
Condition and Results of Operations.”

In addition, hedging instruments may not effectively offset the costs of guarantees or may otherwise be insufficient in
relation to our obligations. Furthermore, we are subject to the risk that changes in policyholder behavior or mortality, combined
with adverse market events, produce economic losses not addressed by the risk management techniques employed. These,
individually or collectively, may have a material adverse effect on our results of operations, including net income, capitalization,
financial condition or liquidity, including our ability to receive dividends from our operating insurance companies. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities — Variable
Annuity Guarantees” and Note 1 of the Notes to the Consolidated Financial Statements for further consideration of the risks
associated with guaranteed benefits.

Capital-Related Risks

Legal and Regulatory Restrictions and Uncertainty and Restrictions Under the Terms of Certain of Our Securities May
Prevent Us from Repurchasing Our Stock and Paying Dividends at the Level We Wish

The declaration and payment of dividends is subject to the discretion of our Board of Directors, and will depend on our
financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of dividends
by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by the Board. There is no requirement or assurance
that we will declare and pay any dividends. If MetLife, Inc.’s designation as a non-bank SIFI is reinstated, we also may be
subject to restrictions arising from Federal Reserve regulation, including capital planning and stress testing requirements. The
capital requirements that will apply to non-bank SIFIs are unclear. Furthermore, if additional capital requirements are imposed
on MetLife, Inc. as a G-SII, its ability to pay dividends could be reduced by any such additional capital requirements that might
be imposed. See “— Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes
in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.”

In addition, our ability to pay dividends on our common stock and repurchase our common stock is subject to restrictions
under the terms of our preferred stock, junior subordinated debentures and trust securities. These instruments have so called
“dividend stopper” provisions for situations where we may be experiencing financial stress. “Junior subordinated debentures”
include MetLife’s Fixed-to-Floating Exchangeable Surplus Trust Securities, which are exchangeable for junior subordinated
debentures, and which contain terms with the same substantive effects for these purposes as do the terms of MetLife, Inc.’s
junior subordinated debentures. In addition, our ability to pay dividends on our preferred stock and interest on our junior
subordinated debentures is also restricted by the terms of those securities.

We may also be restricted from time to time in our ability to repurchase shares or to enter into share repurchase programs
under Rule 10b5-1 of the Exchange Act. That rule requires, among other things, that we establish any share repurchase program
in good faith at a time when we are not aware of any material non-public information in order for us to have an affirmative
defense against accusations of insider trading. Therefore, we may be unable to repurchase shares or to enter into share repurchase
programs during various periods of time, including periods of significant corporate reorganization such as a spin-off or a sale
of a substantial portion of the Company.

Regulatory Restrictions

MetLife, Inc. may not be able to pay dividends if it does not receive sufficient funds from its operating subsidiaries, which
are themselves subject to separate regulatory restrictions on their ability to pay dividends. See “— As A Holding Company,
MetLife, Inc. Depends on the Ability of Its Subsidiaries to Pay Dividends, a Major Component of Holding Company Free
Cash Flow.” Our ability to pay dividends, repurchase common stock or other securities or engage in other transactions that
could affect our capital may also be affected if MetLife, Inc. is reinstated as a non-bank SIFI or if restrictions applicable to
G-SIIs are imposed upon us. See “— Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly
Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit
Our Growth,” “Business — Regulation — U.S. Regulation — Potential Regulation as a Non-Bank SIFI” and “Business —
Regulation — International Regulation — Global Systemically Important Insurers.”

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“Dividend Stopper” Provisions in Our Preferred Stock and Junior Subordinated Debentures

Certain terms of our preferred stock and our junior subordinated debentures may prevent us from repurchasing our common
stock or paying dividends on our common stock in certain circumstances. MetLife, Inc. also has entered into certain replacement
capital covenants. These covenants limit our ability to eliminate these restrictions through the repayment, redemption or
purchase of preferred stock or junior subordinated debentures by requiring MetLife, with some limitations, to receive cash
proceeds during a specified period from the sale of specified replacement securities prior to any repayment, redemption or
purchase. See Note 14 of the Notes to the Consolidated Financial Statements for a description of such covenants in effect with
respect to junior subordinated debentures.

If we have not paid the full dividends on our preferred stock for the latest completed dividend period, we may not repurchase
or pay dividends on our common stock during a dividend period. Under our junior subordinated debentures, if we have not
paid in full the accrued interest through the most recent interest payment date on our junior subordinated debentures, we may
not repurchase or pay dividends on our common stock or other capital stock (including the preferred stock), subject to certain
exceptions.

Trigger Events for the Restrictions on the Payment of Dividends on Our Preferred Stock and Restrictions on the Payment
of Interest on Our Junior Subordinated Debentures

In addition, the preferred stock and the junior subordinated debentures contain provisions that would automatically suspend
the payment of preferred stock dividends and interest on junior subordinated debentures if MetLife, Inc. fails to meet certain
tests (“Trigger Events”). In such cases, and subject to the terms of the instruments, MetLife, Inc. could make payments up to
the amount of net proceeds from sales of (i) common stock during the 90 days preceding the dividend declaration date or (ii)
common stock or certain kinds of warrants to purchase common stock generally during the 180 days prior to the interest
payment date (the “New Equity Proceeds”).

A “Trigger Event” would occur if:

•

the RBC ratio of MetLife’s largest U.S. insurance subsidiaries in the aggregate (as defined in the applicable instrument)
were to be less than 175% of the company action level based on the subsidiaries’ prior year annual financial statements
filed (generally around March 1) with state insurance commissioners; or

at the end of a quarter (“Final Quarter End Test Date”), consolidated GAAP net income for the four-quarter period
ending two quarters before such quarter-end (the “Preliminary Quarter End Test Date”) is zero or a negative amount
and the consolidated GAAP stockholders’ equity, minus AOCI (the “adjusted stockholders’ equity amount”), as of the
Final Quarter End Test Date and the Preliminary Quarter End Test Date, declined by 10% or more from its level 10
quarters before the Final Quarter End Test Date (the “Benchmark Quarter End Test Date”).

The Trigger Event would continue until there is no longer a Trigger Event at the specified time, and the adjusted
stockholders’ equity amount is no longer 10% or more below its level at each Benchmark Quarter End Test Date that is
associated with a “Trigger Event.”

We currently expect that, when we separate Brighthouse Financial, our adjusted stockholders’ equity amount will decline
by at least 10% in the quarter of the Separation. The adjusted stockholders’ equity amount on the Preliminary Quarter End
Test Date at the end of that quarter, and seven subsequent quarters, will be at least 10% less than the amount on the applicable
Benchmark Quarter End Test Date (in the absence of some other increase in the adjusted stockholders’ equity amount). If, on
any of those Preliminary Quarter End Test Dates, four quarter consolidated GAAP net income is zero or less, a “Trigger Event”
would occur unless, prior to the corresponding Final Quarter End Test Date, the adjusted stockholders’ equity amount is greater
than 90% of the amount of the adjusted stockholders’ equity on the Benchmark Quarter End Test Date.

After a Trigger Event, we would only be permitted to pay dividends on the preferred stock and interest on the junior
subordinated debentures to the extent the New Equity Proceeds were sufficient to do so. In addition, if the New Equity Proceeds
were insufficient to make such payments, the “dividend stopper” provisions would come into effect and we would be unable
to repurchase or pay dividends on our common stock.

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If, for example, we complete the Separation in the third quarter of 2017 and the four quarter consolidated GAAP net
income is zero or less at the end of that quarter (the Preliminary Quarter End Test Date), a Trigger Event may occur that would
restrict payments of dividends on the preferred stock and interest on the junior subordinated debentures beginning in the
second quarter of 2018 after the Final Quarter End Test Date. In that case, we would have to suspend our dividend payments
on, and repurchases of, our common stock, unless we could make payments in full on the preferred and the junior subordinated
debentures, in each case, using the available applicable New Equity Proceeds. The payment restrictions on the preferred and
junior subordinated debt instruments, and the restrictions on repurchases of and payments of dividends on common stock,
could continue until there is no longer a Trigger Event and the adjusted stockholders’ equity amount is greater than 90% of
its level at the Benchmark Quarter End Test Date, which in this example would be the level at the end of the third quarter of
2015.

We are considering measures that would reduce or eliminate these potential risks. Among other possibilities, we may
seek to exclude the impact of the Separation on shareholders’ equity for purposes of the restrictions on payments of dividends
and interest in respect of the preferred stock and junior subordinated debentures, respectively. However, there can be no
assurance we will take these or any other mitigating actions.

Dividends on Our Preferred Stock Are Subject to Declaration by Our Board of Directors

In addition, dividends on our preferred stock are subject to declaration each quarter by our Board of Directors. If our
Board of Directors does not declare dividends on the preferred stock for any quarterly dividend period, the “dividend stopper”
provisions in our preferred stock would prevent us from repurchasing or paying dividends on our common stock for that
period.

Optional Deferral of Interest on the Junior Subordinated Debentures

The junior subordinated debentures provide that we may, at our option and provided that certain conditions are met, defer
payment of interest without giving rise to an event of default for periods of up to 10 years. In that case, after five years MetLife,
Inc. would be obligated to use commercially reasonable efforts to sell equity securities to raise proceeds to pay the interest.
We would not be subject to limitations on the number of deferral periods that we could begin, so long as all accrued and unpaid
interest is paid with respect to prior deferral periods. If we were to defer payments of interest, the “dividend stopper” provisions
in the junior subordinated debentures would thus prevent us from repurchasing or paying dividends on our common stock or
other capital stock (including the preferred stock) during the period of deferral, subject to exceptions.

See Note 16 of the Notes to the Consolidated Financial Statements for additional information about these restrictions.

As a Holding Company, MetLife, Inc. Depends on the Ability of Its Subsidiaries to Pay Dividends, a Major Component of
Holding Company Free Cash Flow

MetLife, Inc. is a holding company for its insurance and financial subsidiaries and does not have any significant operations
of its own. Dividends from its subsidiaries and permitted payments to it under its tax sharing agreement with its subsidiaries are
its principal sources of cash to meet its obligations and to pay preferred and common stock dividends. If the cash MetLife, Inc.
receives from its subsidiaries is insufficient for it to fund its debt service and other holding company obligations, MetLife, Inc.
may be required to raise cash through the incurrence of debt, the issuance of additional equity or the sale of assets.

Dividends that MetLife, Inc. expects to receive from Brighthouse and other companies in connection with the Separation
are subject to contingencies that include investor interest, ratings actions, and the macroeconomic environment, among others.
These contingencies may affect Brighthouse’s ability to incur debt to pay a portion of these dividends and otherwise affect those
companies’ ability to pay these dividends.

The payment of dividends and other distributions to MetLife, Inc. by its U.S. insurance subsidiaries is regulated by insurance
laws and regulations. In general, dividends in excess of prescribed limits require insurance regulatory approval. In addition,
insurance regulators may prohibit the payment of dividends or other payments by its insurance subsidiaries to MetLife, Inc. if
they determine that the payment could be adverse to our policyholders or contractholders. The payment of dividends and other
distributions by insurance companies is also influenced by business conditions and rating agency considerations. See “Business
— Regulation — U.S. Regulation — Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquidity and Capital Sources — Dividends
from Subsidiaries.” See also “— Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated,
and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth.”

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Any payment of interest, dividends, distributions, loans or advances by our foreign subsidiaries and branches to MetLife,
Inc. could be subject to taxation, insurance regulatory or other restrictions on dividends or repatriation of earnings under applicable
law, monetary transfer restrictions and foreign currency exchange regulations in the jurisdiction in which such foreign subsidiaries
operate. See “Business — Regulation — International Regulation” and “— Risks Related to Our Business — Our International
Operations Face Political, Legal, Operational and Other Risks, Including Exposure to Local and Regional Economic Conditions,
That Could Negatively Affect Those Operations or Our Profitability.”

From time to time, MetLife, Inc. or its subsidiaries may establish net worth maintenance or other support agreements with
other subsidiaries. Those commitments may limit such supported subsidiary’s ability to pay MetLife, Inc. dividends, or require
MetLife, Inc. or another subsidiary to transfer capital to such supported subsidiary, in either case limiting capital that is available
for other purposes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity
and Capital Resources — MetLife, Inc. — Liquidity and Capital Uses — Support Agreements.”

Dividends from operating subsidiaries are a major component of holding company free cash flow. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures.” If
MetLife, Inc.’s operating subsidiaries were unable to make expected dividend payments to MetLife, Inc., we may be unable to
meet our free cash flow goals and our ability to distribute cash to shareholders could be adversely affected.

Operational Risks

Our Risk Management Policies and Procedures May Leave Us Exposed to Unidentified or Unanticipated Risk, Which Could
Negatively Affect Our Business

Our enterprise risk management program is designed to mitigate material risks and loss to the Company. We have developed
and continue to develop our risk management policies and procedures to reflect the ongoing review of our risks and expect to
continue to do so in the future. Nonetheless, our policies and procedures may not be comprehensive and may not identify every
risk to which we are exposed. Many of our methods for managing risk and exposures are based upon the use of observed historical
market behavior to model or project potential future exposure.

Models used by our business are based on assumptions and projections which may be inaccurate. Business decisions based
on incorrect or misused model output and reports could have a material adverse impact on our results of operations. Model risk
may be the result of a model being misspecified for its intended purpose, being misused or producing incorrect or inappropriate
results. Models used by our business may not operate properly and could contain errors related to model inputs, data, assumptions,
calculations, or output. We perform model validations which are conducted by experienced professionals with the requisite
authority and technical ability to effectively challenge the models. The ongoing model validation process could give rise to
adjustments to models that may adversely impact our results of operations. As a result, these methods may not fully predict
future exposures, which can be significantly greater than our historical measures indicate.

Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe
occurrence or other matters that are publicly available or otherwise accessible to us. This information may not always be accurate,
complete, up-to-date or properly evaluated. Furthermore, there can be no assurance that we can effectively review and monitor
all risks or that all of our employees will follow our risk management policies and procedures, nor can there be any assurance
that our risk management policies and procedures will enable us to accurately identify all risks and limit our exposures based
on our assessments. In addition, we may have to implement more extensive and perhaps different risk management policies and
procedures under pending regulations. See “Business — Regulation — U.S. Regulation — Potential Regulation as a Non-Bank
SIFI,” “Business — Regulation — International Regulation — Global Systemically Important Insurers” and “Quantitative and
Qualitative Disclosures About Market Risk.”

The Continued Threat of Terrorism and Ongoing Military Actions May Adversely Affect the Value of Our Investment Portfolio
and the Level of Claim Losses We Incur

The continued threat of terrorism, both within the U.S. and abroad, ongoing military and other actions and heightened
security measures in response to these types of threats may cause significant volatility in global financial markets and result in
loss of life, property damage, additional disruptions to commerce and reduced economic activity. The value of assets in our
investment portfolio may be adversely affected by declines in the credit and equity markets and reduced economic activity
caused by the continued threat of terrorism. Companies in which we maintain investments may suffer losses as a result of
financial, commercial or economic disruptions and such disruptions might affect the ability of those companies to pay interest
or principal on their securities or mortgage loans. Terrorist actions also could disrupt our operations centers in the U.S. or abroad
and result in higher than anticipated claims under our insurance policies. See “— Economic Environment and Capital Markets-
Related Risks — If Difficult Conditions in the Global Capital Markets and the Economy Generally Persist, They May Materially
Adversely Affect Our Business and Results of Operations.”

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The Failure in Cyber- or Other Information Security Systems, as well as the Occurrence of Events Unanticipated in Our
Disaster Recovery Systems and Management Continuity Planning, Could Result in a Loss or Disclosure of Confidential
Information, Damage to Our Reputation and Impairment of Our Ability to Conduct Business Effectively

Our business is highly dependent upon the effective operation of our computer systems. We rely on these systems throughout
our business for a variety of functions, including processing claims, transactions and applications, providing information to
customers and distributors, performing actuarial analyses and maintaining financial records. We also retain confidential and
proprietary information on our computer systems and we rely on sophisticated technologies to maintain the security of that
information. Our computer systems have been, and will likely continue to be, subject to computer viruses or other malicious
codes, unauthorized access, cyberattacks or other computer-related penetrations. While, to date, MetLife has not experienced a
material breach of cybersecurity, administrative and technical controls and other preventive actions we take to reduce the risk
of cyber-incidents and protect our information technology may be insufficient to prevent physical and electronic break-ins,
cyber-attacks or other security breaches to our computer systems. In some cases, such physical and electronic break-ins, cyber-
attacks or other security breaches may not be immediately detected. This may impede or interrupt our business operations and
could adversely affect our business, financial condition and results of operations. In addition, the availability and cost of insurance
for operational and other risks relating to our business and systems may change and any such change may affect our results of
operations.

In the event of a disaster such as a natural catastrophe, epidemic, industrial accident, blackout, computer virus, terrorist
attack, cyberattack or war, unanticipated problems with our disaster recovery systems could have a material adverse impact on
our ability to conduct business and on our results of operations and financial position, particularly if those problems affect our
computer-based data processing, transmission, storage and retrieval systems and destroy valuable data. In addition, in the event
that a significant number of our managers, or employees generally, were unavailable following a disaster, our ability to effectively
conduct business could be severely compromised. These interruptions also may interfere with our suppliers’ ability to provide
goods and services and our employees’ ability to perform their job responsibilities.

The failure of our computer systems and/or our disaster recovery plans for any reason could cause significant interruptions
in our operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal
information relating to our customers. Such a failure could harm our reputation, subject us to regulatory sanctions and legal
claims, lead to a loss of customers and revenues and otherwise adversely affect our business and financial results. Although we
conduct due diligence, negotiate contractual provisions and, in many cases, conduct periodic reviews of our vendors, distributors,
and other third parties that provide operational or information technology services to us to confirm compliance with MetLife’s
information security standards, the failure of such third parties’ computer systems and/or their disaster recovery plans for any
reason might cause significant interruptions in our operations and result in a failure to maintain the security, confidentiality or
privacy of sensitive data, including personal information relating to our customers. Such a failure could harm our reputation,
subject us to regulatory sanctions and legal claims, lead to a loss of customers and revenues and otherwise adversely affect our
business and financial results. While we maintain cyber liability insurance that provides both third-party liability and first-party
liability coverages, our insurance may not be sufficient to protect us against all losses. MetLife, Inc. and its subsidiaries maintain
a primary cybersecurity and privacy liability insurance policy with a limit of $15 million, and have additional coverage for
cybersecurity and privacy liability available under blended professional liability excess coverage policies with a total limit of
$210 million. There can be no assurance that our information security policies and systems in place can prevent unauthorized
use or disclosure of confidential information, including nonpublic personal information.

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Any Failure To Protect The Confidentiality Of Client Information Could Adversely Affect Our Reputation And Have A
Material Adverse Effect On Our Business, Financial Condition And Results Of Operations

Pursuant to U.S. federal and state laws, and laws of other jurisdictions in which we operate, various government agencies
have established rules protecting the privacy and security of personal information. In addition, most U.S. states and a number
of jurisdictions outside the United States, have enacted laws, which vary significantly from jurisdiction to jurisdiction, to safeguard
the privacy and security of personal information. Many of our employees have access to, and routinely process, personal
information of clients through a variety of media, including information technology systems. We rely on various internal processes
and controls to protect the confidentiality of client information that is accessible to, or in the possession of, our company and
our employees. It is possible that an employee could, intentionally or unintentionally, disclose or misappropriate confidential
client information or our data could be the subject of a cybersecurity attack. If we fail to maintain adequate internal controls or
if our employees fail to comply with our policies and procedures, misappropriation or intentional or unintentional inappropriate
disclosure or misuse of client information could occur. Such internal control inadequacies or non-compliance could materially
damage our reputation or lead to civil or criminal penalties, which, in turn, could have a material adverse effect on our business,
financial condition and results of operations. In addition, we analyze customer data to better manage our business. There has
been increased scrutiny, including from U.S. state regulators, regarding the use of “big data” techniques such as price optimization.
We cannot predict what, if any, actions may be taken with regard to “big data,” but any inquiries could cause reputational harm
and any limitations could have a material impact on our business, financial condition and results of operations.

Our Associates May Take Excessive Risks Which Could Negatively Affect Our Financial Condition and Business

As an insurance enterprise, we are in the business of accepting certain risks. The associates who conduct our business,
including executive officers and other members of management, sales managers, investment professionals, product managers,
sales agents, wholesalers, underwriters, and other associates, do so in part by making decisions and choices that involve exposing
us to risk. These include decisions such as setting underwriting guidelines and standards, product design and pricing, determining
what assets to purchase for investment and when to sell them, which business opportunities to pursue, and other decisions. We
endeavor, in the design and implementation of our compensation programs and practices, to avoid giving our associates incentives
to take excessive risks; however, associates may take such risks regardless of the structure of our compensation programs and
practices. Similarly, although we employ controls and procedures designed to monitor associates’ business decisions and prevent
us from taking excessive risks, and to prevent employee misconduct, these controls and procedures may not be effective. If our
associates take excessive risks, the impact of those risks could harm our reputation and have a material adverse effect on our
financial condition and business operations.

General Risks

MetLife, Inc.’s Board of Directors May Influence the Outcome of Stockholder Votes on Many Matters Due to the Voting
Provisions of the MetLife Policyholder Trust

Under the Plan, we established the MetLife Policyholder Trust to hold the shares of MetLife, Inc. common stock allocated
to eligible policyholders not receiving cash or policy credits under the plan. As of February 23, 2017, the Trust held 162,077,300
shares, or 14.9%, of the outstanding shares of MetLife, Inc. common stock. Because of voting provisions of the Trust and the
number of shares held by it, the Trust may affect the outcome of matters brought to a stockholder vote. Except on votes regarding
certain fundamental corporate actions described below, the trustee will vote all of the shares of common stock held in the Trust
in accordance with the recommendations given by MetLife, Inc.’s Board of Directors to its stockholders or, if the Board gives
no such recommendations, as directed by the Board. As a result of the voting provisions of the Trust, the Board of Directors
may be able to influence the outcome of votes on matters submitted to a vote of stockholders, excluding certain fundamental
corporate actions, so long as the Trust holds a substantial number of shares of common stock.

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If the vote relates to fundamental corporate actions specified in the Trust, the trustee will solicit instructions from the Trust

beneficiaries and vote all shares held in the Trust in proportion to the instructions it receives. These actions include:

•

an election or removal of directors in which a stockholder has properly nominated one or more candidates in opposition
to a nominee or nominees of MetLife, Inc.’s Board of Directors or a vote on a stockholder’s proposal to oppose a Board
nominee for director, remove a director for cause or fill a vacancy caused by the removal of a director by stockholders,
subject to certain conditions;

a merger or consolidation, a sale, lease or exchange of all or substantially all of the assets, or a recapitalization or
dissolution, of MetLife, Inc., in each case requiring a vote of stockholders under applicable Delaware law;

any transaction that would result in an exchange or conversion of shares of common stock held by the Trust for cash,
securities or other property; and

any proposal requiring MetLife, Inc.’s Board of Directors to amend or redeem the rights under MetLife, Inc.’s stockholder
rights plan, other than a proposal with respect to which we have received advice of nationally-recognized legal counsel
to the effect that the proposal is not a proper subject for stockholder action under Delaware law. MetLife, Inc. does not
currently have a stockholder rights plan.

If a vote concerns any of these fundamental corporate actions, the trustee will vote all of the shares of common stock held
by the Trust in proportion to the instructions it received, which will give disproportionate weight to the instructions actually
given by Trust beneficiaries.

The MetLife Policyholder Trust Agreement provides that we may terminate the Trust once the percentage of outstanding
shares held in the Trust falls to 25%. The winding up of the Trust must commence 90 days after we provide the trustee with
notice that the percentage of outstanding shares held in the Trust is 10% or less. In connection with any termination of the Trust,
all of the shares of common stock then held in the Trust will need to be distributed to the respective Trust beneficiaries, unless
we offer to purchase all or a portion of such Trust shares. In connection with the termination of the Trust and such a distribution,
we may incur costs related to regulatory filings, mailings to Trust beneficiaries or others, and costs related to an increase in the
number of shareholders, which may include increased mailing and proxy solicitation expenses. After such a distribution, the
addition of the respective Trust beneficiaries to our shareholder base with full voting rights may have a significant impact on
matters brought to a stockholder vote and other aspects of our corporate governance.

Changes in Accounting Standards Issued by the Financial Accounting Standards Board or Other Standard-Setting Bodies
May Adversely Affect Our Financial Statements

Our financial statements are subject to the application of GAAP, which is periodically revised and/or expanded. Accordingly,
from time to time we are required to adopt new or revised accounting standards issued by recognized authoritative bodies,
including the Financial Accounting Standards Board (the “FASB”). The impact of accounting pronouncements that have been
issued but not yet implemented is disclosed in our reports filed with the SEC. See Note 1 of the Notes to the Consolidated
Financial Statements. An assessment of proposed standards is not provided as such proposals are subject to change through the
exposure process and official positions of the FASB are determined only after extensive due process and deliberations. Therefore,
the effects on our financial statements cannot be meaningfully assessed. The required adoption of future accounting standards
could have a material adverse effect on our financial condition and results of operations.

Changes in Our Assumptions Regarding the Discount Rate, Expected Rate of Return, Mortality Rates and Expected Increase
in Compensation Used for Our Pension and Other Postretirement Benefit Plans May Result in Increased Expenses and
Reduce Our Profitability

We determine our pension and other postretirement benefit plan costs based on our best estimates of future plan experience.
These assumptions are reviewed regularly and include discount rates, expected rates of return on plan assets, mortality rates,
expected increases in compensation levels and expected medical inflation. Changes in these assumptions may result in increased
expenses and reduce our profitability. See Note 18 of the Notes to the Consolidated Financial Statements for details on how
changes in these assumptions would affect plan costs.

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We May Not be Able to Protect Our Intellectual Property and May be Subject to Infringement Claims

We rely on a combination of contractual rights with third parties and copyright, trademark, patent and trade secret laws to
establish and protect our intellectual property. Although we endeavor to protect our rights, third parties may infringe or
misappropriate our intellectual property. We may have to litigate to enforce and protect our copyrights, trademarks, patents,
trade secrets and know-how or to determine their scope, validity or enforceability. This would represent a diversion of resources
that may be significant and our efforts may not prove successful. The inability to secure or protect our intellectual property assets
could harm our reputation and have a material adverse effect on our business and our ability to compete with other insurers and
financial institutions.

In addition, we may be subject to claims by third parties for (i) patent, trademark or copyright infringement, (ii) breach of
patent, trademark or copyright license usage rights, or (iii) misappropriation of trade secrets. Any such claims or resulting
litigation could result in significant expense and liability for damages. If we were found to have infringed or misappropriated a
third-party patent or other intellectual property right, we could in some circumstances be enjoined from providing certain products
or services to our customers or from utilizing and benefiting from certain patents, copyrights, trademarks, trade secrets or licenses.
Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement a costly alternative.
Any of these scenarios could harm our reputation and have a material adverse effect on our business and results of operations.

We May Experience Difficulty in Marketing and Distributing Products Through Our Distribution Channels

Since the completion of the U.S. Retail Advisor Force Divestiture in July 2016, we primarily distribute our products through
a variety of third-party distribution channels. We may periodically negotiate the terms of these relationships, and there can be
no assurance that such terms will remain acceptable to us or such third parties. An interruption in certain key relationships could
materially affect our ability to market our products and could have a material adverse effect on our business, operating results
and financial condition. A distributor has elected to suspend, and other distributors may elect to suspend, alter, reduce or terminate
their distribution relationships with us for various reasons, including uncertainty related to the proposed Separation, changes in
our distribution strategy, adverse developments in our business, adverse rating agency actions or concerns about market-related
risks. We are also at risk that key distribution partners may merge, change their business models in ways that affect how our
products are sold, or terminate their distribution contracts with us, or that new distribution channels could emerge and adversely
impact the effectiveness of our distribution efforts. An increase in bank and broker-dealer consolidation activity could increase
competition for access to distributors, result in greater distribution expenses and impair our ability to market products through
these channels. Consolidation of distributors and/or other industry changes may also increase the likelihood that distributors
will try to renegotiate the terms of any existing selling agreements to terms less favorable to us.

When our products are distributed through unaffiliated firms, we may not be able to monitor or control the manner of their
distribution despite our training and compliance programs. If our products are distributed by such firms in an inappropriate
manner, or to customers for whom they are unsuitable, we may suffer reputational and other harm to our business.

State Laws, Federal Laws, Our Certificate of Incorporation and Our By-Laws May Delay, Deter or Prevent Takeovers and
Business Combinations that Stockholders Might Consider in Their Best Interests

State laws, federal laws and our certificate of incorporation and by-laws may delay, deter or prevent a takeover attempt that
stockholders might consider in their best interests. For instance, such restrictions may prevent stockholders from receiving the
benefit from any premium over the market price of MetLife, Inc.’s common stock offered by a bidder in a takeover context.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of
MetLife, Inc.’s common stock if they are viewed as discouraging takeover attempts in the future.

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Any person seeking to acquire a controlling interest in us would face various regulatory obstacles, including:

•

applicable state insurance laws and regulations may delay or impede a business combination involving us by prohibiting
an entity from acquiring control (generally presumed to exist at direct or indirect ownership of 10% or more of voting
stock) of an insurance company domiciled in the United States without the prior approval of the domestic insurance
regulator. Many foreign jurisdictions in which we operate have similar regulatory approval requirements.

if the acquiring entity is a bank or non-bank SIFI, Dodd-Frank provisions that restrict or impede consolidations, mergers
and acquisitions by systemically significant firms. See “Business — Regulation — U.S. Regulation — Potential
Regulation as a Non-Bank SIFI — Enhanced Prudential Standards for Non-Bank SIFIs.”

Provisions of the Investment Company Act that require approval by the contract owners of our variable contracts in
order to effectuate a change of control of any affiliated investment adviser to a mutual fund underlying our variable
contracts.

FINRA approval requirements for a change of control of any FINRA registered broker-dealer that is a direct or indirect
subsidiary of MetLife, Inc.

Provisions of the Delaware General Corporation Law may affect the ability of an “interested stockholder” (the owner
of 15% or more of the outstanding voting stock of a corporation) to engage in certain business combinations for a period
of three years following the time that the stockholder becomes an “interested stockholder.”

In addition, MetLife, Inc.’s certificate of incorporation and by-laws also contain provisions that may delay, deter or prevent
a takeover attempt that stockholders might consider in their best interests or may otherwise adversely affect prevailing market
prices for MetLife, Inc.’s common stock. These provisions include: a prohibition on the calling of special meetings or action by
written consent by stockholders; and advance notice procedures for the nomination of candidates to the Board of Directors and
stockholder proposals to be considered at stockholder meetings.

A majority of the combined voting power of the outstanding shares entitled to vote generally in the election of Directors
may amend MetLife, Inc.’s certificate of incorporation or by-laws. This may allow shareholders to change the Company’s
corporate governance and, therefore, make it more difficult for the Board of Directors to protect shareholders’ interests, e.g., if
they are presented with an acquisition proposal that undervalues the Company.

Item 1B. Unresolved Staff Comments

MetLife has no unresolved comments from the SEC staff regarding its periodic or current reports under the Exchange Act.

Item 2. Properties

We lease 418,000 rentable square feet in an office building in Manhattan, New York. The term of that lease commenced in
February 2008 and continues until April 2029. We have subleased 66,000 rentable square feet of that space to two subtenants,
which met our standards of review with respect to creditworthiness. We also lease 595,000 rentable square feet at 200 Park
Avenue, New York (the “MetLife Building”) under multiple leases beginning in May 2005 and expiring on various dates through
September 2027. This space includes MetLife, Inc.’s boardroom. We have leased 12,000 rentable square feet in the MetLife
Building to a subtenant for a term that began July 2016 and extends through December 2019. We have retained rights to existing
signage for 20 years with optional renewal periods through 2205. Each of these spaces under lease is occupied by all of our
segments, as well as Corporate & Other. The Company began to consolidate its existing New York City area offices to the
MetLife Building in December 2016 and expects to complete the consolidation by May 2017. As a result of the consolidation,
we are actively marketing the spaces to be vacated for sublease.

We lease 512,000 rentable square feet in Charlotte, North Carolina in two buildings, which are predominantly occupied by
the Brighthouse Financial segment, as well as Corporate & Other. We have leased 69,000 rentable square feet in these buildings
to subtenants through December 2017. The leases for these two buildings commenced in April 2013 and in November 2014 and
both extend through September 2026. We lease 436,000 rentable square feet in two buildings in Cary, North Carolina, which
are occupied primarily by Global Technology & Operations, which supports all of our segments, as well as Corporate & Other.
The initial lease, commencing in February 2015, was expanded in April 2015, and continues through April 2030.

Table of Contents

We own eight buildings in the United States that we use in the operation of our business. These buildings contain 1.7 million
rentable square feet and are located in the following states: Florida, Illinois, Missouri, New York, Oklahoma and Pennsylvania.
Our computer center in Rensselaer, New York is not owned in fee but rather is occupied pursuant to a long-term ground lease.
In addition to the aforementioned leases in New York and North Carolina, we have 100 leases in over 90 other locations throughout
the United States including our Long Island City, New York, facility. These additional leased facilities consist of 4.3 million
rentable square feet. Of these leases, over 35 are occupied as sales offices while the balance of the space is utilized for corporate
functions supporting business activities. We also own over 90 properties and lease close to 950 sites in various locations outside
the United States. We believe that these properties are suitable and adequate for our current and anticipated business operations.

We arrange for property & casualty coverage on our properties, taking into consideration our risk exposures and the cost
and availability of commercial coverages, including deductible loss levels. In connection with the renewal of those coverages,
we have arranged $500 million of property insurance, including coverage for terrorism, on our real estate portfolio through May
1, 2017, its renewal date.

Item 3. Legal Proceedings

See Note 21 of the Notes to the Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

Not applicable.

Table of Contents

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Issuer Common Equity

MetLife, Inc.’s common stock, par value $0.01 per share, began trading on the New York Stock Exchange (“NYSE”) under

the symbol “MET” on April 5, 2000.

The following table presents high and low closing prices for our common stock on the NYSE for the periods indicated:

Common Stock Price

High

Low

Common Stock Price

High

Low

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

2016

47.32

35.21

46.90

36.53

44.70

37.85

57.39

44.37

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

2015

53.91

46.50

57.70

50.25

57.70

46.07

51.69

46.42

At February 23, 2017, there were 79,510 stockholders of record of our common stock.

The following table presents common stock dividend declaration, record and payment dates, as well as per share and

aggregate dividend amounts, for the years ended December 31, 2016 and 2015:

Declaration Date

Record Date

Payment Date

Per Share

Dividend

Aggregate

(In millions)

October 25, 2016

July 7, 2016

April 26, 2016

January 6, 2016

October 27, 2015

July 7, 2015

April 28, 2015

January 6, 2015

November 7, 2016

December 13, 2016

August 8, 2016

September 13, 2016

May 9, 2016

June 13, 2016

February 5, 2016

March 14, 2016

November 6, 2015

December 11, 2015

August 7, 2015

May 11, 2015

September 11, 2015

June 12, 2015

February 6, 2015

March 13, 2015

0.400

0.375

0.350

441

413

1,736

419

420

394

1,653

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The declaration and payment of common stock dividends is subject to the discretion of our Board of Directors, and will
depend on MetLife, Inc.’s financial condition, results of operations, cash requirements, future prospects, regulatory restrictions
on the payment of dividends by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by the Board. The
payment of dividends and other distributions by MetLife, Inc. to its security holders may be subject to regulation by the Federal
Reserve if MetLife, Inc. is re-designated by the FSOC as a non-bank SIFI. See “Business — Regulation — U.S. Regulation —
Potential Regulation as a Non-Bank SIFI.” Furthermore, if additional capital requirements are imposed on MetLife, Inc. as a
G-SII, its ability to pay dividends could be reduced by any such additional capital requirements that might be imposed. See
“Business — Regulation — International Regulation — Global Systemically Important Insurers.” The payment of dividends is
also subject to restrictions under the terms of our preferred stock and junior subordinated debentures in situations where we may
be experiencing financial stress. See “Risk Factors — Capital-Related Risks — Legal and Regulatory Restrictions and Uncertainty
and Restrictions Under the Terms of Certain of Our Securities May Prevent Us from Repurchasing Our Stock and Paying
Dividends at the Level We Wish” and Note 16 of the Notes to the Consolidated Financial Statements. See also “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company
— Liquidity and Capital Uses — Dividends” and Note 23 of the Notes to the Consolidated Financial Statements for further
information regarding preferred and common stock dividends.

See Item 12 for information about our equity compensation plans.

Issuer Purchases of Equity Securities

Purchases of common stock made by or on behalf of MetLife, Inc. or its affiliates during the quarter ended December 31,

2016 are set forth below:

Period
October 1 - October 31, 2016

November 1 - November 30, 2016

December 1 - December 31, 2016

__________________

(a) Total Number of
Shares
Purchased (1)

(b) Average Price
Paid per Share

(d) Maximum Number(or
Approximate Dollar Value)
of Shares that May Yet
Be Purchased Under the
Plans or Programs (2)

—

1,774,766

3,729,653

—

$54.44

$55.21

—

1,774,227

3,728,648

$2,903,411,978

$2,697,567,522

(1)

Except for the foregoing, there were no shares of common stock which were repurchased by MetLife, Inc. During the
periods October 1 through October 31, 2016, November 1 through November 30, 2016, and December 1 through
December 31, 2016, separate account index funds purchased 0 shares, 539 shares and 1,005 shares, respectively, of
common stock on the open market in nondiscretionary transactions.

(2) On November 10, 2016, MetLife, Inc. announced that its Board of Directors authorized $3.0 billion of common stock
repurchases. At December 31, 2016, MetLife, Inc. had $2.7 billion of common stock repurchases remaining under the
authorization. For more information on common stock repurchases, see “Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and
Capital Uses — Common Stock Repurchases,” “Risk Factors — Capital-Related Risks — Legal and Regulatory
Restrictions and Uncertainty and Restrictions Under the Terms of Certain of Our Securities May Prevent Us from
Repurchasing Our Stock and Paying Dividends at the Level We Wish” and Notes 16 and 23 of the Notes to the Consolidated
Financial Statements.

Common Stock Performance Graph

The graph and table below compare the total return on our common shares with the total return on the S&P 500, S&P 500
Insurance, and S&P 500 Financials indices, respectively, for the five year period ending on December 31, 2016. The graph and
table show the total return on a hypothetical $100 investment in our common shares and in each index, respectively, on December
31, 2011, including the reinvestment of all dividends. The graph and table below shall not be deemed to be “soliciting material”
or to be “filed,” or to be incorporated by reference in future filings with the SEC, or to be subject to the liabilities of Section 18
of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities
Act or the Exchange Act.

Table of Contents

MetLife, Inc. common stock

S&P 500

S&P 500 Insurance

S&P 500 Financials

2011

2012

2013

2014

2015

2016

100

108.00

180.83

185.97

170.60

116.00

119.09

128.82

153.57

174.72

174.71

174.60

189.20

201.27

177.01

193.60

198.20

197.41

198.18

227.64

243.38

As of December 31 of,

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Item 6. 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, 2016, 2015 and 2014, and the balance sheet data at December 31,
2016 and 2015 have been derived from the Company’s audited consolidated financial statements included elsewhere herein.
The statement of operations data for the years ended December 31, 2013 and 2012, and the balance sheet data at December 31,
2014, 2013 and 2012 have been derived from the Company’s audited consolidated 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 audited consolidated financial statements and related notes included elsewhere
herein.

Statement of Operations Data

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims

Interest credited to policyholder account balances

Policyholder dividends

Goodwill impairment

Other expenses

Total expenses

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

Preferred stock repurchase premium

Net income (loss) available to MetLife, Inc.’s

common shareholders

Years Ended December 31,

2016

2015

2014

2013

2012

(In millions)

39,153

38,545

39,067

37,674

37,975

9,206

19,947

1,759

171

(6,760)

63,476

9,507

19,281

1,983

597

69,951

9,946

21,153

2,030

(197)

1,317

73,316

9,451

22,232

1,920

161

(3,239)

68,199

8,556

21,984

1,906

(352)

(1,919)

68,150

40,804

38,714

39,102

38,107

37,987

6,282

1,256

260

15,069

63,671

(195)

(999)

804

—

804

800

103

—

5,610

1,388

—

16,769

62,481

7,470

2,148

5,322

—

5,322

5,310

116

6,943

1,376

—

17,091

64,512

8,804

2,465

6,339

(3)

6,336

6,309

122

—

8,179

1,259

—

16,602

64,147

4,052

661

3,391

3,393

3,368

122

—

7,729

1,369

1,868

17,755

66,708

1,442

128

1,314

1,362

1,324

122

—

697

5,152

6,187

3,246

1,202

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EPS Data (1)

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

Basic

Diluted

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

per common share:

Basic

Diluted

Net income (loss) available to MetLife, Inc.’s common

shareholders per common share:

Basic

Diluted

Cash dividends declared per common share

Years Ended December 31,

2016

2015

2014

2013

2012

0.63

4.61

4.57

5.48

5.42

2.94

2.91

— $

1.08

0.04

0.63

1.575

4.61

4.57

1.475

5.48

5.42

1.325

2.94

2.91

1.010

1.12

0.740

Balance Sheet Data

Separate account assets

Total assets

Policyholder liabilities and other policy-related balances (2)

Short-term debt

Long-term debt

Collateral financing arrangements

Junior subordinated debt securities

Separate account liabilities

Accumulated other comprehensive income (loss)

Total MetLife, Inc.’s stockholders’ equity

Noncontrolling interests

2016

2015

2014

2013

2012

December 31,

$ 308,620
$ 898,764
$ 427,231
242
$
16,502
$
4,071
$
3,169
$
$ 308,620
5,347
$
67,309
$
171
$

$ 301,598
$ 877,933
$ 411,359
100
$
18,023
$
4,139
$
3,194
$
$ 301,598
4,771
$
67,949
$
470
$

(In millions)

$ 316,994
$ 902,337
$ 417,141
100
$
16,286
$
4,196
$
3,193
$
$ 316,994
10,649
$
72,053
$
507
$

$ 317,201
$ 885,296
$ 418,487
175
$
18,653
$
4,196
$
3,193
$
$ 317,201
5,104
$
61,553
$
543
$

$ 235,393
$ 836,781
$ 438,191
100
$
19,062
$
4,196
$
3,192
$
$ 235,393
11,397
$
64,453
$
384
$

Years Ended December 31,

2016

2015

2014

2013

2012

Other Data (3)

Return on MetLife, Inc.’s common stockholders’ equity

1.0%

7.5%

9.4%

5.4%

2.0%

__________________

(1)

For the year ended December 31, 2012, all shares related to the assumed issuance of shares in settlement of the applicable
stock purchase contracts relating to previously issued common equity units have been excluded from the calculation of
diluted earnings per common share, as these assumed shares are anti-dilutive.

(2)

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.

(3) Return on MetLife, Inc.’s common stockholders’ equity is defined as net income (loss) available to MetLife, Inc.’s common

shareholders divided by MetLife, Inc.’s average common stockholders’ equity.

Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

Forward-Looking Statements and Other Financial Information

Executive Summary

Industry Trends

Summary of Critical Accounting Estimates

Economic Capital

Acquisitions and Dispositions

Results of Operations

Effects of Inflation

Investments

Derivatives

Off-Balance Sheet Arrangements

Insolvency Assessments

Policyholder Liabilities

Liquidity and Capital Resources

Adoption of New Accounting Pronouncements

Future Adoption of New Accounting Pronouncements

Non-GAAP and Other Financial Disclosures

Subsequent Events

Page

105

106

107

132

133

151

154

155

164

186

190

Table of Contents

Forward-Looking Statements and Other Financial Information

For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware
corporation incorporated in 1999, 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 Regarding Forward-Looking Statements,” “Risk Factors,” “Selected Financial Data,”
“Quantitative and Qualitative Disclosures About Market Risk” and the Company’s consolidated financial statements included
elsewhere herein.

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, or are tied to future
periods, in connection with a discussion of future operating or financial performance. In particular, these include statements
relating to future actions, prospective services or products, future performance or results of current and anticipated services or
products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial
results. Any or all forward-looking statements may turn out to be wrong. Actual results could differ materially from those
expressed or implied in the forward-looking statements. See “Note Regarding Forward-Looking Statements.”

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our
performance measures, operating earnings and operating earnings available to common shareholders, that are not based on
GAAP. These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance
for segment reporting, operating earnings is also our GAAP measure of segment performance. Operating earnings and other
financial measures based on operating earnings are also the measures by which senior management’s and many other employees’
performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Operating
earnings and other financial measures based on operating earnings allow analysis of our performance relative to our business
plan and facilitate comparisons to industry results. Forward-looking guidance provided on a non-GAAP basis cannot be reconciled
to the most directly comparable GAAP measures on a forward-looking basis because net income may fluctuate significantly if
net investment gains and losses and net derivative gains and losses move outside of estimated ranges. See “— Non-GAAP and
Other Financial Disclosures” for definitions and a discussion of these measures, and “— Results of Operations” for reconciliations
of historical non-GAAP financial measures to the most directly comparable GAAP measures.

Table of Contents

Executive Summary

Overview

MetLife is a global provider of life insurance, annuities, employee benefits and asset management. MetLife is organized
into six segments: U.S.; Asia; Latin America; EMEA, MetLife Holdings; and Brighthouse Financial. In addition, the Company
reports certain of its results of operations in Corporate & Other. See “— Other Key Information,” “Business — Segments and
Corporate & Other” and Note 2 of the Notes to the Consolidated Financial Statements for further information on the Company’s
segments and Corporate & Other. Management continues to evaluate the Company’s segment performance and allocated
resources and may adjust related measurements in the future to better reflect segment profitability.

Current Year Highlights

During the year ended December 31, 2016, overall sales increased slightly as compared to the year ended December 31,
2015, reflecting an increase in sales of our Retirement and Income Solutions products, offset by declines in our life and annuity
products. We experienced a significant amount of derivative losses in 2016, primarily as a result of our annual actuarial assumption
review. Asymmetrical and non-economic accounting also resulted from derivative losses on non-qualifying hedges, driven by
changes in interest rates, foreign currencies and equity markets. In addition, while positive net flows drove an increase in our
investment portfolio, yields declined as a result of low interest rates, volatile equity markets, and foreign currency fluctuations.
Our results for 2016 also reflect a write-off of DAC and an increase in our insurance-related liabilities due to loss recognition
testing upon re-segmentation, unfavorable reserve adjustments resulting from modeling improvements in the reserving process,
and charges related to goodwill impairment.

The following represents segment level results and percentage contributions to total segment level operating earnings for

the year ended December 31, 2016:

_______________

(1) Excludes Corporate & Other.

(2) Consistent with GAAP guidance for segment reporting, operating earnings is our GAAP measure of segment performance.

See “— Non-GAAP and Other Financial Disclosures.”

Table of Contents

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

Consolidated Results – Highlights
Income (loss) from continuing operations, net of
income tax, down $4.5 billion:

• Unfavorable change in net derivative gains
(losses) of $6.8 billion ($4.4 billion, net of income
tax) primarily driven by the impact of the annual
actuarial assumption review on certain variable
annuity products
embedded
that
derivatives. Asymmetrical and non-economic
accounting also resulted from derivative losses on
non-qualifying hedges, driven by changes in
interest rates, foreign currencies and equity
markets.

contain

• Unfavorable change in net investment gains
(losses) of $426 million ($277 million, net of
income tax)

• Operating earnings available
shareholders down $395 million

to common

• Goodwill impairment charges of $260 million

($223 million, net of income tax)

• Results for 2016 include the financial impact of
converting the Company’s Japan operations to
calendar year-end reporting without retrospective
application of this change to prior years

(1) See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for

reconciliations and definitions of non-GAAP financial measures.

Consolidated Results - Operating Highlights

Operating earnings available to common shareholders down $395 million:
• Results of operations impacted by: (i) lower investment yields; (ii) refinements made to DAC and certain insurance-related
liabilities; (iii) unfavorable underwriting; (iv) the impact of our annual actuarial assumption review; (v) lower asset-based
fee income; (vi) lower tax and related interest expenses; and (vii) higher net investment income from portfolio growth.

• Our 2016 results included the following:

• a $340 million, net of income tax, charge from the re-segmentation of our business, driven by the Brighthouse Financial
segment’s variable and universal life policies. Of this amount, the Company recorded $254 million, net of income tax, as
a charge in the third quarter of 2016, which was mostly recognized as a write-off of DAC, with the remaining $86 million,
net of income tax, recognized as an increase in insurance-related liabilities over the third and fourth quarters of 2016.

• unfavorable reserve adjustments of $257 million, net of income tax, resulting from modeling improvements in the

reserving process

• unfavorable DAC unlockings of $161 million, net of income tax, related to our annual actuarial assumption review of

our U.S. variable annuity business

• a $44 million, net of income tax, charge related to an adjustment to reinsurance receivables in Australia
• tax benefit of $25 million related to a change in tax rate in Japan, which includes a benefit of $20 million that pertains to

prior periods

• tax charge in Chile of $12 million as a result of tax reform legislation, which includes a charge of $10 million that pertains

to prior periods

• Our 2015 results included the following:

• a $557 million tax charge and a $362 million ($235 million, net of income tax) charge for interest on uncertain tax positions
that were recorded under accounting guidance for the recognition of tax uncertainties related to the U.S. tax treatment of
taxes paid by a wholly-owned U.K. investment subsidiary of MLIC

• $183 million of tax benefits related to (i) restructuring in Chile; (ii) a change in tax rate in Japan; (iii) the repatriation of

earnings from Japan; and (iv) the devaluation of the peso in Argentina

Table of Contents

For a more in-depth discussion of our consolidated results, see “— Results of Operations — Consolidated Results” and

“— Results of Operations — Consolidated Results — Operating.”

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

Consolidated Results - Highlights

Income (loss) from continuing operations, net of
income tax, down $1.0 billion:

• Operating earnings available
shareholders down $1.1 billion

to common

• Net derivative gains (losses) unfavorable change
of $1.3 billion ($831 million, net of income tax)
driven by unfavorable changes in market and other
risks in embedded derivatives, as well as changes
in interest rates

• Net investment gains (losses) favorable change of
$794 million ($516 million, net of income tax)
primarily driven by a 2014 loss on the disposition
of MetLife Assurance Limited (“MAL”)

• Includes a tax benefit in Japan of $174 million in

2015

(1) See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for

reconciliations and definitions of non-GAAP financial measures.

Consolidated Results - Operating Highlights

Operating earnings available to common shareholders down $1.1 billion:
• Results of operations impacted by: (i) lower investment yields; (ii) less favorable underwriting; (iii) unfavorable impact
from annual reviews of assumptions; (iv) higher net investment income from portfolio growth; and (v) additional items
described below.

• Our 2015 results also included the following:

• $557 million tax charge and a $362 million ($235 million, net of income tax) charge for interest on uncertain tax positions
recorded under accounting guidance for the recognition of tax uncertainties related to the U.S. tax treatment of taxes paid
by a wholly-owned U.K. investment subsidiary of MLIC

• $183 million of tax benefits related to (i) restructuring in Chile; (ii) a change in tax rate in Japan; (iii) the repatriation of

earnings from Japan; and (iv) the devaluation of the peso in Argentina

• Our 2014 results also included the following:

• $104 million, net of income tax, of favorable reserve adjustments related to disability premium waivers in the life businesses

in our MetLife Holdings and Brighthouse Financial segments

• $117 million, net of income tax, increase in the litigation reserve related to asbestos
• Charge of $57 million, net of income tax, related to delayed settlement interest on unclaimed funds held by state governments

in the life business

• Charges totaling $57 million, net of income tax, related to a settlement of a licensing matter with the NYDFS and the

District Attorney, New York County

• Net tax charge of $9 million related to: (i) charge related to a tax reform bill in Chile; and (ii) benefit related to the filing

of the Company’s U.S. federal tax return

For a more in-depth discussion of our consolidated results, see “— Results of Operations — Consolidated Results” and

“— Results of Operations — Consolidated Results — Operating.”

Table of Contents

Consolidated Company Outlook

The proposed Separation and the completion of our U.S Retail Advisor Force Divestiture evidence our commitment to
Accelerating Value and our refreshed enterprise strategy, the center of which is still One MetLife. Digital and simplified are the
key enablers of our strategic initiatives which include (i) optimizing value and risk by prioritizing businesses with high internal
rates of return, lower capital intensity, and maximum cash generation, (ii) driving operational excellence, by becoming a high-
performance operating company with a competitive cost structure, (iii) transforming our distribution channels to drive efficiency
and productivity through digital enablement and improved customer persistency, and (iv) undertaking a targeted approach to
find the right solutions for the right customers through the commitment to creating differentiated customer value propositions.
This new enterprise strategy will enhance our ability to focus on the right markets, build clear differentiators, and continue to
make the right investments to deliver shareholder value.

In 2017, we will focus on executing the Separation and making critical investments to drive efficiency. While this will put
downward pressure on operating earnings in 2017, we expect post-Separation MetLife operating earnings to grow in 2018 driven
by both business growth and expense discipline. Following the Separation, MetLife will also be significantly less sensitive to
interest rates. Notably, the Separation will also make MetLife a more globally diversified company; we expect MetLife will
generate over 40% of its operating earnings from outside the United States and that percentage should continue to grow over
time.

We have engaged and expect to continue to engage in a number of Separation-related transactions that will impact our
holding companies’ liquid assets. In 2016, we incurred $2.3 billion of Separation-related items which reduced our holding
companies’ liquid assets, as well as our free cash flow. These Separation-related items consisted of Separation-related outflows
comprised of an incremental capital contribution to MetLife USA, capital contributions to Brighthouse subsidiaries and
Separation-related costs, forgone subsidiary dividends from MetLife USA and forgone incremental debt at MetLife, Inc., net of
Separation-related inflows comprised of incremental subsidiary dividends from NELICO and MetLife USA. However, we have
increased and expect to continue to increase our holding companies’ liquid assets over time as a result of (i) $291 million in
cash proceeds that we received in 2016 from the U.S. Retail Advisor Force Divestiture; (ii) dividends in the range of $3.3 billion
to $3.8 billion that we expect to receive in 2017 from Brighthouse (which may be partially funded by the issuance of debt by
Brighthouse) and a MetLife-affiliated reinsurance company prior to the Separation; and (iii) proceeds from the disposition of
our retained shares of Brighthouse common stock that we expect to receive over time. In addition to these Separation-related
items, we expect to have cash commitments of between $1.0 billion and $2.0 billion over the two-year period of 2017 and 2018
relating to liability management transactions, including the repayment of certain debt maturities. Following the Separation, we
plan to maintain a liquidity buffer of $3.0 to $4.0 billion of liquid assets at the holding companies. See “Risk Factors — Risks
Related to Acquisitions, Dispositions or Other Structural Changes — We May Not Complete the Separation of Brighthouse
Financial on the Terms or Timeline Currently Contemplated, if at All” and “Risk Factors — Capital-Related Risks — Legal and
Regulatory Restrictions and Uncertainty and Restrictions Under the Terms of Certain of Our Securities May Prevent Us from
Repurchasing Our Stock and Paying Dividends at the Level We Wish.”

Assuming interest rates follow the observable forward yield curves as of December 31, 2016, we expect the average ratio
of free cash flow to operating earnings over the two-year period of 2017 and 2018, excluding the impact of the Separation, to
be 65% to 75%. This expectation reflects our unit cost improvement program and the related initiative to invest $1 billion by
2020 to generate $800 million pre-tax run rate annual savings, net of stranded overhead. We believe that free cash flow is a key
determinant of dividends and share repurchases.

When making these and other projections, we must rely on the accuracy of our assumptions about future economic and
business conditions, which can be affected by known and unknown risks and other uncertainties. Our assumptions have been
and will continue to be impacted by (i) MetLife, Inc.’s plan to pursue the Separation, (ii) regulatory uncertainty regarding capital
requirements that would have been applicable to MetLife, Inc. as a result of the FSOC’s former designation of MetLife, Inc. as
a non-bank SIFI, which, among other things, impacted the level of our share repurchases, (iii) lower investment margins (primarily
in the United States) as a result of the sustained low interest rate environment, (iv) lower than anticipated merger and acquisition
activity, and (v) the effect on our foreign operations of the strengthening of the U.S. dollar. See “— Other Key Information —
Significant Events” for information regarding the Separation, U.S. Retail Advisor Force Divestiture, and the status of court
proceedings relating to MetLife, Inc.’s challenge to the FSOC’s former designation of it as a non-bank SIFI.

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Other Key Information

Basis of Presentation

Prior to January 1, 2016, certain international subsidiaries had a fiscal year cutoff of November 30th. Accordingly, the
Company’s consolidated financial statements reflect the assets and liabilities of such subsidiaries as of November 30, 2015
and the operating results of such subsidiaries for the years ended November 30, 2015 and 2014. Effective January 1, 2016,
the Company converted its Japan operations to calendar year-end reporting. The elimination of a one-month reporting lag of
a subsidiary is considered a change in accounting principle and requires retrospective application. While the Company believes
that eliminating the lag in the reporting of its Japan operations was preferable in order to consistently reflect events, economic
conditions and global trends on the financial statements, the Company determined that it was impracticable to apply the effects
of the lag elimination to financial reporting periods prior to January 1, 2015. The effect of not retroactively applying this
change in accounting, however, was not material to the 2015 or 2016 consolidated financial statements. Therefore, the Company
reported the cumulative effect of the change in accounting principle in net income for the year ended December 31, 2016 and
did not retrospectively apply the effects of this change to prior periods. See Note 2 of the Notes to the Consolidated Financial
Statements.

Segment Information

Based on the proposed Separation, in the third quarter of 2016, the Company reorganized its businesses. This re-
segmentation resulted in a $340 million, net of income tax, charge to earnings in 2016, all in the Brighthouse Financial segment,
driven by the segment’s variable and universal life products. This charge is the direct result of the Company, beginning in the
third quarter, no longer being able to aggregate, for loss recognition testing, the variable and universal life products of the
Brighthouse Financial segment with the variable and universal life products remaining in the MetLife Holdings segment. Of
this amount, the Company recorded $254 million, net of income tax, as a charge in the third quarter of 2016, which was mostly
recognized as a write-off of DAC, with the remaining $86 million, net of income tax, recognized as an increase in insurance-
related liabilities over the third and fourth quarters of 2016. We expect the ongoing impact to the Brighthouse Financial segment
from the loss of the aggregation benefit to be approximately $40 million, net of income tax, per quarter, which began in the
third quarter of 2016, gradually declining over time.

Significant Events

On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. Additionally, on July 21, 2016, MetLife,
Inc. announced that following the Separation, the separated business will be rebranded as “Brighthouse Financial.” On October
5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. (“Brighthouse”), filed a registration statement on Form 10
(the “Form 10”) with the SEC. On December 6, 2016, Brighthouse filed an amendment to its registration statement on Form
10 with the SEC. The information statement filed as an exhibit to the Form 10 disclosed that the Company intends to include
MetLife USA, NELICO, FMLI, MetLife Advisers, LLC and certain captive reinsurance companies in the proposed separated
business and distribute at least 80.1% of the shares of Brighthouse’s common stock on a pro rata basis to the holders of
MetLife, Inc. common stock. The ultimate form and timing of the Separation will be influenced by a number of factors,
including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives
for the proposed Separation. MetLife expects that the life insurance closed block and the life and annuity business sold through
MLIC will not be a part of Brighthouse Financial. The Separation remains subject to certain conditions including, among
others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the IRS and an
opinion from MetLife’s tax advisor regarding certain U.S. federal income tax matters, insurance and other regulatory approvals,
and an SEC declaration of the effectiveness of the Form 10.

In July 2016, MetLife, Inc. completed the U.S. Retail Advisor Force Divestiture for $291 million. MassMutual assumed
all of the liabilities related to such assets that arise or occur at or after the closing of the sale. As part of the transactions,
MetLife, Inc. and MassMutual entered into a product development agreement under which MetLife’s U.S. retail business will
be the exclusive developer of certain annuity products to be issued by MassMutual. In the MassMutual purchase agreement,
MetLife, Inc. agreed to indemnify MassMutual for certain claims, liabilities and breaches of representations and warranties
up to limits described in the purchase agreement. See Note 3 of the Notes to the Consolidated Financial Statements for further
information.

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On December 18, 2014, the FSOC designated MetLife, Inc. as a non-bank SIFI subject to regulation by the Federal
Reserve and the FDIC, as well as to enhanced supervision and prudential standards. On March 30, 2016, the D.C. District
Court ordered that the designation of MetLife, Inc. as a non-bank SIFI by the FSOC be rescinded. On April 8, 2016, the FSOC
appealed the D.C. District Court’s order to the United States Court of Appeals for the District of Columbia, and oral argument
was heard on October 24, 2016. If the FSOC prevails on appeal or designates MetLife, Inc. as systemically important as part
of its ongoing review of non-bank financial companies, MetLife, Inc. could once again be subject to regulation as a non-bank
SIFI. See “Business — Regulation — U.S. Regulation — Potential Regulation as a Non-Bank SIFI.”

Industry Trends

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. Stressed conditions, volatility and disruptions in global capital markets, particular markets, or financial asset classes
can have an adverse effect on us, in part because we have a large investment portfolio and our insurance liabilities and derivatives
are sensitive to changing market factors. See “Risk Factors — Economic Environment and Capital Markets-Related Risks —
We Are Exposed to Significant Global Financial and Capital Markets Risks Which May Adversely Affect Our Results of
Operations, Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from Period to Period.” The
impact on global capital markets and the economy generally of the transition occurring in the United States government and the
priorities of the Trump Administration is uncertain. See “Risk Factors — Economic Environment and Capital Markets-Related
Risks — If Difficult Conditions in the Global Capital Markets and the Economy Generally Persist, They May Materially Adversely
Affect Our Business and Results of Operations.”

We have market presence in numerous countries and increased exposure to risks posed by local and regional economic
conditions. See “Risk Factors — Risks Related to Our Business — Our International Operations Face Political, Legal, Operational
and Other Risks, Including Exposure to Local and Regional Economic Conditions, That Could Negatively Affect Those
Operations or Our Profitability.” Concerns about the political and/or economic stability in the U.K., Italy, Mexico, Turkey and
Puerto Rico have recently contributed to global market volatility. See “— Investments — Current Environment — Selected
Country Investments.” Events following the U.K.’s referendum on June 23, 2016 and the uncertainties, including foreign currency
exchange risks, associated with its pending withdrawal from the EU, have also contributed to market volatility, both in the U.S.
and beyond. These factors could contribute to weakening GDP growth, primarily in the U.K. and Europe. The magnitude and
longevity of the potential negative economic impacts would depend on the detailed agreements reached by the U.K. and the EU
as a result of the exit negotiations and negotiations regarding trade and other arrangements.

Central banks around the world have used monetary policy to combat global market volatility. For example, the European
Central Bank continues to institute support measures, including quantitative easing, to lessen the risk of deflation, lower borrowing
costs in the Euro zone and encourage corporations to issue more asset-backed securities. These measures, however, could affect
the Euro exchange rate and have uncertain impacts on interest rates and risk markets. In Japan, the Japanese government and
the Bank of Japan have implemented a coordinated strategy which includes the imposition of a negative rate on commercial
bank deposits, continued government bond purchases and tax reform, including the lowering of the Japanese corporate tax rate
and the delay until 2019 of an increase in the consumption tax to 10%. Going forward, Japan’s structural and demographic
challenges may continue to limit its potential growth unless reforms that boost productivity are put into place. Japan’s high
public sector debt levels are mitigated by low refinancing risks and its nominal yields on government debt have remained at a
lower level than that of any other developed country. However, frequent changes in government have prevented policy makers
from implementing fiscal reform measures to put public finances on a sustainable path. For information regarding actions taken
by the Federal Reserve Board’s Federal Open Market Committee (“FOMC”) in the United States, see “ — Impact of a Sustained
Low Interest Rate Environment.”

Impact of a Sustained Low Interest Rate Environment

As a global insurance company, we are affected by the monetary policy of central banks around the world, as well as the
monetary policy of the Federal Reserve Board in the United States. The Federal Reserve Board has taken a number of actions
in recent years to spur economic activity, including asset purchases and keeping interest rates low. However, in December 2015,
the FOMC increased the federal funds rate for the first time in 10 years and raised it again at the December 2016 meeting. Further
increases in the federal funds rate in the future may affect interest rates and risk markets in the U.S. and other developed and
emerging economies. However, we cannot predict with certainty the effect of these programs and policies on interest rates or
the impact on the pricing levels of risk-bearing investments at this time. See “— Investments — Current Environment.”

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During periods of declining interest rates, we may have to invest insurance cash flows and reinvest the cash flows we
received as interest or return of principal on our investments in lower yielding instruments. Moreover, borrowers may prepay
or redeem the fixed income securities, mortgage loans and mortgage-backed securities in our investment portfolio with greater
frequency in order to borrow at lower market rates. Therefore, some of our products expose us to the risk that a reduction in
interest rates will reduce the difference between the amounts that we are required to credit on contracts in our general account
and the rate of return we are able to earn on investments intended to support obligations under these contracts. This difference
between interest earned and interest credited, or margin, is a key metric for the management of, and reporting for, many of our
businesses.

Our expectations regarding future margins are an important component impacting the amortization of certain intangible
assets such as DAC and VOBA. Significantly lower margins may cause us to accelerate the amortization, thereby reducing net
income in the affected reporting period. Additionally, lower margins may also impact the recoverability of intangible assets such
as goodwill, require the establishment of additional liabilities or trigger loss recognition events on certain policyholder liabilities.
We review this long-term margin assumption, along with other assumptions, as part of our annual actuarial assumption review.

Mitigating Actions

The Company continues to be proactive in its investment and interest crediting rate strategies, as well as its product design
and product mix. To mitigate the risk of unfavorable consequences from the low interest rate environment in the U.S., the
Company applies disciplined asset/liability management (“ALM”) strategies, including the use of interest rate derivatives. In
some cases, the Company has entered into offsetting positions as part of its overall ALM strategy and to reduce volatility in
net income. Lowering interest crediting rates on some products, or adjusting the dividend scale on traditional products, can
help offset decreases in investment margins on some products. Our ability to lower interest crediting rates could be limited
by competition, requirements to obtain regulatory approval, or contractual guarantees of minimum rates and may not match
the timing or magnitude of changes in asset yields. As a result, our margins could decrease or potentially become negative.
We are able to limit or close certain products to new sales in order to manage exposures. Business actions, such as shifting
the sales focus to less interest rate sensitive products, can also mitigate this risk. In addition, the Company is well diversified
across product, distribution, and geography. Certain of our non-U.S. businesses, reported within our Latin America, EMEA,
and Asia (exclusive of our Japan business) segments, which accounted for approximately 19% of our operating earnings in
2016, are not significantly interest rate or market sensitive; in particular, they do not have any direct sensitivity to U.S. interest
rates. The Company’s primary exposure within these segments is insurance risk. We expect our non-U.S. businesses to grow
faster than our U.S. businesses and, over time, to become a larger percentage of our total business. As a result of the foregoing,
the Company expects to be able to substantially mitigate the negative impact of a sustained low interest rate environment in
the U.S. on the Company’s profitability. Based on a near to intermediate term analysis of a sustained lower interest rate
environment in the U.S., the Company anticipates operating earnings will continue to increase, although at a slower growth
rate.

Low Interest Rate Scenario

In formulating economic assumptions for its insurance contract assumptions, the Company uses projections that it makes
regarding interest rates. Included in these assumptions is the projection that the 10-year Treasury rate will rise from 2.45% at
December 31, 2016 to 4.25% in 10 years, by 2026 and that 10-year yields will reach 2.73%, 2.93% and 3.08% by December
31, 2017, 2018 and 2019, respectively. Also included is the projection that the three-month LIBOR rate will move from 1.00%
at December 31, 2016 to 1.55%, 1.95% and 2.22% by December 31, 2017, 2018 and 2019, respectively. The low interest rate
scenario reflects an assumed constant 10-year Treasury rate of 1.50% and a constant three-month LIBOR rate of 0.65%, with
the corresponding consensus of interest rate views and credit spreads (the “Low Interest Rate Scenario”).

The following summarizes the impact of the Low Interest Rate Scenario on our U.S. dollar and non-U.S. dollar denominated
positions. In addition, we have included disclosure on the potential impact on 2017, 2018 and 2019 net income using the same
Low Interest Rate Scenario on the mark-to-market of derivative positions that do not qualify as accounting hedges.

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Below is a summary of the rates we used for the Low Interest Rate Scenario versus our business plan through 2019. These

rates represent the most relevant short-term and long-term rates for our business plan.

Years Ended December 31,

2016

2017

2018

2019

Low
Interest
Rate
Scenario

0.65%

1.50%

Business
Plan

1.00%

2.45%

Low
Interest
Rate
Scenario

0.65%

1.50%

Business
Plan

1.55%

2.73%

Low
Interest
Rate
Scenario

0.65%

1.50%

Business
Plan

1.95%

2.93%

Low
Interest
Rate
Scenario

0.65%

1.50%

Business
Plan

2.22%

3.08%

Three-month LIBOR

10-year U.S. Treasury

The Low Interest Rate Scenario assumes three-month LIBOR to be 0.65% and the 10-year U.S. Treasury rate to be 1.50%
at December 31, 2016 and remain constant at those levels until December 31, 2019. We make similar assumptions for interest
rates at other maturities, and hold this interest rate curve constant through December 31, 2019. In addition, in the Low Interest
Rate Scenario, we assume credit spreads remain constant from December 2016 through the end of 2019 as compared to our
business plan which assumes rising credit spreads through 2017 and thereafter remaining constant through the end of 2019.
Further, we also include the impact of low interest rates on our pension and postretirement plan expenses. We allocate this
impact across our segments and it is included in the segment discussion below. The discount rate used to value these plans is
tied to high quality corporate bond yields. Accordingly, an extended low interest rate environment will result in increased
pension and other postretirement benefit liabilities. However, these liabilities are offset by corresponding returns on the fixed
income portfolio of pension and other postretirement benefit plan assets resulting in an overall decrease in expense.

Hypothetical Impact to Operating Earnings

Based on the above assumptions, we estimate an unfavorable combined long-term and short-term interest rate impact
on our consolidated operating earnings from the Low Interest Rate Scenario of approximately $65 million in 2017,
$120 million in 2018 and $210 million in 2019. Under the Low Interest Rate Scenario, our long-term businesses are negatively
impacted by the larger gap between new money yields and the yield on assets rolling off the portfolio. However, there are
positive offsets under the Low Interest Rate Scenario as short-term rates are much lower than the business plan rates and
the yield curve is steeper than that of the business plan. For example, our securities lending business performs better than
our business plan because it is driven by the slope of the yield curve rather than by the level of interest rates. In addition,
derivative income is higher primarily due to our receiver swaps where we receive a fixed rate and pay a floating rate.

Hypothetical Impact to Our Mark-to-Market Derivative Positions

In addition to its impact on operating earnings, we estimated the effect of the Low Interest Rate Scenario on the mark-
to-market of our derivative positions that do not qualify as accounting hedges. We applied the Low Interest Rate Scenario
to these derivatives and compared the impact to that from interest rates in our business plan. We hold a significant position
in long-duration receive-fixed interest rate swaps to hedge reinvestment risk. These swaps are most sensitive to the 30-year
and 10-year swap rates and we recognize gains as rates drop and recognize losses as rates rise. This estimated impact on
the derivative mark-to-market does not include that of our VA program derivatives as the impact of low interest rates in the
freestanding derivatives would be largely offset by the mark-to-market in net derivative gains (losses) for the related
embedded derivative.

Based on these additional assumptions, we estimate the combined long-term and short-term interest rate impact of the
Low Interest Rate Scenario on the mark-to-market of our derivative positions that do not qualify as accounting hedges to
be an increase in net income of $140 million in 2017, $145 million in 2018 and $80 million in 2019. See “— Results of
Operations — Consolidated Results” for information regarding our actual gains and losses on the Company’s non-VA
program derivatives due to interest rate changes which are included in net income.

Segments and Corporate & Other

The following discussion summarizes the impact of the above Low Interest Rate Scenario on the operating earnings
of our segments, as well as Corporate & Other. See also “— Policyholder Liabilities — Policyholder Account Balances”
for information regarding the account values subject to minimum guaranteed crediting rates.

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U.S.

Group Benefits

In general, most of our group life insurance products in the U.S. segment are renewable term insurance and,
therefore, have significant repricing flexibility. Interest rate risk arises mainly from minimum interest rate guarantees
on retained asset accounts. These accounts have minimum interest crediting rate guarantees which range from 0.5% to
3.0%. All of these account balances are currently at their respective minimum interest crediting rates and we would
expect to experience margin compression as we reinvest at lower interest rates. We have used interest rate derivatives
to partially mitigate the risks of a sustained U.S. low interest rate environment. We also have exposure to interest rate
risk in this business arising from our disability policy claim reserves. For these products, lower reinvestment rates
cannot be offset by a reduction in liability crediting rates for established claim reserves. Group disability policies are
generally renewable term policies. Rates may be adjusted on in-force policies at renewal based on the retrospective
experience rating and current interest rate assumptions.

We estimate a favorable combined long-term and short-term interest rate impact on the operating earnings of our
Group Benefits business from the Low Interest Rate Scenario of $5 million, $15 million and $20 million in 2017, 2018
and 2019, respectively.

Retirement and Income Solutions

Retirement and Income Solutions contains both short and long-duration products consisting of capital market
products, pension risk transfers, structured settlements, and other benefit funding products. The majority of short-
duration products are managed on a floating rate basis, which mitigates the impact of the low interest rate environment
in the U.S. The long-duration products have very predictable cash flows and we have matched these cash flows through
our ALM strategies. We also use interest rate swaps to help protect income in this segment against a low interest rate
environment in the U.S. Based on the cash flow estimates, only a small component is subject to reinvestment risk.
Reinvestment risk is defined for this purpose as the amount of reinvestment in 2017, 2018 and 2019 that would impact
operating earnings due to reinvesting cash flows in the Low Interest Rate Scenario. For the long-duration business,
$0.1 billion of the asset base in 2017 will be subject to reinvestment risk on an average asset base of $52.4 billion. In
2018 and 2019, none of the asset base will be subject to reinvestment risk on an average asset base of $54.0 billion and
$54.7 billion, respectively.

We estimate an unfavorable combined long-term and short-term interest rate impact on operating earnings on our
Retirement and Income Solutions business from the Low Interest Rate Scenario of $35 million, $65 million and
$35 million in 2017, 2018 and 2019, respectively.

Property & Casualty

The product portfolio within Property & Casualty is primarily made up of six-month and annual term renewable
policies, which allow for significant re-pricing flexibility with no policyholder benefits tied to interest rates. As a result,
the interest rate risk for the Property & Casualty business is minimal, tied only to our portfolio reinvestment rates and
our ability to offset the change of those rates through re-pricing efforts.

We estimate a combined long-term and short-term interest rate impact on operating earnings on our Property and
Casualty business from the Low Interest Rate Scenario not to be material in 2017, and an unfavorable impact of
$5 million and $10 million in 2018 and 2019, respectively.

Asia

Our Japan business offers traditional life insurance and accident & health products. To the extent the Japan life
insurance portfolio is U.S. interest rate and LIBOR sensitive and we are unable to lower crediting rates to the customer,
operating earnings will decline. We manage interest rate risk on our life products through a combination of product design
features and ALM strategies.

We sell annuities in Japan which are predominantly single premium products with crediting rates set at the time of

issue. This allows us to tightly manage product ALM, cash flows and net spreads, thus maintaining profitability.

We estimate an unfavorable combined long-term and short-term interest rate impact on the operating earnings of our
Asia segment from the Low Interest Rate Scenario of $25 million, $65 million and $120 million in 2017, 2018 and 2019,
respectively.

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MetLife Holdings

Our interest rate sensitive life products include traditional and universal life products. Because the majority of our
traditional life insurance business is participating, we can largely offset lower investment returns on assets backing our
traditional life products through adjustments to the applicable dividend scale. In our universal life products, we manage
interest rate risk through a combination of product design features and ALM strategies, including the use of interest rate
derivative hedges. While we have the ability to lower crediting rates on certain in-force universal life policies to mitigate
margin compression, such actions would be partially offset by increases in our liabilities related to policies with secondary
guarantees.

In annuities, the impact on operating earnings from margin compression is concentrated in our deferred annuities
where there are minimum interest rate guarantees. Under the Low Interest Rate Scenario, we assume that a larger percentage
of customers will maintain their funds with us to take advantage of the attractive minimum guaranteed crediting rates
and we expect to experience margin compression as we reinvest cash flows at lower interest rates. Partially offsetting
this margin compression, we assume we will lower crediting rates on contractual reset dates for the portion of business
that is not currently at minimum crediting rates. Additionally, we have various interest rate derivative positions to partially
mitigate this risk.

Long-term care and retained assets accounts are interest rate sensitive. Long-term care reserves have exposure to
lower reinvestment rates that cannot be offset by a reduction in liability crediting rates for established claim reserves.
Long-term care policies are guaranteed renewable, and rates may be adjusted on a class basis with regulatory approval
to reflect emerging experience. Our long-term care block is closed to new business. We review the discount rate assumptions
and other assumptions associated with our long-term disability claim reserves no less frequently than annually and, with
respect to interest rates, we set the discount rate on these reserves based on the prevailing interest rate environment at the
time. Our retained asset accounts have minimum interest crediting rate guarantees which range from 0.5% to 4.0%, all
of which are currently at their respective minimum interest crediting rates. While we expect to experience margin
compression as we reinvest at lower rates, the interest rate derivatives held in this portfolio should partially mitigate this
risk.

Reinvestment risk is defined for this purpose as the amount of reinvestment in 2017, 2018 and 2019 that would
impact operating earnings due to reinvesting cash flows in the Low Interest Rate Scenario. For the life business, $3.3 billion,
$2.7 billion and $2.5 billion in 2017, 2018 and 2019, respectively, of the asset base will be subject to reinvestment risk
on an average asset base of $61.1 billion, $60.9 billion and $60.6 billion in 2017, 2018 and 2019, respectively. For our
deferred annuities business, $1.3 billion, $0.8 billion, and $1.0 billion in 2017, 2018, and 2019, respectively, of the asset
base will be subject to reinvestment risk on an average asset base of $18.1 billion, $17.8 billion and $17.4 billion in 2017,
2018 and 2019, respectively. For our long-term care portfolio, $0.7 billion, $0.5 billion and $0.5 billion of the asset base
in 2017, 2018 and 2019, respectively, will be subject to reinvestment risk on an average asset base of $11.3 billion,
$12.1 billion and $12.7 billion in 2017, 2018 and 2019, respectively.

We estimate an unfavorable combined long-term and short-term interest rate impact on the operating earnings of our
MetLife Holdings segment from the Low Interest Rate Scenario of $10 million, $25 million and $50 million in 2017,
2018 and 2019, respectively.

Brighthouse Financial

Our interest rate sensitive products include deferred annuities and universal life products. In our universal life products,
we manage interest rate risk through a combination of product design features and ALM strategies, including the use of
interest rate derivatives. While we have the ability to lower crediting rates on certain in-force universal life policies to
mitigate margin compression, such actions would be partially offset by increases in our liabilities related to policies with
secondary guarantees.

The impact on operating earnings from margin compression is concentrated in our fixed deferred annuities, as well
as the fixed account allocations in our variable annuities, where there are minimum interest rate guarantees. Under the
Low Interest Rate Scenario, we assume that a larger percentage of customers will maintain their funds with us to take
advantage of the attractive minimum guaranteed crediting rates and we expect to experience margin compression as we
reinvest cash flows at lower interest rates. Partially offsetting this margin compression, we assume we will lower crediting
rates on contractual reset dates for the portion of business that is not currently at minimum crediting rates. Additionally,
we have various interest rate derivative positions to partially mitigate this risk.

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We estimate a favorable combined long-term and short-term interest rate impact on operating earnings on our
Brighthouse Financial segment from the Low Interest Rate Scenario of $30 million and $5 million in 2017 and 2018,
respectively and an unfavorable impact of $45 million in 2019.

Additionally, we have mark-to-market interest rate risk in our variable annuity guarantees, where reduced interest
rates could result in an increase in the valuation of our liabilities associated with these products. Because this risk is
largely hedged, we have not included the impact of such interest rate risk in the foregoing estimates.

Corporate & Other

Corporate & Other contains the surplus portfolios for the enterprise, the portfolios used to fund the capital needs of
the Company and various reinsurance agreements. The surplus portfolios are subject to reinvestment risk; however, lower
net investment income is significantly offset by lower interest expense on both fixed and variable rate debt. Under a lower
interest rate environment, fixed rate debt is assumed to be either paid off when it matures or refinanced at a lower interest
rate resulting in lower overall interest expense. Variable rate debt is indexed to the three-month LIBOR, which results in
lower interest expense incurred.

We estimate an unfavorable combined long-term and short-term interest rate impact on the operating earnings of
Corporate & Other from the Low Interest Rate Scenario of $30 million in 2017 and a favorable impact of $20 million
and $30 million in 2018 and 2019, respectively.

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 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 continued volatility of the financial markets, its impact on the capital
position of many competitors, and subsequent actions by regulators and rating agencies have altered the competitive environment.
In particular, we believe that these factors have highlighted financial strength as the most significant differentiator and, as a
result, we believe the Company is well positioned to compete in this environment.

Regulatory Developments

In the United States, our life insurance companies are regulated primarily 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, as well as reviews of the utilization of affiliated captive reinsurers and offshore entities to reinsure
insurance risks.

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The regulation of the global financial services industry has received renewed scrutiny as a result of the disruptions in the
financial markets. Significant regulatory reforms have been adopted and additional reforms proposed, and these or other reforms
could be implemented. See “Business — Regulation,” “Risk Factors — Regulatory and Legal Risks — Our Insurance and
Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies May
Reduce Our Profitability and Limit Our Growth,” “Risk Factors — Risks Related to Our Business — Our Statutory Life Insurance
Reserve Financings May Be Subject to Cost Increases and New Financings May Be Subject to Limited Market Capacity,” and
“Risk Factors — Regulatory and Legal Risks — Changes in U.S. Federal, State Securities and State Insurance Laws and
Regulations May Affect Our Operations and Our Profitability.” For example, Dodd-Frank effected the most far-reaching overhaul
of financial regulation in the United States in decades. The full impact of Dodd-Frank on us will depend on whether MetLife,
Inc. again becomes subject to supervision and regulation as a non-bank SIFI, as well as the adoption and implementation of
final rules for insurance non-bank SIFIs required or permitted by Dodd-Frank, a number of which remain to be completed. See
“Risk Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated, and Changes
in Regulation and In Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth” for information
regarding the proposal by President Trump and the majority party to dismantle or roll back Dodd-Frank and the related Executive
Order calling for a comprehensive review of Dodd-Frank.

Mortgage and Foreclosure-Related Exposures

MetLife no longer engages in the origination, sale and servicing of forward and reverse residential mortgage loans. See
Note 21 of the Notes to the Consolidated Financial Statements for further information regarding our mortgage and foreclosure-
related exposures.

Notwithstanding MetLife Bank’s exit from the origination and servicing businesses, MLHL remains obligated to repurchase
loans or compensate for losses upon demand due to alleged defects by MetLife Bank or its predecessor servicers in past servicing
of the loans and material representations made in connection with MetLife Bank’s sale of the loans. Reserves for representation
and warranty repurchases and indemnifications were $34 million and $72 million at December 31, 2016 and 2015, respectively.
Reserves for estimated future losses due to alleged deficiencies on loans originated and sold, as well as servicing of the loans
including servicing acquired, are estimated based on unresolved claims and projected losses under investor servicing contracts
where MetLife Bank’s past actions or inactions are likely to result in missing certain stipulated investor timelines. Reserves for
servicing defects were $11 million and $31 million at December 31, 2016 and 2015, respectively. Management is satisfied that
adequate provision has been made in the Company’s consolidated financial statements for those representation and warranty
obligations that are currently probable and reasonably estimable.

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 on the Consolidated Financial Statements. For a discussion of our
significant accounting policies, see Note 1 of the Notes to the Consolidated Financial Statements. The most critical estimates
include those used in determining:

(i) liabilities for future policy benefits and the accounting for reinsurance;

(ii) capitalization and amortization of DAC and the establishment and amortization of VOBA;

(iii) estimated fair values of investments in the absence of quoted market values;

(iv) investment impairments;

(v) estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives

requiring bifurcation;

(vi) measurement of goodwill and related impairment;

(vii) measurement of employee benefit plan liabilities;

(viii) measurement of income taxes and the valuation of deferred tax assets; and

(ix) liabilities for litigation and regulatory matters.

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In addition, the application of acquisition 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 these policies and estimates, management makes subjective and complex judgments that frequently require
assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common
in the insurance and financial services industries; others are specific to our business and operations. Actual results could differ
from these estimates.

Liability for Future Policy Benefits

Generally, future policy benefits 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. If experience is less favorable than assumed, additional
liabilities may be established, 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 are estimated based upon our 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 are
based on estimates of the expected value of benefits in excess of the projected account balance, recognizing the excess ratably
over the accumulation period based on total expected assessments. Liabilities for ULSG and paid-up guarantees are determined
by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing
those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating
the secondary and paid-up guarantee liabilities are consistent with those used for amortizing 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 S&P 500 Index.

We regularly review our estimates of liabilities for future policy benefits and compare them with our actual experience.
Differences between actual experience and the assumptions used in pricing these policies and guarantees, as well as in the
establishment of the related liabilities, result in variances in profit and could result in losses.

See Note 4 of the Notes to the Consolidated Financial Statements for additional information on our liability for future policy

benefits.

Reinsurance

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. We periodically review actual and
anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and
assumed reinsurance and evaluate the financial strength of counterparties to our reinsurance agreements using criteria similar
to that evaluated in our security impairment process. See “— Investment Impairments.” Additionally, for each of our reinsurance
agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk, in
accordance with applicable accounting standards. We review all contractual features, including those that may limit the amount
of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If we determine
that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk,
we record the agreement using the deposit method of accounting.

See Note 6 of the Notes to the Consolidated Financial Statements for additional information on our reinsurance programs.

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Deferred Policy Acquisition Costs and Value of Business Acquired

We incur significant costs in connection with acquiring new and renewal insurance business. Costs that relate directly to
the successful acquisition or renewal of insurance contracts are capitalized as DAC. In addition to commissions, certain direct-
response advertising expenses and other direct costs, deferrable costs include the portion of an employee’s total compensation
and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only
with respect to actual policies acquired or renewed. We utilize various techniques to estimate the portion of an employee’s time
spent on qualifying acquisition activities that result in actual sales, including surveys, interviews, representative time studies
and other methods. These estimates include assumptions that are reviewed and updated on a periodic basis or more frequently
to reflect significant changes in processes or distribution methods.

VOBA 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. 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 included in other policy-related balances. The estimated
fair value of the acquired obligations is based on projections, by each block of business, of future policy and contract charges,
premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns,
nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections.
The recovery of DAC and VOBA is dependent upon the future profitability of the related business.

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. Our 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. We monitor these events and only change the assumption when our 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 with an offset to our unearned revenue liability which nets to
approximately $230 million. We use a mean reversion approach to separate account returns where the mean reversion period is
five years with a long-term separate account return after the five-year reversion period is over. The current long-term rate of
return assumption for the variable universal life contracts and variable deferred annuity contracts is 7.0%.

We periodically review long-term assumptions underlying the projections of estimated gross margins and profits. These
assumptions primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency,
and expenses to administer business. Assumptions used in the calculation of estimated gross margins and profits which may
have significantly changed are updated annually. We expect these assumptions to be the ones most reasonably likely to cause
significant changes in the future. Changes in these assumptions can be offsetting and we are unable to predict their movement
or offsetting impact over time.

In 2016, as part of the annual actuarial assumption review, the Company made changes to policyholder behavior and long-
term economic assumptions, as well as risk margins, resulting in changes to the actual and expected future gross profits. Other
assumptions, such as expenses, in-force or persistency assumptions and policyholder dividends on participating traditional life
contracts, variable and universal life contracts were also reviewed. See “— Results of Operations — Consolidated Results —
Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015 — Actuarial Assumption Review” for
further information.

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At December 31, 2016, 2015 and 2014, DAC and VOBA for the Company was $24.8 billion, $24.1 billion and $24.4 billion,
respectively. In addition to assumption updates, amortization of DAC and VOBA associated with the variable and universal life
and annuity contracts was significantly impacted by movements in equity markets. The following illustrates the effect on DAC
and VOBA 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, 2016, 2015 and 2014. Increases (decreases) in DAC and VOBA
balances, as presented below, resulted in a corresponding decrease (increase) in amortization.

General account investment return

Separate account investment return

Net investment gains (losses)/Net derivative gains (losses)

Guaranteed minimum income benefits

Expense

In-force/Persistency

Policyholder dividends and other

Total

Years Ended December 31,

2016

2015

2014

(In millions)

(72) $

(12)

1,627

(92)

(8)

(2)

(584)

(31)

(9)

(125)

(93)

220

(39)

954

(149) $

(45)

(42)

(63)

(74)

(63)

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2016:

• Changes in net investment and net derivative 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 decrease of DAC and VOBA amortization of approximately $420 million,
excluding the impact from our nonperformance risk and risk margins, which are described below. The increase in
the guarantee liability valuations on variable annuities was mostly attributable to the annual actuarial assumption
review, which is described more fully in “— Results of Operations — Consolidated Results — Year Ended
December 31, 2016 Compared with the Year Ended December 31, 2015 — Actuarial Assumption Review.” Mark-
to-market changes on the freestanding derivatives hedging such guarantee obligations resulted in a decrease in
DAC and VOBA amortization of approximately $920 million.

– The Company’s nonperformance risk adjustment decreased the valuation of guaranteed liabilities, increased actual
gross profits and increased DAC and VOBA amortization by approximately $120 million. This is more than offset
by higher risk margins, which increased the guarantee liability valuations, decreased actual gross profits and
decreased DAC and VOBA amortization by approximately $380 million.

• The change in current and projected GMIB liabilities, mostly attributable to long-term investment rate of return and
policyholder behavior related assumptions updates, as well as hedge gains, resulted in an increase to DAC and VOBA
amortization of approximately $90 million.

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• The change in policyholder dividends and other is primarily driven by:

– An acceleration of approximately $360 million of DAC amortization associated with universal life products

resulting from the re-segmentation of MetLife businesses to establish a Brighthouse Financial segment.

– An increase of approximately $110 million of DAC amortization resulting from the annual actuarial assumption

update of the closed block.

– An increase of approximately $70 million of DAC amortization resulting from the dividend scale update.

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2015:

• Changes in net investment and net derivative gains (losses) resulted in the following changes in DAC and VOBA

amortization:

– The Company’s nonperformance risk adjustment decreased the valuation of guaranteed liabilities, increased actual
gross profits and increased DAC and VOBA amortization by $17 million. This was partially offset by the lower
risk margins, which increased the guarantee liability valuations, decreased actual gross profits and decreased DAC
and VOBA amortization by $10 million.

– The remainder of the impact increased DAC and VOBA amortization by $226 million and was attributable to 2015

investment activities, methodology refinement, and assumption updates.

• The change in GMIBs resulted in an increase to DAC amortization of $125 million mostly attributable to hedge gains.

• Better than expected persistency and updates in persistency assumptions caused an increase in actual and expected

future gross profits resulting in a net decrease in DAC and VOBA amortization of $220 million.

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2014:

• The increase in equity markets during the year increased separate account balances, which led to higher actual and
expected future gross profits on variable universal life contracts and variable deferred annuity contracts resulting in a
decrease of $43 million in DAC and VOBA amortization.

• Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization.

– The widening of the Company’s nonperformance risk adjustment decreased the valuation of guaranteed liabilities,
increased actual gross profits and increased DAC and VOBA amortization by $44 million. This was more than
offset by the higher risk margins, which increased the guarantee liability valuations, decreased actual gross profits
and decreased DAC and VOBA amortization by $53 million.

– The remainder of the impact of net investment gains (losses), which decreased DAC and VOBA amortization by

$50 million, was primarily attributable to 2014 investment activities.

• The change in current and future projected GMIBs liability resulted in an increase to DAC amortization of $63 million.

• Better than expected persistency and changes in assumptions regarding persistency caused an increase in actual and

expected future gross profits resulting in a net decrease in DAC and VOBA amortization of $94 million.

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Our 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 realized. The increase in unrealized investment gains
(losses) decreased the DAC and VOBA balance by $158 million in 2016, while the change in unrealized investment gains
increased the DAC and VOBA balance by $638 million and decreased by $702 billion in 2015 and 2014, respectively. See
Notes 5 and 8 of the Notes to the Consolidated Financial Statements for information regarding the DAC and VOBA offset to
unrealized investment losses.

Estimated Fair Value of Investments

In determining the estimated fair value of our investments, fair values are based on unadjusted quoted prices for identical
investments in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values
are based on quoted prices in markets that are not active, quoted prices for similar but not identical investments, or other observable
inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to
observable inputs requiring management judgment are used to determine the estimated fair value of investments.

The methodologies, assumptions and inputs utilized are described in Note 10 of the Notes to the Consolidated Financial

Statements.

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

Investment Impairments

One of the significant estimates related to AFS securities is our impairment evaluation. The assessment of whether an other-
than-temporary impairment (“OTTI”) occurred is based on our case-by-case evaluation of the underlying reasons for the decline
in estimated fair value on a security-by-security basis. Our review of each fixed maturity and equity security for OTTI includes
an analysis of gross unrealized losses by three categories of severity and/or age of gross unrealized loss. 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. Accordingly, such an unrealized loss position may not impact our 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 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.
Factors we consider in the OTTI evaluation process are described in Note 8 of the Notes to the Consolidated Financial Statements.

The determination of the amount of allowances and impairments on the remaining invested asset classes is highly subjective
and is based upon our 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.

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements for additional information relating to our

determination of the amount of allowances and impairments.

Derivatives

The determination of the estimated fair value of freestanding derivatives, when quoted market values are not available, is
based on market standard valuation methodologies and inputs that management believes are consistent with what other market
participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign
currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in
estimates and assumptions used in the pricing models. See Note 10 of the Notes to the Consolidated Financial Statements for
additional details on significant inputs into the OTC derivative pricing models and credit risk adjustment.

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We issue variable annuity products with guaranteed minimum benefits, some of which are embedded derivatives 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 derivatives also includes an adjustment for our
nonperformance risk and risk margins for non-capital market inputs. The nonperformance risk adjustment, which is captured as
a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, is determined by taking
into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including
related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities
and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc. Risk margins are established to
capture the non-capital market risks of the instrument which represent the additional compensation a market participant would
require to assume the risks related to the uncertainties in certain actuarial assumptions. 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.

The table below illustrates the impact that a range of reasonably likely variances in credit spreads would have on our
consolidated balance sheet, excluding the effect of income tax, related to the embedded derivative valuation on certain variable
annuity products measured at estimated fair value. In determining the ranges, we have 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 such as those experienced during the 2008-2009 financial crisis, as we do not consider those to be reasonably
likely events in the near future.

In 2016, the Company made changes to the actuarial assumptions that resulted in an increase in the fair value of the embedded
derivatives. The impact of the range of reasonably likely variances in credit spreads also increased significantly as compared to
prior periods. However, these estimated effects do not take into account potential changes in other variables, such as equity price
levels and market volatility, which 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.

100% increase in our credit spread

As reported

50% decrease in our credit spread

Changes in Balance Sheet Carrying Value
At December 31, 2016

Policyholder
Account Balances

DAC and VOBA

(In millions)

3,177

3,978

4,469

591

756

852

The accounting for derivatives is complex and interpretations of accounting standards continue to evolve in practice. If it
is determined that hedge accounting designations were not appropriately applied, reported net income could be materially
affected. 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.

Variable annuities with 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 our 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. If interpretations change, there is a risk that features previously
not bifurcated may require bifurcation and reporting at estimated fair value on the consolidated financial statements and respective
changes in estimated fair value could materially affect net income.

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Additionally, we ceded the risk associated with certain of the variable annuities with guaranteed minimum benefits 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 us with the exception of the input for
nonperformance risk that reflects the credit of the reinsurer. Because certain of the direct guarantees do not meet the definition
of an embedded derivative and, thus are not accounted for at fair value, significant fluctuations in net income may occur since
the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding
and offsetting change in fair value of the direct guarantee.

See Note 9 of the Notes to the Consolidated Financial Statements for additional information on our derivatives and hedging

programs.

Goodwill

Goodwill 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.

For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, the
implied fair value of the reporting unit goodwill is compared to the carrying value of that goodwill to measure the amount of
impairment loss, if any. 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 key inputs, judgments and assumptions necessary in
determining estimated fair value of the reporting units include projected operating earnings, current book value, 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 renewed 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.

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.

In connection with the reorganization, the Company realigned certain businesses among its existing and new segments. As
a result, the Company reallocated goodwill according to the relative fair values of the realigned businesses and reporting units.
The Company performed an analysis to identify all reporting units under this revised structure.

In the third quarter of 2016, the Company performed its annual goodwill impairment test on the life and run-off reporting
units in its Brighthouse Financial segment based upon its best available data at June 30, 2016. The Company utilized an actuarial
based cash flow testing valuation and embedded value approaches, respectively, which estimate the net worth of the reporting
unit and the value of existing and new business, if applicable. Under these actuarial-based methodologies, the estimated fair
value of each of these reporting units was less than its carrying value, indicating a potential for goodwill impairment. The fair
value of the life reporting unit was negatively impacted by a concentration in universal life products, including those with
secondary guarantees, as it did not have the benefit of having a significant book of traditional life insurance. The run-off reporting
unit, as a closed block, used a higher discount rate reflective of expected risk-adjusted returns associated with such business
which negatively impacted its estimated fair value. As a result, the Company performed the second step of its goodwill impairment
process, which compares the implied fair value of the reporting unit’s goodwill with its carrying value. This analysis indicated
that the allocated goodwill associated with each of these reporting units was not recoverable. Therefore, the Company recorded
a non-cash charge of $147 million ($126 million, net of income tax) and $113 million ($97 million, net of income tax) for the
life and run-off reporting units, respectively, impairing the entire goodwill balance which is reported in goodwill impairment
on the consolidated statements of operations and comprehensive income for the year ended December 31, 2016.

In addition, in the third quarter of 2016, the Company performed the annual goodwill impairment test on the life reporting
unit of its MetLife Holdings segment using the actuarial based embedded value fair valuation approach. The estimated fair value
of the reporting unit exceeded its carrying value by approximately 13% and, therefore, the reporting unit was not impaired. If
we had assumed that the discount rate was 100 basis points higher than the discount rate used, the estimated fair value of the
MetLife Holdings life reporting unit would have been less than the carrying value by approximately 7%. The MetLife Holdings
Life reporting unit consists of operations relating to products and businesses no longer actively marketed by the Company. As
of December 31, 2016, the life reporting unit of the MetLife Holdings segment had a $887 million goodwill balance.

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The Company also performed its annual goodwill impairment tests of all other reporting units during the third quarter of
2016 using a qualitative assessment and/or quantitative assessments under the market multiple, discounted cash flow and/or
actuarial-based valuation approaches based on best available data as of June 30, 2016 and concluded that the estimated fair
values of all such reporting units were in excess of their carrying values and, therefore, goodwill was not impaired.

See Note 11 of the Notes to the Consolidated Financial Statements for additional information on our goodwill.

Employee Benefit Plans

Certain subsidiaries of MetLife, Inc. sponsor and/or administer various plans that provide defined benefit pension and other
postretirement benefits covering eligible employees and sales representatives. The calculation of the obligations and expenses
associated with these plans requires an extensive use of assumptions such as the discount rate, expected rate of return on plan
assets, rate of future compensation increases and healthcare cost trend rates, as well as assumptions regarding participant
demographics such as rate and age of retirement, withdrawal rates and mortality. In consultation with external actuarial firms,
we determine these assumptions based upon a variety of factors such as historical experience of the plan and its assets, currently
available market and industry data, and expected benefit payout streams.

We determine the expected rate of return on plan assets based upon an approach that considers inflation, real return, term
premium, credit spreads, equity risk premium and capital appreciation, as well as expenses, expected asset manager performance,
asset weights and the effect of rebalancing. Given the amount of plan assets as of December 31, 2015, the beginning of the
measurement year, if we had assumed an expected rate of return for both our pension and other postretirement benefit plans that
was 100 basis points higher or 100 basis points lower than the rates we assumed, the change in our net periodic benefit costs
would have been a decrease of $100 million and an increase of $100 million, respectively, in 2016. This considers only changes
in our assumed long-term rate of return given the level and mix of invested assets at the beginning of the year, without consideration
of possible changes in any of the other assumptions described above that could ultimately accompany any changes in our assumed
long-term rate of return.

We determine the discount rates used to value the Company’s pension and postretirement obligations, based upon rates
commensurate with current yields on high quality corporate bonds. Given our pension and postretirement obligations as of
December 31, 2015, the beginning of the measurement year, if we had assumed a discount rate for both our pension and
postretirement benefit plans that was 100 basis points higher or 100 basis points lower than the rates we assumed, the change
in our net periodic benefit costs would have been a decrease of $110 million and an increase of $123 million, respectively, in
2016. This considers only changes in our assumed discount rates without consideration of possible changes in any of the other
assumptions described above that could ultimately accompany any changes in our assumed discount rate. 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.

See Note 18 of the Notes to the Consolidated Financial Statements for additional discussion of assumptions used in measuring

liabilities relating to our employee benefit plans.

Income Taxes

We provide 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. Our accounting for income taxes represents
our best estimate of various events and transactions. Tax laws are often complex and may be subject to differing interpretations
by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must
make judgments and interpretations about the application of inherently complex tax laws. We must also make estimates about
when in the future certain items will affect taxable income in the various tax jurisdictions, both domestic and foreign.

In establishing a liability for unrecognized tax benefits, assumptions may be made in determining whether, and to what
extent, a tax position may be sustained. Once established, unrecognized tax benefits are adjusted when there is more information
available or when events occur requiring a change.

Valuation allowances are established against deferred tax assets when management determines, based on available
information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required
in determining whether valuation allowances should be established, as well as the amount of such allowances. See Note 1 of
the Notes to the Consolidated Financial Statements for additional information relating to our determination of such valuation
allowances.

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We may be required to change our provision for income taxes when estimates used in determining valuation allowances on
deferred tax assets significantly change, or when receipt of new information indicates the need for adjustment in valuation
allowances. Additionally, 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 on the financial statements in the year these changes occur.

See Notes 1 and 19 of the Notes to the Consolidated Financial Statements for additional information on our income taxes.

Litigation Contingencies

We are a party to a number of legal actions and are involved in a number of regulatory investigations. Given the inherent
unpredictability of these matters, it is difficult to estimate the impact on our 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 our 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 our 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 us 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, we review relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related
contingencies to be reflected in our consolidated financial statements. It is possible that an adverse outcome in certain of our
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 our consolidated net income or cash flows in particular quarterly or
annual periods.

See Note 21 of the Notes to the Consolidated Financial Statements for additional information regarding our assessment of

litigation contingencies.

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 business.

Our economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity
with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the
material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital
shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of
diversification benefits among risk types. Economic capital-based risk estimation is an evolving science and industry best
practices have emerged and continue to evolve. Areas of evolving industry best practices include stochastic liability valuation
techniques, alternative methodologies for the calculation of diversification benefits, and the quantification of appropriate shock
levels. MetLife’s management is responsible for the ongoing production and enhancement of the economic capital model and
reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

Segment net investment income, with the exception of the Brighthouse Financial segment, is credited or charged based on
the level of allocated equity; however, changes in allocated equity do not impact our consolidated net investment income, income
(loss) from continuing operations, net of income tax or operating earnings. The Brighthouse Financial segment’s net investment
income represents that of the legal entities which comprise Brighthouse and its subsidiaries on a historical basis, however, may
not be indicative of that on a combined standalone basis.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios
adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such
costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates
included in the Company’s product pricing.

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Acquisitions and Dispositions

In 2014, the life insurance joint venture in Vietnam among MetLife, Inc. (through MetLife Limited), Joint Stock Commercial
Bank for Investment & Development of Vietnam and Bank for Investment & Development of Vietnam Insurance Joint Stock
Corporation was established. Operations of the joint venture (BIDV MetLife Life Insurance Limited Liability Company)
commenced in 2014.

In 2014, MetLife, Inc. and Malaysia’s AMMB Holdings Bhd (“AMMB”) completed the formation of their strategic
partnership, in which each holds approximately 50% of both AmMetLife Insurance Berhad and AmMetTakaful Berhad, each
of which became parties to exclusive 20-year distribution agreements with AMMB bank affiliates.

See “— Executive Summary — Other Key Information — Significant Events” for information regarding the U.S. Retail

Advisor Force Divestiture and the proposed Separation.

See also Note 3 of the Notes to the Consolidated Financial Statements for additional information regarding the Company’s

dispositions.

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Results of Operations

Consolidated Results

Business Overview. Overall sales for the year ended December 31, 2016 increased slightly over 2015 levels reflecting an
increase in sales of certain products. An overall increase in sales from our U.S. segment was primarily driven by sales of stable
value products as well as funding agreement issuances. Sales of pension risk transfers and structured settlements improved
slightly while sales in the income annuities and pension businesses were slightly lower. In our Latin America segment, improved
sales of medical, accident & health and property & casualty products were partially offset by lower sales of pension and life
products. For our EMEA segment, improved 2016 sales in the Middle East and the U.K. were partially offset by strong sales in
Poland in 2015. In our MetLife Holdings and Brighthouse Financial segments, the U.S. Retail Advisor Force Divestiture and
the proposed Separation negatively impacted sales, including the suspension of sales through one distributor. Sales in our Asia
segment declined primarily due to management actions taken to improve product value.

Years Ended December 31,

2016

2015

(In millions)

2014

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Goodwill impairment

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Other expenses

Total expenses

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

Preferred stock repurchase premium

39,153

38,545

9,206

19,947

1,759

171

(6,760)

63,476

42,060

6,282

260

(3,589)

2,641

(269)

1,201

15,085

63,671

(195)

(999)

804

—

804

800

103

—

9,507

19,281

1,983

597

69,951

40,102

5,610

—

(3,837)

3,936

(361)

1,208

15,823

62,481

7,470

2,148

5,322

—

5,322

5,310

116

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

697

5,152

39,067

9,946

21,153

2,030

(197)

1,317

73,316

40,478

6,943

—

(4,183)

4,132

(442)

1,216

16,368

64,512

8,804

2,465

6,339

(3)

6,336

6,309

122

—

6,187

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Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

During the year ended December 31, 2016, income (loss) from continuing operations before provision for income tax
decreased $7.7 billion ($4.5 billion, net of income tax) from 2015 primarily driven by an unfavorable change in net derivative
gains (losses) of $6.8 billion ($4.4 billion, net of income tax). Unfavorable changes in operating earnings and net investment
gains (losses), as well as a 2016 goodwill impairment charge, also contributed to the decrease. In addition, in 2016, income
(loss) from continuing operations before provision for income tax includes the financial impact of converting the Company’s
Japan operations to calendar year-end reporting without retrospective application of this change to prior years.

Management of Investment Portfolio and Hedging Market Risks with Derivatives. 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 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. In addition, our general account investment portfolio
includes, within FVO and trading securities, contractholder-directed unit-linked investments supporting unit-linked variable
annuity type liabilities, which do not qualify as separate account assets. The returns on these contractholder-directed unit-
linked investments, which can vary significantly from 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.

We purchase investments to support our insurance liabilities and not to generate net investment gains and losses. However,
net investment gains and losses are incurred and can change significantly from period to period due to changes in external
influences, including changes in market factors such as interest rates, foreign currency exchange rates, credit spreads and
equity markets; counterparty specific factors such as financial performance, credit rating and collateral valuation; and internal
factors such as portfolio rebalancing. Changes in these factors from period to period can significantly impact the levels of
both impairments and realized gains and losses on investments sold.

We also use derivatives as an integral part of our management of the investment portfolio and insurance liabilities to
hedge certain risks, including changes in interest rates, foreign currency exchange rates, credit spreads and equity market
levels. We continually reexamine our strategy for managing such risks.

We use freestanding interest rate, equity, credit and currency derivatives to hedge certain invested assets and insurance
liabilities. A small portion of these hedges are designated and qualify as accounting hedges, which reduce volatility in earnings.
For those hedges not designated as accounting hedges, changes in market factors lead to the recognition of fair value changes
in net derivative gains (losses) generally without an offsetting gain or loss recognized in earnings for the item being hedged,
which creates volatility in earnings.

Certain variable annuity products with guaranteed minimum benefits contain embedded derivatives that are measured at
estimated fair value separately from the host variable annuity contract, with changes in estimated fair value recorded in net
derivative gains (losses). We use freestanding derivatives to hedge the market risks inherent in these variable annuity guarantees.
The valuation of these embedded derivatives includes a nonperformance risk adjustment, which is unhedged, and can be a
significant driver of net derivative gains (losses) and volatility in earnings, but does not have an economic impact on us.

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Net Derivative Gains (Losses). The variable annuity embedded derivatives and associated freestanding derivative hedges
are collectively referred to as “VA program derivatives” in the following table. All other derivatives that are economic hedges
of certain invested assets and insurance liabilities are referred to as “non-VA program derivatives” in the following table. The
table below presents the impact on net derivative gains (losses) from non-VA program derivatives and VA program derivatives:

Non-VA program derivatives

Interest rate

Foreign currency exchange rate

Credit

Equity

Non-VA embedded derivatives

Total non-VA program derivatives

VA program derivatives

Market risks in embedded derivatives

Nonperformance risk adjustment on embedded derivatives

Other risks in embedded derivatives

Total embedded derivatives

Freestanding derivatives hedging embedded derivatives

Total VA program derivatives

Net derivative gains (losses)

Years Ended December 31,

2016

2015

(In millions)

(1,728) $

433

127

(32)

(179)

(1,379)

2,158

520

(4,723)

(2,045)

(3,336)

(5,381)

(6,760) $

171

397

10
(172)
38

444

511
163
(951)
(277)
(129)
(406)
38

The unfavorable change in net derivative gains (losses) on non-VA program derivatives was $1.8 billion ($1.2 billion,
net of income tax). This was primarily due to long-term interest rates increasing during 2016 and decreasing during 2015,
unfavorably impacting receive-fixed interest rate swaps and total rate of return swaps primarily hedging long-duration liability
portfolios. Because certain of these hedging strategies are not designated or do not qualify as accounting hedges, the changes
in the estimated fair value of these freestanding derivatives are recognized in net derivative gains (losses) without an offsetting
gain or loss recognized in earnings for the item being hedged.

The unfavorable change in net derivative gains (losses) on VA program derivatives was $5.0 billion ($3.2 billion, net of
income tax). This was due to an unfavorable change of $3.8 billion ($2.5 billion, net of income tax) in other risks in embedded
derivatives and an unfavorable change of $1.6 billion ($1.0 billion, net of income tax) in market risks in embedded derivatives,
net of the impact of freestanding derivatives hedging those risks, partially offset by a favorable change of $357 million
($232 million, net of income tax) related to the change in the nonperformance risk adjustment on embedded derivatives. Other
risks relate primarily to the impact of policyholder behavior and other non-market risks that generally cannot be hedged.

The foregoing $3.8 billion ($2.5 billion, net of income tax) unfavorable change in other risks in embedded derivatives

reflected:

• Updates to actuarial policyholder behavior assumptions within the valuation model. For details, see “— Actuarial

Assumption Review”; and

• An increase in the risk margin adjustment, measuring policyholder behavior risks, which was also affected by the 2016

actuarial assumption update, along with market and interest rate changes; partially offset by

• The cross effect of capital market changes and the mismatch of fund performance between actual and modeled funds;

and

• A combination of other factors, including reserve changes influenced by benefit features and actual policyholder behavior,

as well as FCTA.

The foregoing $1.6 billion ($1.0 billion, net of income tax) unfavorable change reflects a $3.2 billion ($2.1 billion, net
of income tax) unfavorable change in freestanding derivatives hedging market risks in embedded derivatives, partially offset
by a $1.6 billion ($1.1 billion, net of income tax) favorable change in market risks in embedded derivatives.

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The primary changes in market factors are summarized as follows:

• Long-term interest rates increased in 2016 and decreased in 2015, contributing to an unfavorable change in our
freestanding derivatives and a favorable change in our embedded derivatives. For example, the 10-year U.S. swap rate
increased 15 basis points in 2016 and decreased 10 basis points in 2015.

• Key equity index levels mostly increased in 2016 and decreased in 2015, contributing to an unfavorable change in our
freestanding derivatives and a favorable change in our embedded derivatives. For example, the S&P 500 Index increased
10% in 2016 and decreased 1% in 2015.

The aforementioned $357 million ($232 million, net of income tax) favorable change in the nonperformance risk
adjustment on embedded derivatives resulted from a favorable change of $547 million, before income tax, as a result of model
changes and changes in capital market inputs, such as long-term interest rates and key equity index levels, on variable annuity
guarantees, partially offset by an unfavorable change of $190 million, before income tax, related to changes in our own credit
spread.

When equity index levels decrease in isolation, the variable annuity guarantees become more valuable to policyholders,
which results in an increase in the undiscounted embedded derivative liability. Discounting this unfavorable change by the
risk adjusted rate yields a smaller loss than by discounting at the risk-free rate, thus creating a gain from including an adjustment
for nonperformance risk.

When the risk-free interest rate decreases in isolation, discounting the embedded derivative liability produces a higher
valuation of the liability than if the risk-free interest rate had remained constant. Discounting this unfavorable change by the
risk adjusted rate yields a smaller loss than by discounting at the risk-free interest rate, thus creating a gain from including an
adjustment for nonperformance risk.

When our own credit spread increases in isolation, discounting the embedded derivative liability produces a lower valuation
of the liability than if our own credit spread had remained constant. As a result, a gain is created from including an adjustment
for nonperformance risk. For each of these primary market drivers, the opposite effect occurs when they move in the opposite
direction.

Net Investment Gains (Losses). The unfavorable change in net investment gains (losses) of $426 million ($277 million,
net of income tax) primarily reflects higher gains on sales of real estate, fixed maturity securities and equity securities in 2015
than in 2016 and an increase in the provision for mortgage loan losses in 2016. These unfavorable changes were partially
offset by lower foreign currency transaction losses, as well as a gain from the U.S. Retail Advisor Force Divestiture in 2016.

Goodwill. The year ended December 31, 2016 includes $260 million ($223 million, net of income tax) of non-cash charges
for goodwill impairment associated with our Brighthouse Financial segment. See Note 11 of the Notes to the Consolidated
Financial Statements.

Actuarial Assumption Review. Results for 2016 include a $3.2 billion ($2.1 billion, net of income tax) non-cash charge
associated with the annual review of assumptions related to reserves and DAC, of which a $3.7 billion loss ($2.4 billion, net
of income tax) was recognized in net derivative gains (losses) and a loss of $103 million ($67 million, net of income tax) was
recognized in updates to the closed block projection. Of the $3.2 billion charge, $3.9 billion ($2.5 billion, net of income tax)
was related to reserves and a benefit of $732 million ($478 million, net of income tax) was associated with DAC.

The $3.7 billion loss recognized in net derivative gains (losses) associated with this review of assumptions was included

within the other risks in embedded derivatives caption in the table above.

The significant impacts of the annual actuarial assumption review were on the U.S. variable annuity block of business

and are summarized as follows:

• Changes in policyholder behavior assumptions resulted in reserve increases, partially offset by favorable DAC
amortization, resulting in a net charge of $2.3 billion ($1.5 billion, net of income tax). The policyholder behavior
assumption changes included:

– Lower utilization of the elective annuitization option on the guarantee riders on the contracts;

– Lower election of the guaranteed principal option in certain of our GMIBs, which, if exercised, returns to the

policyholder the original purchase payment amounts;

– Adjusting the rate at which policyholders withdrew funds through systematic withdrawals; and

– Higher policyholder persistency related to the portion of the business that will remain with the Company after the

proposed Separation, dependent on the amount a contract is in-the-money.

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• Changes in economic assumptions resulted in reserve increases and unfavorable DAC amortization resulting in a charge
of $487 million ($316 million, net of income tax). These changes include reducing the long-term separate account
return assumption from 7.25% to 7.00% (from 7.00% to 6.75% for GMIB’s invested in managed volatility funds), and
reducing the projected ultimate 10-year treasury rate from 4.50% to 4.25%.

• The remaining updates resulted in reserve increases from changes in risk margins, partially offset by favorable DAC,

resulting in a charge of $428 million ($277 million, net of income tax).

Results for 2015 include a $313 million ($203 million, net of income tax) charge associated with our annual assumption
review related to reserves and DAC, of which a $3 million loss ($2 million, net of income tax) was recognized in net derivative
gains (losses). Of the $313 million charge, $60 million ($39 million, net of income tax) was related to DAC and $253 million
($164 million, net of income tax) was associated with reserves.

Divested Businesses and Lag Elimination. Income (loss) from continuing operations before provision for income tax
related to the divested businesses and lag elimination, excluding net investment gains (losses) and net derivative gains (losses),
decreased $228 million ($159 million, net of income tax) to a loss of $225 million ($154 million, net of income tax) in 2016
from income of $3 million ($5 million, net of income tax) in 2015. Included in this decline was an increase in total revenues
of $659 million, before income tax, and an increase in total expenses of $887 million, before income tax. Results for 2016
include the financial impact of converting the Company’s Japan operations to calendar year-end reporting without retrospective
application of this change to prior years, as well as expenses and charges associated with the U.S Retail Advisor Force
Divestiture and the proposed Separation.

Taxes. Income tax benefit for the year ended December 31, 2016 was $999 million, or 512% of income (loss) from
continuing operations before provision for income tax, compared with income tax expense of $2.1 billion, or 29% of income
(loss) from continuing operations before provision for income tax, for the year ended December 31, 2015. The Company’s
effective tax rates differ from the U.S. statutory rate of 35% typically due to non-taxable investment income, tax credits for
low income housing, and foreign earnings taxed at lower rates than the U.S. statutory rate. Our 2016 results include the
following tax items: (i) a $110 million benefit related to a change in tax rate in Japan, (ii) a $66 million benefit due to a deferred
tax adjustment related to goodwill, (iii) a $46 million benefit for tax audit settlements, and (iv) a $22 million benefit related
to an investment tax credit, partially offset by (v) a $22 million charge related to the filing of the Company’s U.S. federal tax
return, and (vi) a $19 million charge related to a change in tax rate in Chile. Our 2016 results also include the aforementioned
$260 million ($223 million, net of income tax) non-cash charges for goodwill impairment. The tax benefit on these charges
was limited to $37 million on the associated tax goodwill. Our 2015 results include tax charges of $681 million, of which
$557 million was recorded under accounting guidance for the recognition of tax uncertainties, $88 million was related to
foreign exchange-related gains on investments in Argentina and $36 million was the result of a deferred tax liability true-up
in Japan. These charges were partially offset by the following tax benefits: (i) $174 million related to a change in tax rate in
Japan, (ii) $61 million related to the restructuring of our business in Chile, (iii) $57 million related to the repatriation of
earnings from Japan, and (iv) $31 million related to the devaluation of the peso in Argentina.

Operating Earnings. As more fully described in “— Non-GAAP and Other Financial Disclosures,” we use operating
earnings, which does not equate to income (loss) from continuing operations, net of income tax, as determined in accordance
with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that 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 the business. Operating earnings and other financial measures based on operating earnings allow analysis of our performance
relative to our business plan and facilitate comparisons to industry results. Operating earnings and operating earnings available
to common shareholders should not be viewed as substitutes for income (loss) from continuing operations, net of income tax,
and net income (loss) available to MetLife, Inc.’s common shareholders, respectively. Operating earnings available to common
shareholders decreased $395 million, net of income tax, to $5.1 billion, net of income tax, for the year ended December 31,
2016 from $5.5 billion, net of income tax, for the year ended December 31, 2015.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

During the year ended December 31, 2015, income (loss) from continuing operations, before provision for income tax,
decreased $1.3 billion ($1.0 billion, net of income tax) from 2014 primarily due to an unfavorable change in operating earnings,
driven by the aforementioned tax charge and related charge for interest on uncertain tax positions, and an unfavorable change
in net derivative gains (losses), partially offset by a favorable change in net investment gains (losses).

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Non-VA program derivatives

Interest rate

Foreign currency exchange rate

Credit

Equity

Non-VA embedded derivatives

Total non-VA program derivatives

VA program derivatives

Market risks in embedded derivatives

Nonperformance risk on embedded derivatives

Other risks in embedded derivatives

Total embedded derivatives

Freestanding derivatives hedging embedded derivatives

Total VA program derivatives

Net derivative gains (losses)

Years Ended December 31,

2015

2014

(In millions)

171

397

(172)

444

511

163

(951)

(277)

(129)

(406)

927

(25)

(62)

(99)

830

(266)

(222)

709

487

1,317

The unfavorable change in net derivative gains (losses) on non-VA program derivatives was $386 million ($251 million,
net of income tax). This was primarily due to long-term interest rates decreasing less in 2015 than in 2014, unfavorably
impacting receive-fixed interest rate swaptions and interest rate swaps primarily hedging long-duration liability portfolios.

These unfavorable changes were partially offset by the strengthening of the U.S. dollar relative to other key currencies
favorably impacting foreign currency forwards and futures that primarily hedge foreign denominated fixed maturity securities.
In addition, a change in the value of the underlying assets favorably impacted non-VA embedded derivatives related to funds
withheld on a certain reinsurance agreement. Because certain of these hedging strategies are not designated or do not qualify
as accounting hedges, the changes in the estimated fair value of these freestanding derivatives are recognized in net derivative
gains (losses) without an offsetting gain or loss recognized in earnings for the item being hedged.

The unfavorable change in net derivative gains (losses) on VA program derivatives was $893 million ($580 million, net
of income tax). This was due to an unfavorable change of $685 million ($445 million, net of income tax) in other risks in
embedded derivatives and an unfavorable change of $358 million ($233 million, net of income tax) in market risks in embedded
derivatives, net of the impact of freestanding derivatives hedging those risks, partially offset by a favorable change of
$150 million ($98 million, net of income tax) related to the change in the nonperformance risk adjustment on embedded
derivatives. Other risks relate primarily to the impact of policyholder behavior and other non-market risks that generally cannot
be hedged.

The foregoing $685 million ($445 million, net of income tax) unfavorable change in other risks in embedded derivatives

reflected:

• Refinements in the valuation model, which resulted in an unfavorable year over year change in the valuation of the

embedded derivatives.

• The cross effect of capital markets changes, which resulted in an unfavorable year over year change in the valuation

of the embedded derivatives.

• A combination of other factors, including reserve changes influenced by benefit features and policyholder behavior,

as well as FCTA, which resulted in an unfavorable year over year change in the valuation of embedded derivatives.

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The foregoing $358 million ($233 million, net of income tax) unfavorable change was comprised of an $838 million
($545 million, net of income tax) unfavorable change in freestanding derivatives hedging market risks in embedded derivatives,
which was partially offset by a $480 million ($312 million, net of income tax) favorable change in market risks in embedded
derivatives.

The primary changes in market factors are summarized as follows:

• Long-term interest rates decreased less in 2015 than in 2014, contributing to an unfavorable change in our freestanding
derivatives and a favorable change in our embedded derivatives. For example, the 30-year U.S. swap rate decreased
3% in 2015 and 31% in 2014.

• Key equity index levels decreased in 2015 and increased in 2014, contributing to a favorable change in our freestanding
derivatives and an unfavorable change in our embedded derivatives. For example, the S&P 500 Index decreased 1%
in 2015 and increased 11% in 2014.

• Changes in foreign currency exchange rates contributed to a favorable change in our freestanding derivatives and an
unfavorable change in our embedded derivatives related to the assumed reinsurance of certain variable annuity products
from the Company’s former operating joint venture in Japan. For example, the Japanese yen strengthened against the
euro 10% in 2015 as compared with a weakening of less than 1% against the euro in 2014.

The aforementioned $150 million ($98 million, net of income tax) favorable change in the nonperformance risk adjustment
on embedded derivatives was due to a favorable change of $148 million, before income tax, related to changes in our own
credit spread and a favorable change of $2 million, before income tax, as a result of changes in capital market inputs, such as
long-term interest rates and key equity index levels, on the variable annuity guarantees.

Net Investment Gains (Losses). The favorable change in net investment gains (losses) of $794 million ($516 million, net
of income tax) primarily reflects a loss in 2014 on the disposition of MAL and higher net gains on sales of real estate in 2015,
partially offset by lower net gains on sales and disposals of fixed maturity securities in 2015. For further information on MAL,
see Note 3 of the Notes to the Consolidated Financial Statements.

Actuarial Assumption Review. Results for 2015 include a $313 million ($203 million, net of income tax) charge associated
with our annual assumption review related to reserves and DAC, of which a $3 million loss ($2 million, net of income tax)
was recognized in net derivative gains (losses). Of the $313 million charge, $60 million ($39 million, net of income tax) was
related to DAC and $253 million ($164 million, net of income tax) was associated with reserves.

The $3 million loss recognized in net derivative gains (losses) associated with our annual assumption review was included

within the other risks in embedded derivatives caption in the table above.

As a result of our annual assumption review, changes were made to economic, policyholder behavior, mortality and other

assumptions. The most significant impacts were in the MetLife Holdings segment and are summarized as follows:

• Changes in economic assumptions resulted in an increase of DAC and reserves, resulting in a net charge of $122 million

($79 million, net of income tax).

• Changes in policyholder behavior and mortality assumptions resulted in reserve increases, offset by favorable DAC,

resulting in a net charge of $91 million ($59 million, net of income tax).

• The remaining updates resulted in an increase in reserves, coupled with unfavorable DAC, resulting in a charge of
$100 million ($65 million, net of income tax). The most notable update was related to our projection of closed block
results.

Results for 2014 include a $161 million ($105 million, net of income tax) benefit associated with our annual assumption
review related to reserves and DAC, of which $137 million ($89 million, net of income tax) was recognized in net derivative
gains (losses). Of the $161 million benefit, $82 million ($53 million, net of income tax) was related to DAC and $79 million
($52 million, net of income tax) was associated with reserves.

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Taxes. Income tax expense for the year ended December 31, 2015 was $2.1 billion, or 29% of income (loss) from continuing
operations before provision for income tax, compared with $2.5 billion, or 28% of income (loss) from continuing operations
before provision for income tax, for the year ended December 31, 2014. The Company’s 2015 effective tax rate differs from
the U.S. statutory rate of 35% primarily due to non-taxable investment income, tax credits for low income housing, and foreign
earnings taxed at lower rates than the U.S. statutory rate. Our 2015 results include tax charges of $681 million, of which
$557 million was recorded under accounting guidance for the recognition of tax uncertainties, $88 million was related to
foreign exchange-related gains on investments in Argentina and $36 million was the result of a deferred tax liability true-up
in Japan. These charges were partially offset by tax benefits of $174 million in Japan related to a change in tax rate, $61 million
related to restructuring in Chile, $57 million related to the repatriation of earnings from Japan and $31 million related to the
devaluation of the peso in Argentina. The Company’s 2014 effective tax rate was different from the U.S. statutory rate of 35%
primarily due to non-taxable investment income, tax credits for low income housing, foreign earnings taxed at lower rates
than the U.S. statutory rate, and the tax effects of the MAL divestiture. The 2014 period also includes a $54 million tax charge
related to tax reform in Chile, a $45 million tax charge related to the repatriation of earnings from Japan and an $18 million
tax charge related to a portion of the aforementioned settlement of a licensing matter which was not deductible for income
tax purposes, partially offset by a $32 million tax benefit related to the filing of the Company’s U.S. federal tax return.

Operating Earnings. Operating earnings available to common shareholders decreased $1.1 billion, net of income tax, to
$5.5 billion, net of income tax, for the year ended December 31, 2015 from $6.6 billion, net of income tax, for the year ended
December 31, 2014.

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

Year Ended December 31, 2016

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

(In millions)

Income (loss) from continuing operations, net of income

tax

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Goodwill impairment

Less: Other adjustments to continuing operations (1)

Less: Provision for income tax (expense) benefit

Operating earnings

Less: Preferred stock dividends

Operating earnings available to common shareholders

Year Ended December 31, 2015

Income (loss) from continuing operations, net of income

tax

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Other adjustments to continuing operations (1)

Less: Provision for income tax (expense) benefit

Operating earnings

Less: Preferred stock dividends

Operating earnings available to common shareholders

Year Ended December 31, 2014

(2,648)

(853)

1,782

1,396

629

311

(6)

—

(263)

188

(47)

—

(13)

—

(68)

(61)

1,917

1,242

543

273

187

203

(78)

(941)

(5,851)

—

(50)

276

699

(260)

504

2,015

1,022

(271)

(1)

—

(228)

151

(504)

103

804

171

(6,760)

(260)

2,381

5,192

103

(607)

5,089

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

(In millions)

2,136

1,807

438

288

1,133

1,042

(1,522)

5,322

255

(149)

(72)

501

(120)

(21)

(135)

(72)

(62)

(22)

(41)

307

(434)

(441)

(291)

254

2,004

1,380

625

240

1,242

1,513

(234)

102

(28)

(1,404)

116

597

(1,091)

178

5,600

116

(1,520)

5,484

Income (loss) from continuing operations, net of income

tax

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Other adjustments to continuing operations (1)

Less: Provision for income tax (expense) benefit

Operating earnings

Less: Preferred stock dividends

Operating earnings available to common shareholders

__________________

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

(In millions)

2,430

1,200

401

330

1,939

973

(934)

6,339

130

485

(128)

(158)

512

(532)

(122)

(62)

(242)

(17)

114

(88)

(61)

825

(114)

(226)

(484)

357

(720)

267

2,101

1,307

626

285

1,515

1,553

(307)

130

(86)

(705)

122

(197)

1,317

(1,376)

(87)

6,682

122

(827)

6,560

(1)

See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures”
for the components of such adjustments.

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Table of Contents

Reconciliation of revenues to operating revenues and expenses to operating expenses

Year Ended December 31, 2016

Total revenues

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Adjustments related to net investment gains (losses)

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

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

29,263

11,930

4,816

3,810

11,547

3,019

(909)

63,476

(In millions)

(6)

—

(264)

188

(47)

601

—

(1)

936

203

(941)

—

(182)

(78)

(5,851)

(2)

(1)

(271)

(1)

—

Total operating revenues

Total expenses

29,480

26,574

11,157

10,029

4,672

3,961

2,809

3,396

12,467

11,348

8,951

7,321

(658)

1,042

Less: Adjustments related to net investment gains (losses)

and net derivative gains (losses)

Less: Goodwill impairment

Less: Other adjustments to expenses (1)

Total operating expenses

—

(1)

—

564

—

(10)

—

902

(268)

(1,402)

—

136

260

895

26,575

9,423

3,971

2,494

11,480

7,568

—

249

793

Year Ended December 31, 2015

171

(6,760)

1,159

68,878

63,671

(1,628)

260

2,735

62,304

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

(In millions)

Total revenues

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Adjustments related to net investment gains (losses)

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

28,954

11,986

4,736

2,930

13,179

8,770

(604)

69,951

255

—

(163)

501

147

(135)

—

(5)

(41)

307

—

(245)

(441)

(2)

(234)

102

—

597

(159)

Total operating revenues

Total expenses

28,764

25,706

11,259

9,701

4,777

4,199

2,847

2,599

13,158

11,524

9,142

7,427

(477)

1,325

69,470

62,481

Less: Adjustments related to net investment gains (losses)

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

—

(14)

270

—

(5)

141

(130)

483

—

922

Total operating expenses

25,720

9,422

4,115

2,586

11,335

7,074

1,292

61,544

Year Ended December 31, 2014

Total revenues

Less: Net investment gains (losses)

Less: Net derivative gains (losses)

Less: Adjustments related to net investment gains (losses)

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

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

28,490

12,613

5,296

4,227

13,801

9,257

(368)

73,316

(In millions)

130

485

—

(109)

512

(532)

371

(62)

—

(17)

114

857

(61)

825

(15)

(338)

(484)

357

243

(307)

130

—

Total operating revenues

Total expenses

27,984

24,829

12,251

10,866

5,287

4,815

3,263

3,780

13,390

10,922

9,127

7,981

(222)

1,319

Less: Adjustments related to net investment gains (losses)

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

—

(3)

507

—

283

819

(175)

(64)

201

776

—

117

Total operating expenses

__________________

24,810

10,362

4,532

2,949

11,161

7,004

1,202

62,020

(1)

See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures”
for the components of such adjustments.

116

(197)

1,317

1,096

71,080

64,512

2,457

Table of Contents

Consolidated Results — Operating

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Overview. The primary drivers of the decrease in operating earnings were lower investment yields, refinements made to
DAC and certain insurance-related liabilities, unfavorable underwriting, the impact of our annual actuarial assumption review
and lower asset-based fee income, partially offset by 2015 charges for taxes and related interest expenses, as well as higher
net investment income from portfolio growth.

Foreign Currency. Changes in foreign currency exchange rates had a $51 million negative impact on operating earnings
compared to 2015. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign
currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. A $524 million increase in operating earnings was attributable to business growth. We benefited from
positive net flows from many of our products. As a result, growth in the investment portfolios of our Brighthouse Financial,
U.S., Asia and Latin America segments generated higher net investment income. However, this was partially offset by a
corresponding increase in interest credited expense on certain insurance-related liabilities. In addition, improved results from
our start-up operations also increased operating earnings.

Market Factors. Market factors, including low interest rates, volatile equity markets, and foreign currency exchange rate
fluctuations, continued to impact our investment yields; however, certain impacts were mitigated by derivatives used to hedge
these risks. Excluding the impact of changes in foreign currency exchange rates on reported net investment income in our
non-U.S. segments and inflation-indexed investments, investment yields decreased. Investment yields were negatively affected
by the adverse impact of the low interest rate environment on fixed maturity securities and mortgage loans, as proceeds from
maturing investments and the growth in the investment portfolio were invested at lower yields than the portfolio average. In
addition, we experienced a decrease in returns on real estate joint ventures and alternative investments. Lower investment
earnings on our securities lending program resulted primarily from lower margins due to the impact of a flatter yield curve.
These decreases in net investment income were partially offset by higher income on derivatives. In our Brighthouse Financial
and MetLife Holdings segments, declines in our average separate account balances resulted in a decrease in asset-based fee
income. The changes in market factors discussed above resulted in a $684 million decrease in operating earnings.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Unfavorable underwriting resulted in a
$262 million decrease in operating earnings as a result of higher non-catastrophe claim costs, less favorable development of
prior year non-catastrophe losses and a charge related to an adjustment to reinsurance receivables in our Asia segment. In
addition, unfavorable mortality and morbidity experience in our Brighthouse Financial and MetLife Holdings segments was
partially offset by favorable experience in our Latin America and U.S. segments. The impact of our annual actuarial assumption
review, which occurred in both 2016 and 2015, resulted in a $154 million decrease in operating earnings. Refinements to DAC
and certain insurance-related liabilities, which were recorded in both 2016 and 2015, resulted in a $643 million decrease in
operating earnings, primarily as a result of the aforementioned 2016 charges in our Brighthouse Financial segment totaling
$340 million due to loss recognition testing upon re-segmentation and a 2016 reserve adjustment of $257 million resulting
from modeling improvements in the reserving process in our universal life businesses.

Expenses and Taxes. Our results for 2015 include the aforementioned $235 million charge for interest on uncertain tax
positions. In addition, other expenses declined by $104 million primarily due to expense savings of approximately $100 million
related to the U.S. Retail Advisor Force Divestiture. Excluding these items, expenses were essentially unchanged in total, but
included offsetting fluctuations across our businesses. The Company’s effective tax rates differ from the U.S. statutory rate
of 35% typically due to non-taxable investment income, tax credits for low income housing, and foreign earnings taxed at
lower rates than the U.S. statutory rate. Higher utilization of tax preferenced items and foreign rate differential improved 2016
operating earnings by $41 million over 2015. Our results for 2016 include the following tax items: (i) a $46 million benefit
for tax audit settlements, (ii) a $25 million benefit related to a change in the tax rate in Japan, and (iii) a $22 million benefit
related to an investment tax credit, partially offset by (iv) a $22 million charge related to the filing of the U.S. federal tax
return and (v) a $12 million charge related to a change in the tax rate in Chile. The $25 million benefit in Japan includes a
benefit of $20 million that pertains to prior years; the $12 million tax charge in Chile includes a charge of $10 million that
pertains to prior years. Our results for 2015 include the following tax items: (i) a charge of $557 million recorded under
accounting guidance for the recognition of tax uncertainties, (ii) a benefit of $61 million related to a change in the tax rate in
Japan, (iii) a benefit of $60 million related to the restructuring of our business in Chile, (iv) a benefit of $31 million related
to the repatriation of earnings from Japan, and (v) a $31 million benefit related to devaluation of the peso in Argentina.

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Table of Contents

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Overview. The primary drivers of the decrease in operating earnings were lower investment yields, a tax charge and a
related charge for interest on uncertain tax positions in 2015, less favorable underwriting results and an unfavorable impact
from our annual review of actuarial assumptions, partially offset by higher net investment income from portfolio growth.

Foreign Currency. Changes in foreign currency exchange rates had a $303 million negative impact on operating earnings

compared to 2014.

Business Growth. We benefited from higher sales and business growth across many of our products. Growth in the
investment portfolios of our domestic and Latin America segments generated higher net investment income, which was partially
offset by higher surrenders of foreign currency-denominated fixed annuity products in Japan. The changes in business growth
discussed above resulted in a $483 million increase in operating earnings.

Market Factors. Market factors, including the sustained low interest rate environment, continued to impact our investment
yields. Excluding the impact of inflation-indexed investments in the Latin America segment, investment yields decreased.
Investment yields were negatively impacted by the adverse impact of the sustained low interest rate environment on fixed
maturity securities and mortgage loans, as well as by lower returns on other limited partnership interests and our securities
lending program. These decreases were partially offset by higher income on currency and interest rate derivatives and higher
returns on real estate and real estate joint ventures. The changes in market factors discussed above resulted in a $558 million
decrease in operating earnings.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. A $76 million decrease in underwriting
results was primarily due to higher non-catastrophe related claim costs, as well as higher catastrophe-related losses in our
Property & Casualty businesses, partially offset by favorable mortality. Favorable mortality in our U.S. and Brighthouse
Financial segments was partially offset by less favorable mortality in our MetLife Holdings segment. On an annual basis, we
review and update our long-term assumptions used in our calculations of certain insurance-related liabilities and DAC. These
annual updates, which occurred in both 2015 and 2014, resulted in a net operating earnings decrease of $98 million and were
primarily related to unfavorable DAC unlockings in our MetLife Holdings and Brighthouse Financial segments. Refinements
to DAC and certain insurance-related liabilities that were recorded in both 2015 and 2014 resulted in a net decrease of
$24 million in operating earnings. The 2014 refinements include favorable reserve adjustments related to disability premium
waivers and a charge related to delayed settlement interest on unclaimed funds held by state governments, in our MetLife
Holdings and Brighthouse Financial segments.

Expenses. In 2015, other expenses include the aforementioned $235 million charge for interest on uncertain tax positions.
An additional $77 million increase in expenses was primarily the result of higher employee-related costs and an increase in
expenses associated with corporate initiatives and projects, primarily in Asia. These increases were partially offset by a
$117 million accrual in 2014 to increase the litigation reserve related to asbestos, as well as 2014 charges totaling $57 million
related to the aforementioned settlement of a licensing matter.

Taxes. The Company’s 2015 and 2014 effective tax rates differed from the U.S. statutory rate of 35%, primarily due to
non-taxable investment income, tax credits for low income housing, and foreign earnings taxed at lower rates than the U.S.
statutory rate. Our results for 2015 include the aforementioned tax charge of $557 million recorded under accounting guidance
for the recognition of tax uncertainties, partially offset by a $61 million benefit in Japan related to a tax rate change, a tax
benefit of $60 million related to restructuring in Chile, a $31 million tax benefit related to the repatriation of earnings from
Japan and a $31 million tax benefit related to the devaluation of the peso in Argentina. In 2014, the Company realized a
$32 million tax benefit related to the filing of the Company’s U.S. federal tax return. However, this was more than offset by
a $41 million tax charge related to tax reform in Chile and an $18 million tax charge related to the aforementioned settlement
of a licensing matter which was not deductible for income tax purposes.

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Table of Contents

Segment Results and Corporate & Other

U.S.

Business Overview. An increase in sales was primarily driven by sales of stable value products, as well as funding agreement
issuances in our Retirement and Income Solutions business. In addition, sales of pension risk transfers and structured settlements
were slightly higher than in 2015. These increases were partially offset by slightly lower sales in the income annuities and
pensions businesses. Changes in premiums for the Retirement and Income Solutions business were almost entirely offset by
the related changes in policyholder benefits and claims. Sales increased 24% compared to 2015 in the Group Benefits business,
with strong sales across our core and voluntary products. In our Property & Casualty business, sales of new policies were
slightly lower for both the auto and homeowners lines of business. The number of policies that were not renewed exceeded
new policy sales, resulting in a decrease in exposures.

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Interest expense on debt

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Years Ended December 31,

2016

2015

2014

(In millions)

21,501

20,861

20,243

989

6,206

784

29,480

943

6,209

751

28,764

909

6,111

721

27,984

21,558

20,837

20,110

1,302
(471)
471

3,706

26,575

988

1,216
(493)
471

3,685

25,720

1,040

1,917

2,004

1,168
(488)
458

3,550

24,810

1,073

2,101

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Business Growth. The impact of deposits, funding agreement issuances and increased premiums in 2016 resulted in
higher average invested assets, improving net investment income. However, consistent with the growth in average invested
assets from increased premiums, interest credited on long-duration contracts increased. An increase in average premium
per policy in both our auto and homeowners businesses improved operating earnings. In addition, an increase in other
operating expenses, mainly the result of growth across the segment, was more than offset by the remaining increase in
premiums, fees and other revenues. The combined impact of the items discussed above increased operating earnings by
$175 million.

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Table of Contents

Market Factors. Market factors, including low interest rates, volatile equity markets, and foreign currency exchange
rate fluctuations, continued to impact our investment yields; however, certain impacts were mitigated by derivatives used
to hedge these risks. Investment yields decreased as a result of the impact of the low interest rate environment on fixed
maturity securities and mortgage loans, as proceeds from maturing investments and the growth in the investment portfolio
were invested at lower yields than the portfolio average. In addition, lower returns on alternative investments, other limited
partnership interests and lower prepayment fees reduced yields. Lower investment earnings on our securities lending program
resulted primarily from lower margins due to the impact of a flatter yield curve. These unfavorable changes were partially
offset by higher income on derivatives and real estate. Certain of our funding agreements and guaranteed interest contract
liabilities have interest credited rates that are contractually tied to current market rates, specifically the 3-month LIBOR
and, as a result, a higher average interest credited rate drove an increase in interest credited expense. However, consistent
with the decrease in yields on average invested assets, interest credited on certain long-duration insurance contracts decreased.
The changes in market factors discussed above resulted in a $147 million decrease in operating earnings.

Underwriting and Other Insurance Adjustments. Favorable claims experience in our individual disability and voluntary
businesses were partially offset by unfavorable claims experience in our group disability and dental businesses and resulted
in a $12 million increase in operating earnings. Favorable mortality in 2016, mainly due to favorable claims experience in
our life business, resulted in a $26 million increase in operating earnings. Less favorable mortality from our pension risk
transfer business and specialized life insurance products resulted in a $10 million decrease in operating earnings. In our
Property & Casualty business, non-catastrophe claim costs increased by $85 million, resulting from higher frequencies and
severities in both our auto and homeowners businesses, as well as an increase in claims adjustment expenses. In addition,
less favorable development of prior year non-catastrophe losses reduced operating earnings by $43 million. These increases
were partially offset by a decrease in catastrophe losses, which improved operating earnings by $3 million. Refinements to
certain insurance and other liabilities, which were recorded in both 2016 and 2015, resulted in a $25 million decrease in
operating earnings.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Business Growth. An increase in average premium per policy in both our auto and homeowners businesses improved
operating earnings. Growth in premiums, deposits and funding agreement issuances in 2015, as well as an increase in
allocated equity resulted in higher average invested assets, improving net investment income. However, consistent with the
growth in average invested assets from increased premiums, deposits and funding agreement issuances, interest credited
on long-duration contracts increased. An increase in the annual assessment of the PPACA fee increased other expenses in
2015; however, the impact of the assessment was significantly offset by a related increase in premiums from our dental
business. In addition, an increase in other operating expenses, mainly the result of growth across the segment, was more
than offset by the remaining increase in premiums, fees and other revenues. The combined impact of the items discussed
above increased operating earnings by $120 million.

Market Factors. Market factors, including sustained low interest rates and volatile equity markets, continued to impact
our investment yields. The sustained low interest rate environment drove lower investment yields on our fixed maturity
securities and mortgage loans. Yields were also negatively impacted by a reduction in the size of our securities lending
program. In addition, weaker equity markets in 2015 resulted in lower returns on other limited partnership interests, which
were partially offset by higher returns on alternative investments and interest rate derivatives. Many of our funding
agreements and guaranteed interest contract liabilities have interest credited rates that are contractually tied to external
indices and, as a result, we set lower interest credited rates on new business, as well as on existing business with terms that
can fluctuate. The combined impact of lower investment returns partially offset by lower interest credited expense, resulted
in a decrease in operating earnings of $95 million.

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Underwriting and Other Insurance Adjustments. In our Property & Casualty business, non-catastrophe claim costs
increased $63 million, the result of higher severities in both our auto and homeowners businesses, as well as an increase in
frequencies in our auto business, partially offset by lower frequencies in our homeowners businesses. In addition, catastrophe-
related losses increased by $48 million, mainly due to severe winter weather in 2015. Further, less favorable development
of prior year non-catastrophe losses resulted in a slight decrease to operating earnings. Less favorable reserve development
in our dental business was partially offset by favorable morbidity experience in our individual and group disability businesses,
resulting in a $31 million decrease in operating earnings. Less favorable mortality in our structured settlement and income
annuity businesses was partially offset by more favorable mortality from our pension risk transfer and specialized life
insurance products, and resulted in a $10 million decrease in operating earnings. Our life and AD&D businesses experienced
favorable mortality in 2015, mainly due to favorable claims experience, which resulted in a $48 million increase in operating
earnings. Refinements to certain insurance and other liabilities, which were recorded in both 2015 and 2014, resulted in an
$8 million decrease in operating earnings.

Asia

Business Overview. Sales decreased compared to 2015 primarily due to management actions taken to improve product
value in the region. In Japan, we have seen a successful shift in sales to foreign currency denominated life products from yen
denominated life products, although sales of accident and health products packaged with yen denominated life products
declined. Sales increased in emerging markets, including China and Bangladesh, mainly due to business growth.

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Years Ended December 31,

2016

2015

2014

(In millions)

6,902

6,937

1,487

2,707

11,157

5,191

1,298
(1,668)
1,224
(208)
3,586

9,423
492

1,542

2,675

105

11,259

5,275

1,309
(1,720)
1,256
(309)
3,611

9,422
457

1,242

1,380

7,566

1,693

2,886

106

12,251

5,724

1,544
(1,914)
1,397
(364)
3,975

10,362
582

1,307

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Following a change in the foreign investment law in India, the Company no longer consolidates its India operating
joint venture, effective January 1, 2016. While this change in accounting does affect the comparability of the financial
statement line items, it did not have a significant impact on operating earnings and, therefore, is not discussed below.

Foreign Currency. The impact of changes in foreign currency exchange rates increased operating earnings by $46 million
for 2016 compared to 2015 primarily due to the strengthening of the Japanese yen against the U.S. dollar. Unless otherwise
stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in
significant variances in the financial statement line items.

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Table of Contents

Business Growth. Positive net flows in Japan and Korea resulted in higher average invested assets and an increase in
net investment income. Asia’s premiums and fees decreased from 2015 mainly driven by lower fixed annuity surrenders
and the shift from premium-based to fee-based products in 2016. The discontinuation of single premium products in our
accident & health business in Japan in the third quarter of 2015 also contributed to the decline in premiums. Changes in
premiums for these businesses were partially offset by related changes in policyholder benefits. The combined impact of
the items discussed above improved operating earnings by $64 million.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Our results for 2016 include a
$44 million charge related to an adjustment to reinsurance receivables in Australia. Excluding this charge, lower fixed
annuity surrender gains and higher lapses in Japan, partially offset by favorable claims experience in Australia and Korea,
decreased operating earnings by $15 million. The impact of our annual actuarial assumption review, which occurred in both
2016 and 2015, resulted in a net decrease of $35 million in operating earnings. Refinements to certain insurance and other
liabilities, which were recorded in 2016, resulted in a $36 million increase in operating earnings.

Expenses and Taxes. An increase in expenses, primarily driven by costs associated with growth of our agency channel
in Hong Kong, information technology, and marketing, partially offset by lower consumption tax in Japan and a decline in
corporate overhead, reduced operating earnings by $13 million. Results for 2016 include a $25 million tax benefit related
to a change in the corporate tax rate in Japan (which includes a benefit of $20 million that pertains to prior periods). Results
for 2015 include tax benefits of $61 million related to a change in tax rates, $12 million for the settlement of an audit and
$15 million related to the U.S. taxation of dividends, each related to Japan, as well as a $6 million tax refund in Korea in
2015 related to unclaimed surrender value.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Foreign Currency. The impact of changes in foreign currency exchange rates reduced operating earnings by $126 million

for 2015 compared to 2014 as a result of the weakening of the yen against the U.S. dollar.

This resulted in significant variances on the financial statement line items.

Business Growth. Asia’s premiums, fees and other revenues increased over the prior year driven by broad based in-
force growth across the region, including growth in our ordinary life and accident & health businesses in Japan and Korea,
as well as our group insurance business in Australia. Changes in premiums for these businesses were partially offset by
related changes in policyholder benefits. During the period, surrenders of foreign currency-denominated fixed annuity
products in Japan also contributed to higher fee income. The impact of these surrenders, partially offset by positive net
flows in Korea, Bangladesh and India, resulted in lower average invested assets and a decrease in net investment income.
In addition, a decrease in interest credited expenses was partially offset by increases in amortization of DAC and VOBA,
commissions and variable expenses (net of DAC capitalization), primarily related to the establishment of an agency channel
in Hong Kong. The combined impact of the items discussed above improved operating earnings by $61 million.

Market Factors. Investment returns were positively impacted by higher net investment income resulting from the
recovery of a previously impaired mortgage loan in Japan, improved operating results from our China joint venture and
higher interest rates on fixed maturity securities in Bangladesh. These improved investment returns were partially offset by
the impact of lower interest rates on fixed maturity securities in Korea and the impact in Japan of continued growth of lower
yielding Japanese government securities. The decrease in returns from Japanese government securities was offset by the
favorable impact of increased foreign currency-denominated fixed annuities in Japan driving an increase in higher yielding
foreign currency-denominated fixed maturity securities. Higher investment yields, combined with the impact of foreign
currency hedges, increased operating earnings by $38 million.

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Underwriting and Actuarial Assumption Review. Favorable claims experience, primarily in Japan resulted in a
$15 million increase in operating earnings. In addition, on an annual basis, we review and update our long-term assumptions
used in our calculations of certain insurance-related liabilities and DAC. This annual update resulted in a net operating
earnings increase of $22 million.

Expenses and Taxes. Higher expenses, primarily driven by costs associated with corporate initiatives and projects,
reduced operating earnings by $32 million. Our 2015 results include tax benefits of $61 million related to a change in tax
rates, $12 million for the settlement of an audit and $15 million related to the U.S. taxation of dividends, each related to
Japan. In addition, in 2015, Korea received a tax refund of $6 million related to unclaimed surrender value. Our 2014 results
include tax benefits of $9 million related to the U.S. taxation of dividends and $4 million resulting from a tax rate change,
each related to Japan.

Latin America

Business Overview. Total sales for Latin America increased over 2015. The region experienced higher medical, accident

& health and property & casualty sales, partially offset by lower sales of pension and life products.

Years Ended December 31,

2016

2015

2014

(In millions)

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Other operating expenses

Total operating expenses

2,529

2,581

1,025

1,084

4,672

2,443

328
(321)
184
(1)
2

1,336

3,971

158

543

1,117

1,038

4,777

2,408

349
(341)
271
(1)
—

1,429

4,115

625

2,796

1,239

1,219

5,287

2,615

394
(377)
313
(1)
—

1,588

4,532

129

626

Provision for income tax expense (benefit)

Operating earnings

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Foreign Currency. The impact of changes in foreign currency exchange rates decreased operating earnings by
$81 million for 2016 as compared to 2015 mainly due to the weakening of the Mexican and Argentinean pesos against the
U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency
fluctuations can result in significant variances in the financial statement line items.

Business Growth. Latin America experienced business growth across several lines of business within Mexico, Chile
and Argentina. This business growth resulted in increased premiums and policy fee income which was partially offset by
the related changes in policyholder benefits. Positive net flows, primarily from Chile, Mexico and Argentina, resulted in
an increase in average invested assets and generated higher net investment income. This was partially offset by an increase
in interest credited expense on certain insurance liabilities. Business growth also drove an increase in operating expenses,
commissions and DAC amortization, which were partially offset by higher DAC capitalization. The items discussed above
resulted in a $59 million increase in operating earnings.

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Market Factors. Changes in market factors resulted in a $17 million increase to operating earnings as higher investment
yields were partially offset by higher interest credited expense. An increase in investment yields was primarily driven by a
2016 change in the crediting rate on allocated equity in Mexico, Chile and Argentina, as well as higher yields from fixed
maturity securities in Mexico. These increases were partially offset by lower returns on fixed maturity securities, alternative
investments and mortgage loans in Chile.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Favorable underwriting resulted in a
$38 million increase in operating earnings driven by lower claims experience in Mexico and Chile. The impact of the annual
actuarial assumption review, which occurred in both 2016 and 2015, resulted in a net operating earnings increase of
$16 million. Refinements to certain insurance liabilities and other adjustments in both 2016 and 2015 resulted in a $26 million
decrease to operating earnings.

Taxes. Effective September 1, 2015, AFP ProVida was merged into MetLife Chile Acquisition Company resulting in
an income tax benefit of $60 million in 2015. In the first quarter of 2016, our Chilean businesses, including ProVida, incurred
a tax charge of $12 million as a result of tax reform legislation in Chile (including a charge of $10 million that pertains to
prior periods). In addition, other tax-related adjustments in both 2016 and 2015 resulted in a net decrease in operating
earnings of $20 million. These adjustments were mainly driven by tax charges related to the filing of local tax returns in
Mexico and Chile in 2016 and a tax benefit in 2015 due to the devaluation of the peso in Argentina, partially offset by a
2016 tax benefit due to inflation in Argentina.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Foreign Currency. The impact of changes in foreign currency exchange rates decreased operating earnings by
$111 million for 2015 compared to 2014 mainly due to the weakening of the peso against the U.S. dollar, which included
the impact of changes in foreign currency exchange rates related to the tax charge resulting from tax reform in Chile, as
discussed further below.

Business Growth. Total sales for the region decreased primarily due to the impact of a large contract in Mexico in 2014.
Excluding this large contract, sales increased due to organic growth in several countries but the resulting increase in premiums
was partially offset by related changes in policyholder benefits. An increase in average invested assets, primarily in Chile
and Mexico, generated higher net investment income. Growth in our businesses resulted in higher policy fee income, as
well as increased marketing costs and commissions, which were partially offset by increased DAC capitalization. The items
discussed above were the primary drivers of a $135 million increase in operating earnings.

Market Factors. The net impact of changes in market factors resulted in an $83 million decrease in operating earnings,
driven by lower investment yields and higher interest credited expense. Investment yields decreased on fixed income
securities in Chile and Mexico and we experienced lower investment returns on alternative investments in Chile.

Underwriting and Other Insurance Adjustments. Unfavorable claims experience in several countries decreased
operating earnings by $9 million. Refinements to DAC and other adjustments recorded in both 2015 and 2014 resulted in
a $10 million increase in operating earnings.

Expenses and Taxes. Effective September 1, 2015, ProVida was merged into MetLife Chile Acquisition Company
resulting in an income tax benefit of $60 million in 2015. In the third quarter of 2014, our Chilean businesses, including
ProVida, incurred a tax charge of $41 million ($33 million after adjusting for foreign currency fluctuations) as a result of
tax reform in Chile. Other tax-related adjustments in both 2015 and 2014 decreased operating earnings by $18 million.
These tax-related adjustments include tax charges related to inflation in Chile and Mexico, as well as a 2014 refund claim
in Argentina, partially offset by a benefit resulting from the devaluation of the peso in Argentina in both 2015 and 2014. In
addition, employee-related costs, which include inflation, were higher across several countries, resulting in an $18 million
decrease in operating earnings.

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EMEA

Business Overview. Sales increased in 2016 due to growth in the Middle East and the U.K., partially offset by strong 2015

sales in Poland.

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Years Ended December 31,

2016

2015

2014

(In millions)

2,027

2,036

2,309

391

318

2,809

1,067

112
(403)
408
(13)
1,323

2,494

424

326

2,847

988

120
(472)
497
(16)
1,469

2,586

273

240

466

428

3,263

1,053

148
(680)
613
(31)
1,846

2,949

285

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Foreign Currency. The impact of changes in foreign currency exchange rates reduced operating earnings by $16 million
for 2016 as compared to 2015, primarily driven by the strengthening of the U.S. dollar against the British pound, Turkish
lira, Egyptian pound and Polish zloty. Unless otherwise stated, all amounts discussed below are net of foreign currency
fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. Operating earnings increased by $35 million as a result of business growth mainly in the employee

benefits business in the Middle East and the U.K.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Favorable underwriting, primarily in
our accident & health business in Greece, was largely offset by unfavorable underwriting, primarily in our employee benefits
business and resulted in an operating earnings increase of $2 million. The impact of the annual actuarial assumption review,
which occurred in both 2016 and 2015, resulted in a net operating earnings decrease of $22 million. Refinements to certain
insurance liabilities and other adjustments in 2016 resulted in a $4 million increase to operating earnings.

Expenses. Operating earnings increased by $43 million primarily due to expense discipline across the region and lower

allocated corporate overhead expenses.

Taxes and Other. The Company received tax benefits in both 2016 and 2015; however, since the 2015 benefit exceeded
the 2016 benefit, operating earnings decreased by $19 million. Operating earnings for 2015 were positively impacted by
the conversion to calendar year reporting for certain of our subsidiaries; however, this was offset by certain one-time items,
including re-branding and legal expenses. Our 2016 operating earnings benefited from the cancellation of a distribution
agreement with one of our bancassurance partners, which improved operating earnings by $3 million.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

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Foreign Currency. The impact of changes in foreign currency exchange rates reduced operating earnings by $66 million
for 2015 as compared to 2014, primarily driven by the strengthening of the U.S. dollar against the euro, Russian ruble and
Polish zloty.

Business Growth. Operating earnings benefited from growth in the Middle East, primarily in the Gulf and Turkey, as

well as growth in the U.K., increasing operating earnings by $30 million.

Actuarial Assumption Review. On an annual basis, we review and update our long-term assumptions used in our
calculations of certain insurance-related liabilities and DAC. These annual updates, which occurred in both 2015 and 2014,
resulted in a net operating earnings decrease of $4 million. In addition, operating earnings increased by $5 million due to
a 2014 refinement of DAC in the U.K.

Taxes and Other. The Company had a number of one-time items in both 2015 and 2014, including tax benefits, the
conversion of certain of our subsidiaries to calendar year reporting, as well as re-branding and legal expenses. The combined
impact of these items decreased operating earnings by $3 million. In addition, our 2014 results included a $7 million benefit
related to pension reform in Poland.

MetLife Holdings

Business Overview. As a result of the proposed Separation and the U.S. Retail Advisor Force Divestiture, we have
discontinued the marketing of life and annuity products in this segment, which has led to lower sales. This will result in a
declining DAC asset over time and we anticipate an average decline in premiums, fees and other revenues of approximately
5% per year from expected business run-off. A significant portion of our operating earnings is driven by separate account
balances. Most directly, these balances determine asset-based fee income but they also impact DAC amortization and asset-
based commissions. Separate account balances are driven by sales, movements in the market, surrenders, withdrawals, benefit
payments, transfers and policy charges. Separate account balances increased due to equity market performance, partially offset
by the impact of negative net flows, as benefits, surrenders and withdrawals exceeded sales. While net flows are still negative,
we are seeing stability in surrenders and withdrawals. Although we have discontinued selling our long-term care product, we
continue to collect premiums and administer the existing block of business, which contributed to asset growth in the segment,
and we expect the related reserves to grow as this block matures.

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Interest expense on debt

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Years Ended December 31,

2016

2015

2014

(In millions)

4,506

4,545

1,436

5,944

581

12,467

7,534

1,042
(281)
736

2,392

11,480

288

699

1,482

6,201

930

13,158

7,357

1,062
(410)
577

2,694

11,335

581

1,242

4,545

1,374

6,409

1,062

13,390

7,217

1,098
(326)
444

2,670

11,161

714

1,515

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

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Business Growth. Net investment income increased slightly resulting from a larger invested asset base. Net asset growth
in our life, annuities and long-term care businesses was largely offset by negative net flows as a result of the recapture of
two assumed single-premium deferred annuity reinsurance agreements (by affiliates included in the Brighthouse Financial
segment), which decreased our invested asset base. Consistent with the aforementioned asset growth, interest credited on
insurance liabilities also increased. Lower universal life sales resulted in lower fee income. Additionally, operating earnings
increased since the operating loss from broker-dealer operations was included in the U.S. Retail Advisor Force Divestiture;
this also resulted in declines in both revenues and expenses. The combined impact of the items discussed above resulted in
a $6 million decrease in operating earnings.

Market Factors. Market factors, including low interest rates, volatile equity markets, and foreign currency exchange
rate fluctuations, continued to impact our investment yields; however, certain impacts were mitigated by derivatives used
to hedge these risks. Investment yields decreased on our fixed maturity securities as proceeds from maturing investments
and the growth in the investment portfolio were invested at lower yields than the portfolio average. We also had lower
income on derivatives and alternative investments. These decreases in net investment income were partially offset by higher
returns on private equities. In our deferred annuity business, lower equity returns in 2015 drove a decline in average separate
account balances which resulted in a decrease in asset-based fee income in 2016 relative to 2015. This decrease was partially
offset by lower average interest crediting rates and declines in DAC amortization. The changes in market factors discussed
above resulted in a $189 million decrease in operating earnings.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Unfavorable mortality, primarily in our
universal life business, and unfavorable claim experience in our long-term care business resulted in a $58 million decrease
in operating earnings. The impact of our annual actuarial assumption review, which occurred in both 2016 and 2015, resulted
in a net operating earnings decrease of $34 million and was primarily related to unfavorable DAC unlockings. Refinements
to DAC and certain insurance-related liabilities that were recorded in both 2016 and 2015, including a 2016 reserve adjustment
resulting from modeling improvements in the reserving process in our universal life business, resulted in a $165 million
decrease in operating earnings.

Expenses. Operating earnings increased by $78 million as a result of lower expenses, primarily due to lower costs as

a result of the U.S. Retail Advisor Force Divestiture.

Other. Annuities reinsurance activity with affiliates that are included in the Brighthouse Financial segment decreased
operating earnings by $160 million. This was primarily due to the aforementioned recapture of certain single-premium
deferred annuity reinsurance agreements that resulted in unfavorable recapture settlements and an increase in the related
DAC amortization, partially offset by lower interest credited on the related reinsurance payables. The impact of the lower
interest credited was largely offset by the lower net investment income earned on the assets transferred in connection with
the recapture. Unfavorable results from our reinsurance agreement with our former operating joint venture in Japan resulted
in a $14 million decrease in operating earnings.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Business Growth. A larger invested asset base, driven by positive net flows in our life business and an increase in
allocated equity, generated higher net investment income. This was partially offset by higher interest credited on long-
duration contracts consistent with the growth in average invested assets in our long-term care product. Declines in broker-
dealer revenue also decreased operating earnings. The combined impact of the items discussed above increased operating
earnings by $45 million.

Market Factors. Market factors, including sustained low interest rates and volatile equity markets, continued to impact
our investment yields. The sustained low interest rate environment resulted in a decline in net investment income on our
fixed maturity securities as proceeds from maturing investments were reinvested at lower yields. This reduction in 2015
income from lower yields was partially offset by lower interest credited expense in our deferred annuities business as a
result of declines in average interest credited rates. The decline in yields was also partially offset by higher returns on real
estate, real estate joint ventures and alternative investments. The changes in market factors discussed above resulted in a
$182 million decrease in operating earnings.

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Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Less favorable mortality in both our
universal life and traditional life businesses resulted in a net decrease of $40 million in operating earnings. Favorable claims
experience in our long-term care business, due to higher net closures and the impact of lapses on certain insurance-related
liabilities, increased operating earnings by $16 million. On an annual basis, we review and update our long-term assumptions
used in our calculations of certain insurance-related liabilities and DAC. These annual updates, which occurred in both
2015 and 2014, resulted in a net operating earnings decrease of $77 million and were primarily related to unfavorable DAC
unlockings in the life businesses. Refinements to DAC and certain insurance-related liabilities that were recorded in both
2015 and 2014 resulted in a decrease in operating earnings of $14 million, primarily driven by certain 2014 adjustments in
both our life and annuity businesses. The 2014 refinements include favorable reserve adjustments related to disability
premium waivers and a charge related to delayed settlement interest on unclaimed funds held by state governments.

Expenses. A $23 million increase in expenses was primarily related to higher employee-related and project-related

costs.

Other. Favorable results from our reinsurance agreement with our former operating joint venture in Japan contributed
$38 million to operating earnings. Annuities reinsurance activity with affiliates that are reported in the Brighthouse Financial
segment had a net unfavorable impact to operating earnings of $18 million.

Brighthouse Financial

Business Overview. Sales from our life business decreased by 27% from 2015, primarily as a result of the U.S. Retail
Advisor Force Divestiture. Annuity sales decreased by 23%, primarily driven by a 42% decrease in variable annuity sales as
a result of the proposed Separation and the suspension of sales through one distributor. In our annuities business, despite
positive market performance in 2016, average separate account balances decreased primarily due to higher negative net flows
and the impact of a significant equity market decline in the third quarter of 2015, which was not fully reflected in the 2015
average asset balance.

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Interest expense on debt

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Years Ended December 31,

2016

2015

2014

(In millions)

1,222

1,675

3,491

3,503

735

8,951

3,200

1,162
(333)
1,073

128

2,338

7,568

361

3,718

3,327

422

9,142

2,875

1,255
(399)
731

128

2,484

7,074

555

1,022

1,513

1,474

3,963

3,156

534

9,127

2,711

1,275
(397)
810

133

2,472

7,004

570

1,553

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Business Growth. A $228 million increase in operating earnings was attributable to business growth, primarily due to
higher net investment income resulting from a larger invested asset base. Almost half of this increase resulted from the
recapture of reinsurance agreements (from an affiliate that is included in the MetLife Holdings segment) covering certain
single-premium deferred annuity contracts, with the remainder due primarily to a capital contribution from MetLife, Inc.
in early 2016 and positive net flows in our general account from our annuities and life businesses, partially offset by funding
agreement repayments in our run-off business.

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Market Factors. Market factors, including low interest rates, volatile equity markets, and foreign currency exchange
rate fluctuations, continued to impact our investment yields; however, certain impacts were mitigated by derivatives used
to hedge these risks. Investment yields on fixed maturity securities and mortgage loans decreased as a result of the low
interest rate environment, as proceeds from maturing investments and the growth in the investment portfolio were invested
at lower yields than the portfolio average. Additionally, we recognized lower returns on real estate joint ventures and lower
investment earnings on our securities lending program primarily as a result of lower margins due to the impact of a flatter
yield curve. These unfavorable yield impacts were partially offset by higher income on derivatives. Higher returns on other
limited partnership interests also increased income. In our annuities business, lower equity returns in 2015 drove a decline
in our average separate account balances which resulted in a decrease in asset-based fee income in 2016 relative to 2015.
In addition, we experienced higher costs associated with our variable annuity GMDBs, partially offset by lower average
interest crediting rates on deferred annuities and lower DAC amortization. The changes in market factors discussed above
resulted in a $225 million decrease in operating earnings.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Unfavorable mortality experience in
our universal life business and less favorable mortality experience in our income annuities business, as compared to 2015,
resulted in a net decrease in operating earnings of $82 million. The impact of our annual actuarial assumption review, which
occurred in both 2016 and 2015, resulted in a net operating earnings decrease of $79 million and was primarily related to
unfavorable DAC unlockings in our variable annuity business. Refinements, primarily to DAC and certain insurance-related
liabilities recorded in 2016, resulted in a decrease in operating earnings of $467 million. This decrease was primarily driven
by a $254 million charge in the third quarter of 2016, mostly recognized as a write-off of DAC, and an $86 million increase
in our insurance-related liabilities over the third and fourth quarters of 2016, both due to loss recognition testing upon re-
segmentation, as well as a reserve adjustment of $171 million resulting from modeling improvements in the reserving
process in our universal life business.

Expenses and Taxes. Operating earnings increased due to a decrease in expenses of $20 million, primarily driven by
the U.S. Retail Advisor Force Divestiture and lower project-related costs, partially offset by higher amortization of software
expenses. In 2016, we realized lower tax benefits of $46 million, primarily related to the separate account dividends received
deduction.

Other. Annuities reinsurance activity with an affiliate that is included in the MetLife Holdings segment increased
operating earnings by $160 million. This was primarily due to the aforementioned recapture of certain single-premium
deferred annuity reinsurance agreements that resulted in favorable recapture settlements and the recovery of DAC, partially
offset by lower interest credited on the related reinsurance receivables. The impact of the lower interest credited was largely
offset by the higher net investment income, noted above, earned on the assets transferred in connection with the same
recapture.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Business Growth. An $88 million increase in operating earnings was attributable to business growth. Net investment
income increased primarily due to a higher average invested asset base from positive net flows in our life business, partially
offset by funding agreement repayments in our run-off business. Lower DAC amortization was driven by lower average
separate account balances in our deferred annuity business. A decrease in policyholder account balances in our run-off
business resulted in lower interest credited expense. These increases were partially offset by lower asset-based fees resulting
from the lower average separate account balances in our deferred annuities business.

Market Factors. A $30 million decrease in operating earnings was attributable to market factors, including equity
markets and interest rates. Higher DAC amortization due to lower equity market performance was partially offset by favorable
impacts from interest rate movements. Higher interest credited resulted primarily from higher crediting rates on funding
agreement renewals in our run-off business. While separate account fund returns were down slightly on a full year basis,
the positive returns in the first half of the year drove an increase in our average separate account balances which resulted
in higher asset-based fee income.

Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Favorable mortality in our term life,
income annuities and traditional life businesses resulted in an increase in operating earnings of $50 million. On an annual
basis, we review and update our long-term assumptions used in our calculations of certain insurance-related liabilities and
DAC. These annual updates, which occurred in both 2015 and 2014, resulted in a decrease in operating earnings of
$41 million, primarily related to unfavorable DAC unlockings in the life businesses. Other refinements to DAC and
insurance-related liabilities decreased operating earnings by $13 million, primarily due to a favorable adjustment recognized
in 2014 related to refinements in reserve calculations for traditional life disability waiver premiums.

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Expenses. Higher expenses decreased operating earnings by $46 million, primarily due to the impact from a benefit
recorded in 2014 for affiliated reinsurance recapture activity in our life business, as well as higher allocated costs related
to sales and service support, partially offset by lower project-related costs.

Other. Annuities reinsurance activity with an affiliate that is part of the MetLife Holdings segment had a net favorable
impact to operating earnings of $18 million. This includes recapture activity in 2014 and reflects the favorable increase in
the amortization of deferred ceded commissions on new treaties, favorable recapture settlements, as well as lower net
guarantee reserves partially offset by a net drop in guarantee fees and unfavorable changes in deposit fund balances for
certain variable annuity treaties, which include the base contract. In addition, operating earnings decreased $56 million, as
a result of there being no activity in 2015 related to an agreement reinsuring certain variable annuity guaranteed minimum
benefits originally assumed from our former operating joint venture in Japan, which we exited in November 2014 through
novation.

Corporate & Other

Operating revenues
Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Total operating revenues

Operating expenses
Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Capitalization of DAC

Amortization of DAC and VOBA

Interest expense on debt

Other operating expenses

Total operating expenses

Provision for income tax expense (benefit)

Operating earnings

Less: Preferred stock dividends

Operating earnings available to common shareholders

Years Ended December 31,

2016

2015

2014

(In millions)

40
(119)
(62)
(517)
(658)

(23)
5
(7)
8

1,002
(192)
793
(947)
(504)
103
(607) $

(87) $
(113)
13
(290)
(477)

(175)
23
(2)
(1)
1,013

434

1,292
(365)
(1,404)
116
(1,520) $

89
(103)
275
(483)
(222)

—
(8)
975

153

1,202
(719)
(705)
122
(827)

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The table below presents operating earnings available to common shareholders by source net of income tax:

Other business activities

Other net investment income

Interest expense on debt

Preferred stock dividends

Acquisition costs

Corporate initiatives and projects

Incremental tax benefit (expense)

Other

Operating earnings available to common shareholders

Years Ended December 31,

2016

2015

2014

(In millions)

(5) $
(33)
(652)
(103)
—
(129)
438
(123)
(607) $

(41) $
17
(658)
(116)
—
(169)
(256)
(297)
(1,520) $

(12)
185
(634)
(122)
(4)
(166)
221
(295)
(827)

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

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

Other Business Activities. Operating earnings from other business activities increased $36 million. This was primarily

related to improved results from our start-up operations.

Other Net Investment Income. A $50 million decrease in other net investment income was primarily driven by lower
returns on fixed maturity securities as a result of the low interest rate environment and a decrease in average total portfolio
holdings, primarily driven by a capital contribution to MetLife USA which is reported in the Brighthouse Financial segment.
Additionally, lower returns on real estate, real estate joint ventures and private equities decreased other net investment
income.

Preferred Stock Dividends. Preferred stock dividends decreased by $13 million. In June 2015, MetLife, Inc. repurchased
its 6.50% Non-Cumulative Preferred Stock, Series B (the “Series B preferred stock”) on which dividends had been paid
quarterly. Also in June 2015, MetLife, Inc. issued 1,500,000 shares of its 5.25% Fixed-to-Floating Rate Non-Cumulative
Preferred Stock, Series C (the “Series C preferred stock”) on which dividends are payable semi-annually until June 15,
2020, and are payable quarterly thereafter.

Corporate Initiatives and Projects. Expenses associated with corporate initiatives and projects decreased by $40 million,

primarily due to lower costs associated with enterprise-wide initiatives taken by the Company.

Incremental Tax Benefit. Corporate & Other benefits from the impact of certain permanent tax preferenced items,
including non-taxable investment income and tax credits for investments in low income housing. As a result, our effective
tax rate differs from the U.S. statutory rate of 35%. In 2016, we had higher utilization of tax preferenced investments, which
increased our operating earnings by $69 million over 2015. In addition, our results for 2016 include a tax benefit of $46 million
for tax audit settlements and $22 million related to an investment tax credit. Our 2015 results included the aforementioned
tax charge of $557 million, which was recorded under accounting guidance for the recognition of tax uncertainties.

Other. Our 2015 results include the aforementioned $235 million charge for interest on uncertain tax positions. In 2016,
operating earnings decreased by $35 million as a result of net adjustments to certain reinsurance assets and liabilities. In
addition, operating earnings decreased $27 million due to higher employee-related costs, including those related to the
Separation. An impairment charge on a real estate property in 2015, partially offset by higher real estate costs in 2016,
increased operating earnings by $10 million.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

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

Other Business Activities. Operating earnings from other business activities decreased $29 million primarily due to

lower operating earnings from start-up operations.

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Other Net Investment Income. A $168 million decrease in other net investment income was driven by an increase in
the amount credited to the segments due to growth in the economic capital managed by Corporate & Other on their behalf.
This decrease was also impacted by the sustained low interest rate environment, which drove lower investment yields on
fixed maturity securities and lower returns on alternative investments. This was partially offset by increased income from
higher average invested assets and improved returns on real estate investments.

Interest Expense on Debt. Interest expense on debt increased by $24 million, mainly due to the issuance of $1.5 billion

of senior notes in March 2015 and $1.25 billion of senior notes in November 2015.

Incremental Tax Benefit (Expense). Corporate & Other benefits from the impact of certain permanent tax differences,
including non-taxable investment income and tax credits for investments in low income housing. As a result, our effective
tax rate differs from the U.S. statutory rate of 35%. Our 2015 results include the aforementioned tax charge of $557 million,
which was recorded under accounting guidance for the recognition of tax uncertainties. Our 2014 results include an
$18 million tax charge related to a portion of the settlement of a licensing matter that was not deductible for income tax
purposes. In addition, in 2015, we had higher utilization of tax preferenced investments, a benefit related to the timing of
certain tax credits and other tax benefits, which increased our operating earnings by $62 million over 2014.

Other. Our 2015 results include the aforementioned charge of $235 million for interest on uncertain tax positions, as
well as a $20 million charge associated with company use real estate. These increases in expenses were partially offset by
lower corporate expenses of $30 million, a $21 million tax refund received for a favorable outcome on prior year tax audits
and a decrease in employee-related costs of $22 million. Our results for 2014 include a $117 million accrual to increase the
litigation reserve related to asbestos and charges totaling $57 million related to the settlement of a licensing matter with the
NYDFS and the District Attorney, New York County.

Effects of Inflation

Management believes that inflation has not had a material effect on the Company’s consolidated results of operations, except

insofar as inflation may affect interest rates.

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 cannot 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.

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Investments

Investment Risks

Our 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 Investments Department,
led by the Chief Investment Officer, manages investment risks using a risk control framework comprised of policies, procedures
and limits, as discussed further below. The Investments Risk Committee, chaired by GRM, reviews and monitors investment
risk limits and tolerances. We are exposed to the following primary sources of investment risks:

•

credit risk, relating to the uncertainty associated with the continued ability of a given obligor to make timely payments
of principal and interest;

interest rate risk, relating to the market price and cash flow variability associated with changes in market interest rates.
Changes in market interest rates will impact the net unrealized gain or loss position of our fixed income investment
portfolio and the rates of return we receive on both new funds invested and reinvestment of existing funds;

•

liquidity risk, relating to the diminished ability to sell certain investments, in times of strained market conditions;

• market valuation risk, relating to the variability in the estimated fair value of investments associated with changes in
market factors such as credit spreads and equity market levels. A widening of credit spreads will adversely impact the
net unrealized gain (loss) position of the fixed income investment portfolio, will increase losses associated with credit-
based non-qualifying derivatives where we assume credit exposure, and, if credit spreads widen significantly or for an
extended period of time, will likely result in higher OTTI. Credit spread tightening will reduce net investment income
associated with purchases of fixed maturity securities and will favorably impact the net unrealized gain (loss) position
of the fixed income investment portfolio;

•

currency risk, relating to the variability in currency exchange rates for foreign denominated investments. This risk
relates to potential decreases in estimated fair value and net investment income resulting from changes in currency
exchange rates versus the U.S. dollar. In general, the weakening of foreign currencies versus the U.S. dollar will
adversely affect the estimated fair value of our foreign denominated investments; and

real estate risk, relating to commercial, agricultural and residential real estate, and stemming from factors, which include,
but are not limited to, market conditions, including the demand and supply of leasable commercial space,
creditworthiness of borrowers and their tenants and joint venture partners, capital markets volatility and inherent interest
rate movements.

We manage investment risk through in-house fundamental credit analysis of the underlying obligors, issuers, transaction
structures and real estate properties. We also manage credit risk, market valuation risk and liquidity risk through industry and
issuer diversification and asset allocation. Risk limits to promote diversification by asset sector, avoid concentrations in any
single issuer and limit overall aggregate credit and equity risk exposure, as measured by our economic capital framework, are
approved annually by a committee of directors that oversees our investment portfolio. For real estate assets, we manage credit
risk and market valuation risk through geographic, property type and product type diversification and asset allocation. We manage
interest rate risk as part of our ALM strategies. These strategies include maintaining an investment portfolio with diversified
maturities that has a weighted average duration that reflects the duration of our estimated liability cash flow profile, and utilizing
product design, such as the use of market value adjustment features and surrender charges, to manage interest rate risk. We also
manage interest rate risk through proactive monitoring and management of certain non-guaranteed elements of our products,
such as the resetting of credited interest and dividend rates for policies that permit such adjustments. In addition to hedging with
foreign currency derivatives, we manage currency risk by matching much of our foreign currency liabilities in our foreign
subsidiaries with their respective foreign currency assets, thereby reducing our risk to foreign currency exchange rate fluctuation.
We also use certain derivatives in the management of credit, interest rate, and market valuation risk.

We use purchased credit default swaps to mitigate credit risk in our investment portfolio. Generally, we purchase credit
protection by entering into credit default swaps referencing the issuers of specific assets we own. In certain cases, basis risk
exists between these credit default swaps and the specific assets we own. For example, we may purchase credit protection on a
macro basis to reduce exposure to specific industries or other portfolio concentrations. In such instances, the referenced entities
and obligations under the credit default swaps may not be identical to the individual obligors or securities in our investment
portfolio. In addition, our purchased credit default swaps may have shorter tenors than the underlying investments they are
hedging. However, we dynamically hedge this risk through the rebalancing and rollover of our credit default swaps at their most
liquid tenors. We believe that our purchased credit default swaps serve as effective economic hedges of our credit exposure.

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We enter into market standard purchased and written credit default swap contracts. Payout under such contracts is triggered
by certain credit events experienced by the referenced entities. For credit default swaps covering North American corporate
issuers, credit events typically include bankruptcy and failure to pay on borrowed money. For European corporate issuers, credit
events typically also include involuntary restructuring. With respect to credit default contracts on Western European sovereign
debt, credit events typically include failure to pay debt obligations, repudiation, moratorium, or involuntary restructuring. In
each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the
International Swaps and Derivatives Association determines that a credit event has occurred.

Current Environment

The global economy and markets continue to be affected by stress and volatility, which has adversely affected the financial
services sector, in particular, and global capital markets. Recently, political and/or economic instability in the U.K., Mexico,
Italy, Turkey and Puerto Rico have contributed to global market volatility. Events following the U.K.’s referendum on June 23,
2016 and the uncertainties associated with its pending withdrawal from the EU have contributed to market volatility. See “—
Industry Trends — Financial and Economic Environment.”

As a global insurance company, we are affected by the monetary policy of central banks around the world. See “— Industry
Trends — Financial and Economic Environment” for further information on such measures, as well as for information regarding
actions taken by Japan’s central government and the Bank of Japan to boost inflation expectations and achieve sustainable
economic growth in Japan. See also “— Industry Trends — Impact of a Sustained Low Interest Rate Environment” for information
regarding the December 2015 and December 2016 actions taken by the FOMC to raise the federal funds rate. The Federal Reserve
may take further actions to influence interest rates in the future, which may have an impact on the pricing levels of risk-bearing
investments and may adversely impact the level of product sales. See “Risk Factors — Economic Environment and Capital
Markets-Related Risks — We Are Exposed to Significant Global Financial and Capital Markets Risks Which May Adversely
Affect Our Results of Operations, Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from
Period to Period.”

European Investments

We maintain general account investments in Europe to support our insurance operations and related policyholder liabilities
in these countries and certain of our non-European operations invest in Europe for diversification. In Europe, we have
proactively mitigated risk in both direct and indirect exposures by investing in a diversified portfolio of high quality investments
with a focus on the higher-rated countries, including the U.K., Germany, France, the Netherlands, Poland, Norway and Sweden.
The sovereign debt of these countries continues to maintain investment grade credit ratings from all major rating agencies.
European sovereign fixed maturity securities, at estimated fair value, were $8.5 billion at December 31, 2016. Our European
corporate securities (fixed maturity and perpetual hybrid securities classified as non-redeemable preferred stock) are invested
in a diversified portfolio of primarily non-financial services securities, which comprised $19.7 billion, or 67%, of European
total corporate securities, at estimated fair value, at December 31, 2016. Of these European fixed maturity securities, 94%
were investment grade and, for the 6% that were below investment grade, the majority were non-financial services corporate
securities at December 31, 2016. European financial services corporate securities, at estimated fair value, were $9.9 billion
(including $6.7 billion within the banking sector) with 98% investment grade, at December 31, 2016. Total European fixed
maturity securities, at estimated fair value, were $38.9 billion at December 31, 2016, including $770 million of structured
securities.

Selected Country Investments

Recent country specific volatility due to local economic and/or political concerns has affected the performance of certain

of our investments. See “— Industry Trends — Financial and Economic Environment.”

We have exposure to such volatility, as we maintain general account investments in the selected countries as summarized
below to support our insurance operations and related policyholder liabilities in these countries and we also have exposure
through our global portfolio diversification.

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The following table presents a summary of fixed maturity securities in these countries. The information below is presented

on a country of risk basis (e.g. the country where the issuer primarily conducts business).

United Kingdom

Mexico

Italy

Turkey

Puerto Rico (2)

Total

Investment grade %

__________________

Selected Country Fixed Maturity Securities at December 31, 2016

Sovereign

Financial
Services

Non-
Financial
Services

Structured

Total (1)

(Dollars in millions)

$ 2,690

$ 8,066

3,907

508

1,890

276

—

485

183

124

435

104

—

$ 11,286

6,372

718

511

133

$ 4,335

$ 3,331

$ 10,748

606

$ 19,020

93%

96%

92%

99%

93%

(1)

The par value and amortized cost were $18.2 billion and $19.4 billion, respectively, at December 31, 2016.

(2) Our exposure to Puerto Rico sovereigns is in the form of political subdivision fixed maturity securities and is composed

completely of revenue bonds. We have no Puerto Rico general obligation bonds.

We manage direct and indirect investment exposure in the selected countries through fundamental credit analysis and we
continually monitor and adjust our level of investment exposure. We do not expect that our general account investments in
these countries will have a material adverse effect on our results of operations or financial condition.

Current Environment Summary

All of these factors 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, net investment gains (losses), net derivative gains (losses), level of unrealized
gains (losses) within the various asset classes in our investment portfolio, and our level of investment in lower yielding cash
equivalents, short-term investments and government securities. See “— Industry Trends” and “Risk Factors — Economic
Environment and Capital Markets-Related Risks — We Are Exposed to Significant Global Financial and Capital Markets
Risks Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and May Cause Our Net
Investment Income to Vary from Period to Period.”

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Investment Portfolio Results

The following yield table presents the yield and net investment income for our investment portfolio for the periods
indicated. Yields are calculated using reported net investment income which is not adjusted for the impact of changes in foreign
currency exchange rates. As described below, this table reflects certain differences from the presentation of net investment
income presented in the GAAP consolidated statements of operations. This yield table presentation is consistent with how we
measure our investment performance for management purposes, and we believe it enhances understanding of our investment
portfolio results.

Fixed maturity securities (2) (3)

Mortgage loans (3)

Real estate and real estate joint ventures

Policy loans

Equity securities

Other limited partnership interests

Cash and short-term investments

Other invested assets

Investment income

Investment fees and expenses

Net investment income including divested businesses and

lag elimination (4), (5), (6)

Less: net investment income from divested businesses

and lag elimination (4), (5), (6)

Net investment income (6)

__________________

For the Years Ended December 31,

2016

2015

2014

Yield% (1)

Amount

Yield% (1)

Amount

Yield% (1)

Amount

4.39 % $

14,217

4.63 % $

14,201

4.81 % $

14,946

(Dollars in millions)

4.64 %

3.92 %

5.23 %

4.88 %

9.24 %

1.03 %

4.64 %

(0.14)

3,258

353

589

140

641

113

1,169

20,480

(614)

4.97 %

4.89 %

5.23 %

4.71 %

8.45 %

1.04 %

4.85 %

(0.15)

3,135

488

603

144

669

129

1,053

20,422

(633)

5.15 %

3.67 %

5.36 %

4.30 %

13.01 %

1.07 %

2,928

376

629

133

1,033

161

906

5.01 %

21,112

(0.13)

(556)

4.50 %

19,866

4.70 %

19,789

4.88 %

20,556

(166)

19,700

—

19,789

(72)

20,484

(1) Yields are calculated as investment income as a percent of average quarterly asset carrying values. Investment income
excludes recognized gains and losses and reflects GAAP adjustments presented in footnote (6) below. Asset carrying
values exclude unrealized gains (losses), collateral received in connection with our securities lending program,
freestanding derivative assets, collateral received from derivative counterparties, the effects of consolidating certain
variable interest entities (“VIEs”) under GAAP that are treated as consolidated securitization entities (“CSEs”) and
contractholder-directed unit-linked investments. A yield is not presented for other invested assets as it is not considered
a meaningful measure of performance for this asset class.

(2)

Investment income includes amounts from FVO and trading securities of $37 million, $21 million and $103 million for
the years ended December 31, 2016, 2015 and 2014, respectively.

(3)

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

(4) Yield calculations include the net investment income and ending carrying values of the divested businesses, as well as

lag elimination.

(5) Net investment income included in yield calculations include earned income on derivatives and amortization of premium
on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge
accounting treatment (“investment hedge adjustments”). The investment hedge adjustments presented in the table below
exclude cash settlements of $1 million, $0 and $1 million for the years ended December 31, 2016, 2015 and 2014,
respectively.

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(6) Net investment income presented in the yield table varies from the most directly comparable GAAP measure due to certain
reclassifications and adjustments and excludes the effects of consolidating certain VIEs under GAAP that are treated as
CSEs and contractholder-directed unit-linked investments. Such reclassifications and adjustments are presented in the
table below.

Years Ended December 31,

2016

2015

2014

(In millions)

Net investment income — in the above yield table

19,700

19,789

Real estate discontinued operations

Investment hedge adjustments

Operating joint ventures adjustment

Contractholder-directed unit-linked investments

Divested businesses and lag elimination (1)

Incremental net investment income from CSEs

—
(878)
6

950

166

—
(776)
(4)
264

—

20,484
(1)
(705)
(1)
1,266

Net investment income — GAAP consolidated statements of operations

19,947

19,281

21,153

__________________

(1)

For the year ended December 31, 2016, $166 million related to the impact of converting the Company’s Japan operations
to calendar year-end reporting. See Note 2 of the Notes to the Consolidated Financial Statements for further information.

See “— Results of Operations — Consolidated Results — Year Ended December 31, 2016 Compared with the Year Ended
December 31, 2015” and “— Results of Operations — Consolidated Results —Year Ended December 31, 2015 Compared
with the Year Ended December 31, 2014,” for an analysis of the year over year changes in net investment income.

Fixed Maturity and Equity Securities AFS

The following table presents fixed maturity and equity securities AFS by type (public or private) and information about

perpetual and redeemable securities held at:

Fixed maturity securities

Publicly-traded

Privately-placed

Total fixed maturity securities

Percentage of cash and invested assets

Equity securities

Publicly-traded

Privately-held

Total equity securities

Percentage of cash and invested assets

Perpetual securities included within fixed maturity and equity securities

AFS

Redeemable preferred stock with a stated maturity included within fixed

maturity securities AFS

December 31, 2016

December 31, 2015

Estimated Fair
Value

% of
Total

Estimated Fair
Value

% of
Total

(Dollars in millions)

298,604

52,285

85.1 % $

14.9

302,400

49,002

86.1 %

13.9

350,889

100.0 % $

351,402

100.0 %

67.7%

2,066

1,128

3,194

0.6%

599

1,080

64.7 % $

35.3

100.0 % $

69.1%

2,184

1,137

3,321

0.7%

819

1,216

65.8 %

34.2

100.0 %

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Perpetual securities are included within fixed maturity and equity securities. Upon acquisition, we classify perpetual
securities that have attributes of both debt and equity as fixed maturity securities if the securities have an interest rate step-up
feature which, when combined with other qualitative factors, indicates that the securities have more debt-like characteristics;
while those with more equity-like characteristics are classified as equity securities. Many of such securities, commonly referred
to as “perpetual hybrid securities,” have been issued by non-U.S. financial institutions that are accorded the highest two capital
treatment categories by their respective regulatory bodies (i.e. core capital, or “Tier 1 capital” and perpetual deferrable securities,
or “Upper Tier 2 capital”).

Redeemable preferred stock with a stated maturity is included within fixed maturity securities. These securities, which are
commonly referred to as “capital securities,” primarily have cumulative interest deferral features and are primarily issued by
U.S. financial institutions.

In connection with our investment management business, we manage privately-placed and infrastructure fixed maturity
securities on behalf of institutional clients, which are unaffiliated investors. These privately-placed and infrastructure fixed
maturity securities had an estimated fair value of $8.0 billion and $6.1 billion at December 31, 2016 and 2015, respectively. As
these assets are managed on behalf of, and owned by, our institutional clients, they are not included in our consolidated financial
statements.

During 2016, we commenced management of below investment grade fixed maturity securities on behalf of institutional
clients, which are unaffiliated investors. These fixed maturity securities had an estimated fair value of $316 million at
December 31, 2016. As these assets are managed on behalf of, and owned by, our institutional clients, they are not included in
our consolidated financial statements.

Also in connection with our investment management business, we manage index investment portfolios that track the return
of industry fixed income and equity market indices such as the Barclay’s U.S. Aggregate Bond Index and S&P 500® Index. These
assets had an estimated fair value of $27.2 billion and $26.0 billion at December 31, 2016 and 2015, respectively, and are included
within separate account assets in our consolidated financial statements.

Valuation of Securities. We are responsible for the determination of the estimated fair value of our investments. We determine
the estimated fair value of publicly-traded securities after considering one of three primary sources of information: quoted market
prices in active markets, independent pricing services, or independent broker quotations. We determine the estimated fair value
of privately-placed securities after considering one of three primary sources of information: market standard internal matrix
pricing, market standard internal discounted cash flow techniques, or independent pricing services (after we determine the
independent pricing services’ use of available observable market data). For publicly-traded securities, the number of quotations
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 data about market transactions and inputs from multiple pricing sources that are market
observable or can be derived principally from or corroborated by observable market data. See Note 10 of the Notes to the
Consolidated Financial Statements for a discussion of the types of market standard valuation methodologies utilized and key
assumptions and observable inputs used in applying these standard valuation methodologies. When a price is not available in
the active market or through an independent pricing service, management values the security primarily using market standard
internal matrix pricing or discounted cash flow techniques, and non-binding quotations from independent brokers who are
knowledgeable about these securities. Independent non-binding broker quotations utilize inputs that may be difficult to
corroborate with observable market data. As shown in the following section, less than 1% of our fixed maturity securities were
valued using non-binding quotations from independent brokers at December 31, 2016.

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 valuation
adjustments, when applied, are based upon established policies and are applied consistently over time. See Note 10 of the Notes
to the Consolidated Financial Statements for further information on our valuation controls and procedures including our formal
process to challenge any prices received from independent pricing services that are not considered representative of estimated
fair value.

We have reviewed the significance and observability of inputs used in the valuation methodologies to determine the
appropriate fair value hierarchy level for each of our securities. Based on the results of this review and investment class analysis,
each instrument is categorized as Level 1, 2 or 3 based on the lowest level significant input to its valuation. See Note 10 of the
Notes to the Consolidated Financial Statements for information regarding the valuation techniques and inputs by level within
the three level fair value hierarchy by major classes of invested assets.

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Fair Value of Fixed Maturity and Equity Securities – AFS

Fixed maturity and equity securities AFS measured at estimated fair value on a recurring basis and their corresponding

fair value pricing sources are as follows:

December 31, 2016

Fixed Maturity
Securities

Equity
Securities

(Dollars in millions)

Level 1

Quoted prices in active markets for identical assets

31,153

8.9% $

1,373

43.0%

Level 2

Independent pricing sources

Internal matrix pricing or discounted cash flow techniques

Significant other observable inputs

Level 3

Independent pricing sources

Internal matrix pricing or discounted cash flow techniques

Independent broker quotations

Significant unobservable inputs

Total estimated fair value

296,440

2,187

298,627

16,156

3,709

1,244

21,109

350,889

84.5

0.6

85.1

4.6

1.0

0.4

6.0

1,122

1,217

469

127

604

35.1

3.0

38.1

14.7

4.0

0.2

18.9

100.0% $

3,194

100.0%

See Note 10 of the Notes to the Consolidated Financial Statements for the fixed maturity securities and equity securities

AFS fair value hierarchy.

The composition of fair value pricing sources for and significant changes in Level 3 securities at December 31, 2016 are

as follows:

• The majority of the Level 3 fixed maturity and equity securities AFS were concentrated in three sectors: United

States and foreign corporate securities and residential mortgage-backed securities (“RMBS”).

• Level 3 fixed maturity securities are priced principally through market standard valuation methodologies, independent
pricing services and, to a much lesser extent, 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 consist of less liquid securities with very limited trading activity or where less price transparency exists
around the inputs to the valuation methodologies. Level 3 fixed maturity securities include: sub-prime RMBS; certain
below investment grade private securities and less liquid investment grade corporate securities (included in United
States and foreign corporate securities) and less liquid asset-backed securities (“ABS”) and foreign government
securities.

• During the year ended December 31, 2016, Level 3 fixed maturity securities increased by $295 million, or 1%. The

increase was driven by purchases in excess of sales and an increase in estimated fair value recognized in OCI.

See Note 10 of the Notes to the Consolidated Financial Statements for a rollforward of the fair value measurements for
fixed maturity securities and equity securities AFS measured at estimated fair value on a recurring basis using significant
unobservable (Level 3) inputs; transfers into and/or out of Level 3; and 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 AFS

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements for information about fixed maturity securities

AFS by sector, contractual maturities and continuous gross unrealized losses.

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Fixed Maturity Securities Credit Quality — Ratings

The Securities Valuation Office of the 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 designation is available from the NAIC, then, as permitted by the NAIC, an internally developed designation
is used. The NAIC designations are generally similar to the credit quality ratings of the NRSRO for fixed maturity securities,
except for certain structured securities as described below. Rating agency ratings are based on availability of applicable ratings
from rating agencies on the NAIC credit rating provider list, including Moody’s, S&P, Fitch, Dominion Bond Rating Service,
A.M. Best, Kroll Bond Rating Agency, Egan Jones Ratings Company and Morningstar, Inc. (“Morningstar”). If no rating is
available from a rating agency, then an internally developed rating is used.

The NAIC has adopted revised methodologies for certain structured securities comprised of non-agency RMBS,
commercial mortgage-backed securities (“CMBS”) and ABS. The NAIC’s objective with the revised 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 structured
securities. We apply the revised NAIC methodologies to structured securities held by MetLife, Inc.’s insurance subsidiaries
that maintain the NAIC statutory basis of accounting. The NAIC’s present methodology is to evaluate structured securities
held by insurers using the revised NAIC methodologies on an annual basis. If MetLife, Inc.’s insurance subsidiaries acquire
structured securities that have not been previously evaluated by the NAIC, but are expected to be evaluated by the NAIC in
the upcoming annual review, an internally developed designation is used until a final designation becomes available. These
revised NAIC designations may not correspond to NRSRO ratings.

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

2016

2015

December 31,

NAIC
Designation

NRSRO Rating

Amortized
Cost

Unrealized
Gain (Loss)

Estimated
Fair
Value

% of
Total

Amortized
Cost

Unrealized
Gain (Loss)

(Dollars in millions)

Estimated
Fair
Value

% of
Total

Aaa/Aa/A

Baa

Subtotal investment

grade

Caa and lower

In or near default

Subtotal below

investment grade

Total fixed maturity

securities

$ 232,875

16,191

$ 249,066

71.0 % $ 234,176

16,627

$ 250,803

71.4 %

77,281

3,816

81,097

23.1

77,313

2,210

79,523

22.6

20,007

330,163

94.1

18,837

330,326

94.0

310,156

13,885

5,410

895

437

(2)

14,322

5,494

904

4.1

1.6

0.2

—

5.9

311,489

15,314

5,083

1,036

(172)

(244)

15,142

4,839

1,041

4.3

1.4

0.3

—

6.0

20,198

528

20,726

21,475

(399)

21,076

$ 330,354

20,535

$ 350,889

100.0 % $ 332,964

18,438

$ 351,402

100.0 %

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The following tables present total fixed maturity securities, based on estimated fair value, by sector classification and by
NRSRO rating and the applicable NAIC designations from the NAIC published comparison of NRSRO ratings to NAIC
designations, except for certain structured securities, which are presented using the NAIC methodologies as described above:

NAIC Designation:

NRSRO Rating:

Aaa/Aa/A

Baa

Caa and
Lower

In or Near
Default

Total
Estimated
Fair Value

(Dollars in millions)

Fixed Maturity Securities — by Sector & Credit Quality Rating

44,732

$ 43,063

$ 8,414

$ 3,884

760

— $ 100,853

December 31, 2016

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate

RMBS

State and political subdivision

ABS

CMBS

57,038

48,951

22,951

35,916

15,575

12,776

11,127

485

5,035

30,189

707

502

971

145

—

2,230

3,141

322

125

—

870

709

—

904

Total fixed maturity securities

$ 249,066

$ 81,097

$ 14,322

$ 5,494

Percentage of total

December 31, 2015

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate

RMBS

State and political subdivision

ABS

CMBS

71.0%

23.1%

4.1%

1.6%

0.2%

43,448

$ 44,158

$ 9,163

$ 3,532

61,646

43,911

23,368

37,394

14,818

13,646

12,572

—

4,098

29,362

560

599

702

—

1,730

3,621

579

—

395

732

177

—

493

—

326

114

Total fixed maturity securities

$ 250,803

$ 79,523

$ 15,142

$ 4,839

1,041

—

57,523

57,138

57,057

36,993

16,176

13,877

11,272

$ 350,889

—%

100.0%

— $ 100,794

—

61,646

50,499

57,198

38,797

15,441

14,394

12,633

$ 351,402

Percentage of total

71.4%

22.6%

4.3%

1.4%

0.3%

—%

100.0%

U.S. and Foreign Corporate Fixed Maturity Securities

We maintain a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does
not have any exposure to any single issuer in excess of 1% of total investments and the top ten holdings comprised 2% of
total investments at both December 31, 2016 and 2015. The tables below present our U.S. and foreign corporate securities
holdings by industry at:

Industrial
Consumer
Finance
Utility
Communications
Other

Total

December 31,

2016

2015

Estimated
Fair
Value

% of
Total

Estimated
Fair
Value

% of
Total

48,109

36,952

33,431

23,949

12,955

2,514

(Dollars in millions)

30.4% $

23.4

21.2

15.2

8.2

1.6

44,710

37,317

33,050

27,770

11,559

3,586

28.3%

23.6

20.9

17.6

7.3

2.3

157,910

100.0% $

157,992

100.0%

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Structured Securities

We held $62.1 billion and $65.8 billion of structured securities, at estimated fair value, at December 31, 2016 and 2015,

respectively, as presented in the RMBS, ABS and CMBS sections below.

RMBS

The table below presents our RMBS holdings at:

Estimated
Fair
Value

2016

% of
Total

December 31,

Net
Unrealized
Gains (Losses)

Estimated
Fair
Value

(Dollars in millions)

2015

% of
Total

Net
Unrealized
Gains (Losses)

22,286

14,707

36,993

60.2% $

624

39.8

100.0% $

700

20,604

18,193

38,797

53.1% $

46.9

100.0% $

23,579

63.7% $

276

26,214

67.6% $

1,787

6,527

5,100

4.8

17.7

13.8

36,993

100.0% $

24,162

35,916

65.3%

97.1%

180

163

700

1,960

5,990

4,633

5.1

15.4

11.9

38,797

100.0% $

26,809

37,394

69.1%

96.4%

578

305

883

763

(18)

883

By security type:

Collateralized mortgage obligations

Pass-through securities

Total RMBS

By risk profile:

Agency

Prime

Alt-A

Sub-prime

Total RMBS

Ratings profile:

Rated Aaa/AAA

Designated NAIC 1

Collateralized mortgage obligations are structured by dividing the cash flows of mortgages into separate pools or tranches
of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed
securities are 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.

The majority of our RMBS holdings were rated Aaa/AAA by Moody’s, S&P or Fitch; and were designated NAIC 1 by
the NAIC at December 31, 2016 and 2015. Agency RMBS were guaranteed or otherwise supported by Federal National
Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association. Non-
agency RMBS include prime, alternative residential mortgage loans (“Alt-A”) and sub-prime 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 is between prime and sub-
prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.

Included within prime and Alt-A RMBS are re-securitization of real estate mortgage investment conduit (“Re-REMIC”)
securities. Re-REMIC RMBS involve the pooling of previous issues of prime and 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 re-securitization.

Historically, we have managed our exposure to sub-prime RMBS holdings by focusing primarily on senior tranche
securities, stress testing the portfolio with severe loss assumptions and closely monitoring the performance of the portfolio.
Our sub-prime RMBS portfolio consists predominantly of securities that were purchased after 2012 at significant discounts
to par value and discounts to the expected principal recovery value of these securities. The vast majority of these securities
are investment grade under the NAIC designations (e.g., NAIC 1 and NAIC 2). The estimated fair value of our sub-prime
RMBS holdings purchased since 2012 was $4.6 billion and $4.0 billion at December 31, 2016 and 2015, respectively, with
unrealized gains (losses) of $140 million and $74 million at December 31, 2016 and 2015, respectively.

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ABS

Our ABS holdings are diversified both by collateral type and by issuer. The following table presents our ABS holdings

at:

Estimated
Fair
Value

2016

% of
Total

December 31,

Net
Unrealized
Gains (Losses)

Estimated
Fair
Value

(Dollars in millions)

6,866

1,477

1,256

1,144

1,079

2,055

49.5% $

(42) $

10.6

9.1

8.2

7.8

14.8

(29)

7,698

1,153

1,365

1,284

831

2,063

2015

% of
Total

Net
Unrealized
Gains (Losses)

53.5% $

(144)

8.0

9.5

8.9

5.8

14.3

—

(30)

13,877

100.0% $

(43) $

14,394

100.0% $

(104)

6,811

12,776

49.1%

92.1%

7,510

13,646

52.2%

94.8%

By collateral type:

Collateralized obligations

Automobile loans

Foreign residential loans

Student loans

Credit card loans

Other loans

Total

Ratings profile:

Rated Aaa/AAA

Designated NAIC 1

CMBS

Our CMBS holdings are diversified by vintage year. The following tables present our CMBS holdings by NRSRO rating

and by vintage year at:

December 31, 2016

Aaa

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

(Dollars in millions)

2003 - 2005

120

2006

2007

2008 - 2010

2011

2012

2013

2014

2015

2016

180

458

403

1,000

972

2,373

1,052

130

181

486

422

1,059

986

2,374

1,043

—

383

846

940

460

141

—

394

893

952

452

136

—

330

410

265

217

—

339

397

258

216

Total

6,596

$ 6,722

2,883

$ 2,942

1,414

$ 1,404

—

130

171

130

172

—

187

317

542

1,125

2,256

2,177

3,058

1,381

201

322

572

1,164

2,349

2,196

3,050

1,366

$ 11,092

$ 11,272

Ratings
Distribution

59.6%

26.1%

12.5%

1.5%

0.3%

100.0%

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Table of Contents

Aaa

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, 2015

2003 - 2005

187

198

1,061

1,070

477

560

506

989

854

2,258

486

593

534

1,036

859

2,227

2006

2007

2008 - 2010

2011

2012

2013

2014

2015

Total

Ratings
Distribution

(Dollars in millions)

144

—

368

696

939

445

101

145

—

376

735

937

436

500

893

453

325

513

925

459

327

—

123

—

125

—

372

392

1,266

1,282

828

646

1,383

2,590

2,247

3,060

843

681

1,433

2,706

2,256

3,022

6,897

$ 7,008

2,789

$ 2,833

2,440

$ 2,500

150

156

134

136

$ 12,410

$ 12,633

55.5%

22.4%

19.8%

1.2%

1.1%

100.0%

The tables above reflect NRSRO ratings including Moody’s, S&P, Fitch and Morningstar. CMBS designated NAIC 1

were 98.7% and 99.5% of total CMBS at December 31, 2016 and 2015, respectively.

Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements for information about the evaluation of fixed

maturity securities and equity securities AFS for OTTI and evaluation of temporarily impaired AFS securities.

OTTI Losses on Fixed Maturity and Equity Securities AFS Recognized in Earnings

See Note 8 of the Notes to the Consolidated Financial Statements for information about OTTI losses and gross gains and

gross losses on AFS securities sold.

Overview of Fixed Maturity and Equity Security OTTI Losses Recognized in Earnings

Impairments of fixed maturity and equity securities were $206 million, $130 million and $96 million for the years ended
December 31, 2016, 2015 and 2014, respectively. Impairments of fixed maturity securities were $129 million, $90 million
and $60 million for the years ended December 31, 2016, 2015 and 2014, respectively. Impairments of equity securities were
$77 million, $40 million and $36 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Credit-related impairments of fixed maturity securities were $118 million, $90 million and $60 million for the years ended

December 31, 2016, 2015 and 2014, respectively.

Explanations of changes in fixed maturity and equity securities impairments are as follows:

Year Ended December 31, 2016 Compared with the Year Ended December 31, 2015

Overall OTTI losses recognized in earnings on fixed maturity and equity securities were $206 million for the year
ended December 31, 2016, as compared to $130 million for the year ended December 31, 2015. The most significant increase
in OTTI losses were in U.S. and foreign corporate securities and common stock, which comprised $180 million for the year
ended December 31, 2016, as compared to $93 million for the year ended December 31, 2015. An increase of $87 million
in OTTI losses on U.S. and foreign corporate securities and common stock was concentrated in industrial securities and
was the result of lower oil prices impacting the energy sector.

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

Overall OTTI losses recognized in earnings on fixed maturity and equity securities were $130 million for the year
ended December 31, 2015 as compared to $96 million for the year ended December 31, 2014. The most significant decrease
in OTTI losses were in U.S. and foreign corporate securities, which comprised $54 million for the year ended December
31, 2015, as compared to $9 million for the year ended December 31, 2014. An increase of $45 million in OTTI losses on
U.S. and foreign corporate securities reflected the impact of weakening foreign currencies on non-functional currency
denominated fixed maturity securities and lower oil prices impacting the energy sector. The $45 million increase in OTTI
losses on U.S. and foreign corporate securities was concentrated in the utility and consumer services industries.

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Future Impairments

Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present
value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation, interest rates and credit
spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in
upcoming periods.

FVO and Trading Securities

FVO and trading securities are primarily comprised of securities for which the FVO has been elected (“FVO Securities”).
FVO Securities 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, certain fixed maturity and equity securities
held-for-investment by the general account to support ALM strategies for certain insurance products and investments in certain
separate accounts; securities held by CSEs; and trading securities, as further described in Note 1 of the Notes to the Consolidated
Financial Statements. In 2016, the Company reinvested its trading securities portfolio into other asset classes and, at December 31,
2016, the Company no longer held any actively traded securities. FVO and trading securities were $13.9 billion and $15.0 billion
at estimated fair value, or 2.7% and 3.0% of total cash and invested assets, at December 31, 2016 and 2015, respectively. See
Note 10 of the Notes to the Consolidated Financial Statements for the FVO and trading securities fair value hierarchy and a
rollforward of the fair value measurements for FVO and trading securities measured at estimated fair value on a recurring basis
using significant unobservable (Level 3) inputs.

Securities Lending

We participate in a securities lending program whereby securities are loaned to third parties, primarily brokerage firms and
commercial banks. We obtain collateral, usually cash, in an amount generally 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. We monitor the estimated fair value of the securities loaned on a daily basis with additional collateral
obtained as necessary throughout the duration of the loan. Securities loaned under such transactions may be sold or re-pledged
by the transferee. We are liable to return to our counterparties the cash collateral under our control. Security collateral on deposit
from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated
financial statements. These transactions are treated as financing arrangements and the associated cash collateral liability is
recorded at the amount of the cash received.

See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Securities Lending” and Note 8

of the Notes to the Consolidated Financial Statements for information regarding our securities lending program.

Repurchase Agreement Transactions

The Company participates in short-term repurchase agreements with unaffiliated financial institutions. Under these
agreements, the Company lends fixed maturity securities and receives cash as collateral in an amount generally equal to 85%
to 100% of the estimated fair value of the securities loaned at the inception of the transaction. The associated liability is recorded
at the amount of cash received. The Company monitors the estimated fair value of the collateral and the securities loaned
throughout the duration of the transaction and additional collateral is obtained as necessary. Securities loaned under such
transactions may be sold or re-pledged by the transferee.

See Note 8 of the Notes to the Consolidated Financial Statements for information regarding our repurchase agreement

transactions.

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Table of Contents

Mortgage Loans

Our mortgage loans are principally collateralized by commercial, agricultural and residential properties. Mortgage loans

and the related valuation allowances are summarized as follows at:

2016

2015

December 31,

Recorded
Investment

% of
Total

Valuation
Allowance

% of
Recorded
Investment

Recorded
Investment

% of
Total

Valuation
Allowance

% of
Recorded
Investment

(Dollars in millions)

Commercial

Agricultural

Residential

Total

48,035

14,456

11,696

74,187

64.7% $

19.5

15.8

100.0% $

234

344

0.5% $

0.3%

0.6%

44,012

13,188

9,734

65.8% $

19.7

14.5

0.5% $

66,934

100.0% $

217

318

0.5%

0.3%

0.6%

0.5%

The information presented in the tables herein exclude mortgage loans where we elected the FVO. Such amounts are

presented in Note 8 of the Notes to the Consolidated Financial Statements.

We diversify our mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration.
Of our commercial and agricultural mortgage loan portfolios, 86% are collateralized by properties located in the United States,
with the remaining 14% collateralized by properties located outside the United States, which includes 5% of properties located
in the U.K., at December 31, 2016. The carrying value of our commercial and agricultural mortgage loans located in California,
New York and Texas were 20%, 12% and 8%, respectively, of total commercial and agricultural mortgage loans at December 31,
2016. Additionally, we manage risk when originating commercial and agricultural mortgage loans by generally lending up to
75% of the estimated fair value of the underlying real estate collateral.

We manage our residential mortgage loan portfolio in a similar manner to reduce risk of concentration, with 92%
collateralized by properties located in the United States, and the remaining 8% collateralized by properties located outside the
United States, at December 31, 2016. The carrying value of our residential mortgage loans located in California, Florida, and
New York were 33%, 8%, and 6%, respectively, of total residential mortgage loans at December 31, 2016.

In connection with our investment management business, we manage commercial mortgage loans on behalf of institutional
clients, which are unaffiliated investors. These commercial mortgage loans had an estimated fair value of $3.0 billion and
$2.0 billion at December 31, 2016 and 2015, respectively. As these assets are managed on behalf of, and owned by, our institutional
clients, they are not included in our consolidated financial statements.

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Commercial Mortgage Loans by Geographic Region and Property Type. Commercial mortgage loans are the largest
component of the mortgage loan invested asset class. The tables below present the diversification across geographic regions and
property types of commercial mortgage loans at:

Region

Pacific

Middle Atlantic

International

South Atlantic

West South Central

East North Central

Mountain

New England

West North Central

East South Central

Multi-Region and Other

Total recorded investment

Less: valuation allowances

Carrying value, net of valuation allowances

Property Type

Office

Retail

Apartment

Hotel

Industrial

Other

Total recorded investment

Less: valuation allowances

Carrying value, net of valuation allowances

__________________

December 31,

2016

2015

Amount

% of
Total

Amount

% of
Total

(Dollars in millions)

11,254

23.4% $

8,708

8,084

6,304

4,271

2,447

1,460

1,414

599

436

3,058

48,035

234

47,801

23,843

10,619

5,870

4,367

2,998

338

48,035

234

47,801

18.1

16.8

13.1

8.9

5.1

3.0

1.3

0.9

6.4

100.0%

49.6% $

22.1

12.2

9.1

6.3

0.7

100.0%

9,583

8,154

7,889

6,127

4,311

2,346

1,117

1,367

520

512

2,086

44,012

217

43,795

21,525

10,466

5,171

4,396

2,334

120

44,012

217

43,795

21.8%

18.5

17.9

13.9

9.8

5.3

2.5

3.1

1.2

4.8

100.0%

48.9%

23.8

11.7

10.0

5.3

0.3

100.0%

Mortgage Loan Credit Quality — Monitoring Process. We monitor our mortgage loan investments on an ongoing basis,
including a review of loans that are current, past due, restructured and under foreclosure. See Note 8 of the Notes to the
Consolidated Financial Statements for tables that present mortgage loans by credit quality indicator, past due and nonaccrual
mortgage loans, as well as impaired mortgage loans. See “— Real Estate and Real Estate Joint Ventures” for real estate acquired
through foreclosure.

We review our 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, 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 sector basis. We review our residential mortgage loans on an ongoing basis. See Note 8 of the Notes to the
Consolidated Financial Statements for information on our evaluation of residential mortgage loans and related valuation
allowance methodology.

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Table of Contents

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. Generally, the higher the loan-to-value ratio, the higher the risk of
experiencing a credit loss. 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. Generally, the lower the debt service coverage ratio, the higher the risk of
experiencing a credit loss. For our commercial mortgage loans, our average loan-to-value ratio was 52% at both December 31,
2016 and 2015, and our average debt service coverage ratio was 2.6x at both December 31, 2016 and 2015. The debt service
coverage ratio, as well as the values utilized in calculating the ratio, is updated annually on a rolling basis, with a portion of the
portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part
of our ongoing review of our commercial mortgage loan portfolio. For our agricultural mortgage loans, our average loan-to-
value ratio was 43% at both December 31, 2016 and 2015. The values utilized in calculating the agricultural mortgage loan loan-
to-value ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated.

Mortgage Loan Valuation Allowances. Our 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 we expect to incur a loss. Accordingly, a valuation allowance is provided to absorb these estimated
probable credit losses.

The determination of the amount of valuation allowances is based upon our periodic evaluation and assessment of known
and inherent risks associated with our loan portfolios. Such evaluations and assessments are based upon several factors, including
our 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, 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.

See Notes 1, 8 and 10 of the Notes to the Consolidated Financial Statements for information about how valuation allowances
are established and monitored, activity in and balances of the valuation allowance, and the estimated fair value of impaired
mortgage loans and related impairments included within net investment gains (losses) as of and for the years ended December
31, 2016, 2015 and 2014.

Real Estate and Real Estate Joint Ventures

We diversify our real estate investments by both geographic region and property type to reduce risk of concentration. Of
our real estate investments, excluding funds, 72% were located in the United States, with the remaining 28% located outside
the United States, at December 31, 2016. The carrying value of our real estate investments, excluding funds, located in Japan,
California and District of Columbia were 24%, 16% and 9%, respectively, of total real estate investments, excluding funds, at
December 31, 2016. Real estate funds, including those classified within traditional, were 12% of our real estate investments, at
December 31, 2016. The majority of these funds hold underlying real estate investments that are well diversified across the
United States.

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Real estate investments by type consisted of the following at:

December 31,

2016

2015

Carrying
Value

% of
Total

Carrying
Value

% of
Total

Traditional

Real estate joint ventures and funds

Subtotal

Foreclosed (commercial, agricultural and residential)

Real estate held-for-investment

Real estate held-for-sale

Total real estate and real estate joint ventures

8,739

243

8,982

9,041

—

9,041

(Dollars in millions)

96.7% $

2.7

99.4

0.6

100.0

—

100.0% $

7,859

482

8,341

8,386

8,433

93.2%

5.7

98.9

0.5

99.4

0.6

100.0%

We classify within traditional, in the above table, income-producing real estate, which is comprised of wholly-owned real
estate and joint ventures with interests in single property income-producing real estate. The estimated fair value of the traditional
and held-for-sale real estate investment portfolios was $13.9 billion and $12.4 billion at December 31, 2016 and 2015,
respectively. The total gross market value of such real estate investments was $19.0 billion and $20.3 billion at December 31,
2016 and 2015, respectively. Gross market value is the total fair value of these investments regardless of encumbering debt.

We classify within real estate joint ventures and funds, in the above table, our investment 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 a runoff portfolio of real estate private equity funds. From time to time, if we intend to retain an interest
in the property, we transfer investments from these development joint ventures to traditional real estate after the completed
property commences operations.

Impairments recognized on real estate and real estate joint ventures were $34 million, $93 million and $20 million for the
years ended December 31, 2016, 2015 and 2014, respectively. Depreciation expense on real estate investments was $92 million,
$162 million and $199 million for the years ended December 31, 2016, 2015 and 2014, respectively. Real estate investments
were net of accumulated depreciation of $823 million and $1.2 billion at December 31, 2016 and 2015, respectively.

In connection with our investment management business, we manage real estate investments on behalf of institutional
clients, which are unaffiliated investors. These real estate investments had an estimated fair value of $4.3 billion and $3.8 billion
at December 31, 2016 and 2015, respectively. The total gross market value of commercial real estate investments under
management for unaffiliated investors was $6.4 billion and $5.8 billion at December 31, 2016 and 2015, respectively. Gross
market value is the total fair value of these investments regardless of encumbering debt. As these assets are managed on behalf
of, and owned by our institutional clients, they are not included in our consolidated financial statements.

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We diversify our real estate investments by both geographic region and property type to reduce risk of concentration.

Real estate and real estate joint venture investments by property type are categorized by sector as follows at:

Office

Apartment

Retail

Real estate funds

Land

Hotel

Industrial

Agriculture

Other

December 31,

2016

2015

Carrying
Value

% of
Total

Carrying
Value

% of
Total

3,507

1,541

1,040

976

558

530

461

367

(Dollars in millions)

38.8% $

17.0

11.5

10.8

6.2

5.9

5.1

0.7

4.0

3,265

1,662

1,032

683

348

544

483

384

38.7%

19.7

12.2

8.1

4.1

6.5

5.7

0.4

4.6

Total real estate and real estate joint ventures

9,041

100.0% $

8,433

100.0%

Other Limited Partnership Interests

Other limited partnership interests are comprised of private equity funds and hedge funds. The carrying value of other
limited partnership interests was $6.8 billion and $7.1 billion at December 31, 2016 and 2015, respectively, which included
$1.0 billion and $1.9 billion of hedge funds, at December 31, 2016 and 2015, respectively. Cash distributions on these investments
are generated from investment gains, operating income from the underlying investments of the funds and liquidation of the
underlying investments of the funds. We estimate that the underlying investments of the funds will be liquidated over the next
two to 10 years.

Other Invested Assets

The following table presents the carrying value of our other invested assets by type at:

Freestanding derivatives with positive estimated fair values

15,761

68.0% $

14,406

December 31,

2016

2015

Carrying
Value

% of
Total

Carrying
Value

(Dollars in millions)

% of
Total

Tax credit and renewable energy partnerships

Leveraged leases, net of non-recourse debt

Direct financing leases

Operating joint ventures

Funds withheld

Other

Total

3,231

1,590

1,115

643

110

735

13.9

6.9

4.8

2.8

0.5

3.1

3,145

1,712

1,076

605

771

809

64.0%

13.9

7.6

4.8

2.7

3.4

3.6

23,185

100.0% $

22,524

100.0%

Leveraged lease impairments were $77 million, $41 million and $80 million for the years ended December 31, 2016, 2015

and 2014, respectively.

See Notes 1, 8 and 9 of the Notes to the Consolidated Financial Statements for information regarding tax credit and renewable
energy partnerships, leveraged and direct financing leases, funds withheld and operating joint ventures and freestanding
derivatives with positive estimated fair values.

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Our private placement unit originated $10.2 billion and $9.2 billion of private investments, comprised primarily of certain
privately placed fixed maturity securities, during the years ended December 31, 2016 and 2015, respectively. The carrying value
of such private investments included within our consolidated balance sheets was $50.6 billion and $46.6 billion at December
31, 2016 and 2015.

In addition, we originated $339 million and $480 million of tax credit and renewable energy partnerships during the years
ended December 31, 2016 and 2015, respectively. The carrying value of such tax credit and renewable energy partnerships
included on our consolidated balance sheets was $3.2 billion and $3.1 billion at December 31, 2016 and 2015, respectively.

Derivatives

Derivative Risks

We are exposed to various risks relating to our ongoing business operations, including interest rate, foreign currency exchange
rate, credit and equity market. We use a variety of strategies to manage these risks, including the use of derivatives. See Note 9
of the Notes to the Consolidated Financial Statements for:

• A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used

in managing various risks.

•

Information about the gross notional amount, estimated fair value, and primary underlying risk exposure of our
derivatives by type of hedge designation, excluding embedded derivatives held at December 31, 2016 and 2015.

• The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or

nonqualifying hedge relationships for the years ended December 31, 2016, 2015 and 2014.

See “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures — Hedging

Activities” for more information about our use of derivatives by major hedge program.

Fair Value Hierarchy

See Note 10 of the Notes to the Consolidated Financial Statements for derivatives measured at estimated fair value on a

recurring basis and their corresponding fair value hierarchy.

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 unobservable, management believes they are consistent with what other market participants would use when pricing such
instruments and are considered appropriate given the circumstances. 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, 2016 include: interest rate forwards with maturities which extend beyond
the observable portion of the yield curve; interest rate total return swaps with unobservable repurchase rates; foreign currency
swaps and forwards with certain unobservable inputs, including the unobservable portion of the yield curve; credit default swaps
priced using unobservable credit spreads, or that are priced through independent broker quotations; equity variance swaps with
unobservable volatility inputs; and equity index options with unobservable correlation inputs. At December 31, 2016, less
than 1% of the estimated fair value of our derivatives was priced through independent broker quotations.

See Note 10 of the Notes to the Consolidated Financial Statements for a rollforward of the fair value measurements for

derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

The gain (loss) on Level 3 derivatives primarily relates to interest rate total return swaps with unobservable repurchase
rates; certain purchased equity index options that are valued using models dependent on an unobservable market correlation
input, equity variance swaps that are valued using observable equity volatility data plus an unobservable equity variance spread
and foreign currency swaps and forwards that are valued using an unobservable portion of the swap yield curves. Other significant
inputs, which are observable, include equity index levels, equity volatility and the swap yield curves. We validate the
reasonableness of these inputs by valuing the positions using internal models and comparing the results to broker quotations.

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The gain (loss) on Level 3 derivatives, percentage of gain (loss) attributable to observable and unobservable inputs, and the

primary drivers of observable gain (loss) are summarized as follows:

Gain (loss) recognized in net income (loss)

Percentage of gain (loss) attributable to observable inputs

Primary drivers of observable gain (loss)

Percentage of gain (loss) attributable to unobservable
inputs

Year Ended December 31, 2016

($734) million

120%

Increases in interest rates on interest rate total return swaps;
decreases in certain equity volatility levels; and increases in
certain equity index levels; partially offset by weakening of the
U.S. dollar versus foreign currencies on receive inflation-linked
foreign currency, pay U.S. dollar forwards and swaps.

(20%)

See “— Summary of Critical Accounting Estimates — Derivatives” for further information on the estimates and assumptions

that affect derivatives.

Credit Risk

See Note 9 of the Notes to the Consolidated Financial Statements for information about how we manage credit risk related
to derivatives and for the estimated fair value of our net derivative assets and net derivative liabilities after the application of
master netting agreements and collateral.

Our policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under the
same master netting agreement. This policy applies to the recognition of derivatives on the consolidated balance sheets, and
does not affect our legal right of offset.

Credit Derivatives

The following table presents the gross notional amount and estimated fair value of credit default swaps at:

Credit Default Swaps

Purchased (1)

Written (2)

Total

__________________

December 31,

2016

2015

Gross
Notional
Amount

Estimated
Fair Value

Gross
Notional
Amount

Estimated
Fair Value

2,038

12,645

14,683

(In millions)

(26) $

180

154

1,870

10,311

12,181

(6)

(1) At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. At December 31, 2015,
the gross notional amount and estimated fair value for purchased credit default swaps in the trading portfolio were
$175 million and ($2) million, respectively.

(2) At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. At December 31, 2015,
the gross notional amount and estimated fair value for written credit default swaps in the trading portfolio were $20 million
and ($2) million, respectively.

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The following table presents the gross gains, gross losses and net gain (losses) recognized in income for credit default swaps

as follows:

Credit Default Swaps

Purchased (2), (4)

Written (3), (4)

Total

__________________

Years Ended December 31,

Gross
Gains
(1)

2016

Gross
Losses
(1)

109

116

(47) $
(28)
(75) $

Net
Gains
(Losses)

Gross
Gains
(1)

(In millions)
(40) $
81

2015

Gross
Losses
(1)

Net
Gains
(Losses)

(28) $
(112)
(140) $

4
(83)
(79)

(1) Gains (losses) are reported in net derivative gains (losses), except for gains (losses) on the trading portfolio, which are

reported in net investment income.

(2)

The gross gains and gross (losses) for purchased credit default swaps in the trading portfolio were $4 million and
($4) million, respectively, for the year ended December 31, 2016, and $8 million and ($11) million, respectively, for the
year ended December 31, 2015.

(3)

The gross gains and gross (losses) for written credit default swaps in the trading portfolio were $3 million and ($3) million,
respectively, for both of the years ended December 31, 2016 and December 31, 2015.

(4) Gains (losses) do not include earned income (expense) on credit default swaps.

The unfavorable change in net gains (losses) on purchased credit default swaps of ($44) million was due to certain credit
spreads on credit default swaps hedging certain bonds, narrowing in the current period as compared to the prior period. The
favorable change in net gains (losses) on written credit default swaps of $164 million was due to certain credit spreads on certain
credit default swaps used as replications narrowing in the current period as compared to the prior period.

The maximum amount at risk related to our written credit default swaps is equal to the corresponding gross notional amount.
In a replication transaction, we pair an asset on our balance sheet with a written credit default swap to synthetically replicate a
corporate bond, a core asset holding of life insurance companies. Replications are entered into in accordance with the guidelines
approved by state insurance regulators and the NAIC and are an important tool in managing the overall corporate credit risk
within the Company. In order to match our long-dated insurance liabilities, we seek to buy long-dated corporate bonds. In some
instances, these may not be readily available in the market, or they may be issued by corporations to which we already have
significant corporate credit exposure. For example, by purchasing Treasury bonds (or other high-quality assets) and associating
them with written credit default swaps on the desired corporate credit name, we can replicate the desired bond exposures and
meet our ALM needs. In addition, given the shorter tenor of the credit default swaps (generally five-year tenors) versus a long-
dated corporate bond, we have more flexibility in managing our credit exposures.

Embedded Derivatives

See Note 10 of the Notes to the Consolidated Financial Statements for information about embedded derivatives measured

at estimated fair value on a recurring basis and their corresponding fair value hierarchy.

See Note 10 of the Notes to the Consolidated Financial Statements for a rollforward of the fair value measurements for

embedded derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

See Note 9 of the Notes to the Consolidated Financial Statements for information about the nonperformance risk adjustment

included in the valuation of guaranteed minimum benefits accounted for as embedded derivatives.

See “— Summary of Critical Accounting Estimates — Derivatives” for further information on the estimates and assumptions

that affect embedded derivatives.

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Off-Balance Sheet Arrangements

Credit and Committed Facilities

We maintain an unsecured revolving credit facility, as well as committed facilities, with various financial institutions.
Brighthouse maintains an unsecured term loan agreement and an unsecured revolving credit facility with various financial
institutions. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Sources — Global Funding
Sources — Credit and Committed Facilities” for further descriptions of such arrangements. For the classification of expenses
on such credit and committed facilities and the nature of the associated liability for letters of credit issued and drawdowns on
these credit and committed facilities, see Note 12 of the Notes to the Consolidated Financial Statements.

Collateral for Securities Lending, Third-Party Custodian Administered Repurchase Programs and Derivatives

We participate in a securities lending program in the normal course of business for the purpose of enhancing the total return
on our investment portfolio. Periodically we receive non-cash collateral for securities lending from counterparties on deposit
from customers, which cannot be sold or re-pledged, and which has not been recorded on our consolidated balance sheets. The
amount of this collateral was $46 million and $50 million at estimated fair value at December 31, 2016 and 2015, respectively.
See Notes 1 and 8 of the Notes to the Consolidated Financial Statements, as well as “— Investments — Securities Lending” for
discussion of our securities lending program, the classification of revenues and expenses, and the nature of the secured financing
arrangement and associated liability.

We also participate in third-party custodian administered repurchase programs for the purpose of enhancing the total return
on our investment portfolio. We loan certain of our fixed maturity securities to financial institutions and, in exchange, non-cash
collateral is put on deposit by the financial institutions on our behalf with third-party custodians. The estimated fair value of
securities loaned in connection with these transactions was $382 million and $738 million at December 31, 2016 and
December 31, 2015, respectively. Non-cash collateral on deposit with third-party custodians on our behalf was $401 million
and $781 million at December 31, 2016 and December 31, 2015, respectively, which cannot be sold or re-pledged, and which
has not been recorded on our consolidated balance sheets.

We enter into derivatives to manage various risks relating to our ongoing business operations. We have non-cash collateral
from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which has not been
recorded on our consolidated balance sheets. The amount of this non-cash collateral was $2.3 billion and $2.2 billion at
December 31, 2016 and 2015, respectively. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital
Uses — Pledged Collateral” and “Derivatives” in Note 9 of the Notes to the Consolidated Financial Statements for information
regarding the earned income on and the gross notional amount, estimated fair value of assets and liabilities and primary underlying
risk exposure of our derivatives.

Lease Commitments

As lessee, we have entered into various lease and sublease agreements for office space, information technology and other
equipment. Our commitments under such lease agreements are included within the contractual obligations table. See “— Liquidity
and Capital Resources — The Company — Contractual Obligations” and Note 21 of the Notes to the Consolidated Financial
Statements.

Guarantees

See “Guarantees” in Note 21 of the Notes to the Consolidated Financial Statements.

Other

We enter into the following additional commitments in the normal course of business for the purpose of enhancing the total
return on our investment portfolio: mortgage loan commitments and commitments to fund partnerships, bank credit facilities,
bridge loans and private corporate bond investments. See “Net Investment Income” and “Net Investment Gains (Losses)” in
Note 8 of the Notes to the Consolidated Financial Statements for information on the investment income, investment expense,
and gains and losses from such investments. See also “— Investments — Fixed Maturity and Equity Securities AFS” and “—
Investments — Mortgage Loans” for information on our investments in fixed maturity securities and mortgage loans. See “—
Investments — Real Estate and Real Estate Joint Ventures” and “— Investments — Other Limited Partnership Interests” for
information on our partnership investments.

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Other than the commitments disclosed in Note 21 of the Notes to the Consolidated Financial Statements, there are no other
material obligations or liabilities arising from the commitments to fund mortgage loans, partnerships, bank credit facilities,
bridge loans, and private corporate bond investments. For further information on commitments to fund partnership investments,
mortgage loans, bank credit facilities, bridge loans and private corporate bond investments, see “— Liquidity and Capital
Resources — The Company — Contractual Obligations.”

Insolvency Assessments

See Note 21 of the Notes to the Consolidated Financial Statements.

Policyholder Liabilities

We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations or to
provide for future annuity payments. Amounts for actuarial liabilities are computed and reported on the consolidated financial
statements in conformity with GAAP. For more details on Policyholder Liabilities, see “— Summary of Critical Accounting
Estimates.”

Due to the nature of the underlying risks and the uncertainty associated with the determination of actuarial liabilities, we
cannot precisely determine the amounts that will ultimately be paid with respect to these actuarial liabilities, and the ultimate
amounts may vary from the estimated amounts, particularly when payments may not occur until well into the future.

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. We charge or credit changes in our liabilities to expenses in
the period the liabilities are established or re-estimated. If the liabilities originally established for future benefit payments prove
inadequate, we must increase them. Such an increase could adversely affect our earnings and have a material adverse effect on
our business, results of operations and financial condition.

We have experienced, and will likely in the future experience, catastrophe losses and possibly acts of terrorism, as well as
turbulent financial markets that may have an adverse impact on our business, results of operations, and financial condition. 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. We also use hedging,
reinsurance and other risk management activities to mitigate financial market volatility.

See “Business — Regulation — U.S. Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy

Analysis” and “Business — Regulation — International Regulation” for further information.

Future Policy Benefits

We establish liabilities for amounts payable under insurance policies. See Notes 1 and 4 of the Notes to the Consolidated
Financial Statements, “— Industry Trends — Impact of a Sustained Low Interest Rate Environment — Low Interest Rate
Scenario” and “— Variable Annuity Guarantees.” A discussion of future policy benefits by segment (as well as Corporate &
Other) follows.

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Table of Contents

U.S.

Amounts payable under insurance policies for this segment are comprised of group insurance and annuities, as well as
property & casualty policies. For group insurance, future policyholder benefits are comprised mainly of liabilities for disabled
lives under disability waiver of premium policy provisions, liabilities for survivor income benefit insurance, active life policies
and premium stabilization and other contingency liabilities held under life insurance contracts. For group annuity contracts,
future policyholder benefits are primarily related to payout annuities, including pension risk transfers, structured settlement
annuities and institutional income annuities. There is no interest rate crediting flexibility on these liabilities. As a result, a
sustained low interest rate environment could negatively impact earnings; however, we mitigate our risks by applying various
ALM strategies, including the use of various interest rate derivative positions. The components of future policy benefits related
to our property & casualty policies are liabilities for unpaid claims, 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 our historical experience and analysis of historical development patterns of the relationship of loss adjustment expenses
to losses for each line of business, and we consider the effects of current developments, anticipated trends and risk management
programs, reduced for anticipated salvage and subrogation.

Asia

Future policy benefits for this segment are held primarily for traditional life, endowment, annuity and accident & health
contracts. They are also held for total return pass-through provisions included in certain universal life and savings products.
They include certain liabilities for variable annuity and variable life guarantees of minimum death benefits, and longevity
guarantees. Factors impacting these liabilities include sustained periods of lower yields than rates established at policy issuance,
lower than expected asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and
actual mortality or morbidity resulting in higher than expected benefit payments. We mitigate our risks by applying various
ALM strategies.

Latin America

Future policy benefits for this segment are held primarily for immediate annuities in Chile, Argentina and Mexico and
traditional life contracts mainly in Mexico, Brazil and Colombia. There are also liabilities held for total return pass-through
provisions included in certain universal life and savings products in Mexico. Factors impacting these liabilities include sustained
periods of lower yields than rates established at policy issuance, lower than expected asset reinvestment rates, and mortality
and lapses different than expected. We mitigate our risks by applying various ALM strategies.

EMEA

Future policy benefits for this segment include unearned premium reserves for group life and credit insurance contracts.
Future policy benefits are also held for traditional life, endowment and annuity contracts with significant mortality risk and
accident & health contracts. Factors impacting these liabilities include lower than expected asset reinvestment rates, market
volatility, actual lapses resulting in lower than expected income, and actual mortality or morbidity resulting in higher than
expected benefit payments. We mitigate our risks by having premiums which are adjustable or cancellable in some cases, and
by applying various ALM strategies.

MetLife Holdings

Future policy benefits for the life business are comprised mainly of liabilities for traditional life and for universal and
variable life insurance contracts. In order to manage risk, we have often reinsured a portion of the mortality risk on life
insurance policies. The reinsurance programs are routinely evaluated and this may result in increases or decreases to existing
coverage. We have entered into various interest rate derivative positions 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. For the annuities business, future policy benefits are comprised mainly of liabilities for life-contingent
income annuities, and liabilities for the variable annuity guaranteed minimum benefits which are accounted for as insurance.
Other future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium
policy provisions, and active life policies. In addition, for our other products, future policyholder benefits related to the
reinsurance of our former Japan joint venture are comprised of liabilities for the variable annuity guaranteed minimum benefits
which are accounted for as insurance.

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Brighthouse Financial

Future policy benefits for the life business are comprised mainly of liabilities for traditional life and for universal and
variable life insurance contracts. In order to manage risk, we have often reinsured a portion of the mortality risk on life
insurance policies. The reinsurance programs are routinely evaluated and this may result in increases or decreases to existing
coverage. We have entered into various interest rate derivative positions 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. For the annuities business, future policy benefits are comprised mainly of liabilities for life-contingent
income annuities, and liabilities for the variable annuity guaranteed minimum benefits accounted for as insurance. For our
other products, future policyholder benefits are comprised mainly of group annuity contracts, primarily related to payout
annuities, including pension risk transfers, structured settlement annuities and institutional income annuities. There is no
interest rate crediting flexibility on these liabilities. As a result, a sustained low interest rate environment could negatively
impact earnings; however, we mitigate our risks by applying various ALM strategies, including the use of various interest rate
derivative positions.

Corporate & Other

Future policy benefits primarily include liabilities for the global employee benefits reinsurance business. Additionally,

future policy benefits include liabilities for the U.S. direct business sold directly to consumers.

Policyholder Account Balances

Policyholder account balances are generally equal to the account value, which includes accrued interest credited, but excludes
the impact of any applicable charge that may be incurred upon surrender. See “— Industry Trends — Impact of a Sustained Low
Interest Rate Environment — Low Interest Rate Scenario” and “— Variable Annuity Guarantees.” See also Notes 1 and 4 of
the Notes to the Consolidated Financial Statements for additional information. A discussion of policyholder account balances
by segment (as well as Corporate & Other) follows.

U.S.

Policyholder account balances in this segment are comprised of funding agreements, retained asset accounts, universal
life policies, the fixed account of variable life insurance policies and specialized life insurance products for benefit programs.

Group Benefits

Policyholder account balances in this business are held for retained asset accounts, universal life policies, the fixed
account of variable life insurance policies and specialized life insurance products for benefit programs. Policyholder account
balances are credited interest at a rate we determine, which is influenced by current market rates. A sustained low interest
rate environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of
these policyholder account balances. We have various interest rate derivative positions to partially mitigate the risks
associated with such a scenario.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Group

Benefits:

December 31, 2016

Account
Value (1)

Account
Value at
Guarantee (1)

(In millions)

4,992

1,881

712

4,866

1,881

685

Guaranteed Minimum Crediting Rate

Greater than 0% but less than 2%

Equal to 2% but less than 4%

Equal to or greater than 4%

__________________

(1)

These amounts are not adjusted for policy loans.

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Retirement and Income Solutions

Policyholder account balances in this business 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. We are exposed to interest rate risks, as well as foreign currency exchange rate
risk, when guaranteeing payment of interest and return of principal at the contractual maturity date. We may invest in floating
rate assets or enter into receive-floating interest rate swaps, also tied to external indices, as well as caps, to mitigate the
impact of changes in market interest rates. We also mitigate our risks by applying various ALM strategies and seek to hedge
all foreign currency exchange rate risk through the use of foreign currency hedges, including cross currency swaps.

Asia

Policyholder account balances in this segment are held largely for fixed income retirement and savings plans, fixed
deferred annuities, interest sensitive whole life products, universal life and, to a lesser degree, liability amounts for unit-linked-
type funds 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 Asia that generally are sold with minimum credited rate guarantees. Liabilities
for guarantees on certain variable annuities in Asia are accounted for as embedded derivatives and recorded at estimated fair
value 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. We mitigate our risks by applying various ALM strategies and
with reinsurance. 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.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Asia:

Guaranteed Minimum Crediting Rate (1)

Annuities

Greater than 0% but less than 2%

Equal to 2% but less than 4%

Equal to or greater than 4%
Life & Other

Greater than 0% but less than 2%

Equal to 2% but less than 4%

Equal to or greater than 4%

__________________

December 31, 2016

Account
Value (2)

Account
Value at
Guarantee (2)

(In millions)

19,771

1,076

7,772

19,700

273

2,930

408

7,454

8,568

273

(1)

Excludes negative VOBA liabilities of $935 million at December 31, 2016, primarily held in Japan. These liabilities were
established in instances where the estimated fair value of contract obligations exceeded the book value of assumed
insurance policy liabilities associated with the acquisition of ALICO. These negative liabilities were established primarily
for decreased market interest rates subsequent to the issuance of the policy contracts.

(2)

These amounts are not adjusted for policy loans.

Latin America

Policyholder account balances in this segment are held largely for investment-type products and universal life products
in Mexico and Chile, and deferred annuities in Brazil. Some of the deferred annuities in Brazil are unit-linked-type funds that
do not meet the GAAP definition of separate accounts. The rest of the deferred annuities have minimum credited rate guarantees,
and these liabilities and the universal life liabilities are generally impacted by sustained periods of low interest rates. Liabilities
for unit-linked-type funds are impacted by changes in the fair value of the associated investments, as the return on assets is
generally passed directly to the policyholder.

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EMEA

Policyholder account balances in this segment are held mostly for universal life, deferred annuity, pension products, and
unit-linked-type funds that do not meet the GAAP definition of separate accounts. They are also held for endowment products
without significant mortality risk. Where there are interest rate guarantees, these liabilities are generally impacted by sustained
periods of low interest rates. We mitigate our risks by applying various ALM strategies. Liabilities for unit-linked-type funds
are impacted by changes in the fair value of the associated investments, as the return on assets is generally passed directly to
the policyholder.

MetLife Holdings

Life policyholder account balances are held for retained asset accounts, universal life policies, the fixed account of variable
life insurance policies, embedded derivatives related to the reinsurance of our former Japan joint venture, and funding
agreements. For annuities, policyholder account balances are held for fixed deferred annuities, the fixed account portion of
variable annuities, and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates
we determine which are influenced by current market rates, subject to specified minimums. A sustained low interest rate
environment could negatively impact earnings as a result of the minimum credited rate guarantees present in most of these
policyholder account balances. We have various interest rate derivative positions to partially mitigate the risks associated with
such a scenario. Additionally, for our other products, policyholder account balances are held for variable annuity guaranteed
minimum living benefits that are accounted for as embedded derivatives.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the MetLife

Holdings segment:

Guaranteed Minimum Crediting Rate

Greater than 0% but less than 2%

Equal to 2% but less than 4%

Equal to or greater than 4%

__________________

(1)

These amounts are not adjusted for policy loans.

Brighthouse Financial

December 31, 2016

Account
Value (1)

Account
Value at
Guarantee (1)

(In millions)

1,936

20,261

9,367

1,832

17,116

6,327

Life policyholder account balances are held for universal life policies and the fixed account of variable life insurance
policies. For annuities, policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable
annuities, and non-life contingent income annuities. For our other products, policyholder account balances are comprised of
funding agreements. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by
current market rates, subject to specified minimums. 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.
We are exposed to interest rate risks, as well as foreign currency exchange rate risk, when guaranteeing payment of interest
and return of principal at the contractual maturity date. We may invest in floating rate assets or enter into receive-floating
interest rate swaps, also tied to external indices, as well as caps, to mitigate the impact of changes in market interest rates. We
also mitigate our risks by applying various ALM strategies and seek to hedge all foreign currency exchange rate risk through
the use of foreign currency hedges, including cross currency swaps. A sustained low interest rate environment could negatively
impact earnings as a result of the minimum credited rate guarantees present in most of these policyholder account balances.
We have various interest rate derivative positions to partially mitigate the risks associated with such a scenario. Additionally,
for our other products policyholder account balances are held for variable annuity guaranteed minimum living benefits that
are accounted for as embedded derivatives.

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The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the

Brighthouse Financial segment:

Guaranteed Minimum Crediting Rate

Greater than 0% but less than 2%

Equal to 2% but less than 4%

Equal to or greater than 4%

__________________

(1)

These amounts are not adjusted for policy loans.

December 31, 2016

Account
Value (1)

Account
Value at
Guarantee (1)

(In millions)

1,725

22,844

3,239

1,042

15,255

2,341

As a result of acquisitions, we establish additional liabilities known as excess interest reserves for policies with credited
rates in excess of market rates as of the applicable acquisition dates. At December 31, 2016, excess interest reserves were
$418 million for the Brighthouse Financial segment.

Variable Annuity Guarantees

We issue, directly and through assumed business, 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 optional market value resets. See Notes 1
and 4 of the Notes to the Consolidated Financial Statements for additional information.

Certain guarantees, including portions thereof, have insurance liabilities established that are included in future policy
benefits. Guarantees accounted for in this manner include GMDBs, the life-contingent portion of certain GMWBs, and the non-
life contingent portions of both GMWBs and GMIBs 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 are based on best estimate assumptions consistent
with those used to amortize DAC. 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 those previously
projected or when current estimates of future assessments exceed those previously projected. At each reporting period, we update
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.

Certain 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 GMABs, and the
non-life contingent portions of both GMWBs and GMIBs that do not require annuitization. The estimated fair values of guarantees
accounted for as 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 to project the cash flows
from the guarantees under multiple capital market scenarios to determine an economic liability. The reported estimated fair value
is then determined by taking the present value of these risk-free generated cash flows using a discount rate that incorporates a
spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin. For more information on the
determination of estimated fair value, see Note 10 of the Notes to the Consolidated Financial Statements.

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The table below contains the carrying value for guarantees at:

Asia

GMDB

GMAB

GMWB

EMEA

GMDB

GMAB
GMWB

MetLife Holdings

GMDB

GMIB
GMAB

GMWB

Brighthouse Financial

GMDB
GMIB

GMAB

GMWB

Total

Future Policy
Benefits

December 31,

Policyholder
Account Balances

December 31,

2016

2015

2016

2015

(In millions)

—

1
—
30

257
471
—

161

987
2,335

—

138

—

2
—
8

209
406
—

127

741
2,004

—

104

— $

189

—
17
(50)

—
93
13

1,268

—
2,024

334

4,507

3,715

3,925

—

151

—
16
(63)

—
(354)
13

1,009

—
(153)
9

280

945

The carrying amounts for guarantees included in policyholder account balances above include nonperformance risk
adjustments of $982 million and $462 million at December 31, 2016 and 2015, respectively. These nonperformance risk
adjustments represent the impact of including a credit spread when discounting the underlying risk neutral cash flows to determine
the estimated fair values. The nonperformance risk adjustment does not have an economic impact on us as it cannot be monetized
given the nature of these policyholder liabilities. The change in valuation arising from the nonperformance risk adjustment is
not hedged.

The carrying values of these guarantees can change significantly during periods of sizable and sustained shifts in equity
market performance, equity volatility, interest rates or foreign currency exchange rates. Carrying values are also impacted by
our assumptions around mortality, separate account returns and policyholder behavior, including lapse rates.

As discussed below, we use a combination of product design, hedging strategies, reinsurance, and other risk management
actions to mitigate the risks related to these benefits. Within each type of guarantee, there is a range of product offerings reflecting
the changing nature of these products over time. Changes in product features and terms are in part driven by customer demand
but, more importantly, reflect our risk management practices of continuously evaluating the guaranteed benefits and their
associated asset-liability matching. Recently, we have been diversifying the concentration of income benefits in the portfolio of
the Company’s annuities business by focusing on withdrawal benefits, variable annuities without living benefits and index-
linked annuities. To this end, the GMIBs were no longer available for new purchases after February 19, 2016.

The sections below provide further detail by total account value for certain of our most popular guarantees. Total account
values include amounts not reported on the consolidated balance sheets from assumed business, contractholder-directed
investments which do not qualify for presentation as separate account assets, and amounts included in our general account. The
total account values and the net amounts at risk include direct and assumed business, but exclude offsets from hedging or ceded
reinsurance, if any.

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GMDBs

We offer a range of GMDBs to our contractholders. The table below presents GMDBs, by benefit type, at December 31,

2016:

Return of premium or five to seven year step-up

Annual step-up

Roll-up and step-up combination

Total

__________________

Total Account Value (1)

Asia & EMEA

MetLife
Holdings

(In millions)

Brighthouse
Financial

8,243

54,165

—

3,667

6,412

55,559

23,523

29,549

8,243

64,244

108,631

(1)

Total account value excludes $2.2 billion for contracts with no GMDBs. Further, many of our annuity contracts offer
more than one type of guarantee such that GMDB amounts listed above are not mutually exclusive to the amounts in the
living benefit guarantees table below.

Based on total account value, less than 39% of our GMDBs included enhanced death benefits such as the annual step-up
or roll-up and step-up combination products. We expect the above GMDB risk profile to be relatively consistent for the
foreseeable future.

Living Benefit Guarantees

The table below presents our living benefit guarantees based on total account values at December 31, 2016:

GMIB

GMWB - non-life contingent (2)

GMWB - life-contingent

GMAB

__________________

Total Account Value (1)

Asia & EMEA

MetLife
Holdings

(In millions)

Brighthouse
Financial

— $

24,310

2,361

3,784

1,212

3,621

11,177

814

7,357

39,922

64,505

3,373

19,212

697

87,787

(1)

Total account value excludes $47.4 billion for contracts with no living benefit guarantees. Further, many of our annuity
contracts offer more than one type of guarantee such that living benefit guarantee amounts listed above are not mutually
exclusive of the amounts in the GMDBs table above.

(2)

The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of $1,024 million
with a guarantee at annuitization.

In terms of total account value, GMIBs are our most significant living benefit guarantee. Our primary risk management
strategy for our GMIB products is our derivatives hedging program as discussed below. Additionally, we have engaged in
certain reinsurance agreements covering some of our GMIB business. As part of our overall risk management approach for
living benefit guarantees, we continually monitor the reinsurance markets for the right opportunity to purchase additional
coverage for our GMIB business.

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The table below presents our GMIB associated total account values, by their guaranteed payout basis, at December 31,

2016:

7-year setback, 2.5% interest rate

7-year setback, 1.5% interest rate

10-year setback, 1.5% interest rate

10-year mortality projection, 10-year setback, 1.0% interest rate

10-year mortality projection, 10-year setback, 0.5% interest rate

Total
Account Value
(In millions)

31,876

5,352

17,762

29,672

4,153

88,815

The annuitization interest rates on GMIBs have been decreased from 2.5% to 0.5% over time, partially in response to the
low interest rate environment, accompanied by an increase in the setback period from seven years to 10 years and the
introduction of a 10-year mortality projection.

Additionally, 33% of the $88.8 billion of GMIB total account value has been invested in managed volatility funds as of
December 31, 2016. These funds seek to manage volatility by adjusting the fund holdings within certain guidelines based on
capital market movements. Such activity reduces the overall risk of the underlying funds while maintaining their growth
opportunities. These risk mitigation techniques translate to a reduction or elimination of the need for us to manage the funds’
volatility through hedging or reinsurance.

Our GMIB products typically have a waiting period of 10 years to be eligible for annuitization. As of December 31, 2016,
only 18% of our contracts with GMIBs were eligible for annuitization. The remaining contracts are not eligible for annuitization
for an average of six years.

Once eligible for annuitization, contractholders would only be expected to annuitize if their contracts were in-the-money.
We calculate in-the-moneyness with respect to GMIBs consistent with net amount at risk as discussed in Note 4 of the Notes
to the Consolidated Financial Statements, by comparing the contractholders’ income benefits based on total account values
and current annuity rates versus the guaranteed income benefits. The net amount at risk was $3,834 million at December 31,
2016, of which $3,641 million was related to GMIB guarantees. For those contracts with GMIB, the table below presents
details of contracts that are in-the-money and out-of-the money at December 31, 2016:

In-the-money

Out-of-the-money

Total GMIBs

In-the-
Moneyness

Total
Account Value

(In millions)

% of Total

30% +

20% to 30%
10% to 20%

0% to 10%

-10% to 0%

-20% to 10%

-20% +

3,652

2,629
4,410

7,418

18,109

13,868

7,833

49,005

70,706

88,815

3%
5%

16%

55%

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Derivatives Hedging Variable Annuity Guarantees

Our risk mitigating hedging strategy uses various OTC and exchange traded derivatives. The table below presents the
gross notional amount, estimated fair value and primary underlying risk exposure of the derivatives hedging our variable
annuity guarantees:

Primary Underlying
Risk Exposure

Instrument Type

Amount

Assets

Liabilities

Amount

Assets

Liabilities

Gross Notional

Estimated Fair Value

Gross Notional

Estimated Fair Value

Interest rate

Interest rate swaps

36,266

$ 2,770

1,711

23,430

$ 2,056

966

(In millions)

December 31,

2016

2015

Foreign currency exchange

rate

Equity market

Interest rate futures

Interest rate options

Foreign currency

forwards

Currency futures

Equity futures

Equity index options

Equity variance swaps

Equity total return

swaps

Total

3,959

18,943

3,086

12,320

51,190

23,157

585

—

1,298

223

222

—

1,458

756

3,915

24,923

2,305

135

7,104

54,113

23,437

994

—

1,541

195

3,901

160

3,803

—

1,041

636

152,907

$ 4,966

4,322

143,165

$ 4,927

2,738

The change in estimated fair values of our derivatives is recorded in policyholder benefits and claims if such derivatives
are hedging guarantees included in future policy benefits, and in net derivative gains (losses) if such derivatives are hedging
guarantees included in policyholder account balances.

Our hedging strategy involves the significant use of static longer-term derivative instruments to avoid the need to execute
transactions during periods of market disruption or higher volatility. We continually monitor the capital markets for
opportunities to adjust our liability coverage, as appropriate. Futures are also used to dynamically adjust the daily coverage
levels as markets and liability exposures fluctuate.

We remain liable for the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or unwilling
to pay. Certain of our reinsurance agreements and most derivative positions are collateralized and derivatives positions are
subject to master netting agreements, both of which significantly reduce the exposure to counterparty risk. In addition, we are
subject to the risk that hedging and other risk management actions 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.

Liquidity and Capital Resources

Overview

Liquidity Management

Based upon the strength of our franchise, diversification of our businesses, strong financial fundamentals and the
substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to
meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously monitor
and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well as changing
needs and opportunities.

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Short-term Liquidity

We maintain a substantial short-term liquidity position, which was $14.2 billion and $11.1 billion at December 31,
2016 and 2015, respectively. Short-term liquidity includes cash and cash equivalents and short-term investments, excluding
assets that are pledged or otherwise committed, including amounts received in connection with securities lending, repurchase
agreements, derivatives, and secured borrowings, as well as amounts held in the closed block.

Liquid Assets

An integral part of our liquidity management includes managing our level of liquid assets, which was $230.7 billion
and $229.4 billion at December 31, 2016 and 2015, respectively. Liquid assets include cash and cash equivalents, short-
term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged
or otherwise committed include amounts received in connection with securities lending, repurchase agreements, derivatives,
regulatory deposits and custodial accounts, collateral financing arrangements, funding agreements and secured borrowings,
as well as amounts held in the closed block.

Capital Management

We have established several senior management committees as part of our capital management process. These committees,
including the Capital Management Committee and the Enterprise Risk Committee (“ERC”), regularly review actual and
projected capital levels (under a variety of scenarios including stress scenarios) and our annual capital plan in accordance with
our capital policy. The Capital Management Committee is comprised of members of senior management, including MetLife,
Inc.’s Chief Financial Officer (“CFO”), Treasurer and Chief Risk Officer (“CRO”). The ERC is also comprised of members
of senior management, including MetLife, Inc.’s CFO, CRO and Chief Investment Officer.

Our Board of Directors and senior management are directly involved in the development and maintenance of our capital
policy. The capital policy sets forth, among other things, minimum and target capital levels and the governance of the capital
management process. All capital actions, including proposed changes to the annual capital plan, capital targets or capital
policy, are reviewed by the Finance and Risk Committee of the Board prior to obtaining full Board approval. The Board
approves the capital policy and the annual capital plan and authorizes capital actions, as required.

See “Risk Factors — Capital-Related Risks — Legal and Regulatory Restrictions and Uncertainty and Restrictions Under
the Terms of Certain of Our Securities May Prevent Us from Repurchasing Our Stock and Paying Dividends at the Level We
Wish” and Note 16 of the Notes to the Consolidated Financial Statements for information regarding restrictions on payment
of dividends and stock repurchases. See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases”
for information regarding MetLife, Inc.’s common stock repurchase authorizations.

The Company

Liquidity

Liquidity refers to the ability to generate adequate amounts of cash to meet our needs. We determine our liquidity needs
based on a rolling 12-month forecast by portfolio of invested assets which we monitor daily. We adjust the asset mix and asset
maturities based on this rolling 12-month forecast. To support this forecast, we conduct cash flow and stress testing, which
include various scenarios of the potential risk of early contractholder and policyholder withdrawal. We include provisions
limiting withdrawal rights on many of our products, including general account pension products 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, we have various alternatives available
depending on market conditions and the amount and timing of the liquidity need. These available alternatives include cash
flows from operations, sales of liquid assets, global funding sources including commercial paper and various credit and
committed facilities.

Under certain stressful market and economic conditions, our access to liquidity may deteriorate, or the cost to access
liquidity may increase. If we require significant amounts of cash on short notice in excess of anticipated cash requirements
or if we are required to post or return cash collateral in connection with derivatives or our securities lending program, we may
have difficulty selling investments in a timely manner, be forced to sell them for less than we otherwise would have been able
to realize, or both. In addition, in the event of such forced sale, for securities in an unrealized loss position, realized losses
would be incurred on securities sold and impairments would be incurred, if there is a need to sell securities prior to recovery,
which may negatively impact our financial condition. See “Risk Factors — Investment-Related Risks — Should the Need
Arise, We May Have Difficulty Selling Certain Holdings in Our Investment Portfolio or in Our Securities Lending Program
in a Timely Manner and Realizing Full Value Given Their Illiquid Nature.”

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In extreme circumstances, all general account assets within a particular legal entity — other than those which may have

been pledged to a specific purpose — are available to fund obligations of the general account of that legal entity.

Capital

We manage our capital position to maintain our financial strength and credit ratings. Our capital position is supported by
our ability to generate strong cash flows within our operating companies and borrow funds at competitive rates, as well as by
our demonstrated ability to raise additional capital to meet operating and growth needs despite adverse market and economic
conditions.

Rating Agencies

Rating agencies assign insurer financial strength ratings to MetLife, Inc.’s domestic life insurance subsidiaries and
credit ratings to MetLife, Inc. and certain of its subsidiaries. Financial strength ratings represent the opinion of rating agencies
regarding the ability of an insurance company to pay obligations under insurance policies and contracts in accordance with
their terms. Credit ratings indicate the rating agency’s opinion regarding a debt issuer’s ability to meet the terms of debt
obligations in a timely manner. They are important factors in our overall funding profile and ability to access certain types
of liquidity. The level and composition of regulatory capital at the subsidiary level and our equity capital are among the
many factors considered in determining our insurer financial strength ratings 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. See “Business — Company Ratings” for further information on our insurer financial strength
ratings.

Downgrades in our insurer financial strength ratings could have a material adverse effect on our financial condition
and results of operations in many ways. See “Risk Factors — Risk Related to Business — A Downgrade or a Potential
Downgrade in Our Financial Strength or Credit Ratings Could Result in a Loss of Business and Materially Adversely Affect
Our Financial Condition and Results of Operations.”

A downgrade in the credit ratings or insurer financial strength ratings of MetLife, Inc. or its subsidiaries would likely

impact us in the following ways, including:

•

impact our ability to generate cash flows from the sale of funding agreements and other capital market products offered
by our Retirement and Income Solutions business;

impact the cost and availability of financing for MetLife, Inc. 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 investments held by the subsidiaries subject to the agreements. See “— Liquidity and
Capital Uses — Pledged Collateral.”

Statutory Capital and Dividends

Our U.S. insurance subsidiaries have statutory surplus well above levels to meet current regulatory requirements.

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, claim, expense and statutory reserve items. The formula takes into account the risk characteristics of the insurer,
including asset risk, insurance risk, interest rate risk, market 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 most of our U.S. 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 subject to these requirements was in excess of each of those RBC levels.

As a Delaware corporation, American Life is subject to Delaware law; however, because it does not conduct insurance
business in Delaware or any other domestic state, it is exempt from RBC requirements under Delaware law. American Life’s
operations are also regulated by applicable authorities of the countries in which it operates and is subject to capital and
solvency requirements in those countries.

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The amount of dividends that our insurance subsidiaries can pay to MetLife, Inc. or to 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 MetLife, Inc.
and other parent entities by their respective insurance subsidiaries is governed by insurance laws and regulations. See
“Business — Regulation — U.S. Regulation — Insurance Regulation,” “Business — Regulation — International
Regulation,” “— MetLife, Inc. — Liquidity and Capital Sources — Dividends from Subsidiaries” and Note 16 of the Notes
to the Consolidated Financial Statements.

Affiliated Captive Reinsurance Transactions

Various subsidiaries of MetLife, Inc. cede specific policy classes, including term and universal life insurance,
participating whole life insurance, long-term disability insurance, group life insurance and other business to various wholly-
owned captive reinsurers. The reinsurance activities among these affiliated companies are eliminated within our consolidated
results of operations. The statutory reserves of such affiliated captive reinsurers are supported by a combination of funds
withheld assets, investment assets and letters of credit issued by unaffiliated financial institutions. MetLife, Inc. has
committed to maintain the surplus of several of the domestic affiliated captive reinsurers, as well as provided guarantees
of the reinsurers’ and other affiliated international insurance entities’ repayment obligations on the letters of credit. MetLife,
Inc. has also provided guarantees of these reinsurers’ repayment obligations on derivative and certain reinsurance agreements
entered into by these reinsurers. See “— MetLife, Inc. — Liquidity and Capital Uses — Support Agreements” for further
details on certain of these guarantees. Various subsidiaries of MetLife, Inc. enter into reinsurance agreements with affiliated
captive reinsurers for risk and capital management purposes, as well as to manage statutory reserve requirements related
to universal life and term life insurance policies and other business.

The NAIC continues to review insurance companies’ use of affiliated captive reinsurers and off-shore entities. The
NYDFS continues to have a moratorium on new reserve financing transactions involving captive insurers. We are not aware
of any states other than New York and California implementing such a moratorium. While such a moratorium would not
impact our existing reinsurance agreements with captive reinsurers, a moratorium placed on the use of captives for new
reserve financing transactions could impact our ability to write certain products and/or impact our RBC ratios and ability
to deploy excess capital in the future. This could result in our need to increase prices, modify product features or limit the
availability of those products to our customers. While this affects insurers across the industry, it could adversely impact our
competitive position and our results of operations in the future. We continue to evaluate product modifications, pricing
structure and alternative means of managing risks, capital and statutory reserves and we expect the discontinued use of
captive reinsurance on new reserve financing transactions would not have a material impact on our future consolidated
financial results.

Our U.S. variable annuity guaranteed minimum benefit risk and certain other risks were previously ceded to an affiliated
captive reinsurer. In November 2014, this captive reinsurer merged with and into MetLife USA, further reducing the
Company’s exposure to and use of captive reinsurers. See “Risk Factors — Regulatory and Legal Risks — Our Insurance
and Brokerage Businesses Are Highly Regulated, and Changes in Regulation and in Supervisory and Enforcement Policies
May Reduce Our Profitability and Limit Our Growth — U.S. Regulation — Insurance Regulation” and Note 6 of the Notes
to the Consolidated Financial Statements for further information on our reinsurance activities.

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Summary of the Company’s Primary Sources and Uses of Liquidity and Capital

Our primary sources and uses of liquidity and capital are summarized as follows:

Years Ended December 31,

2016

2015

2014

(In millions)

Sources:

Operating activities, net

Changes in policyholder account balances, net

Changes in payables for collateral under securities loaned and other transactions,

net

Short-term debt issuances, net

Long-term debt issued

Financing element on certain derivative instruments

Common stock issued, net of issuance costs

Preferred stock issued, net of issuance costs

Other, net

Total sources

Uses:

Investing activities, net

Changes in policyholder account balances, net

Changes in payables for collateral under securities loaned and other transactions,

net

Short-term debt repayments, net

Long-term debt repaid

Collateral financing arrangements repaid

Financing element on certain derivative instruments

Treasury stock acquired in connection with share repurchases

Repurchase of preferred stock

Preferred stock repurchase premium

Dividends on preferred stock

Dividends on common stock

Effect of change in foreign currency exchange rates on cash and cash equivalents

Total uses

14,827

14,129

4,925

—

—
—
—

—

19,838

5,850

—

3,636

—

1,279

1,367

372

—

103

1,736

302

14,713

—

1,544

—

3,893

181

—

1,483

21,247

10,398

1,717

—

1,438

57
—
1,930

1,460

116

1,653

492

19,303

Net increase (decrease) in cash and cash equivalents

5,125

1,944

16,376

1,483

5,031

—

1,000

—

1,000

—

24,937

15,055

—

2,862

—

747

1,000

—

122

1,499

354

21,714

3,223

Cash Flows from Operations

The principal cash inflows from our insurance activities come from insurance premiums, net investment income, annuity
considerations and deposit funds. The principal cash outflows are the result of various life insurance, property & casualty,
annuity and pension products, operating expenses and income tax, as well as interest expense. A primary liquidity concern
with respect to these cash flows is the risk of early contractholder and policyholder withdrawal.

Cash Flows from Investments

The principal cash inflows from our investment activities come from repayments of principal, proceeds from maturities
and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to purchases of
investments, issuances of policy loans and settlements of freestanding derivatives. Additional cash outflows relate to
purchases of businesses. We typically have a net cash outflow from investing activities because cash inflows from insurance
operations are reinvested in accordance with our ALM discipline to fund insurance liabilities. We closely monitor and
manage these risks through our comprehensive investment risk management process. The primary liquidity concerns with
respect to these cash flows are the risk of default by debtors and market disruption.

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Cash Flows from Financing

The principal cash inflows from our financing activities come from issuances of debt and other securities, deposits of
funds associated with policyholder account balances and lending of securities. The principal cash outflows come from
repayments of debt, payments of dividends on and repurchases of MetLife, Inc.’s securities, withdrawals associated with
policyholder account balances and the return of securities on loan. The primary liquidity concerns with respect to these cash
flows are market disruption and the risk of early contractholder and policyholder withdrawal.

Liquidity and Capital Sources

In addition to the general description of liquidity and capital sources in “— Summary of the Company’s Primary Sources
and Uses of Liquidity and Capital,” the following additional information is provided regarding our primary sources of liquidity
and capital:

Global Funding Sources

Liquidity is provided by a variety of global funding sources, including funding agreements, credit facilities and
commercial paper. Capital is provided by a variety of global funding sources, including short-term and long-term debt,
collateral financing arrangements, junior subordinated debt securities, preferred securities, equity securities and equity-
linked securities. The diversity of our global funding sources enhances our funding flexibility, limits dependence on any
one market or source of funds and generally lowers the cost of funds. Our primary global funding sources include:

Preferred Stock

In June 2015, MetLife, Inc. issued 1,500,000 shares of Series C preferred stock, with a $0.01 par value per share and
a liquidation preference of $1,000 per share, for aggregate proceeds of $1.5 billion. See Note 16 of the Notes to the
Consolidated Financial Statements.

Common Stock

In October 2014, MetLife, Inc. issued 22,907,960 new shares of its common stock for $1.0 billion in connection with
the remarketing of senior debt securities and settlement of stock purchase contracts. See “— Remarketing of Senior Debt
Securities and Settlement of Stock Purchase Contracts.”

Commercial Paper, Reported in Short-term Debt

MetLife, Inc. and MetLife Funding each have a commercial paper program that is supported by our general corporate
credit facility (see “— Credit and Committed Facilities”). 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 affiliates in order
to enhance the financial flexibility and liquidity of these companies.

Federal Home Loan Bank Funding Agreements, Reported in Policyholder Account Balances

Certain of our domestic insurance subsidiaries are members of a regional FHLB. During the years ended December 31,
2016, 2015 and 2014, we issued $21.7 billion, $21.6 billion and $13.9 billion, respectively, and repaid $21.2 billion,
$21.1 billion and $14.0 billion, respectively, under funding agreements with certain regional FHLBs. At December 31,
2016 and 2015, total obligations outstanding under these funding agreements were $16.0 billion and $15.5 billion,
respectively. See Note 4 of the Notes to the Consolidated Financial Statements.

Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances

We issue 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, 2016, 2015 and 2014, we issued
$41.1 billion, $48.1 billion and $48.9 billion, respectively, and repaid $42.0 billion, $49.9 billion and $45.6 billion,
respectively, under such funding agreements. At December 31, 2016 and 2015, total obligations outstanding under these
funding agreements were $30.9 billion and $31.6 billion, respectively. See Note 4 of the Notes to the Consolidated
Financial Statements.

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Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances

We have issued funding agreements to a subsidiary of Farmer Mac, as well as 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. The obligations under all such funding
agreements are secured by a pledge of certain eligible agricultural mortgage loans. During the years ended December 31,
2016, 2015 and 2014, we issued $1.2 billion, $50 million and $200 million, respectively, and repaid $1.2 billion,
$250 million and $200 million, respectively, under such funding agreements. At both December 31, 2016 and 2015, total
obligations outstanding under these funding agreements were $2.6 billion. See Note 4 of the Notes to the Consolidated
Financial Statements.

Senior Notes Issuances and Other Borrowings

Senior Notes

In November 2015, March 2015, and April 2014, MetLife, Inc. issued $1.3 billion, $1.5 billion and $1.0 billion
of senior notes, respectively. Net proceeds from these issuances were used for general corporate purposes, which
included the early redemption or repayment upon maturity of certain senior notes.

Other Borrowings

In December 2015, MetLife Private Equity Holdings, LLC, a wholly-owned indirect investment subsidiary of
MLIC, borrowed $350 million under term loans that mature in December 2020. See Note 12 of the Notes to the
Consolidated Financial Statements.

Remarketing of Senior Debt Securities and Settlement of Stock Purchase Contracts

In October 2014, MetLife, Inc. closed the successful remarketing of $1.0 billion of senior debt securities underlying
common equity units issued in November 2010 in connection with the acquisition of ALICO. MetLife, Inc. did not receive
any proceeds from the remarketing. Most common equity unit holders used the remarketing proceeds to settle their
payment obligations under the applicable stock purchase contracts. The subsequent settlement of the stock purchase
contracts provided proceeds to MetLife, Inc. of $1.0 billion in October 2014 in exchange for newly issued shares of
MetLife, Inc.’s common stock, as described in “— Common Stock” above. See Note 15 of the Notes to the Consolidated
Financial Statements.

Credit and Committed Facilities

At December 31, 2016, we maintained a $4.0 billion unsecured revolving credit facility and certain committed
facilities aggregating $11.5 billion. When drawn upon, these facilities bear interest at varying rates in accordance with
the respective agreements.

The unsecured revolving credit facility is used for general corporate purposes, to support the borrowers’ commercial
paper programs and for the issuance of letters of credit. At December 31, 2016, we had outstanding $730 million in letters
of credit and no drawdowns against this facility. Remaining availability was $3.3 billion at December 31, 2016.

The committed facilities are used for collateral for certain of our affiliated reinsurance liabilities. At December 31,
2016, $6.0 billion in letters of credit and $2.8 billion in aggregate drawdowns under collateral financing arrangements
were outstanding. Remaining availability was $2.6 billion at December 31, 2016.

In December 2016, MetLife, Inc. and MetLife Funding entered into an agreement to amend their existing $4.0 billion
unsecured revolving credit facility, which provides, among other things, that the facility will be amended and restated
upon the completion of the proposed Separation and the satisfaction of certain other conditions. As amended and restated,
the unsecured revolving credit facility will provide for borrowings and the issuance of letters of credit in an aggregate
amount of up to $3.0 billion. All borrowings under this amended revolving credit facility must be repaid by December
20, 2021, except that letters of credit outstanding upon termination may remain outstanding until December 20, 2022.

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In December 2016, Brighthouse Financial, Inc. entered into a $3.0 billion three-year senior unsecured delayed draw
term loan agreement with a bank syndicate. Borrowings under the term loan agreement may be used for general corporate
purposes, including payment of a portion of the dividends to be paid by Brighthouse Financial, Inc. to MetLife, Inc. in
connection with the Separation. The term loan agreement provides that borrowings may be made during the period prior
to the Separation. There were no outstanding borrowings as of December 31, 2016. In December 2016, Brighthouse
Financial, Inc. also entered into a $2.0 billion five-year senior unsecured revolving credit facility with a bank syndicate.
Borrowings and letters of credit under the revolving credit agreement may be used for general corporate purposes, including
payment of a portion of the dividends to be paid by Brighthouse Financial, Inc. to MetLife, Inc. in connection with the
Separation (the three-year and the five-year Brighthouse credit facilities, collectively, the “Brighthouse Credit Facilities”).
The Brighthouse Credit Facilities contain certain administrative, reporting, legal and financial covenants, including
requirements by Brighthouse Financial, Inc. to maintain a specified minimum consolidated net worth and to maintain a
maximum ratio of indebtedness to total capitalization, and limitations on the dollar amount of indebtedness that may be
incurred by Brighthouse Financial, Inc., which could restrict Brighthouse Financial, Inc. operations and use of funds.

See Note 12 of the Notes to the Consolidated Financial Statements for further information about these facilities,
including the circumstances under which Brighthouse may draw upon such facilities in connection with and after the
Separation.

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 our actual future cash funding requirements.

Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt at:

Short-term debt

Long-term debt (2), (3)

Collateral financing arrangements (4)

Junior subordinated debt securities (4)

__________________

December 31,

2016

2015 (1)

(In millions)

242

16,467

4,071

3,169

100

17,889

4,139

3,168

(1) Net of $100 million of unamortized issuance costs, which were reported in other assets at December 31, 2015.

(2)

(3)

Excludes $35 million and $60 million at December 31, 2016 and 2015, respectively, of long-term debt relating to CSEs
— FVO (see Note 10 of the Notes to the Consolidated Financial Statements). For more information regarding long-term
debt, see Note 12 of the Notes to the Consolidated Financial Statements.

Includes $402 million and $403 million of non-recourse debt at December 31, 2016 and 2015, respectively, for which
creditors have no access, subject to customary exceptions, to the general assets of the Company other than recourse to
certain investment subsidiaries.

(4)

For information regarding collateral financing arrangements and junior subordinated debt securities, see Notes 13 and
14 of the Notes to the Consolidated Financial Statements, respectively.

Debt and Facility Covenants

Certain of our debt instruments and committed facilities, as well as our unsecured credit facility, contain various
administrative, reporting, legal and financial covenants. We believe we were in compliance with all applicable covenants
at December 31, 2016.

Dispositions

Cash proceeds from dispositions during the years ended December 31, 2016, 2015 and 2014 were $291 million, $0,

and $759 million, respectively. See Note 3 of the Notes to the Consolidated Financial Statements.

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Liquidity and Capital Uses

In addition to the general description of liquidity and capital uses in “— Summary of the Company’s Primary Sources
and Uses of Liquidity and Capital” and “— Contractual Obligations,” the following additional information is provided
regarding our primary uses of liquidity and capital:

Preferred Stock Repurchase

In June 2015, MetLife, Inc. repurchased and canceled all of its Series B preferred stock for $1.5 billion in a series of

related transactions as described in Note 16 of the Notes to the Consolidated Financial Statements.

Common Stock Repurchases

As described in Note 16 of the Notes to the Consolidated Financial Statements, the Board of Directors has authorized
the repurchase of MetLife, Inc. common stock. Pursuant to such repurchase authorizations, during the years ended
December 31, 2016, 2015, and 2014, MetLife, Inc. repurchased 6,948,739 shares, 39,491,991 shares and 18,876,363 shares
of common stock in the open market for $372 million, $1.9 billion and $1.0 billion, respectively.

At December 31, 2016, MetLife, Inc. had $2.7 billion remaining under the November 2016 common stock repurchase
authorization. Under these authorizations, MetLife, Inc. 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. In 2017, through February 23, 2017, MetLife, Inc.
repurchased 8,718,054 shares of its common stock in the open market for $468 million.

Common stock repurchases are dependent upon several factors, including our capital position, liquidity, financial
strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to
management’s assessment of the stock’s underlying value and applicable regulatory approvals, as well as other legal and
accounting factors. See “Business — Regulation — U.S. Regulation — Potential Regulation as a Non-Bank SIFI,”
“Business — Regulation — International Regulation — Global Systemically Important Insurers,” “Risk Factors — Capital-
Related Risks — Legal and Regulatory Restrictions and Uncertainty and Restrictions Under the Terms of Certain of Our
Securities May Prevent Us from Repurchasing Our Stock and Paying Dividends at the Level We Wish.” and Note 16 of the
Notes to the Consolidated Financial Statements.

Dividends

During the years ended December 31, 2016, 2015 and 2014, MetLife, Inc. paid dividends on its common stock of
$1.7 billion, $1.7 billion and $1.5 billion, respectively. During the years ended December 31, 2016, 2015 and 2014, MetLife,
Inc. paid dividends on its preferred stock of $103 million, $116 million, and $122 million, respectively. See Note 16 of the
Notes to the Consolidated Financial Statements for information regarding the calculation and timing of these dividend
payments.

Preferred stock dividends are paid quarterly in accordance with the terms of MetLife, Inc.’s Floating Rate Non-
Cumulative Preferred Stock, Series A. MetLife, Inc. paid dividends on its Series B preferred stock through the June 15,
2015 payment date. Dividends are paid semi-annually on MetLife, Inc.’s Series C preferred stock commencing December
15, 2015 and ending on June 15, 2020, and thereafter will be paid quarterly.

The payment of dividends and other distributions by MetLife, Inc. to its security holders may be subject to regulation
by the Federal Reserve as a result of MetLife, Inc.’s designation as a non-bank SIFI. See “Business — Regulation — U.S.
Regulation — Potential Regulation as a Non-Bank SIFI.” In addition, if additional capital requirements are imposed on
MetLife, Inc. as a G-SII, its ability to pay dividends could be reduced by any such additional capital requirements that might
be imposed. See “Business — Regulation — International Regulation — Global Systemically Important Insurers.” The
payment of dividends is also subject to restrictions under the terms of our preferred stock and junior subordinated debentures
in situations where we may be experiencing financial stress. See “Risk Factors — Capital-Related Risks — Legal and
Regulatory Restrictions and Uncertainty and Restrictions Under the Terms of Certain of Our Securities May Prevent Us
from Repurchasing Our Stock and Paying Dividends at the Level We Wish” and Note 16 of the Notes to the Consolidated
Financial Statements.

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Debt Repayments

See Notes 12 and 13 of the Notes to the Consolidated Financial Statements for further information on long-term and

short-term debt and collateral financing arrangements, respectively, including:

•

In June 2016, MetLife, Inc. repaid at maturity its $1.3 billion 6.750% senior notes;

• During 2016, following regulatory approval, MetLife Reinsurance Company of Charleston (“MRC”), a wholly-owned
subsidiary of MetLife, Inc., repurchased and canceled $68 million in aggregate principal amount of its surplus notes,
which were reported in collateral financing arrangements on the consolidated balance sheet;

•

In June 2015, MetLife, Inc. repaid at maturity its $1.0 billion 5.0% senior notes;

• During 2015, following regulatory approval, MRC, repurchased and canceled $57 million in aggregate principal amount

of its surplus notes; and

•

In June and February 2014, MetLife, Inc. repaid at maturity its $350 million and $1.0 billion senior notes, respectively;
and

In May 2014, MetLife, Inc. redeemed $200 million aggregate principal amount of its 5.875% senior notes due in
November 2033 at par.

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 at our discretion.

Support Agreements

MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments
and guarantees with subsidiaries. Under these arrangements, each Obligor, with respect to the applicable entity, has agreed
to cause such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. We
anticipate that in the event that these arrangements place demands upon us, there will be sufficient liquidity and capital to
enable us to meet anticipated demands. See “— MetLife, Inc. — Liquidity and Capital Uses — Support Agreements.”

Insurance Liabilities

Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, property
& casualty, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For
annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings and
Brighthouse Financial segments, which include individual annuities, lapses and surrenders tend to occur in the normal
course of business. During the years ended December 31, 2016 and 2015, general account surrenders and withdrawals from
annuity products were $3.4 billion and $3.8 billion, respectively. In the Retirement and Income Solutions business within
the U.S. segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as
well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly
predictable surrenders or withdrawals. With regard to the Retirement and Income Solutions business products that provide
customers with limited rights to accelerate payments, as of December 31, 2016, there were no funding agreements or other
capital market products that could be put back to the Company.

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Pledged Collateral

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At
December 31, 2016 and 2015, we had received pledged cash collateral of $6.5 billion and $6.6 billion, respectively. At
December 31, 2016 and 2015, we had pledged cash collateral of $1.6 billion and $241 million, respectively. With respect
to OTC-bilateral derivatives in a net liability position that have credit contingent provisions, a one-notch downgrade in the
Company’s credit or financial strength rating, as applicable, would have required $6 million of additional collateral be
provided to our counterparties as of December 31, 2016. See Note 9 of the Notes to the Consolidated Financial Statements
for additional information about collateral pledged to us, collateral we pledge and derivatives subject to credit contingent
provisions.

We pledge collateral and have had collateral pledged to us, and may be required from time to time to pledge additional
collateral or be entitled to have additional collateral pledged to us, in connection with collateral financing arrangements
related to the reinsurance of closed block and ULSG liabilities. See Note 13 of the Notes to the Consolidated Financial
Statements.

We pledge collateral from time to time in connection with funding agreements. See Note 4 of the Notes to the

Consolidated Financial Statements.

Securities Lending

We participate in a securities lending program whereby securities are loaned to third parties, primarily brokerage firms
and commercial banks. We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when
the loaned securities are returned to us. Under our securities lending program, we were liable for cash collateral under our
control of $26.8 billion and $30.2 billion at December 31, 2016 and 2015, respectively. Of these amounts, $6.6 billion and
$10.1 billion at December 31, 2016 and 2015, respectively, were on open, meaning that the related loaned security could
be returned to us on the next business day requiring the immediate return of cash collateral we hold. The estimated fair
value of the securities on loan related to the cash collateral on open at December 31, 2016 was $6.5 billion, over 99% of
which were U.S. government and agency securities which, if put to us, could be immediately sold to satisfy the cash
requirements to immediately return the cash collateral. See Note 8 of the Notes to the Consolidated Financial Statements.

Litigation

Putative or certified class action litigation and other litigation, and claims and assessments against us, in addition to
those discussed elsewhere herein and those otherwise provided for on the consolidated financial statements, have arisen in
the course of our business, including, but not limited to, in connection with our activities as an insurer, employer, investor,
investment advisor, taxpayer and, formerly, a mortgage lending bank. Further, state insurance regulatory authorities and
other federal and state authorities regularly make inquiries and conduct investigations concerning our compliance with
applicable insurance and other laws and regulations. See Note 21 of the Notes to the Consolidated Financial Statements.

We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred
and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be reasonably
possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate estimate of
the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. 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 our financial position, based on information currently known by us, in our 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 our consolidated net income or cash
flows in particular quarterly or annual periods.

Acquisitions

Cash outflows for acquisitions and investments in strategic partnerships during the years ended December 31, 2016,

2015 and 2014 were $0, $0 and $277 million, respectively.

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Contractual Obligations

The following table summarizes our major contractual obligations at December 31, 2016:

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

392,034

24,356

21,729

21,259

300,987

33,264

41,472

12,495

2,160

23,805

28,954

33,264

2,468

12,209

289

23,319

34,347

21,464

—

4,275

185

475

—

3,811

400

—

324,690

216,222

—

30,918

996

464

806,217

124,859

61,033

47,033

573,292

Insurance liabilities

Policyholder account balances

Payables for collateral under securities loaned

and other transactions

Debt

Investment commitments

Operating leases

Other

Total

Insurance Liabilities

Insurance liabilities include future policy benefits, other policy-related balances, policyholder dividends payable and
the policyholder dividend obligation, which are all reported on the consolidated balance sheet and are more fully described
in Notes 1 and 4 of the Notes to the Consolidated Financial Statements. The amounts presented reflect future estimated cash
payments and (i) are based on mortality, morbidity, lapse and other assumptions comparable with our experience and
expectations of future payment patterns; and (ii) consider future premium receipts on current policies in-force. All estimated
cash payments presented are undiscounted as to interest, net of estimated future premiums on in-force policies and gross
of any reinsurance recoverable. Payment of amounts related to policyholder dividends left on deposit are projected based
on assumptions of policyholder withdrawal activity. 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 on the consolidated balance sheet in the more than five years category. Additionally, the more
than five years category includes estimated payments due for periods extending for more than 100 years.

The sum of the estimated cash flows of $392.0 billion exceeds the liability amounts of $216.7 billion included on the
consolidated balance sheet principally due to (i) the time value of money, which accounts for a substantial portion of the
difference; and (ii) differences in assumptions, most significantly mortality, between the date the liabilities were initially
established and the current date; and (iii) liabilities related to accounting conventions, or which are not contractually due,
which are excluded.

Actual cash payments may differ significantly from the liabilities as presented on the consolidated balance sheets and
the estimated cash payments as presented due to differences between actual experience and the assumptions used in the
establishment of these liabilities and the estimation of these cash payments.

For the majority of our insurance operations, estimated contractual obligations for future policy benefits and policyholder
account balances, as presented, 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.”

Policyholder Account Balances

See Notes 1 and 4 of the Notes to the Consolidated Financial Statements for a description of the components of
policyholder account balances. See “— Insurance Liabilities” regarding the source and uncertainties associated with the
estimation of the contractual obligations related to future policy benefits and policyholder account balances.

Amounts presented represent the estimated cash payments 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
for 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 foreign currency rates.

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The sum of the estimated cash flows of $301.0 billion exceeds the liability amount of $210.2 billion included on the
consolidated balance sheets principally due to (i) the time value of money, which accounts for a substantial portion of the
difference; (ii) differences in assumptions, between the date the liabilities were initially established and the current date;
and (iii) liabilities related to accounting conventions, or which are not contractually due, which are excluded.

Payables for Collateral Under Securities Loaned and Other Transactions

We have accepted cash collateral in connection with securities lending and derivatives. As the securities lending
transactions expire within the next year and the timing of the return of the derivatives collateral is uncertain, the return of
the collateral has been included in the one year or less category in the table. We also held non-cash collateral, which is not
reflected as a liability on the consolidated balance sheet of $2.3 billion at December 31, 2016.

Debt

Amounts presented for debt include short-term debt, long-term debt, collateral financing arrangements and junior
subordinated debt securities, the total of which differs from the total of the corresponding amounts presented on the
consolidated balance sheet as the amounts presented herein (i) do not include premiums or discounts upon issuance or
purchase accounting fair value adjustments; (ii) include future interest on such obligations for the period from January 1,
2017 through maturity; and (iii) do not include $35 million at December 31, 2016 of long-term debt relating to CSEs —
FVO as such debt does not represent our contractual obligation. Future interest on variable rate debt was computed using
prevailing rates at December 31, 2016 and, as such, does not consider the impact of future rate movements. Future interest
on fixed rate debt was computed using the stated rate on the obligations for the period from January 1, 2017 through maturity,
except with respect to junior subordinated debt which was computed using the stated rates through the scheduled redemption
dates as it is our expectation that such obligations will be redeemed as scheduled. Inclusion of interest payments on junior
subordinated debt securities through the final maturity dates would increase the contractual obligation by $7.7 billion.
Pursuant to collateral financing arrangements, MetLife, Inc. may be required to deliver cash or pledge collateral to the
respective unaffiliated financial institutions. See Note 13 of the Notes to the Consolidated Financial Statements.

Investment Commitments

To enhance the return on our investment portfolio, we commit to lend funds under mortgage loans, bank credit facilities,
bridge loans and private corporate bond investments and we commit to fund partnership investments. In the table, the timing
of the funding of mortgage loans and private corporate bond investments is based on the expiration dates of the corresponding
commitments. As it relates to commitments to fund partnerships and bank credit facilities, we anticipate that these amounts
could be invested any time over the next five years; however, as the timing of the fulfillment of the obligation cannot be
predicted, such obligations are generally presented in the one year or less category. Commitments to fund bridge loans are
short-term obligations and, as a result, are presented in the one year or less category. See Note 21 of the Notes to the
Consolidated Financial Statements and “— Off-Balance Sheet Arrangements.”

Operating Leases

As a lessee, we have 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 our financial position or results of operations. See
Note 21 of the Notes to the Consolidated Financial Statements.

Other

Other obligations presented are principally comprised of amounts due under reinsurance agreements, 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, and accruals and accounts payable due
under contractual obligations, which are all reported in other liabilities on the consolidated balance sheets. If the timing of
any of these other obligations is sufficiently uncertain, the amounts are included within the one year or less category. Items
reported in other liabilities on the consolidated balance sheets that were excluded from the table represent accounting
conventions or are not liabilities due under contractual obligations. Unrecognized tax benefits and related accrued interest
totaling $1.8 billion was excluded as the timing of payment cannot be reliably determined.

Separate account liabilities are excluded as they are fully funded by cash flows from the corresponding separate account

assets and are set equal to the estimated fair value of separate account assets.

We also enter into agreements to purchase goods and services in the normal course of business; however, such amounts
are excluded as these purchase obligations were not material to our consolidated results of operations or financial position
at December 31, 2016.

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Additionally, we have agreements in place for services we conduct, generally at cost, between subsidiaries relating to
insurance, reinsurance, loans and capitalization. Intercompany transactions have been eliminated in consolidation.
Intercompany transactions among insurance subsidiaries and affiliates have been approved by the appropriate insurance
regulators as required.

MetLife, Inc.

Liquidity and Capital Management

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 facilities. 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 MetLife, Inc.’s liquidity. MetLife, Inc. 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 MetLife, Inc.’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 MetLife, Inc.’s access to liquidity.

MetLife, Inc.’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.”

See “— Executive Summary — Consolidated Company Outlook” for a discussion of expected impacts to liquidity and
capital resources in connection with the Separation including incremental sources of liquidity and capital from subsidiary
dividends that we expect to receive from Brighthouse (expected to be partially funded from the issuance of debt by Brighthouse)
and a MetLife-affiliated reinsurance subsidiary, and proceeds over time from the disposition of our retained shares of
Brighthouse common stock, as well as incremental uses of liquidity and capital from foregone subsidiary dividends and
foregone incremental debt issuances and ongoing uses of liquidity and capital from the repayment of debt maturities.

Liquidity

For a summary of MetLife, Inc.’s liquidity, see “— The Company — Liquidity.”

Capital

For a summary of MetLife, Inc.’s capital, see “— The Company — Capital.” For further information regarding potential
capital restrictions and limitations on MetLife, Inc. as a non-bank SIFI and G-SII, see “Business — Regulation — U.S.
Regulation — Potential Regulation as a Non-Bank SIFI” and “Business — Regulation — International Regulation — Global
Systemically Important Insurers.” See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases”
and “— The Company — Liquidity and Capital Uses — Preferred Stock Repurchase” for information regarding MetLife,
Inc.’s common and preferred stock repurchases, respectively.

Liquid Assets

At December 31, 2016 and 2015, MetLife, Inc. and other MetLife holding companies had $5.8 billion and $6.4 billion,
respectively, in liquid assets. Of these amounts, $3.7 billion and $5.3 billion were held by MetLife, Inc. and $2.1 billion and
$1.1 billion were held by other MetLife holding companies at December 31, 2016 and 2015, respectively. Liquid assets include
cash and cash equivalents, short-term investments and publicly-traded securities excluding, assets that are pledged or otherwise
committed. Assets pledged or otherwise committed include amounts received in connection with derivatives and collateral
financing arrangements.

Liquid assets held in non-U.S. holding companies are generated in part through dividends from non-U.S. insurance
operations. Such dividends are subject to local insurance regulatory requirements, as discussed in “— Liquidity and Capital
Sources — Dividends from Subsidiaries.” The cumulative earnings of certain active non-U.S. operations have been reinvested
indefinitely in such non-U.S. operations, as described in Note 19 of the Notes to the Consolidated Financial Statements. Under
current tax laws, should we repatriate such earnings, we may be subject to additional U.S. income taxes and foreign withholding
taxes.

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MetLife, Inc. and Other MetLife Holding Companies Sources and Uses of Liquid Assets and Sources and Uses of Liquid

Assets included in Free Cash Flow

MetLife, Inc.’s sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash flow

are summarized as follows.

Year Ended December 31, 2016

Year Ended December 31, 2015

Year Ended December 31, 2014

Sources and
Uses of Liquid
Assets

Sources and
Uses of Liquid
Assets Included
in Free Cash
Flow

Sources and
Uses of Liquid
Assets

Sources and
Uses of Liquid
Assets Included
in Free Cash
Flow

Sources and
Uses of Liquid
Assets

Sources and
Uses of Liquid
Assets Included
in Free Cash
Flow

(In millions)

MetLife, Inc. (Parent Company Only)

Sources:

Dividends and returns of capital from subsidiaries (1)

4,550

2,340

2,388

Long-term debt issued (2)

Common stock issued, net of issuance costs

Repayments on and (issuances of) loans to subsidiaries and

related interest, net (3)

Other, net (4)

Total sources

Uses:

Capital contributions to subsidiaries (5)

Long-term debt repaid - unaffiliated

Interest paid on debt and financing arrangements -

unaffiliated

Dividends on common stock

Treasury stock acquired in connection with share

repurchases

Dividends on preferred stock

Issuances of and (repayments on) loans to subsidiaries and

related interest, net (3) (5)

Total uses

Net increase (decrease) in liquid assets, MetLife, Inc. (Parent

Company Only)

Liquid assets, beginning of year

Liquid assets, end of year

Free Cash Flow, MetLife, Inc. (Parent Company Only)

Net cash provided by operating activities, MetLife, Inc. (Parent

Company Only)

Other MetLife Holding Companies

Sources:

Dividends and returns of capital from subsidiaries

Capital contributions from MetLife, Inc.

Total sources

Uses:

Capital contributions to subsidiaries

Repayments on and (issuance of) loans to subsidiaries and

affiliates and related interest, net

Other, net

Total uses

Net increase (decrease) in liquid assets, Other MetLife Holding

Companies

Liquid assets, beginning of year

Liquid assets, end of year

Free Cash Flow, Other MetLife Holding Companies

Net increase (decrease) in liquid assets, All Holding Companies

—

120

4,670

1,733

1,250

983

1,736

372

103

6,276

(1,606)

5,289

3,683

3,747

—

(210)

4,340

1,733

—

983

—

103

2,918

1,422

2,739

—

383

755

6,217

667

1,000

965

1,653

1,930

116

—

6,331

(114)

5,403

5,289

1,606

1,750

—

383

795

5,268

667

—

965

—

116

—

1,748

3,520

1,000

597

1,333

6,318

1,262

1,550

968

1,499

1,000

122

—

6,401

(83)

5,486

5,403

2,615

1,485

1,354

1,339

—

1,485

307

123

483

1,002

1,142

2,144

(604)

—

1,485

307

123

483

1,002

150

1,504

510

506

1,043

461

681

1,142

347

150

1,504

510

506

—

1,339

458

605

1,043

1,111

228

453

681

145

461

228

445

—

597

1,333

4,763

1,011

—

968

—

122

—

2,101

2,662

1,339

—

1,339

458

605

Free Cash Flow, All Holding Companies (6) (7)

2,424

3,981

2,890

__________________

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(1) All dividends and returns of capital to MetLife, Inc. were from operating subsidiaries and none were from other MetLife

holding companies during the years ended December 31, 2016, 2015 and 2014.

(2)

(3)

Included in free cash flow is the portion of long-term debt issued that represents incremental debt to be at or below target
leverage ratios.

See MetLife, Inc. (Parent Company Only) Condensed Statements of Cash Flows included in Schedule II of the Financial
Statement Schedules for the source of liquid assets from receipts on loans to subsidiaries (excluding interest) and for the
use of liquid assets for the issuances of loans to subsidiaries (excluding interest).

(4) Other, net includes $433 million, $171 million and $862 million of net receipts by MetLife, Inc. to and from subsidiaries
under a tax sharing agreement and tax payments to tax agencies during the years ended December 31, 2016, 2015 and
2014, respectively.

(5) Amounts to fund business acquisitions were $0, $0 and $251 million (included in capital contributions to subsidiaries)

during the years ended December 31, 2016, 2015 and 2014, respectively.

(6)

In 2016, we incurred $2,256 million of Separation-related items which reduced liquid assets and free cash flow. Excluding
these Separation-related items, adjusted free cash flow would be $4,680 million for the year ended December 31, 2016.
See “— Sources and Uses of Liquid Assets from Separation-related Transactions.”

(7)

See “— Non-GAAP and Other Financial Disclosures” for the reconciliation of net cash provided by operating activities
of MetLife, Inc. to free cash flow of all holding companies.

The primary sources of MetLife, Inc.’s liquid assets are dividends and returns of capital from subsidiaries, long-term
debt issued, common stock issued, and net receipts from subsidiaries under a tax sharing agreement. MetLife, Inc.’s insurance
subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of their respective
domiciles. See “— Liquidity and Capital Sources — Dividends from Subsidiaries.”

The primary uses of MetLife, Inc.’s liquid assets are principal and interest payments on long-term debt, dividends on
or repurchases of common and preferred stock, capital contributions to subsidiaries, funding of business acquisitions, income
taxes and operating expenses. MetLife, Inc. is party to various capital support commitments and guarantees with certain of
its subsidiaries. See “— Liquidity and Capital Uses — Support Agreements.”

In addition, MetLife, Inc. issues loans to subsidiaries or subsidiaries issue loans to MetLife, Inc. Accordingly, changes
in MetLife, Inc. liquid assets include issuances of loans to subsidiaries, proceeds of loans from subsidiaries and the related
repayment of principal and payment of interest on such loans. See “— Liquidity and Capital Sources — Senior Notes
Issuances and Other Borrowings — Maturities and Issuances of Affiliated Long-term Debt” and “— Liquidity and Capital
Uses — Affiliated Capital and Debt Transactions.”

Sources and Uses of Liquid Assets of Other MetLife Holding Companies

The primary sources of liquid assets of other MetLife holding companies are dividends, returns of capital and remittances
from their subsidiaries and branches, principally non-U.S. insurance companies; capital contributions received; receipts of
principal and interest on loans to subsidiaries and affiliates and borrowings from subsidiaries and affiliates. MetLife, Inc.’s
non-U.S. operations are subject to regulatory restrictions on the payment of dividends imposed by local regulators. See “—
Liquidity and Capital Sources — Dividends from Subsidiaries.”

The primary uses of liquid assets of other MetLife holding companies are capital contributions paid to their subsidiaries
and branches, principally non-U.S. insurance companies; loans to subsidiaries and affiliates; principal and interest paid on
loans from subsidiaries and affiliates; and the following items, which are reported within other, net: dividends and returns
of capital; business acquisitions; and operating expenses. There were no uses of liquid assets of other MetLife holding
companies to fund business acquisitions during the years ended December 31, 2016, 2015, and 2014.

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Sources and Uses of Liquid Assets from Separation-related Transactions

We have engaged and expect to continue to engage in a number of Separation-related transactions that will impact our
holding companies’ liquid assets. In 2016, we incurred $2.3 billion of Separation-related items which reduced our holding
companies’ liquid assets, as well as our free cash flow. These Separation-related items consisted of Separation-related
outflows comprised of an incremental capital contribution to MetLife USA, capital contributions to Brighthouse subsidiaries
and Separation-related costs, forgone subsidiary dividends from MetLife USA and forgone incremental debt at MetLife,
Inc., net of Separation-related inflows comprised of incremental subsidiary dividends from NELICO and MetLife USA.
However, we have increased and expect to continue to increase our holding companies’ liquid assets over time as a result
of (i) $291 million in cash proceeds that we received in 2016 from the U.S. Retail Advisor Force Divestiture; (ii) dividends
in the range of $3.3 billion to $3.8 billion that we expect to receive in 2017 from Brighthouse (which may be partially
funded by the issuance of debt by Brighthouse) and a MetLife-affiliated reinsurance company prior to the Separation; and
(iii) proceeds from the disposition of our retained shares of Brighthouse common stock that we expect to receive over
time. In addition to these Separation-related items, we expect to have cash commitments of between $1.0 billion and $2.0
billion over the two-year period of 2017 and 2018 relating to liability management transactions, including the repayment
of certain debt maturities. Following the Separation, we plan to maintain a liquidity buffer of $3.0 to $4.0 billion of liquid
assets at the holding companies. See “— Executive Summary — Consolidated Company Outlook.”

Liquidity and Capital Sources

In addition to the description of liquidity and capital sources in “— The Company — Summary of the Company’s Primary
Sources and Uses of Liquidity and Capital” and “— The Company — Liquidity and Capital Sources,” the following additional
information is provided regarding MetLife, Inc.’s primary sources of liquidity and capital.

Dividends from Subsidiaries

MetLife, Inc. relies, in part, on dividends from its subsidiaries to meet its cash requirements. MetLife, Inc.’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 we conduct
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.

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The table below sets forth the dividends permitted to be paid by MetLife, Inc.’s primary insurance subsidiaries without

insurance regulatory approval and the respective dividends paid:

2017

Permitted
without
Approval (1)

2016

2015

2014

Paid (2)

Permitted
without
Approval (3)

Paid (2)

(In millions)

Permitted
without
Approval (3)

Paid (2)

Permitted
without
Approval (3)

2,723

$ 5,740 (6)

— $

—

473

261

N/A

106

228

N/A

295 (7)

—

3,753

$ 1,489

— $

—

586

500

130

N/A

156

136

235

102

N/A

199 (7)

—

1,200

821 (6)

— $

—

3,056

155 (5)

239

102

N/A

199

200

N/A

227 (8)

—

1,163

—

1,013

218

120

102

Company

Metropolitan Life Insurance

Company (4)

American Life Insurance

Company

MetLife Insurance Company

USA

Metropolitan Property and
Casualty Insurance
Company

Metropolitan Tower Life
Insurance Company

MetLife Investors Insurance

Company (5)

New England Life Insurance

Company

General American Life
Insurance Company

__________________

(1) Reflects dividend amounts that may be paid during 2017 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
2017, some or all of such dividends may require regulatory approval.

(2) Reflects 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)

(6)

The New York Insurance Law was amended, permitting MLIC to pay dividends without prior regulatory approval under
one of two alternative formulations beginning in 2016. See Note 16 of the Notes to the Consolidated Financial Statements.
The dividend amount that MLIC was permitted to pay during 2016 and will be permitted to pay during 2017 were calculated
using the new formulation.

Prior to the mergers into MetLife USA of certain of its affiliates and a subsidiary, Exeter Reinsurance Company, Ltd. paid
dividends of $155 million on its preferred stock. In August 2014, MetLife Insurance Company of Connecticut (“MICC”),
MetLife USA’s predecessor, redeemed for $1.4 billion and retired 4,595,317 shares of its common stock owned by MetLife
Investors Group, LLC (“MLIG”). Following the redemption, in August 2014, MLIG paid a dividend of $1.4 billion to
MetLife, Inc. MetLife USA did not pay dividends in 2014.

In 2016, MLIC paid an ordinary cash dividend to MetLife, Inc. in the amount of $3.6 billion. In addition, in December
2016, MLIC distributed all of the issued and outstanding shares of common stock of each of NELICO and GALIC to
MetLife, Inc. in the form of a non-cash extraordinary dividend in the amount of $981 million and $1.2 billion, respectively,
as calculated on a statutory basis. During December 2014, MLIC distributed shares of New England Securities Corporation
(“NES”) to MetLife, Inc. as an in-kind dividend of $113 million.

(7) Dividends paid by NELICO in 2015 were paid to its former parent, MLIC. Dividends paid by NELICO in 2016, including

a $295 million extraordinary cash dividend, were paid to its new parent, MetLife, Inc.

(8)

In December 2014, NELICO distributed shares of NES to MLIC as an extraordinary in-kind dividend of $113 million,
as calculated on a statutory basis. Also, in December 2014, NELICO paid an extraordinary cash dividend to MLIC in the
amount of $114 million.

In addition to the amounts presented in the table above, for the years ended December 31, 2016, 2015 and 2014, cash
dividends in the aggregate amount of $26 million, $9 million and $17 million, respectively, were paid to MetLife, Inc. by
certain of its other subsidiaries. Additionally, for the years ended December 31, 2016, 2015 and 2014, MetLife, Inc. received
cash of $80 million, $5 million and $0, respectively, representing returns of capital from certain subsidiaries.

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The dividend capacity of our 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 our non-U.S. operations, including
the FSA, may also limit or not permit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed
to be detrimental to the solvency or financial strength of the non-U.S. operations, or for other reasons. Most of the non-
U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S. holding companies. The capital and
rating considerations applicable to the first tier subsidiaries may also impact the dividend flow into MetLife, Inc.

We actively manage target and excess capital levels and dividend flows on a proactive basis and forecast 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. See “Risk Factors — Capital-Related Risks — As a Holding Company, MetLife, Inc.
Depends on the Ability of Its Subsidiaries to Pay Dividends, a Major Component of Holding Company Free Cash Flow”
and Note 16 of the Notes to the Consolidated Financial Statements.

Short-term Debt

MetLife, Inc. maintains a commercial paper program, the proceeds of which can be used to finance the general liquidity
needs of MetLife, Inc. and its subsidiaries. MetLife, Inc. had no short-term debt outstanding at either December 31, 2016
or 2015.

Preferred Stock

For information on MetLife, Inc.’s preferred stock, see “— The Company — Liquidity and Capital Sources — Global

Funding Sources — Preferred Stock.”

Senior Notes Issuances and Other Borrowings

For information on MetLife, Inc.’s unaffiliated senior notes issuances and other borrowings, see “— The Company —

Liquidity and Capital Sources — Global Funding Sources — Senior Notes Issuances and Other Borrowings.”

Maturities and Issuances of Affiliated Long-term Debt

In September 2016, a $250 million senior note issued to MLIC matured and, subsequently, in September 2016 MetLife,
Inc. issued a new $250 million senior note to MLIC. The note matures in September 2020 and bears interest at a rate per
annum of 3.03%, payable semi-annually.

In June 2014, a $500 million senior note payable to MLIC matured and, subsequently, MetLife, Inc. issued a new
$500 million senior note to MLIC. The note matures in June 2019 and bears interest at a fixed rate of 3.54%, payable
semi-annually.

Collateral Financing Arrangements and Junior Subordinated Debt Securities

For information on MetLife, Inc.’s collateral financing arrangements and junior subordinated debt securities, see

Notes 13 and 14 of the Notes to the Consolidated Financial Statements, respectively.

Credit and Committed Facilities

In June 2016, MetLife, Inc. entered into a five-year agreement with an indirect wholly-owned subsidiary, MetLife
Ireland Treasury d.a.c. (formerly known as MetLife Ireland Treasury Limited) (“MIT”), to borrow up to $1.3 billion on a
revolving basis, at interest rates based on the United States Internal Revenue Service’s safe harbor interest rate in effect at
the time of the borrowing. MetLife, Inc. may borrow funds under the agreement at MIT’s discretion and subject to the
availability of funds. There were no outstanding borrowings at December 31, 2016.

See “— The Company — Liquidity and Capital Sources — Global Funding Sources — Credit and Committed Facilities”

for information about MetLife, Inc.’s unsecured credit facility.

MetLife, Inc. maintains a committed facility with a capacity of $425 million. At December 31, 2016, MetLife, Inc. had
outstanding $425 million in letters of credit, no drawdowns outstanding and no remaining availability against this facility.
In addition, MetLife, Inc. is a party and/or guarantor to committed facilities of certain of its subsidiaries, which aggregated
$11.1 billion at December 31, 2016. The committed facilities are used as collateral for certain of the Company’s affiliated
reinsurance liabilities.

See “— The Company — Liquidity and Capital Sources — Global Funding Sources — Credit and Committed Facilities,”
as well as Note 12 of the Notes to the Consolidated Financial Statements, for further information regarding these facilities.

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Long-term Debt Outstanding

The following table summarizes the outstanding long-term debt of MetLife, Inc. at:

Long-term debt — unaffiliated

Long-term debt — affiliated

Collateral financing arrangements

Junior subordinated debt securities

__________________

December 31,

2016

2015 (1)

(In millions)

15,505

3,100

2,797

1,734

16,927

3,314

2,797

1,733

(1) Net of $82 million of unamortized issuance costs, which were reported in other assets at December 31, 2015.

See Note 6 in Schedule II of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Statements for

information regarding the Junior Subordinated Debt Securities exchange transaction in February 2017.

Debt and Facility Covenants

Certain of MetLife, Inc.’s debt instruments and committed facilities, as well as its credit facility, contain various
administrative, reporting, legal and financial covenants. MetLife, Inc. believes it was in compliance with all applicable
covenants at December 31, 2016.

Dispositions

Cash proceeds from dispositions during the years ended December 31, 2016, 2015 and 2014 were $291 million, $0,

and $7 million, respectively. See Note 3 of the Notes to the Consolidated Financial Statements.

Liquidity and Capital Uses

The primary uses of liquidity of MetLife, Inc. include debt service, cash dividends on common and preferred stock, capital
contributions to subsidiaries, common and preferred stock repurchases, 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 investment portfolio and other cash
flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable MetLife,
Inc. to make payments on debt, pay cash dividends on its common and preferred stock, contribute capital to its subsidiaries,
repurchase its common and preferred stock, pay all general operating expenses and meet its cash needs.

In addition to the description of liquidity and capital uses in “— The Company — Liquidity and Capital Uses” and “—
The Company — Contractual Obligations,” the following additional information is provided regarding MetLife, Inc.’s primary
uses of liquidity and capital:

Affiliated Capital and Debt Transactions

During the years ended December 31, 2016, 2015 and 2014, MetLife, Inc. invested a net amount of $1.5 billion,
$88 million and $1.8 billion, respectively, in various subsidiaries. The investment in 2016 included a cash capital contribution
of $1.5 billion to MetLife USA in connection with the Separation.

MetLife, Inc. lends funds, as necessary, to its subsidiaries and affiliates, some of which are regulated, to meet their
capital requirements. MetLife, Inc. had loans to subsidiaries outstanding of $1.2 billion at both December 31, 2016 and
2015.

In April 2016, American Life issued a $140 million short-term note to MetLife, Inc. which was repaid in June 2016.

The short-term note bore interest at six-month LIBOR plus 1.00%.

In May 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June 2015.

The short-term note bore interest at six-month LIBOR plus 1.00%.

In April 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in May 2015.

The short-term note bore interest at six-month LIBOR plus 0.875%.

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In December 2014, MetLife, Inc. entered into a five-year agreement with MetLife Reinsurance Company of Bermuda,
Ltd. (“MrB”), a Bermuda insurance affiliate and an indirect, wholly-owned subsidiary of MetLife, Inc., to lend up to
$500 million to MrB on a revolving basis. There were no loans outstanding at December 31, 2016 and 2015.

In December 2014, American Life issued a $100 million surplus note to MetLife, Inc. The surplus note bears interest

at a fixed rate of 3.17%, payable semi-annually, and matures in June 2020.

In August 2014, MICC paid to MLIG $1.4 billion to redeem and retire its common stock owned by MLIG; as a result,
all of the outstanding shares of common stock of MICC were directly held by MetLife, Inc. Following the redemption, in
August 2014, MLIG paid a dividend of $1.4 billion to MetLife, Inc., and MetLife, Inc. made a capital contribution to MICC
of $231 million.

In August 2014, American Life issued a $120 million short-term note to MetLife, Inc. which was repaid in December
2014. In February 2014, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June
2014. Both short-term notes bore interest at six-month LIBOR plus 0.875%.

In July 2013, MIT borrowed the Chilean peso equivalent of $1.5 billion from MetLife, Inc., which was due July 2023.
The loan bore interest at a fixed rate of 8.5%, payable annually. In December, September and June 2015, MIT made loan
payments of the Chilean peso equivalent of $77 million, $153 million and $231 million, respectively. In December 2014
and June 2014, MIT made loan payments of the Chilean peso equivalent of $493 million and $69 million, respectively. At
December 31, 2015, the loan was fully paid.

Debt Repayments

For information on MetLife, Inc.’s debt repayments, see “— The Company — Liquidity and Capital Uses — Debt

Repayments.” MetLife, Inc. intends to repay or refinance, in whole or in part, all the debt that is due in 2017.

Repayments of Affiliated Long-term Debt

In June 2016, March 2016 and December 2015, MetLife, Inc. repaid $204 million, $10 million and $286 million,
respectively, of affiliated long-term debt to MetLife Exchange Trust I, at maturity, in exchange for returns of capital. The
long-term notes bore interest at three-month LIBOR plus 0.70%.

Maturities of Senior Notes

The following table summarizes MetLife, Inc.’s outstanding senior notes by year of maturity through 2021 and 2022

to 2046, excluding any premium or discount and unamortized issuance costs, at December 31, 2016:

Year of Maturity

Principal

(In millions)

Interest Rate

2017

2018

2019

2020

2021

2022 - 2046

Support Agreements

$
$

500

1,035

1,035
500

250

494

250

1,000

500

1.76%

1.90%

6.82%

7.72%
3.54%

3.57%

5.25%

3.03%

4.75%

5.64%

5.86%

12,133

Ranging from 3.00% - 6.50%

MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under
these arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has
guaranteed certain contractual obligations. See “— The Company — Liquidity and Capital Uses — Support Agreements.”

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MetLife, Inc., in connection with MetLife Reinsurance Company of Delaware’s (“MRD”) reinsurance of certain
universal life and term life risks, entered into capital maintenance agreements pursuant to which MetLife, Inc. agreed,
without limitation as to amount, to cause the first and second protected cells of MRD to maintain total adjusted capital equal
to or greater than 200% of each such protected cell’s company action level RBC, as defined in state insurance statutes. In
addition, MetLife, Inc. entered into an agreement with the Delaware Department of Insurance to increase such capital
maintenance threshold to 300% of each such protected cell’s company action level RBC, in the event of specified downgrades
in the senior unsecured debt ratings of MetLife, Inc.

MetLife, Inc. guarantees the obligations of its subsidiary, DelAm, under a stop loss reinsurance agreement with RGA
Reinsurance (Barbados) Inc. (“RGARe”), pursuant to which RGARe retrocedes to DelAm a portion of the whole life medical
insurance business that RGARe assumed from American Life on behalf of its Japan operations. Also, MetLife, Inc. guarantees
the obligations of its subsidiary, Missouri Reinsurance, Inc. (“MoRe”), under a retrocession agreement with RGARe,
pursuant to which MoRe retrocedes certain group term life insurance liabilities (which retrocession was terminated effective
as of January, 2016) and a portion of the closed block liabilities associated with industrial life and ordinary life insurance
policies that it assumed from MLIC.

MetLife, Inc. guarantees the obligations of MrB, a Bermuda insurance affiliate and an indirect, wholly-owned subsidiary
of MetLife, Inc. under a reinsurance agreement with Mitsui Sumitomo Primary Life Insurance Co., Ltd. (“Mitsui”), a former
affiliate that is now an unaffiliated third party, under which MrB reinsures certain variable annuity business written by
Mitsui.

MetLife, Inc. guarantees the obligations of MrB in an aggregate amount up to $1.0 billion, under a reinsurance agreement
with MetLife Europe d.a.c. (“MEL”) (formerly known as MetLife Europe Limited), under which MrB reinsured the
guaranteed living benefits and guaranteed death benefits associated with certain unit-linked annuity contracts issued by
MEL.

MetLife, Inc., in connection with MetLife Reinsurance Company of Vermont’s (“MRV”) 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 the three protected cells of MRV to maintain total adjusted capital in an
amount that is equal to or greater than 200% of each such protected cell’s authorized control level RBC, as defined in
Vermont state insurance statutes. See Note 12 of the Notes to the Consolidated Financial Statements.

MetLife, Inc., 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 in an amount that is
equal to or greater than 200% of the company action level RBC, as defined in South Carolina 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 Note 13 of the Notes to the Consolidated
Financial Statements.

MetLife, Inc., in connection with the collateral financing arrangement associated with MetLife Reinsurance Company
of South Carolina’s (“MRSC”) reinsurance of ULSG, committed to the South Carolina Department of Insurance to take
necessary action to cause MRSC to maintain the greater of capital and surplus of $250,000 or total adjusted capital in an
amount that is equal to or greater than 100% of authorized control level RBC, as defined in South Carolina state insurance
statutes. See Note 13 of the Notes to the Consolidated Financial Statements.

MetLife, Inc. has a net worth maintenance agreement with its insurance subsidiary, First MetLife. Under this agreement,
as amended, MetLife, Inc. agreed, without limitation as to the amount, to cause First MetLife to have capital and surplus
of $10 million, total adjusted capital in an amount that is equal to or greater than 150% of the company action level RBC,
as defined by applicable state insurance statutes, and liquidity necessary to enable it to meet its current obligations on a
timely basis. In connection with the Separation, this support agreement will be terminated.

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MetLife, Inc. guarantees obligations arising from derivatives of the following subsidiaries: MrB, MetLife International
Holdings, LLC and MetLife Worldwide Holdings, LLC. These subsidiaries are exposed to various risks relating to their
ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. These
subsidiaries use a variety of strategies to manage these risks, including the use of derivatives. Further, all of the subsidiaries’
derivatives are subject to industry standard netting agreements and collateral agreements that limit the unsecured portion
of any open derivative position. On a net counterparty basis at December 31, 2016 and 2015, derivative transactions with
positive mark-to-market values (in-the-money) were $495 million and $583 million, respectively, and derivative transactions
with negative mark-to-market values (out-of-the-money) were $237 million and $32 million, respectively. To secure the
obligations represented by the out of-the-money transactions, the subsidiaries had provided collateral to their counterparties
with an estimated fair value of $233 million and $32 million at December 31, 2016 and 2015, respectively. Accordingly,
unsecured derivative liabilities guaranteed by MetLife, Inc. were $4 million and $0 at December 31, 2016 and 2015,
respectively.

MetLife, Inc. also guarantees the obligations of certain of its subsidiaries under committed facilities with third-party

banks. See Note 12 of the Notes to the Consolidated Financial Statements.

Acquisitions

During the years ended December 31, 2016, 2015 and 2014, there were no cash outflows from MetLife, Inc. for

acquisitions.

Adoption of New Accounting Pronouncements

See Note 1 of the Notes to the Consolidated Financial Statements.

Future Adoption of New Accounting Pronouncements

See Note 1 of the Notes to the Consolidated Financial Statements.

Non-GAAP and Other Financial Disclosures

In this report, the Company presents certain measures of its performance that are not calculated in accordance with GAAP.
We believe that these non-GAAP financial measures enhance the understanding of our performance by highlighting the results
of operations and the underlying profitability drivers of our business.

The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial

measures calculated in accordance with GAAP:

Non-GAAP financial measures:
operating revenues
(i)
(ii) operating expenses
(iii) operating earnings

(iv) operating earnings available to common

shareholders
free cash flow of all holding companies

(v)

Comparable GAAP financial measures:
revenues
(i)
(ii) expenses
(iii) income (loss) from continuing operations, net of income

tax

(iv) net income (loss) available to MetLife, Inc.’s common

shareholders

(v) MetLife, Inc.’s net cash provided by operating activities

Reconciliations of these non-GAAP measures to the most directly comparable historical GAAP measures are included in
this section and the results of operations, see “— Results of Operations.” Reconciliations of these non-GAAP measures to the
most directly comparable GAAP measures is not accessible on a forward-looking basis because we believe it is not possible
without unreasonable efforts to provide other than a range of net investment gains and losses and net derivative gains and losses,
which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net
income.

Our definitions of the various non-GAAP and other financial measures discussed in this report may differ from those used

by other companies:

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Operating earnings and related measures:

•

operating earnings; and

operating earnings available to common shareholders.

These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance
for segment reporting, operating earnings is also our GAAP measure of segment performance. Operating earnings and other
financial measures based on operating earnings are also the measures by which senior management’s and many other employees’
performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Operating
earnings and other financial measures based on operating earnings allow analysis of our performance relative to our business
plan and facilitate comparisons to industry results.

Operating earnings is defined as operating revenues less operating expenses, both net of income tax. Operating earnings

available to common shareholders is defined as operating earnings less preferred stock dividends.

Operating revenues and operating expenses

These financial measures focus on our primary businesses principally by excluding the impact of market volatility, which
could distort trends, and revenues and costs related to non-core products and divested businesses and certain entities required
to be consolidated under GAAP. Also, these measures exclude results of discontinued operations and other businesses that
have been or will be sold or exited by MetLife and are referred to as divested businesses. In addition, for the year ended
December 31, 2016, operating revenues and operating expenses exclude the financial impact of converting the Company’s
Japan operations to calendar year-end reporting without retrospective application of this change to prior periods and is referred
to as lag elimination. Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). Operating
expenses also excludes goodwill impairments.

The following additional adjustments are made to revenues, in the line items indicated, in calculating operating revenues:

• Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net
investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB Fees”);

• Net investment income: (i) includes investment hedge adjustments, (ii) includes income from discontinued real estate
operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for
under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and
(v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

• Other revenues are adjusted for settlements of foreign currency earnings hedges.

The following additional adjustments are made to expenses, in the line items indicated, in calculating operating expenses:

•

Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend
obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit
adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic
crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through
adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments
associated with surrenders or terminations of contracts (“Market Value Adjustments”);

Interest credited to policyholder account balances includes adjustments for earned income on derivatives and
amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge
accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-
linked investments;

• Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative gains

(losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;

• Amortization of negative VOBA excludes amounts related to Market Value Adjustments;

•

Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under
GAAP; and

• Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory

requirements, and (iii) acquisition, integration and other costs.

Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized

at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

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The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which
could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes
the impact related to the timing of certain tax credits, as well as certain tax reforms.

Return on equity, allocated equity and related measures:

• MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA, is defined as MetLife, Inc.’s common
stockholders’ equity, excluding the net unrealized investment gains (losses) and defined benefit plans adjustment
components of AOCI, net of income tax.

• Operating ROE is defined as operating earnings available to common shareholders, divided by average GAAP common

stockholders’ equity.

• Operating ROE, excluding AOCI other than FCTA, is defined as operating earnings available to common shareholders

divided by average GAAP common stockholders’ equity, excluding AOCI other than FCTA.

• Allocated equity is the portion of MetLife, Inc.’s common stockholders’ equity that management allocates to each of
its segments and sub-segments based on local capital requirements and economic capital. See “— Economic Capital.”
Allocated equity excludes the impact of AOCI other than FCTA.

The above measures represent a level of equity consistent with the view that, in the ordinary course of business, we do not
plan to sell most investments for the sole purpose of realizing gains or losses. Also refer to the utilization of operating earnings
and other financial measures based on operating earnings mentioned above.

The following additional information is relevant to an understanding of our performance results:

• The impact of changes in our foreign currency exchange rates is calculated using the average foreign currency exchange

rates for the current period and is applied to each of the comparable periods (“Constant Currency Basis”).

• 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. Further, sales statistics for our Latin America, Asia and
EMEA segments are on a Constant Currency Basis.

• Asymmetrical and non-economic accounting refers to: (i) the portion of net derivative gains (losses) on embedded
derivatives attributable to the inclusion of our credit spreads in the liability valuations, (ii) hedging activity that generates
net derivative gains (losses) and creates fluctuations in net income because hedge accounting cannot be achieved and
the item being hedged does not a have an offsetting gain or loss recognized in earnings, (iii) inflation-indexed benefit
adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic
crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through
adjustments, and (iv) impact of changes in foreign currency exchange rates on the re-measurement of foreign
denominated unhedged funding agreements and financing transactions to the U.S. dollar and the re-measurement of
certain liabilities from non-functional currencies to functional currencies.

• The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for
reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the
sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other
net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from debt
to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock
dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be viewed as a
substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP. The free cash
flow ratio is typically expressed as a percentage of annual operating earnings available to common shareholders. A
reconciliation of net cash provided by operating activities of MetLife, Inc. to free cash flow of all holding companies
for the years ended December 31, 2016, 2015 and 2014 is provided below.

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Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc.
to Free Cash Flow of All Holding Companies

Years Ended December 31,

2016

2015

(In millions)

2014

MetLife, Inc. (parent company only) net cash provided by operating activities

3,747

1,606

2,615

Adjustments from net cash provided by operating activities to free cash flow:

Add: Incremental debt to be at or below target leverage ratios

Add: Capital contributions to subsidiaries

Add: Returns of capital from subsidiaries

Add: Repayments on and (issuances of) loans to subsidiaries, net

Add: Investment portfolio and derivatives changes and other, net

MetLife, Inc. (parent company only) free cash flow

Other MetLife, Inc. holding companies:

Add: Dividends and returns of capital from subsidiaries

Add: Capital contributions from MetLife, Inc.

Add: Capital contributions to subsidiaries

Add: Repayments on and (issuances of) loans to subsidiaries, net

Add: Other expenses

Add: Investment portfolio and derivative changes and other, net

Total other MetLife, Inc. holding companies free cash flow

Free cash flow of all holding companies (1)

Ratio of net cash provided by operating activities to consolidated net income
(loss) available to MetLife, Inc.'s common shareholders:

MetLife, Inc. (parent company only) net cash provided by operating activities

Consolidated net income (loss) available to MetLife, Inc.’s common
shareholders (1)

Ratio of net cash provided by operating activities (parent company only) to
consolidated net income (loss) available to MetLife, Inc.'s common
shareholders (1) (2)

Ratio of free cash flow to operating earnings available to common
shareholders:

Free cash flow of all holding companies (3)

Consolidated operating earnings available to common shareholders (3)

Ratio of free cash flow of all holding companies to consolidated operating
earnings available to common shareholders (3)

__________________

—

(1,733)

—

(672)

1,422

1,485

—

(53)

(307)

(671)

548

1,002

2,424

3,747

697

538%

2,424

5,089

1,750

(667)

461

365

3,520

1,354

150

(27)

(510)

(729)

223

461

445

(1,011)

—

462

151

2,662

1,339

—

(48)

(458)

(637)

228

3,981

2,890

1,606

5,152

31%

3,981

5,484

2,615

6,187

42%

2,890

6,560

48%

73%

44%

(1) Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for 2016 includes Separation-related
costs of $73 million, net of income tax. Excluding this amount from the denominator of the ratio, this ratio, as adjusted,
would be 487%. Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for 2015 includes
a non-cash charge of $792 million, net of income tax, related to an uncertain tax position. Excluding this charge from
the denominator of the ratio, this ratio, as adjusted, would be 27%. See “— Liquidity and Capital Resources — MetLife,
Inc. — Liquid Assets — MetLife, Inc. and Other MetLife Holding Companies Sources and Uses of Liquid Assets and
Sources and Uses of Liquid Assets included in Free Cash Flow.”

(2) Including the free cash flow of other MetLife, Inc. holding companies of $1.0 billion, $461 million and $228 million
for the years ended December 31, 2016, 2015 and 2014, respectively, in the numerator of the ratio, this ratio, as adjusted,
would be 681%, 40% and 46%, respectively. Including the free cash flow of other MetLife, Inc. holding companies in
the numerator of the ratio and excluding the Separation-related costs and uncertain tax position non-cash charge from
the denominator of the ratio, this ratio, as adjusted, would be 617% and 35% for the years ended December 31, 2016
and 2015, respectively.

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(3) In 2016, we incurred $2.3 billion of Separation-related items which reduced our holding companies’ liquid assets, as
well as our free cash flow. Excluding these Separation-related items, adjusted free cash flow would be $4.7 billion for
the year ended December 31, 2016. Consolidated operating earnings available to common shareholders for 2016 was
negatively impacted by notable items, primarily related to the actuarial assumption review and other insurance
adjustments, of $1.0 billion, net of income tax, and Separation-related costs of $15 million, net of income tax. Excluding
the Separation-related items, which reduced free cash flow, from the numerator of the ratio and excluding such notable
items and Separation-related costs negatively impacting consolidated operating earnings available to common
shareholders from the denominator of the ratio, the adjusted free cash flow ratio for 2016 would be 77%. Consolidated
operating earnings available to common shareholders for 2015 includes a non-cash charge of $792 million, net of
income tax, related to an uncertain tax position. Excluding this charge from the denominator of the ratio, the adjusted
free cash flow ratio for 2015 would be 63%. See “— Liquidity and Capital Resources — MetLife, Inc. — Liquid Assets
— MetLife, Inc. and Other MetLife Holding Companies Sources and Uses of Liquid Assets and Sources and Uses of
Liquid Assets included in Free Cash Flow — Sources and Uses of Liquid Assets from Separation-related Transactions”
for information about the 2016 Separation-related items.

Subsequent Events

See Note 23 of the Notes to the Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Risk Management

We have developed an integrated process for managing risk, which we conduct through multiple Board and senior
management committees (financial and non-financial) within the GRM, ALM Unit, Treasury Department and Investments
Department. The risk committee structure is designed to provide a consolidated enterprise-wide assessment and management
of risk. The ERC is responsible for reviewing all material risks to the enterprise and deciding on actions, if necessary, in the
event risks exceed desired tolerances, taking into consideration industry best practices and the current environment to resolve
or mitigate those risks. Additional committees at the MetLife, Inc. and subsidiary insurance company level manage capital and
risk positions, approve ALM strategies and establish corporate business standards.

Global Risk Management

Independent from the lines of business, the centralized GRM, led by the CRO, collaborates and coordinates across all
committees to ensure that all material risks are properly identified, measured, aggregated, managed and reported across the
Company. The CRO reports to the CEO and is primarily responsible for maintaining and communicating the Company’s
enterprise risk policies and for monitoring and analyzing all material risks.

GRM considers and monitors a full range of risks against the Company’s solvency, liquidity, earnings, business operations

and reputation. GRM’s primary responsibilities consist of:

•

implementing a corporate risk framework, which outlines our enterprise approach for managing risk;

developing policies and procedures for managing, measuring, monitoring and controlling those risks identified in the
corporate risk framework;

coordinating Own Risk and Solvency Assessments for the Board, senior management and regulator use;

establishing appropriate corporate risk tolerance levels;

recommending risk appetite statements and investment general authorizations to the Board;

• managing capital on an economic basis;

•

recommending capital allocations on an economic capital basis; and

reporting to (i) the Finance and Risk Committee of MetLife, Inc.’s Board of Directors; (ii) the Investment Committee
of MetLife, Inc.’s Board of Directors (iii) the Compensation Committee of MetLife, Inc.’s Board of Directors; and (iv)
the financial and non-financial senior management committees on various aspects of risk.

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Asset/Liability Management

We actively manage our 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 ALM Unit, GRM, 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 by product type. Generally, our ALM Steering Committee oversees the activities of the
underlying ALM Committees. The ALM Steering Committee reports to the ERC.

We establish target asset portfolios for each major insurance product or product group, which represent the investment
strategies used to profitably fund our liabilities within acceptable levels of risk. The ALM Working Groups monitor these
strategies through regular review of portfolio metrics, such as effective duration, yield curve sensitivity, convexity, liquidity,
asset sector concentration and credit quality.

Market Risk Exposures

We regularly analyze our exposure to interest rate, foreign currency exchange rate and equity market price risk. As a result
of that analysis, we have determined that the estimated fair values of certain assets and liabilities are materially exposed to
changes in interest rates, foreign currency exchange rates and equity markets. We have exposure to market risk through our
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 markets.

Interest Rates

Our exposure to interest rate changes results most significantly from our holdings of fixed maturity securities, as well as
our interest rate sensitive liabilities. The fixed maturity securities include U.S. and foreign government bonds, securities issued
by government agencies, corporate bonds, mortgage-backed securities and ABS, 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 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. See “Risk Factors — Economic Environment and Capital Markets-Related Risks — We Are
Exposed to Significant Global Financial and Capital Markets Risks Which May Adversely Affect Our Results of Operations,
Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from Period to Period.”

Foreign Currency Exchange Rates

Our exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results from our holdings in non-
U.S. dollar denominated fixed maturity and equity securities, mortgage loans, and certain liabilities, as well as through our
investments in foreign subsidiaries. The principal currencies that create foreign currency exchange rate risk in our investment
portfolios and liabilities are the Euro, the Japanese yen and the British pound. Selectively, we use U.S. dollar assets to support
certain long-duration foreign currency liabilities. Through our investments in foreign subsidiaries and joint ventures, we are
primarily exposed to the Japanese yen, the Euro, the Polish zloty, the British pound, the Mexican peso, the Chilean peso and
the Korean won. 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. We have matched much of our foreign currency liabilities in our foreign subsidiaries with their respective foreign currency
assets, thereby reducing our risk to foreign currency exchange rate fluctuation. See “Risk Factors — Risks Related to Our
Business — Fluctuations in Foreign Currency Exchange Rates Could Negatively Affect Our Profitability.”

Equity Market

Along with investments in equity securities, we have exposure to equity market risk through certain liabilities that involve
long-term guarantees on equity performance such as embedded derivatives on variable annuities with guaranteed minimum
benefits and certain policyholder account balances. Equity exposures associated with other limited partnership interests are
excluded from this discussion as they are not considered financial instruments under GAAP.

Management of Market Risk Exposures

We use a variety of strategies to manage interest rate, foreign currency exchange rate and equity market risk, including the

use of derivatives.

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Interest Rate Risk Management

To manage interest rate risk, we analyze 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 derivatives. These
projections involve evaluating the potential gain or loss on most of our in-force business under various increasing and decreasing
interest rate environments. The NYDFS regulations require that we perform some of these analyses annually as part of our
review of the sufficiency of our regulatory reserves. For several of our legal entities, we maintain 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 and any non-invested assets allocated to the segment are maintained,
with any excess allocated to Corporate & Other. 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. We measure relative sensitivities
of the value of our assets and liabilities to changes in key assumptions utilizing internal models. These models reflect specific
product characteristics 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 loan prepayments and defaults.

We employ product design, pricing and ALM strategies to reduce the potential effects of interest rate movements. Product
design and pricing strategies include the use of surrender charges or restrictions on withdrawals in some products and the
ability to reset crediting rates for certain products. ALM strategies include the use of derivatives and duration mismatch limits.
We also use reinsurance to mitigate interest rate risk.

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 we intend 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, we may support such liabilities with equity investments, derivatives or interest
rate curve mismatch strategies.

Foreign Currency Exchange Rate Risk Management

MetLife, Inc. has a well-established Enterprise FX (Foreign Exchange) Risk Policy to ensure MetLife manages foreign
currency exchange rate exposures within the Company’s risk tolerance. In general, investments backing specific liabilities
are currency matched. This is achieved through direct investments in matching currency or through the use of FX derivatives.
Management of each of the Company’s segments, with oversight from the Company’s FX Risk Committee, is responsible for
establishing limits and managing any foreign currency exchange rate exposure.

We use foreign currency swaps, forwards and options to mitigate the liability exposure, risk of loss and financial statement
volatility associated with our investments in foreign subsidiaries, foreign currency denominated fixed income investments
and the sale of certain insurance products.

Equity Market Risk Management

We manage equity market risk on an integrated basis with other risks through our ALM strategies, including the dynamic
hedging of certain variable annuity guarantee benefits, as well as reinsurance, in order to limit losses, minimize exposure to
large risks, and provide additional capacity for future growth. We also manage equity market risk exposure in our investment
portfolio through the use of derivatives. These derivatives include exchange-traded equity futures, equity index options
contracts, total rate of return swaps and equity variance swaps. This risk is managed by our ALM Unit in partnership with the
Investments Department.

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Hedging Activities

We use derivative contracts primarily to hedge a wide range of risks including interest rate risk, foreign currency exchange
rate risk, and equity market risk. Derivative hedges are designed to reduce risk on an economic basis while considering their
impact on financial results under different accounting regimes, including U.S. GAAP and local statutory accounting. Our
derivative hedge programs vary depending on the type of risk being 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. Our use of derivatives by major
hedge programs is as follows:

• Risks Related to Guarantee Benefits — We use a wide range of derivative contracts to mitigate the risk associated with
variable annuity living guarantee benefits. These derivatives include equity and interest rate futures, interest rate swaps,
currency futures/forwards, equity indexed options, total rate of return swaps, interest rate option contracts and equity
variance swaps.

• Minimum Interest Rate Guarantees — For certain liability contracts, we provide the contractholder a guaranteed
minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. We purchase
interest rate floors to reduce risk associated with these liability guarantees.

• Reinvestment Risk in Long-Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to

certain long-duration liability contracts. Hedges include interest rate swaps and swaptions.

•

Foreign Currency Exchange Rate Risk — We use currency swaps, forwards and options to hedge foreign currency
exchange rate risk. These hedges are generally used to swap foreign currency denominated bonds, investments in foreign
subsidiaries or equity market exposures to U.S. dollars. Our foreign subsidiaries also use these hedges to swap non-
local currency assets to local currency, to match liabilities.

• General ALM Hedging Strategies — In the ordinary course of managing our asset/liability risks, we use 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

We measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, foreign
currency exchange rates and equity market prices 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, foreign currency exchange
rates and equity market prices. We believe 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, we used market rates at December 31, 2016. The
sensitivity analysis separately calculates each of our market risk exposures (interest rate, foreign currency exchange rate and
equity market) relating to our trading and non-trading assets and liabilities. We modeled the impact of changes in market rates
and prices on the estimated fair values of our market sensitive assets and liabilities as follows:

•

the net present values of our interest rate sensitive exposures resulting from a 10% change (increase or decrease) in
interest rates;

the U.S. dollar equivalent estimated fair values of our foreign currency exposures due to a 10% change (increase in the
value of the U.S. dollar compared to all foreign currencies or decrease in the value of the U.S. dollar compared to all
foreign currencies) in foreign currency exchange rates; and

•

the estimated fair value of our equity positions due to a 10% change (increase or decrease) in equity market prices.

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The sensitivity analysis is an estimate and should not be viewed as predictive of our future financial performance. We cannot
ensure that our actual losses in any particular period will not exceed the amounts indicated in the table below. Limitations related
to this sensitivity analysis include:

•

interest sensitive liabilities do not include $214.4 billion of insurance contracts, which are accounted for on a book
value basis. Management believes that the changes in the economic value of those contracts under changing interest
rates would offset a significant portion of the fair value changes of interest sensitive assets.

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 mortgage loans;

foreign currency risk is not isolated for certain embedded derivatives within host asset and liability contracts, as the
risk on these instruments is reflected as equity;

for the derivatives that qualify as hedges, the impact on reported earnings may be materially different from the change
in market values;

the analysis excludes liabilities pursuant to insurance contracts and real estate holdings; and

the model assumes that the composition of assets and liabilities remains unchanged throughout the period.

Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management. Based
on our analysis of the impact of a 10% change (increase or decrease) in market rates and prices, we have 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 market exposures.

The table below illustrates the potential loss in estimated fair value for each market risk exposure of our market sensitive

assets and liabilities at:

Interest rate risk (2)

Foreign currency exchange rate risk (2)

Equity market risk (2)

__________________

December 31, 2016 (1)

(In millions)

7,540

6,823

502

(1)

In 2016, the Company reinvested its trading securities portfolio into other asset classes and, at December 31, 2016, the
Company no longer held any actively traded securities. The potential losses in estimated fair value presented are for non-
trading securities.

(2)

The risk sensitivities derived used a 10% increase to interest rates, a 10% strengthening of the U.S. dollar against foreign
currencies, and a 10% increase in equity prices.

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The table below provides additional detail regarding the potential loss in estimated fair value of our interest sensitive financial

instruments due to a 10% increase in yield curve by type of asset or liability at:

Assets

Fixed maturity securities

Equity securities

FVO general account securities

Mortgage loans

Policy loans

Short-term investments

Other invested assets

Cash and cash equivalents

Accrued investment income

Premiums, reinsurance and other receivables

Other assets

Embedded derivatives within asset host contracts (2)

Total assets

Liabilities (3)

Policyholder account balances

Payables for collateral under securities loaned and other transactions

Short-term debt

Long-term debt

Collateral financing arrangements

Junior subordinated debt securities

Other liabilities

Embedded derivatives within liability host contracts (2)

Total liabilities

Derivative Instruments

Interest rate and interest rate total return swaps

Interest rate floors

Interest rate caps

Interest rate futures

Interest rate options

Interest rate forwards

Synthetic GICs

Foreign currency swaps

Foreign currency forwards

Currency futures

Currency options

Credit default swaps

Equity futures

Equity index options

Equity variance swaps

Equity total return swaps

Total derivative instruments

Net Change

__________________

Notional
Amount

December 31, 2016

Estimated
Fair
Value (1)

(In millions)

Assuming a
10% Increase
in the Yield
Curve

350,889

(6,251)

3,194

611

75,129

13,015

7,810

662

17,877

3,988

5,161

269

380

122,908

33,264

242

18,016

3,775

3,982

2,028

4,105

4,507

178

135

—

763

(395)

—

958

(863)

—

281

154

(135)

(533)

(158)

(1)

(2)

(687)

(126)

(3)

—

(244)

(5)

(23)

(7,342)

657

—

382

—

105

621

1,806

(1,582)

(20)

(60)

(126)

(137)

—

(91)

(4)

—

(12)

—

(2)

(18)

—

(2,004)

(7,540)

94,365

14,201

90,400

6,081

20,854

4,645

5,566

42,306

18,059

915

12,493

14,683

12,494

54,028

23,157

3,901

(1)

Separate account assets and liabilities and contractholder-directed unit-linked investments and associated policyholder
account balances, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the
contractholder. Mortgage loans, FVO general account securities and long-term debt exclude $136 million, $8 million and
$35 million, respectively, related to CSEs. See Note 8 of the Notes to the Consolidated Financial Statements for information
regarding CSEs.

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Table of Contents

(2)

(3)

Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.

Excludes $214.4 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy
benefits and other policy-related balances. These liabilities would economically offset a significant portion of the net
change in fair value of our financial instruments resulting from a 10% increase in the yield curve.

Sensitivity to rising interest rates increased by $1.7 billion, or 29%, to $7.5 billion at December 31, 2016 from $5.8 billion
at December 31, 2015. The change was primarily due to an increase of $1.1 billion from the use of derivatives, used by the
Company as hedges against low interest rates. Sensitivity also increased as a result of increased rates, since the sensitivity is
calculated based on a 10% increase in the yield curve, and lengthening of asset durations.

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The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10%

increase in the U.S. dollar compared to all foreign currencies at:

Assets

Fixed maturity securities

Equity securities

FVO general account securities

Mortgage loans

Policy loans

Short-term investments

Other invested assets

Cash and cash equivalents

Accrued investment income

Premiums, reinsurance and other receivables

Other assets

Embedded derivatives within asset host contracts (2)

Total assets

Liabilities (3)

Policyholder account balances

Payables for collateral under securities loaned and other transactions

Long-term debt

Other liabilities

Embedded derivatives within liability host contracts (2)

Total liabilities

Derivative Instruments

Interest rate and interest rate total return swaps

Interest rate floors

Interest rate caps

Interest rate futures

Interest rate options

Interest rate forwards

Synthetic GICs

Foreign currency swaps

Foreign currency forwards

Currency futures

Currency options

Credit default swaps

Equity futures

Equity index options

Equity variance swaps

Equity total return swaps

Total derivative instruments

Net Change

__________________

Notional
Amount

December 31, 2016

Estimated
Fair
Value (1)

(In millions)

Assuming a
10% Increase
in the Foreign
Exchange Rate

350,889

(8,830)

3,194

611

75,129

13,015

7,810

662

17,877

3,988

5,161

269

380

122,908

33,264

18,016

2,028

4,105

4,507

178

135

—

763

(395)

—

958

(863)

—

281

154

(135)

(533)

(158)

(79)

(6)

(745)

(147)

(293)

(157)

(393)

(75)

(110)

(6)

(14)

(10,855)

3,278

101

110

140

3,633

(67)

—

(46)

—

686

(558)

(90)

472

(5)

—

399

(6,823)

94,365

14,201

90,400

6,081

20,854

4,645

5,566

42,306

18,059

915

12,493

14,683

12,494

54,028

23,157

3,901

(1) Does not necessarily represent those financial instruments solely subject to foreign currency exchange rate risk. Separate
account assets and liabilities and contractholder-directed unit-linked investments and associated policyholder account
balances, which are foreign currency exchange rate sensitive, are not included herein as any foreign currency exchange
rate risk is borne by the contractholder. Mortgage loans, FVO general securities and long-term debt exclude $136 million,
$8 million and $35 million, respectively, related to CSEs. See Note 8 of the Notes to Consolidated Financial Statements
for information regarding CSEs.

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(2)

(3)

Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.

Sensitivity to foreign currency exchange rates increased by $1.2 billion, or 20%, to $6.8 billion at December 31, 2016 from
$5.7 billion at December 31, 2015. This change was primarily due to an increase in the fair value of foreign currency assets
which may be backing foreign currency liabilities that are not included in this analysis.

The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10%

increase in equity prices by type of asset or liability at:

Assets

Equity securities

Embedded derivatives within asset host contracts (2)

Total assets

Liabilities

Policyholder account balances

Embedded derivatives within liability host contracts (2)

Total liabilities

Derivative Instruments

Interest rate and interest rate total return swaps

Interest rate floors

Interest rate caps

Interest rate futures

Interest rate options

Interest rate forwards

Synthetic GICs

Foreign currency swaps

Foreign currency forwards

Currency futures

Currency options

Credit default swaps

Equity futures

Equity index options

Equity variance swaps

Equity total return swaps

Total derivative instruments

Net Change

__________________

Notional
Amount

December 31, 2016

Estimated
Fair
Value (1)

(In millions)

Assuming a
10% Increase
in Equity
Prices

94,365

14,201

90,400

6,081

20,854

4,645

5,566

42,306

18,059

915

12,493

14,683

12,494

54,028

23,157

3,901

3,194

380

122,908

4,105

4,507

178

135

—

763

(395)

—

958

(863)

—

281

154

(135)

(533)

(158)

319

(21)

298

—

1,001

—

(1,205)

(183)

(428)

(1,801)

(502)

(1) Does not necessarily represent those financial instruments solely subject to equity price risk. Additionally, separate account
assets and liabilities and contractholder-directed unit-linked investments and associated policyholder account balances,
which are equity market sensitive, are not included herein as any equity market risk is borne by the contractholder.

(2)

Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.

Sensitivity to rising equity prices increased by $483 million to $502 million at December 31, 2016 from $19 million at
December 31, 2015. This increase was primarily due to the expansion of our macro hedge programs, which we use as hedges
against equity declines.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements, Notes and Schedules

Report of Independent Registered Public Accounting Firm

Financial Statements at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015

and 2014:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies

Note 2 — Segment Information

Note 3 — Dispositions

Note 4 — Insurance

Note 5 — Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
Note 6 — Reinsurance

Note 7 — Closed Block

Note 8 — Investments

Note 9 — Derivatives

Note 10 — Fair Value

Note 11 — Goodwill

Note 12 — Long-term and Short-term Debt

Note 13 — Collateral Financing Arrangements

Note 14 — Junior Subordinated Debt Securities

Note 15 — Common Equity Units

Note 16 — Equity

Note 17 — Other Expenses

Note 18 — Employee Benefit Plans

Note 19 — Income Tax

Note 20 — Earnings Per Common Share

Note 21 — Contingencies, Commitments and Guarantees

Note 22 — Quarterly Results of Operations (Unaudited)

Note 23 — Subsequent Events

Financial Statement Schedules at December 31, 2016 and 2015 and for the Years Ended December 31,

2016, 2015 and 2014:

Schedule I — Consolidated Summary of Investments — Other Than Investments in Related Parties

Schedule II — Condensed Financial Information (Parent Company Only)
Schedule III — Consolidated Supplementary Insurance Information

Schedule IV — Consolidated Reinsurance

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200

201

202

203

204

205

207

224

232

233
250
253

257

259

278

293

314

316

320

322

323

324

342

343

354

360

361

371

372

373

374

383

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
MetLife, Inc.
New York, New York

We have audited the accompanying consolidated balance sheets of MetLife, Inc. and subsidiaries (the “Company”) as of
December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), equity, and
cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement
schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules. These consolidated financial statements
and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the consolidated financial statements and financial statement schedules 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, 2016 and 2015, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

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, 2016, based on the criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission,
and our report dated February 28, 2017, expressed an unqualified opinion on the Company’s internal control over financial
reporting.

/s/ DELOITTE & TOUCHE LLP
New York, New York
February 28, 2017

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Table of Contents

Assets

Investments:

MetLife, Inc.

Consolidated Balance Sheets
December 31, 2016 and 2015

(In millions, except share and per share data)

2016

2015

Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $330,354 and $332,964, respectively; includes $3,422 and

$4,277, respectively, relating to variable interest entities)

350,889

Equity securities available-for-sale, at estimated fair value (cost: $2,744 and $2,997, respectively)

Fair value option and trading securities, at estimated fair value (includes $0 and $404, respectively, of actively traded securities; and $8

and $13, respectively, relating to variable interest entities)

Mortgage loans (net of valuation allowances of $344 and $318, respectively; includes $136 and $172, respectively, at estimated fair value,

relating to variable interest entities; includes $566 and $314, respectively, under the fair value option)

Policy loans (includes $0 and $4, respectively, relating to variable interest entities)

Real estate and real estate joint ventures (includes $59 and $47, respectively, of real estate held-for-sale)

Other limited partnership interests (includes $14 and $27, respectively, relating to variable interest entities)

Short-term investments, principally at estimated fair value (includes $0 and $26, respectively, relating to variable interest entities)

Other invested assets, principally at estimated fair value (includes $31 and $43, respectively, relating to variable interest entities)

Total investments

Cash and cash equivalents, principally at estimated fair value (includes $1 and $85, respectively, relating to variable interest entities)

Accrued investment income (includes $1 and $23, respectively, relating to variable interest entities)

Premiums, reinsurance and other receivables (includes $2 and $21, respectively, relating to variable interest entities)

Deferred policy acquisition costs and value of business acquired (includes $0 and $240, respectively, relating to variable interest entities)

Current income tax recoverable

Goodwill

Other assets (includes $3 and $148, respectively, relating to variable interest entities)

Separate account assets (includes $0 and $1,022, respectively, relating to variable interest entities)

Total assets

Liabilities and Equity

Liabilities

Future policy benefits (includes $0 and $716, respectively, relating to variable interest entities)

Policyholder account balances (includes $0 and $21, respectively, relating to variable interest entities)

Other policy-related balances (includes $0 and $238, respectively, relating to variable interest entities)

Policyholder dividends payable

Policyholder dividend obligation

Payables for collateral under securities loaned and other transactions

Short-term debt

Long-term debt (includes $35 and $63, respectively, at estimated fair value, relating to variable interest entities)

Collateral financing arrangements

Junior subordinated debt securities

Deferred income tax liability

Other liabilities (includes $0 and $81, respectively, relating to variable interest entities)

Separate account liabilities (includes $0 and $1,022, respectively, relating to variable interest entities)

Total liabilities

Contingencies, Commitments and Guarantees (Note 21)

Redeemable noncontrolling interests in partially-owned consolidated subsidiaries

Equity

MetLife, Inc.’s stockholders’ equity:

Preferred stock, par value $0.01 per share; $2,100 aggregate liquidation preference

Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,164,029,985 and 1,159,590,766 shares issued, respectively;

1,095,519,005 and 1,098,028,525 shares outstanding, respectively

Additional paid-in capital

Retained earnings

Treasury stock, at cost; 68,510,980 and 61,562,241 shares, respectively

Accumulated other comprehensive income (loss)

Total MetLife, Inc.’s stockholders’ equity

Noncontrolling interests

Total equity

Total liabilities and equity

See accompanying notes to the consolidated financial statements.

201

3,194

13,923

74,545

11,028

9,041

6,778

7,810

23,185

500,393

17,877

3,988

26,081

24,798

9,220

7,767

308,620

898,764

199,971

210,235

14,386

708

1,931

33,264

242

16,502

4,071

3,169

9,367

28,818

308,620

831,284

—

30,944

34,480

(3,474)

5,347

67,309

171

67,480

898,764

351,402

3,321

15,024

67,102

11,258

8,433

7,096

9,299

22,524

495,459

12,752

3,988

22,702

24,130

161

9,477

7,666

301,598

877,933

191,879

202,722

14,255

720

1,783

36,871

100

18,023

4,139

3,194

10,592

23,561

301,598

809,437

—

30,749

35,519

(3,102)

4,771

67,949

470

68,419

877,933

Table of Contents

MetLife, Inc.

Consolidated Statements of Operations
For the Years Ended December 31, 2016, 2015 and 2014

(In millions, except per share data)

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

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)

Total revenues

Expenses

Policyholder benefits and claims

Interest credited to policyholder account balances

Policyholder dividends

Goodwill impairment

Other expenses

Total expenses

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

Preferred stock repurchase premium

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

Income (loss) from continuing operations, net of income tax, available to MetLife, Inc.’s

common shareholders per common share:

Basic

Diluted

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

Basic

Diluted

Cash dividends declared per common share

2016

2015

2014

39,153

38,545

39,067

9,206

19,947

1,759

(115)

(14)

300

171

(6,760)

63,476

9,507

19,281

1,983

(84)

(6)

687

597

69,951

9,946

21,153

2,030

(43)

(17)

(137)

(197)

1,317

73,316

40,804

38,714

39,102

6,282

1,256

260

15,069

63,671

(195)

(999)

804

—

804

800

103

—

5,610

1,388

—

16,769

62,481

7,470

2,148

5,322

—

5,322

5,310

116

6,943

1,376

—

17,091

64,512

8,804

2,465

6,339

(3)

6,336

6,309

122

—

697

5,152

6,187

0.63

1.575

4.61

4.57

4.61

4.57

1.475

5.48

5.42

5.48

5.42

1.325

See accompanying notes to the consolidated financial statements.

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MetLife, Inc.

Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Net income (loss) (1)

Other comprehensive income (loss):

Unrealized investment gains (losses), net of related offsets

Unrealized gains (losses) on derivatives

Foreign currency translation adjustments

Defined benefit plans adjustment

Other comprehensive income (loss), before income tax

Income tax (expense) benefit related to items of other comprehensive income (loss)

Other comprehensive income (loss), net of income tax

Comprehensive income (loss)

2016

2015

2014

804

5,322

6,336

760

573

(363)

131

1,101

(437)

664

1,468

(7,443)

589

(1,624)

354

(8,124)

2,266

(5,858)

(536)

10,103

1,386

(1,444)

(970)

9,075

(3,528)

5,547

11,883

Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income

tax

Comprehensive income (loss) attributable to MetLife, Inc.

1,376

(568) $

11,854

__________________

(1) Net income (loss) attributable to noncontrolling interests did not exclude any gains (losses) of redeemable noncontrolling
interests in partially-owned consolidated subsidiaries for the year ended December 31, 2016. Net income (loss) attributable
to noncontrolling interests excludes losses of redeemable noncontrolling interests in partially-owned consolidated
subsidiaries of less than $1 million for the year ended December 31, 2015. Net income (loss) attributable to noncontrolling
interests excludes gains of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than
$1 million for the year ended December 31, 2014.

See accompanying notes to the consolidated financial statements.

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MetLife, Inc.

Consolidated Statements of Equity
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Preferred
Stock

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Treasury
Stock
at Cost

Accumulated
Other
Comprehensive
Income (Loss)

Total
MetLife, Inc.’s
Stockholders’
Equity

Noncontrolling
Interests (1)

Total
Equity

Balance at December 31, 2013

29,277

27,332

(172)

5,104

61,553

543

Treasury stock acquired in connection with share repurchases

(1,000)

Common stock issuance

Stock-based compensation

Dividends on preferred stock

Dividends on common stock

Change in equity of noncontrolling interests

Net income (loss)

Other comprehensive income (loss), net of income tax

Balance at December 31, 2014

Repurchase of preferred stock

Preferred stock repurchase premium

Preferred stock issuance

Treasury stock acquired in connection with share repurchases

Stock-based compensation

Dividends on preferred stock

Dividends on common stock

Change in equity of noncontrolling interests

Net income (loss)

Other comprehensive income (loss), net of income tax

Balance at December 31, 2015

Treasury stock acquired in connection with share repurchases

Stock-based compensation

Dividends on preferred stock

Dividends on common stock

Change in equity of noncontrolling interests

Net income (loss)

Other comprehensive income (loss), net of income tax

Balance at December 31, 2016

__________________

(1)

999

267

30,543

(1,459)

1,483

182

—

30,749

35,519

195

(103)

(1,736)

800

(122)

(1,499)

6,309

32,020

(1,172)

5,545

10,649

(42)

(116)

(1,653)

5,310

(1,930)

(3,102)

(372)

(5,878)

4,771

576

(1,000)

1,000

267

(122)

(1,499)

—

6,309

5,545

72,053

(1,460)

(42)

1,483

(1,930)

182

(116)

(1,653)

—

5,310

(5,878)

67,949

(372)

195

(103)

(1,736)

—

800

576

(65)

507

(69)

470

(391)

62,096

(1,000)

1,000

267

(122)

(1,499)

(65)

6,336

5,547

72,560

(1,460)

(42)

1,483

(1,930)

182

(116)

(1,653)

(69)

5,322

(5,858)

68,419

(372)

195

(103)

(1,736)

(391)

804

664

— $

30,944

34,480

(3,474)

5,347

67,309

171

67,480

(1) Net income (loss) attributable to noncontrolling interests did not exclude any gains (losses) of redeemable noncontrolling interests in partially-owned consolidated
subsidiaries for the year ended December 31, 2016. Net income (loss) attributable to noncontrolling interests excludes losses of redeemable noncontrolling interests
in partially-owned consolidated subsidiaries of less than $1 million for the year ended December 31, 2015. Net income (loss) attributable to noncontrolling interests
excludes gains of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than $1 million for the year ended December 31, 2014.

See accompanying notes to the consolidated financial statements.

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MetLife, Inc.

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization expenses

Amortization of premiums and accretion of discounts associated with investments, net

(Gains) losses on investments and from sales of businesses, net

(Gains) losses on derivatives, net

(Income) loss from equity method investments, net of dividends or distributions

Interest credited to policyholder account balances

Universal life and investment-type product policy fees

Goodwill impairment

Change in fair value option and trading securities

Change in accrued investment income

Change in premiums, reinsurance and other receivables

Change in deferred policy acquisition costs and value of business acquired, net

Change in income tax

Change in other assets

Change in insurance-related liabilities and policy-related balances

Change in other liabilities

Other, net

Net cash provided by (used in) 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

Cash received under repurchase agreements

Cash paid under repurchase agreements

Cash received under reverse repurchase agreements

Cash paid under reverse repurchase agreements

Sales of businesses, net of cash and cash equivalents disposed of $135, $0 and $323, respectively

Purchases of investments in operating joint ventures

Net change in policy loans

Net change in short-term investments

Net change in other invested assets

Other, net

2016

2015

2014

804

5,322

6,336

652

(1,110)

(171)

8,963

475

6,282

(9,206)

260

111

(31)

(2,125)

(949)

(1,557)

3,248

6,279

2,766

136

14,827

150,658

1,241

12,977

826

1,542

(146,397)

(1,006)

(21,017)

(1,515)

(1,313)

4,259

(6,963)

—

156

(39)

195

1,270

(267)

(457)

693

(1,141)

(597)

1,451

481

5,610

(9,507)

—

784

138

(837)

491

825

2,752

6,366

1,134

164

14,129

146,732

1,117

12,647

3,256

1,827

(148,799)

(996)

(20,449)

(1,298)

(1,429)

2,690

(4,211)

199

(199)

199

(199)

—

287

(777)

(936)

(59)

713

(611)

202

(21)

327

6,943

(9,946)

—

(739)

207

(650)

1,134

2,075

2,573

5,847

1,885

101

16,376

118,526

490

14,128

1,012

823

(130,197)

(530)

(17,464)

(2,282)

(1,764)

1,760

(4,003)

—

436

(277)

(27)

5,167

(512)

(341)

Net cash provided by (used in) investing activities

(5,850)

(10,398)

(15,055)

See accompanying notes to the consolidated financial statements.

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MetLife, Inc.

Consolidated Statements of Cash Flows — (continued)
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Cash flows from financing activities

Policyholder account balances:

Deposits

Withdrawals

Net change in payables for collateral under securities loaned and other transactions

Net change in short-term debt

Long-term debt issued

Long-term debt repaid

Collateral financing arrangements repaid

Financing element on certain derivative instruments, net

Common stock issued, net of issuance costs

Treasury stock acquired in connection with share repurchases

Preferred stock issued, net of issuance costs

Repurchase of preferred stock

Preferred stock repurchase premium

Dividends on preferred stock

Dividends on common stock

Other, net

Net cash provided by (used in) financing activities

Effect of change in foreign currency exchange rates on cash and cash equivalents balances

Change in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Supplemental disclosures of cash flow information:

Net cash paid (received) for:

Interest

Income tax

Non-cash transactions

Fixed maturity securities received in connection with pension risk transfer transactions

Reduction of fixed maturity securities in connection with a reinsurance transaction

Reduction of other invested assets in connection with a reinsurance transaction

Deconsolidation of operating joint venture (Note 8):

Reduction of fixed maturity securities

Reduction of noncontrolling interests

Deconsolidation of real estate investment vehicles:

Reduction of redeemable noncontrolling interests

Reduction of long-term debt

Reduction of real estate and real estate joint ventures

2016

2015

2014

88,188

92,904

(83,263)

(3,636)

—

(1,279)

(68)

(1,367)

—

(372)

—

(103)

(1,736)

(3,550)

(302)

5,125

12,752

(94,621)

1,544

—

3,893

(1,438)

(57)

181

—

(1,930)

1,483

(1,460)

(42)

(116)

(1,653)

(1,295)

(492)

1,944

10,808

17,877

12,752

1,202

672

985

224

676

917

373

— $

1,178

1,127

903

— $

571

688

89,520

(88,037)

5,031

(75)

1,000

(2,862)

—

(747)

1,000

(1,000)

—

(122)

(1,499)

2,256

(354)

3,223

7,585

10,808

1,213

748

—

774

413

1,132

See accompanying notes to the consolidated financial statements.

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Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements

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

Business

“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and
affiliates. MetLife is a global provider of life insurance, annuities, employee benefits and asset management. MetLife is organized
into six segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); MetLife Holdings; and Brighthouse
Financial.

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts
reported on the consolidated financial statements. In applying these policies and estimates, management makes subjective and
complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies,
estimates and related judgments are common in the insurance and financial services industries; others are specific to the
Company’s business and operations. Actual results could differ from these estimates.

Consolidation

The accompanying consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well
as partnerships and joint ventures in which the Company has control, and variable interest entities (“VIEs”) for which the
Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.

Prior to January 1, 2016, certain international subsidiaries had a fiscal year cutoff of November 30th. Accordingly, the
Company’s consolidated financial statements reflect the assets and liabilities of such subsidiaries as of November 30, 2015
and the operating results of such subsidiaries for the years ended November 30, 2015 and 2014. Effective January 1, 2016,
the Company converted its Japan operations to calendar year-end reporting. The elimination of a one-month reporting lag of
a subsidiary is considered a change in accounting principle and requires retrospective application. While the Company believes
that eliminating the lag in the reporting of its Japan operations was preferable in order to consistently reflect events, economic
conditions and global trends on the financial statements, the Company determined that it was impracticable to apply the effects
of the lag elimination to financial reporting periods prior to January 1, 2015. The effect of not retroactively applying this
change in accounting, however, was not material to the 2015 or 2016 consolidated financial statements. Therefore, the Company
reported the cumulative effect of the change in accounting principle in net income for the year ended December 31, 2016 and
did not retrospectively apply the effects of this change to prior periods.

Discontinued Operations

The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale
are reported in discontinued operations if certain criteria are met. Effective January 1, 2014, the Company adopted new
guidance regarding reporting of discontinued operations for disposals or classifications as held-for-sale that have not been
previously reported on the consolidated financial statements. A disposal of a component is reported in discontinued operations
if the disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results.
See “— Adoption of New Accounting Pronouncements.”

Separate Accounts

Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts cannot
be used to settle the liabilities that arise from any other business of the Company. Separate account assets are subject to general
account claims only to the extent the value of such assets exceeds the separate account liabilities. The Company reports
separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if:

•

such separate accounts are legally recognized;

assets supporting the contract liabilities are legally insulated from the Company’s general account liabilities;

investments are directed by the contractholder; and

all investment performance, net of contract fees and assessments, is passed through to the contractholder.

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MetLife, Inc.

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

Notes to the Consolidated Financial Statements — (continued)

The Company reports separate account assets at their fair value which is based on the estimated fair values of the underlying
assets comprising the individual separate account portfolios. Investment performance (including investment income, net
investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders
of such separate accounts are offset within the same line on the statements of operations. Separate accounts credited with a
contractual investment return are combined on a line-by-line basis with the Company’s general account assets, liabilities,
revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for
similar financial instruments held within the general account. Unit-linked separate account investments that are directed by
contractholders but do not meet one or more of the other above criteria are included in fair value option (“FVO”) and trading
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. Such fees are included in universal life and investment-
type product policy fees on the statements of operations.

Reclassifications

Certain amounts in the prior years’ consolidated financial statements and related footnotes thereto have been reclassified

to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements.

Summary of Significant Accounting Policies

The following are the Company’s significant accounting policies with references to notes providing additional information

on such policies and critical accounting estimates relating to such policies.

Accounting Policy

Insurance

Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles

Reinsurance

Investments

Derivatives

Fair Value

Goodwill

Employee Benefit Plans

Income Tax

Litigation Contingencies

Insurance

Note

Future Policy Benefit Liabilities and Policyholder Account Balances

The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over
an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid,
reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying
assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment
of liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal, retirement, disability incidence,
disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective
product type 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. For long duration insurance contracts, assumptions such as mortality, morbidity and interest
rates are “locked in” upon the issuance of new business. However, significant adverse changes in experience on such
contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then
current assumptions and do not include a provision for adverse deviation.

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MetLife, Inc.

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

Notes to the Consolidated Financial Statements — (continued)

Premium deficiency reserves may also be established for short-duration contracts to provide for expected future losses.
These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for
which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the
historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated
investment income is considered in the calculation of premium deficiency losses for short-duration contracts.

Liabilities for universal and variable life policies with secondary guarantees (“ULSG”) and paid-up guarantees are
determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and
recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used
in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing deferred policy
acquisition costs (“DAC”), and are thus subject to the same variability and risk as further discussed herein. The assumptions
of investment performance and volatility for variable products are consistent with historical experience of appropriate
underlying equity indices, such as the Standard & Poor’s Global Ratings (“S&P”) 500 Index. The benefits used in calculating
the liabilities are based on the average benefits payable over a range of scenarios.

The Company regularly reviews its estimates of liabilities for future policy benefits and compares them with its actual
experience. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the
period in which the changes occur.

Policyholder account balances relate to contracts or contract features where the Company has no significant insurance

risk.

The Company issues directly and assumes through reinsurance certain variable annuity products with guaranteed
minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less
withdrawals. These guarantees are accounted for as insurance liabilities or as embedded derivatives depending on how and
when the benefit is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid without
requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is
accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable
event, or (ii) annuitization. In certain cases, a guarantee may have elements of both an insurance liability and an embedded
derivative and in such cases the guarantee is split and accounted for under both models.

Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death
benefits (“GMDBs”), the portion of guaranteed minimum income benefits (“GMIBs”) that require annuitization, and the
life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”).

Guarantees accounted for as embedded derivatives in policyholder account balances include the non life-contingent
portion of GMWBs, guaranteed minimum accumulation benefits (“GMABs”) and the portion of GMIBs that do not require
annuitization. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee
fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional
fees represent “excess” fees and are reported in universal life and investment-type product policy fees.

Other Policy-Related Balances

Other policy-related balances include policy and contract claims, unearned revenue liabilities, premiums received in
advance, policyholder dividends due and unpaid, policyholder dividends left on deposit and negative value of business
acquired.

The liability for policy and contract claims generally relates to incurred but not reported (“IBNR”) death, disability,
long-term care and dental claims, as well as claims which have been reported but not yet settled. The liability for these
claims is based on the Company’s estimated ultimate cost of settling all claims. The Company derives estimates for the
development of IBNR claims principally from analyses of historical patterns of claims by business line. The methods used
to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and
differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the
period in which the estimates are changed or payments are made.

The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges
for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product’s
estimated gross profits and margins, similar to DAC as discussed further herein. Such amortization is recorded in universal
life and investment-type product policy fees.

209

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MetLife, Inc.

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

Notes to the Consolidated Financial Statements — (continued)

The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premiums

received in advance and applies the cash received to premiums when due.

See “— Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles” for a discussion of

negative value of business acquired.

Recognition of Insurance Revenues and Deposits

Premiums related to traditional life, annuity contracts with life contingencies, long-duration accident & health, and
credit insurance policies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are
provided to recognize profits over the estimated lives of the insurance policies. When premiums are due over a significantly
shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into earnings
in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments.

Premiums related to short-duration non-medical health and disability, accident & health, and certain credit insurance

contracts are recognized on a pro rata basis over the applicable contract term.

Deposits related to universal life-type and investment-type products are credited to policyholder account balances.
Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded
in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are
charged to earnings include interest credited and benefit claims incurred in excess of related policyholder account balances.

Premiums related to property & casualty contracts are recognized as revenue on a pro rata basis over the applicable
contract term. Unearned premiums, representing the portion of premium written related to the unexpired coverage, are also
included in future policy benefits.

All revenues and expenses are presented net of reinsurance as applicable.

Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles

The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are

related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include:

•

incremental direct costs of contract acquisition, such as commissions;

the portion of an employee’s total compensation and benefits related to time spent selling, underwriting or processing
the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed;

other essential direct costs that would not have been incurred had a policy not been acquired or renewed; and

the costs of direct-response advertising, the primary purpose of which is to elicit sales to customers who could be shown
to have responded specifically to the advertising and that results in probable future benefits.

All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent
training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as
incurred.

Value of business acquired (“VOBA”) is an intangible asset resulting from a business combination that represents the
excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at
the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of
future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating
expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business
may vary from these projections.

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MetLife, Inc.

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

Notes to the Consolidated Financial Statements — (continued)

DAC and VOBA are amortized as follows:

Products:
• Nonparticipating and non-dividend-paying traditional contracts:

In proportion to the following over estimated lives of the contracts:

Actual and expected future gross premiums.

• Term insurance

• Nonparticipating whole life insurance

• Traditional group life insurance

• Non-medical health insurance

• Accident & health insurance

• Participating, dividend-paying traditional contracts

• Fixed and variable universal life contracts

• Fixed and variable deferred annuity contracts

• Credit insurance contracts

• Property & casualty insurance contracts

• Other short-duration contracts

Actual and expected future gross margins.

Actual and expected future gross profits.

Actual and future earned premiums.

See Note 5 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included in

other expenses.

The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are

aggregated on the financial statements for reporting purposes.

The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder
receives a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage
of the customer’s deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than
would have been received based on the normal general account interest rate credited. The Company defers sales inducements
and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The
amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if
circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements (“DSI”) to
determine the recoverability of the asset.

Value of distribution agreements acquired (“VODA”) is reported in other assets and represents the present value of
expected future profits associated with the expected future business derived from the distribution agreements acquired as part
of a business combination. Value of customer relationships acquired (“VOCRA”) is also reported in other assets and represents
the present value of the expected future profits associated with the expected future business acquired through existing customers
of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over
useful lives ranging from 10 to 40 years and such amortization is included in other expenses. Each year, or more frequently
if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the
asset is impaired.

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 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.

Reinsurance

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against
loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance
agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews all contractual features,
including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely
reimbursement of claims.

211

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MetLife, Inc.

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

Notes to the Consolidated Financial Statements — (continued)

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)
premiums, reinsurance and other receivables (future policy benefits) are established.

For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts
paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Unearned premiums
are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are
amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection
provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts
paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized immediately as a loss and are
reported in the appropriate line item within the statement of operations. Any gain on such retroactive agreement is deferred
and is amortized as part of DAC, primarily using the recovery method.

Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables
and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with
the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In
the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance
recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of
allowances for uncollectible reinsurance.

Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are
net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With
respect to GMIBs, a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated
reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance
and other receivables with changes in estimated fair value reported in policyholder benefits and 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. Deposits
received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables.
As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest
on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the
adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other
expenses, as appropriate.

Investments

Net Investment Income and Net Investment Gains (Losses)

Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses
on sales of investments, impairment losses and changes in valuation allowances are reported within net investment gains
(losses), unless otherwise stated herein.

Fixed Maturity and Equity Securities

The majority of the Company’s fixed maturity and equity securities are classified as available-for-sale (“AFS”) and
are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate
component of other comprehensive income (loss) (“OCI”), net of policy-related amounts and deferred income taxes. All
security transactions are recorded on a trade date basis. Investment gains and losses on sales are determined on a specific
identification basis.

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

Notes to the Consolidated Financial Statements — (continued)

Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective
yield method giving effect to amortization of premiums and accretion of discounts, and is based on the estimated economic
life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount of
prepayments of the underlying loans. See Note 8 “— Investments — Fixed Maturity and Equity Securities AFS —
Methodology for Amortization of Premium and Accretion of Discount on Structured Securities.” The amortization of
premium and accretion of discount of fixed maturity securities also takes into consideration call and maturity dates. Dividends
on equity securities are recognized when declared.

The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether
impairments have occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in
estimated fair value, as well as an analysis of the gross unrealized losses by severity and/or age as described in Note 8
“— Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities.”

For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment (“OTTI”) is recognized
in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent
to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery,
the OTTI recognized in earnings is the entire difference between the security’s amortized cost and estimated fair value. If
neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected
future cash flows expected to be collected is recognized as an OTTI in earnings (“credit loss”). If the estimated fair value
is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-
than-credit factors (“noncredit loss”) is recorded in OCI.

With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular
equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or
greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to
the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision
was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the
security’s cost and its estimated fair value.

FVO and Trading Securities

FVO and trading securities are stated at estimated fair value and include investments for which the FVO has been
elected (“FVO Securities”) and investments that are actively purchased and sold (“Actively traded securities”). FVO
Securities include:

•

fixed maturity and equity securities held-for-investment by the general account to support asset and liability management
strategies for certain insurance products and investments in certain separate accounts (“FVO general account
securities”); and

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 (“FVO
contractholder-directed unit-linked investments”).

Actively traded securities principally include fixed maturity securities and short sale agreement liabilities, which are

included in other liabilities.

Changes in estimated fair value of these securities are included in net investment income, except for certain securities

included in FVO Securities, where changes are included in net investment gains (losses).

Mortgage Loans

The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and
residential. The accounting policies that are applicable to all portfolio segments are presented below and the accounting
policies related to each of the portfolio segments are included in Note 8.

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

Notes to the Consolidated Financial Statements — (continued)

Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred
fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned.
Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of
discounts.

Also included in mortgage loans are commercial mortgage loans held by consolidated securitization entities (“CSEs”)
and residential mortgage loans for which the FVO was elected, and which are stated at estimated fair value. Changes in
estimated fair value are recognized in net investment gains (losses) for commercial mortgage loans held by CSEs — FVO,
and net investment income for residential mortgage loans — FVO.

Policy Loans

Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest
rate. Generally, accrued interest is capitalized on the policy’s anniversary date. Valuation allowances are not established for
policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid
principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the
insurance policy.

Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-
line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-
line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for
impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not
be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted
cash flows are written down to their estimated fair value, which is generally computed using the present value of expected
future cash flows discounted at a rate commensurate with the underlying risks.

Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition
for a reasonable price in comparison to its estimated fair value is classified as held-for-sale. Real estate held-for-sale is
stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated.

Real Estate Joint Ventures and Other Limited Partnership Interests

The Company uses the equity method of accounting for equity securities when it has significant influence or at least
20% interest and for real estate joint ventures and other limited partnership interests (“investees”) when it has more than a
minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes
its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not
sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.

The Company uses the cost method of accounting for investments in which it has virtually no influence over the
investee’s operations. The Company recognizes distributions on cost method investments when such distributions become
payable or received. Because of the nature and structure of these cost method investments, they do not meet the characteristics
of an equity security in accordance with applicable accounting standards.

The Company routinely evaluates its equity method and cost method investments for impairment. For equity method
investees, the Company considers financial and other information provided by the investee, other known information and
inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment
has occurred. The Company considers its cost method investments for impairment when the carrying value of such
investments exceeds the net asset value (“NAV”). The Company takes into consideration the severity and duration of this
excess when determining whether the cost method investment is impaired.

Short-term Investments

Short-term investments include securities and other investments with remaining maturities of one year or less, but
greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates
estimated fair value.

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

Notes to the Consolidated Financial Statements — (continued)

Other Invested Assets

Other invested assets consist principally of the following:

•

Freestanding derivatives with positive estimated fair values which are described in “— Derivatives” below.

• Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of
income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the investment
is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method.

• Leveraged leases which are recorded net of non-recourse debt. Income is recognized by applying the leveraged lease’s
estimated rate of return to the net investment in the lease. The Company regularly reviews residual values for impairment.

• Direct financing leases gross investment is equal to the minimum lease payments plus the unguaranteed residual value.
Income is recorded by applying the pre-tax internal rate of return to the investment balance. The Company regularly
reviews lease receivables for impairment. Certain direct financing leases are linked to inflation.

•

Funds withheld represent a receivable for amounts contractually withheld by ceding companies in accordance with
reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the
agreement which may be contractually specified or directly related to the underlying investments.

Investments in operating joint ventures that engage in insurance underwriting activities are accounted for under the
equity method.

Securities Lending Program

Securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and
commercial banks, are treated as financing arrangements and the associated liability is recorded at the amount of cash
received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102%
of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration
of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The Company is liable
to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection
with securities lending transactions may not be sold or re-pledged, unless the counterparty is in default, and is not reflected
on the Company’s financial statements. The Company monitors the estimated fair value of the securities loaned on a daily
basis and additional collateral is obtained as necessary throughout the duration of the loan. Income and expenses associated
with securities lending transactions are reported as investment income and investment expense, respectively, within net
investment income.

Repurchase Agreement Transactions

The Company participates in short-term repurchase agreements with unaffiliated financial institutions. Under these
agreements, the Company lends fixed maturity securities and receives cash as collateral in an amount generally equal to
85% to 100% of the estimated fair value of the securities loaned at the inception of the transaction. The associated liability
is recorded at the amount of cash received. The Company monitors the estimated fair value of the collateral and the securities
loaned throughout the duration of the transaction and additional collateral is obtained as necessary. Securities loaned under
such transactions may be sold or re-pledged by the transferee.

Derivatives

Freestanding Derivatives

Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as
liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts
recognized for derivatives executed with the same counterparty under the same master netting agreement.

Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However,
accruals that are not scheduled to settle within one year are included with the derivatives carrying value in other invested
assets or other liabilities.

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

Notes to the Consolidated Financial Statements — (continued)

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting,

changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:

Statement of Operations Presentation:

Policyholder benefits and claims

Net investment income

Hedge Accounting

Derivative:
• Economic hedges of variable annuity guarantees included in future

policy benefits

• Economic hedges of equity method investments in joint ventures
• All derivatives held in relation to trading portfolios
• Derivatives held within contractholder-directed unit-linked

investments

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk
management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge
designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:

•

Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses),
consistent with the change in estimated fair value of the hedged item attributable to the designated risk being hedged.

• Cash flow hedge (a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related
to a recognized asset or liability) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into
the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged
item); ineffectiveness in net derivative gains (losses).

• Net investment in a foreign operation hedge - effectiveness in OCI, consistent with the translation adjustment for the

hedged net investment in the foreign operation; ineffectiveness in net derivative gains (losses).

The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported
on the statement of operations within interest income or interest expense to match the location of the hedged item. Accruals
on derivatives in net investment hedges are recognized in OCI.

In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated
risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the
hedging instrument’s effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as
a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge
effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship.
Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation
and different interpretations or estimates may have a material effect on the amount reported in net income.

The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer
highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires,
is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the
derivative is de-designated as a hedging instrument.

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting
changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance
sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying
value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated
fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the
remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes
in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement
of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.

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

Notes to the Consolidated Financial Statements — (continued)

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on
the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its
estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred
gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction
that is no longer probable are recognized immediately in net derivative gains (losses).

In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on
the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).

Embedded Derivatives

The Company sells variable annuities and issues certain insurance products and investment contracts and is a party to
certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative
to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and
accounted for as a freestanding derivative if:

•

the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value
recorded in earnings;

the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host
contract; and

a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.

Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes
in their estimated fair value are generally reported in net derivative gains (losses), except for those in policyholder benefits
and claims related to ceded reinsurance of GMIB. If the Company is unable to properly identify and measure an embedded
derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value,
with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment
income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with
changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income
if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the
embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the
present value of projected future guaranteed benefits. Any additional fees represent “excess” fees and are reported in universal
life and investment-type product policy fees.

Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the
measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition.

Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in
active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on
quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable
inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to
observable inputs requiring management judgment are used to determine the estimated fair value of assets and liabilities.

Goodwill

Goodwill represents the future economic benefits arising from net assets acquired in a business combination that are not
individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net
assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently
if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its
annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter.
Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless
there is a significant identified impairment event.

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

Notes to the Consolidated Financial Statements — (continued)

The impairment test is performed at the reporting unit level, which is the operating segment or a business one level below
the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For
purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there may
be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as
the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill
over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income.

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.

Employee Benefit Plans

Certain subsidiaries of MetLife, Inc. 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 is December 31 for U.S. and non-U.S. subsidiaries.

The Company recognizes the funded status of each of its defined pension and postretirement benefit plans, measured as
the difference between the fair value of plan assets and the benefit obligation, which is the projected benefit obligation (“PBO”)
for pension benefits and the accumulated postretirement benefit obligation (“APBO”) for other postretirement benefits in
other assets or other liabilities.

Actuarial gains and losses result from differences between the actual experience and the assumed experience on plan
assets or PBO during a particular period and are recorded in accumulated OCI (“AOCI”). To the extent such gains and losses
exceed 10% of the greater of the PBO or the estimated fair value of plan assets, the excess is amortized into net periodic
benefit costs, generally over the average projected future service years of the active employees. In addition, prior service
costs (credit) are recognized in AOCI at the time of the amendment and then amortized to net periodic benefit costs over the
average projected future service years of the active employees.

Net periodic benefit costs are determined using management estimates and actuarial assumptions and are comprised of
service cost, interest cost, settlement and curtailment costs, expected return on plan assets, amortization of net actuarial (gains)
losses, and amortization of prior service costs (credit). Fair value is used to determine the expected return on plan assets.

The subsidiaries also sponsor defined contribution plans for substantially all U.S. employees under which a portion of
employee contributions is matched. Applicable matching contributions are made each payroll period. Accordingly, the
Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as
earned to the defined contribution plans, no liability for matching contributions is recognized on the balance sheets.

Income Tax

MetLife, Inc. 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. 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.

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

Notes to the Consolidated Financial Statements — (continued)

The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or
carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established against deferred
tax assets when management determines, based on available information, that it is more likely than not that deferred income
tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be
established, as well as the amount of such allowances. When making such determination the Company considers many factors,
including:

•

the nature, frequency, and amount of cumulative financial reporting income and losses in recent years;

the jurisdiction in which the deferred tax asset was generated;

the length of time that carryforward can be utilized in the various taxing jurisdiction;

future taxable income exclusive of reversing temporary differences and carryforwards;

future reversals of existing taxable temporary differences;

taxable income in prior carryback years; and

tax planning strategies.

The Company may be required to change its provision for income taxes when estimates used in determining valuation
allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment
in valuation allowances. Additionally, the effect of changes in tax laws, tax regulations, or interpretations of such laws or
regulations, is recognized in net income tax expense (benefit) in the period of change.

The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the
appropriate taxing authorities before any part of the benefit can be recorded on the financial statements. A tax position is
measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax
benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings
in the period that such determination is made.

The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax

expense.

Litigation Contingencies

The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the
inherent unpredictability of these matters, it is difficult to estimate the impact on the Company’s financial position. Liabilities
are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Except
as otherwise disclosed in Note 21, legal costs are recognized as incurred. On a quarterly and annual basis, the Company
reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related
contingencies to be reflected on the Company’s financial statements.

Other Accounting Policies

Stock-Based Compensation

The Company grants certain employees and directors stock-based compensation awards under various plans that are
subject to specific vesting conditions. With the exception of performance shares granted in 2013 and after which are re-
measured quarterly, the cost of all stock-based transactions is measured at fair value at grant date and recognized over the
period during which a grantee is required to provide services in exchange for the award. Although the terms of the Company’s
stock-based plans do not accelerate vesting upon the attainment of the applicable criteria for post-employment award
continuation, the requisite service period subsequent to attaining such criteria is considered non-substantive. Accordingly,
the Company recognizes compensation expense related to stock-based awards over the shorter of the requisite service period
or the period to attainment of such criteria. An estimation of future forfeitures of stock-based awards is incorporated into
the determination of compensation expense when recognizing expense over the requisite service period.

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

Notes to the Consolidated Financial Statements — (continued)

Cash and Cash Equivalents

The Company considers all highly liquid securities and other investments purchased with an original or remaining
maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized
cost, which approximates estimated fair value.

Property, Equipment, Leasehold Improvements and Computer Software

Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated
depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of
the assets, as appropriate. The estimated life is generally 40 years for company occupied real estate property, from one to
25 years for leasehold improvements, and from three to seven years for all other property and equipment. The cost basis of
the property, equipment and leasehold improvements was $2.4 billion and $2.0 billion at December 31, 2016 and 2015,
respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was
$1.1 billion at both December 31, 2016 and 2015. Related depreciation and amortization expense was $207 million,
$216 million and $182 million for the years ended December 31, 2016, 2015 and 2014, 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 $2.5 billion and $2.2 billion at December 31, 2016 and 2015, respectively.
Accumulated amortization of capitalized software was $1.7 billion and $1.5 billion at December 31, 2016 and 2015,
respectively. Related amortization expense was $248 million, $212 million and $212 million for the years ended
December 31, 2016, 2015 and 2014, respectively.

Other Revenues

Other revenues include, in addition to items described elsewhere herein, advisory fees, broker-dealer commissions and
fees, administrative service fees, and changes in account value relating to corporate-owned life insurance (“COLI”). Such
fees and commissions are recognized in the period in which services are performed. Under certain COLI contracts, if the
Company reports certain unlikely adverse results in its 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.

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.

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. For most of the Company’s foreign operations, the local currency is the functional currency. For certain other
foreign operations, such as Japan, the local currency and one or more other currencies qualify as functional currencies.
Assets and liabilities of foreign affiliates and subsidiaries are translated from the functional currency to U.S. dollars at the
exchange rates in effect at each year-end and revenues and expenses are translated at the average exchange rates during the
year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses
from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate
functional currency, are reported as part of net investment gains (losses) in the period in which they occur.

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. 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; and (ii) settlement of stock purchase contracts
underlying common equity units using the treasury stock method. Under the treasury stock method, exercise or issuance of
stock-based awards and settlement of 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. The difference between the number
of shares assumed issued and number of shares assumed purchased represents the dilutive shares.

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

Notes to the Consolidated Financial Statements — (continued)

Adoption of New Accounting Pronouncements

Effective January 1, 2016, the Company retrospectively adopted guidance relating to short-duration contracts. The new
guidance requires insurance entities to provide users of financial statements with more transparent information about initial
claim estimates and subsequent adjustments to these estimates, including information on: (i) reconciling from the claim
development table to the balance sheet liability, (ii) methodologies and judgments in estimating claims, and (iii) the timing, and
frequency of claims. The adoption did not have an impact on the Company’s consolidated financial statements other than expanded
disclosures in Note 4.

Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain
entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number
of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the
entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or
service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the
reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that
applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities
are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and
maximum exposure to loss as of December 31, 2016, disclosed in Note 8, reflect the application of the new guidance.

Effective November 18, 2014, the Company adopted new guidance on when, if ever, the cost of acquiring an entity should
be used to establish a new accounting basis (“pushdown”) in the acquired entity’s separate financial statements. The guidance
provides an acquired entity and its subsidiaries with an irrevocable option to apply pushdown accounting in its separate financial
statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. If a reporting entity elects
to apply pushdown accounting, its stand-alone financial statements would reflect the acquirer’s new basis in the acquired entity’s
assets and liabilities. The election to apply pushdown accounting should be determined by an acquired entity for each individual
change-in-control event in which an acquirer obtains control of the acquired entity; however, an entity that does not elect to
apply pushdown accounting in the period of a change-in-control can later elect to retrospectively apply pushdown accounting
to the most recent change-in-control transaction as a change in accounting principle. The new guidance did not have a material
impact on the consolidated financial statements upon adoption.

Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations and
disclosures of disposals of components of an entity. The guidance increases the threshold for a disposal to qualify as a discontinued
operation, expands the disclosures for discontinued operations and requires new disclosures for certain disposals that do not
meet the definition of a discontinued operation. Disposals must now represent a strategic shift that has or will have a major
effect on the entity’s operations and financial results to qualify as discontinued operations.

Effective January 1, 2014, the Company adopted new guidance regarding the presentation of an unrecognized tax benefit.
The new guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented on the
financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit
carryforward. However, when the carryforwards are not available at the reporting date to settle any additional income taxes that
would result from the disallowance of a tax position or the applicable tax law does not require, and the entity does not intend
to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented on the financial statements as a
liability and will not be combined with the related deferred tax asset. The adoption was prospectively applied and resulted in a
reduction to other liabilities and a corresponding increase to deferred income tax liability in the amount of $277 million.

Effective January 1, 2014, the Company adopted new guidance on other expenses. The objective of this standard is to
address how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection
and Health Care and Education Reconciliation Act of 2010, signed into law on March 30, 2010, as amended by the Health Care
and Education Reconciliation Act. The amendments in this standard specify that the liability for the fee should be estimated and
recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable
with a corresponding deferred cost that is amortized to expense using the straight-line method of allocation unless another method
better allocates the fee over the calendar year that it is payable. In accordance with the adoption of the new accounting
pronouncement on January 1, 2014, the Company recorded $57 million in other liabilities, and a corresponding deferred cost,
in other assets.

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

Notes to the Consolidated Financial Statements — (continued)

Future Adoption of New Accounting Pronouncements

In February 2017, the Financial Accounting Standards Board (“FASB”) issued new guidance on derecognition of
nonfinancial assets (Accounting Standards Update (“ASU”) 2017- 05, Other Income-Gains and Losses from the Derecognition
of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial
Sales of Nonfinancial Assets). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim
periods within those years. Early adoption is permitted for interim or annual reporting periods beginning after December 15,
2016. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment
at the date of adoption. The new guidance clarifies the scope and accounting of a financial asset that meets the definition of an
“in-substance nonfinancial asset” and defines the term, “in-substance nonfinancial asset.” The ASU also adds guidance for partial
sales of nonfinancial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial
statements.

In January 2017, the FASB issued new guidance on goodwill impairment (ASU 2017- 04, Intangibles-Goodwill and Other
(Topic 350): Simplifying the Test for Goodwill Impairment). The new guidance is effective for fiscal years beginning after
December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption
is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The new guidance
simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The new guidance requires a one-step
impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an
impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. The Company
is currently evaluating the impact of this guidance on its consolidated financial statements.

In January 2017, the FASB issued new guidance on business combinations (ASU 2017- 01, Business Combinations
(Topic 805): Clarifying the Definition of a Business). The new guidance is effective for fiscal years beginning after December 15,
2017 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted as
specified in the guidance. The new guidance clarifies the definition of a business and requires that an entity apply certain criteria
in order to determine when a set of assets and activities qualifies as a business. The adoption of this standard will result in fewer
acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that do not qualify as businesses
will be capitalized rather than expensed. The Company is currently evaluating the impact of this guidance on its consolidated
financial statements.

In November 2016, the FASB issued new guidance on restricted cash (ASU 2016-18, Statement of Cash Flows (Topic 230):
a consensus of the FASB Emerging Issues Task Force). The new guidance is effective for fiscal years beginning after December 15,
2017 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted.
The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents,
and amounts generally described as restricted cash or restricted cash equivalents. As a result, the new guidance requires that
amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents
when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new
guidance does not provide a definition of restricted cash or restricted cash equivalents. The Company is currently evaluating
the impact of this guidance on its consolidated financial statements.

In October 2016, the FASB issued new guidance on consolidation evaluation for entities under common control
(ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control). The new
guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and should
be applied on a retrospective basis. Early adoption is permitted. The new guidance does not change the characteristics of a
primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a
VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held
through related parties that are under common control with the reporting entity. The adoption of this new guidance will not have
a material impact on the Company’s consolidated financial statements.

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

Notes to the Consolidated Financial Statements — (continued)

In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income
Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning
after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis.
Early adoption is permitted in the first interim or annual reporting period. Current guidance prohibits the recognition of current
and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance
requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the
transfer occurs. Also, the guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The
Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash
Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years
beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all
periods presented. Early adoption is permitted in any interim or annual period. This ASU addresses diversity in how certain cash
receipts and cash payments are presented and classified in the statement of cash flows. The Company is currently evaluating
the impact of this guidance on its consolidated financial statements.

In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance
is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption
is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces
the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit
losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new
guidance requires that an OTTI on a debt security will be recognized as an allowance going forward, such that improvements
in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net
investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses.
The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance
and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance.
The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company
is continuing to evaluate the overall impact of the new guidance on its consolidated financial statements.

In March 2016, the FASB issued new guidance on stock compensation (ASU 2016-09, Compensation - Stock Compensation
(Topic 718): Improvements to Employee Share-based Payment Accounting. The new guidance is effective for the fiscal years
beginning after December 15, 2016, including interim periods within those fiscal years, and requires either a modified
retrospective, a retrospective or a prospective transition approach depending upon the type of change. Early adoption is permitted
in any interim or annual period. The new guidance changes several aspects of the accounting for share-based payment award
transactions, including: (i) income tax consequences when awards vest or are settled; (ii) classification of awards as either equity
or liabilities due to statutory tax withholding requirements; and (iii) classification on the statement of cash flows. The adoption
of this new guidance will not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued new guidance on leasing transactions (ASU 2016-02, Leases - Topic 842). The new
guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years,
and requires a modified retrospective transition approach. Early adoption is permitted. The new guidance requires a lessee to
recognize assets and liabilities for leases with lease terms of more than 12 months. Leases would be classified as finance or
operating leases and both types of leases will be recognized on the balance sheet. Lessor accounting will remain largely unchanged
from current guidance except for certain targeted changes. The new guidance will also require new qualitative and quantitative
disclosures. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts as well
as identification of other contracts that may fall under the scope of the new guidance. The Company is currently evaluating the
impact of this guidance on its consolidated financial statements.

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

Notes to the Consolidated Financial Statements — (continued)

In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and
Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial instruments. The
new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.
Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting
guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the
fair value of financial liabilities measured under the FVO that are due to instrument-specific credit risk, and (iii) certain disclosures
associated with the fair value of financial instruments. Additionally, there will no longer be a requirement to assess equity
securities for impairment since such securities will be measured at fair value through net income. The Company has assessed
the population of financial instruments that are subject to the new guidance and has determined that the most significant impact
will be the requirement to report changes in fair value in net income each reporting period for all equity securities currently
classified as available-for-sale and to a lesser extent, other limited partnership interests and real estate joint ventures that are
currently accounted for under the cost method. The population of these investments accounted for under the cost method is not
material. The Company is continuing to evaluate the overall impact of this guidance on its consolidated financial statements.

In May 2014, the FASB issued a comprehensive new revenue recognition standard

Revenue from Contracts
with Customers (Topic 606)), effective for fiscal years beginning after December 15, 2017 and interim periods within those
years. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect
adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S.
GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of Financial Services
insurance (Topic 944), leases, financial instruments and guarantees. For those contracts that are impacted, the guidance will
require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled, in exchange for those goods or services. Given the scope of the new
revenue recognition guidance, the Company does not expect the adoption to have a material impact on its consolidated revenues
or statements of operations, with the Company’s implementation efforts primarily focused on other revenues on the consolidated
statements of operations, which represents less than 3% of consolidated total revenues in 2016.

Other

Effective January 3, 2017, the Chicago Mercantile Exchange (“CME”) amended its rulebook, resulting in the characterization
of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments will impact
the accounting treatment of the Company’s centrally cleared derivatives, for which the CME serves as the central clearing party.
The application of the amended rulebook is expected to reduce the gross derivative assets and liabilities, as well as the related
collateral, recorded on the consolidated balance sheet for trades cleared through the CME. The Company is currently evaluating
the impact of these amendments on its consolidated financial statements. This change is not expected to impact the tax treatment
of such derivatives, although the Internal Revenue Service (“IRS”) is being asked to issue definitive guidance.

2. Segment Information

MetLife is organized into six segments: U.S.; Asia; Latin America; EMEA; MetLife Holdings; and Brighthouse Financial.

In addition, the Company reports certain of its results of operations in Corporate & Other.

On January 12, 2016, MetLife, Inc. announced its plan to separate a substantial portion of its former Retail segment, as well
as certain portions of its former Corporate Benefit Funding segment and Corporate & Other (the “Separation”). Additionally,
on July 21, 2016, MetLife, Inc. announced that following the Separation, the separated business will be rebranded as “Brighthouse
Financial.” On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. (“Brighthouse”), filed a registration
statement on Form 10 (the “Form 10”) with the U.S. Securities and Exchange Commission (“SEC”). On December 6, 2016
Brighthouse filed an amendment to its registration statement on Form 10 with the SEC. The information statement filed as an
exhibit to the Form 10 disclosed that the Company intends to include MetLife Insurance Company USA (“MetLife USA”), New
England Life Insurance Company (“NELICO”), First MetLife Investors Insurance Company (“FMLI”), MetLife Advisers, LLC
and certain captive reinsurance companies in the proposed separated business and distribute at least 80.1% of the shares of
Brighthouse’s common stock on a pro rata basis to the holders of MetLife, Inc. common stock.

The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations
and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. The
Separation remains subject to certain conditions, including among others, obtaining final approval from the MetLife, Inc. Board
of Directors, receipt of a favorable ruling from the IRS and an opinion from MetLife’s tax advisor regarding certain U.S. federal
income tax matters, insurance and other regulatory approvals, and an SEC declaration of the effectiveness of the Form 10.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

2. Segment Information (continued)

Based on the proposed Separation, in the third quarter of 2016, the Company reorganized its businesses. This re-segmentation
resulted in a $296 million, net of income tax, charge to earnings in the third quarter of 2016, all in the Brighthouse Financial
segment, driven by the segment’s variable and universal life products. This charge is the direct result of the Company, beginning
in the third quarter, no longer being able to aggregate, for loss recognition testing, the variable and universal life products of
Brighthouse with the variable and universal life products remaining with MetLife Holdings. Of this amount, the Company
recorded $254 million, net of income tax, as a one-time charge, which was mostly recognized as a write-off of DAC, with the
remaining $42 million, net of income tax, recognized as an increase in insurance-related liabilities.

U.S.

The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers
throughout their lives. These products are sold to corporations and their respective employees, other institutions and their
respective members, as well as individuals. The U.S. segment is organized into three businesses: Group Benefits, Retirement
and Income Solutions and Property & Casualty.

• The Group Benefits business offers insurance products and services which include life, dental, group short- and

long-term disability, individual disability, accidental death and dismemberment, critical illness, vision and accident
& health coverages, as well as prepaid legal plans. This business also sells administrative services-only
arrangements to some employers.

• The Retirement and Income Solutions business offers a broad range of annuity and investment products, including

guaranteed interest contracts and other stable value products, institutional income annuities and separate account
contracts for the investment management of defined benefit and defined contribution plan assets. This business also
includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-
owned life insurance used to finance nonqualified benefit programs for executives.

• The Property & Casualty business offers personal and commercial lines of property and casualty insurance,

including private passenger automobile, homeowners’ and personal excess liability insurance. In addition, Property
& Casualty offers small business owners property, liability and business interruption insurance.

Asia

The Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and
their respective employees, which include whole life, term life, variable life, universal life, accident & health insurance, fixed
and variable annuities, credit insurance and endowment products.

Latin America

The Latin America segment offers a broad range of products to both individuals and corporations, as well as other institutions
and their respective employees, which include life insurance, accident & health insurance, group medical, dental, credit insurance,
endowment and retirement and savings products.

EMEA

The EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions and
their respective employees, which include life insurance, accident & health insurance, credit insurance, annuities, endowment
and retirement and savings products.

MetLife Holdings

The MetLife Holdings segment consists of operations relating to products and businesses no longer actively marketed by
the Company in the United States. These products and businesses include variable, universal, term and whole life, as well as
variable, fixed and index-linked annuities. The MetLife Holdings segment also includes the Company’s discontinued long-term
care business and the assumed reinsurance of certain variable annuity products from the Company’s former operating joint
venture in Japan.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

2. Segment Information (continued)

Brighthouse Financial

The Brighthouse Financial segment offers a broad range of products and services which include variable, fixed, index-
linked and income annuities, as well as variable, universal, term and whole life products. These products and services are actively
marketed through various third party retail distribution channels in the United States. In addition, the Brighthouse Financial
segment includes certain run-off businesses which are not actively marketed.

Corporate & Other

Financial Measures and Segment Accounting Policies

Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance
for segment reporting, operating earnings is also the Company’s GAAP measure of segment performance and is reported below.
Operating earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The
Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the
understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.
Operating earnings allows analysis of the Company’s performance relative to the Company’s business plan and facilitates
comparisons to industry results.

Operating earnings is defined as operating revenues less operating expenses, both net of income tax.

The financial measures of operating revenues and operating expenses focus on the Company’s primary businesses principally
by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products
and divested businesses and certain entities required to be consolidated under GAAP. Also, these measures exclude results of
discontinued operations and other businesses that have been or will be sold or exited by MetLife and are referred to as divested
businesses. In addition, for the year ended December 31, 2016, operating revenues and operating expenses exclude the financial
impact of converting the Company’s Japan operations to calendar year-end reporting without retrospective application of this
change to prior periods and is referred to as lag elimination. Operating revenues also excludes net investment gains (losses) and
net derivative gains (losses). Operating expenses also excludes goodwill impairments.

The following additional adjustments are made to revenues, in the line items indicated, in calculating operating revenues:

• Net investment income: (i) includes earned income on derivatives and amortization of premium on derivatives that are
hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment,
(ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments
relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to
contractholder-directed unit-linked investments and (v) excludes certain amounts related to securitization entities that
are VIEs consolidated under GAAP; and

• Other revenues are adjusted for settlements of foreign currency earnings hedges.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

2. Segment Information (continued)

The following additional adjustments are made to expenses, in the line items indicated, in calculating operating expenses:

•

Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend
obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit
adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic
crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through
adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”) and (iv) market value adjustments
associated with surrenders or terminations of contracts (“Market Value Adjustments”);

• Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative

gains (losses), (ii) GMIB Fees and GMIB Costs and (iii) Market Value Adjustments;

• Amortization of negative VOBA excludes amounts related to Market Value Adjustments;

•

Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under
GAAP; and

• Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory

requirements, and (iii) acquisition, integration and other costs.

Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at

acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could
differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the
impact related to the timing of certain tax credits, as well as certain tax reforms.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate &
Other, for the years ended December 31, 2016, 2015 and 2014 and at December 31, 2016 and 2015. The segment accounting
policies are the same as those used to prepare the Company’s consolidated financial statements, except for operating earnings
adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below,
with the exception of the Brighthouse Financial segment, for which equity is reflective of the historical equity of the legal entities
which comprise Brighthouse and related companies, which will be eliminated upon Separation. The Brighthouse Financial
segment equity is not indicative of Brighthouse and related companies’ equity on a combined standalone basis.

The Company’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated
equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to
the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic
capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion
of diversification benefits among risk types. The Company’s management is responsible for the ongoing production and
enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with
emerging industry practice standards.

Segment net investment income, with the exception of the Brighthouse Financial segment, is credited or charged based on
the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment
income, income (loss) from continuing operations, net of income tax or operating earnings. As noted above, the Brighthouse
Financial segment’s net investment income represents that of the legal entities which comprise Brighthouse and related companies
on a historical basis, however, may not be indicative of that on a combined standalone basis.

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Notes to the Consolidated Financial Statements — (continued)

2. Segment Information (continued)

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2. Segment Information (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Year Ended December 31, 2016

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

Adjustments

Total
Consolidated

Operating Results

21,501

989

6,206

784

—

6,902

1,487

2,707

—

2,529

1,025

1,084

—

2,027

391

318

—

(In millions)

4,506

1,436

5,944

581

—

1,222

3,491

3,503

735

—

29,480

11,157

4,672

2,809

12,467

8,951

21,558

1,302

—

(471)

471

—

3,706

26,575

988

5,191

1,298

—

(1,668)

1,224

(208)

—

3,586

9,423

492

1,917

1,242

2,443

1,067

328

—

(321)

184

(1)

1,336

3,971

158

543

112

—

(403)

408

(13)

—

1,323

2,494

273

7,534

1,042

—

(281)

736

—

2,392

11,480

288

699

3,200

1,162

—

(333)

1,073

—

128

2,338

7,568

361

1,022

40
(119)
(62)
(517)
—

—
(658)

(23)
5

—
(7)
8

—

1,002
(192)
793
(947)
(504)

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Goodwill impairment

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Other expenses

Total expenses

Provision for income tax expense (benefit)

Operating earnings

Adjustments to:

Total revenues

Total expenses

Provision for income tax (expense) benefit

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

426

506

247

171
(6,760)
(5,402)

1,090

1,033

260
(105)
(1,463)
(47)
3

596

1,367
(2,381)

39,153

9,206

19,947

1,759

171
(6,760)
63,476

42,060

6,282

260
(3,589)
2,641
(269)
1,201

15,085

63,671
(999)

38,727

8,700

19,700

1,751

—

68,878

40,970

5,249

—
(3,484)
4,104
(222)
1,198

14,489

62,304

1,382

5,192

(5,402)
(1,367)
2,381

804

At December 31, 2016

U.S.

Asia (1)

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

Total assets

Separate account assets

Separate account liabilities

__________________

253,683

85,950

120,656

8,020

67,233

48,455

(In millions)

25,596

4,329

184,276

48,823

222,681

113,043

24,639

— $

898,764

308,620

(1)

Total assets includes $98.0 billion of assets from the Japan operations which represents 11% of total consolidated assets.

229

Table of Contents

2. Segment Information (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Year Ended December 31, 2015

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

Adjustments

Total
Consolidated

Operating Results

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Goodwill impairment

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Other expenses

Total expenses

Provision for income tax expense (benefit)

Operating earnings

Adjustments to:

Total revenues

Total expenses

Provision for income tax (expense) benefit

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

20,861

943

6,209

751

—

6,937

1,542

2,675

105

—

2,581

1,117

1,038

—

2,036

424

326

—

(In millions)

4,545

1,482

6,201

930

—

1,675

3,718

3,327

422

—

28,764

11,259

4,777

2,847

13,158

9,142

20,837

1,216

—

(493)

471

—

3,685

25,720

1,040

2,004

5,275

1,309

—

(1,720)

1,256

(309)

—

3,611

9,422

457

2,408

349

—

(341)

271

(1)

—

1,429

4,115

988

120

—

(472)

497

(16)

—

1,469

2,586

7,357

1,062

—

(410)

577

—

2,694

11,335

581

2,875

1,255

—

(399)

731

—

128

2,484

7,074

555

1,380

625

240

1,242

1,513

(87) $
(113)
13
(290)
—

—
(477)

(175)
23

—
(2)
(1)
—

1,013

434

1,292
(365)
(1,404)

38,545

9,507

19,281

1,983

597

69,951

40,102

5,610

—
(3,837)
3,936
(361)
1,208

15,823

62,481

2,148

38,548

(3) $

394
(508)
(37)
597

481

537

276

—

134
(35)
8

937
(178)

9,113

19,789

2,020

—

69,470

39,565

5,334

—
(3,837)
3,802
(326)
1,200

15,806

61,544

2,326

5,600

481
(937)
178

5,322

At December 31, 2015

U.S.

Asia (1)

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

Total assets

Separate account assets

Separate account liabilities

__________________

237,858

79,540

113,895

8,964

64,808

46,061

(In millions)

26,767

3,996

187,677

48,590

226,792

114,447

20,136

— $

877,933

301,598

(1)

Total assets includes $90.0 billion of assets from the Japan operations which represents 10% of total consolidated assets.

230

Table of Contents

2. Segment Information (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Year Ended December 31, 2014

U.S.

Asia

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

Adjustments

Total
Consolidated

Operating Results

Revenues

Premiums

Universal life and investment-type product policy fees

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims and policyholder dividends

Interest credited to policyholder account balances

Goodwill impairment

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Other expenses

Total expenses

Provision for income tax expense (benefit)

Operating earnings

Adjustments to:

Total revenues

Total expenses

Provision for income tax (expense) benefit

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

20,243

909

6,111

721

—

7,566

1,693

2,886

106

—

2,796

1,239

1,219

—

2,309

466

428

—

(In millions)

4,545

1,374

6,409

1,062

—

1,474

3,963

3,156

534

—

27,984

12,251

5,287

3,263

13,390

9,127

20,110

1,168

—

(488)

458

—

3,550

24,810

1,073

2,101

5,724

1,544

—

(1,914)

1,397

(364)

—

3,975

10,362

582

1,307

2,615

1,053

148

—

(680)

613

(31)

—

1,846

2,949

7,217

1,098

—

(326)

444

—

2,670

11,161

714

2,711

1,275

—

(397)

810

—

133

2,472

7,004

570

285

1,515

1,553

394

—

(377)

313

(1)

—

1,588

4,532

129

626

231

39,067

9,946

21,153

2,030
(197)
1,317

73,316

40,478

6,943

—
(4,183)
4,132
(442)
1,216

16,368

64,512

2,465

89
(103)
275
(483)
—

—
(222)

—

—
(8)
—

975

153

1,202
(719)
(705)

39,022

405

669
(3)
(197)
1,317

2,236

1,000

1,282

—
(1)
105
(46)
38

114

2,492

9,541

20,484

2,033

—

71,080

39,478

5,661

—
(4,182)
4,027
(396)
1,178

16,254

62,020

2,378

6,682

2,236
(2,492)
(87)
6,339

6,339

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

2. Segment Information (continued)

The following table presents total premiums, universal life and investment-type product policy fees and other revenues by

major product groups of the Company’s segments, as well as Corporate & Other:

Life insurance

Accident & health insurance

Annuities

Property & casualty insurance

Non-insurance

Total

Years Ended December 31,

2016

2015

2014

(In millions)

22,755

23,037

14,150

8,982

3,560

671

13,090

9,653

3,504

751

23,483

13,336

9,984

3,524

716

50,118

50,035

51,043

The following table presents total premiums, universal life and investment-type product policy fees and other revenues

associated with the Company’s U.S. and foreign operations:

U.S.

Foreign:

Japan

Other

Total

Years Ended December 31,

2016

2015

2014

(In millions)

34,895

35,042

34,536

7,088

8,135

6,264

8,729

50,118

50,035

6,917

9,590

51,043

Revenues derived from any customer did not exceed 10% of consolidated premiums, universal life and investment-type

product policy fees and other revenues for the years ended December 31, 2016, 2015 and 2014.

3. Dispositions

2016 Disposition

In July 2016, MetLife, Inc. completed the sale to Massachusetts Mutual Life Insurance Company (“MassMutual”) of its
U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and
outstanding shares of MetLife’s affiliated broker-dealer, MetLife Securities, Inc. (“MSI”), a wholly-owned subsidiary of
MetLife, Inc. (collectively, the “U.S. Retail Advisor Force Divestiture”) for $291 million. MassMutual assumed all of the
liabilities related to such assets that arise or occur after the closing of the sale. The Company recorded a gain of $103 million
($58 million, net of income tax), in net investment gains (losses) for the year ended December 31, 2016. See Notes 10 and 18
for discussion of certain charges related to the sale.

2014 Disposition

In May 2014, the Company completed the sale of its wholly-owned subsidiary, MetLife Assurance Limited (“MAL”), for
$702 million (£418 million) in net cash consideration. As a result of the sale, a loss of $633 million ($442 million, net of income
tax), was recorded for the year ended December 31, 2014, which includes a reduction to goodwill of $60 million ($51 million,
net of income tax), as well as $77 million ($50 million, net of income tax) related to net investments in foreign operation hedges.
The loss is reflected within net investment gains (losses) on the consolidated statements of operations and comprehensive income
(loss). Compared to the expected loss at the time of the sales agreement, the actual loss on the sale was increased by net income
from MAL of $77 million for the year ended December 31, 2014. MAL’s results of operations are included in continuing
operations.

232

Table of Contents

4. Insurance

Insurance Liabilities

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Insurance liabilities are comprised of future policy benefits, policyholder account balances and other policy-related balances.

Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:

U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

December 31,

2016

2015

(In millions)

128,745

123,060

89,422

14,760

18,075

105,017

73,999

(5,426)

83,510

14,022

19,009

102,853

71,853

(5,451)

424,592

408,856

Future policy benefits are measured as follows:

Product Type:

Participating life

Nonparticipating life

Measurement Assumptions:

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
less than 1% to 11% 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.

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 2% to 11% for
domestic business and less than 1% to 13% for international business.

Individual and group
traditional fixed annuities
after annuitization

Present value of expected future payments. Interest rate assumptions used in establishing such
liabilities range from 2% to 11% for domestic business and less than 1% to 12% for international
business.

Non-medical health
insurance

Disabled lives

Property & casualty
insurance

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% (primarily related to domestic business).

Present value of benefits method and experience assumptions as to claim terminations, expenses
and interest. Interest rate assumptions used in establishing such liabilities range from 2% to
8% for domestic business and less than 1% to 9% for international business.

The amount estimated for claims that have been reported but not settled and claims incurred but
not reported are 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.

Participating business represented 4% of the Company’s life insurance in-force at both December 31, 2016 and 2015.
Participating policies represented 18%, 19% and 18% of gross traditional life insurance premiums for the years ended
December 31, 2016, 2015 and 2014, respectively.

Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross premium
payments and investment performance; (ii) credited interest, ranging from less than 1% to 13% for domestic business and less
than 1% to 15% for international business, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments
relating to business combinations.

233

Table of Contents

4. Insurance (continued)

Guarantees

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits.
GMABs and the portions of both non-life-contingent GMWBs and GMIBs that do not require annuitization are accounted for
as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as
insurance liabilities include:

Guarantee:

GMDBs

• A return of purchase payment upon death even if

the account value is reduced to zero.

• An enhanced death benefit may be available for an

additional fee.

GMIBs

• After a specified period of time determined at the
time of issuance of the variable annuity contract,
a minimum accumulation of purchase payments,
even if the account value is reduced to zero, that
can be annuitized to receive a monthly income
stream that is not less than a specified amount.

• Certain contracts also provide for a guaranteed
lump sum return of purchase premium in lieu of
the annuitization benefit.

Measurement Assumptions:

• Present value of expected death benefits in excess of
the projected account balance recognizing the excess
ratably over the accumulation period based on the
present value of total expected assessments.

• Assumptions are consistent with those used for
amortizing DAC, and are thus subject to the same
variability and risk.

•

Investment performance and volatility assumptions are
consistent with the historical experience of the
appropriate underlying equity index, such as the
S&P 500 Index.

• Benefit assumptions are based on the average benefits

payable over a range of scenarios.

• Present value of expected income benefits in excess of
the projected account balance at any future date of
annuitization and recognizing the excess ratably over
the accumulation period based on present value of
total expected assessments.

• Assumptions are consistent with those used for

estimating GMDB liabilities.

• Calculation

incorporates an assumption for

the
percentage of the potential annuitizations that may
be elected by the contractholder.

GMWBs

• A return of purchase payment via partial
withdrawals, even if the account value is reduced
to zero, provided that cumulative withdrawals in
a contract year do not exceed a certain limit.

• Certain contracts include guaranteed withdrawals

that are life contingent.

• Expected value of the life contingent payments and
expected assessments using assumptions consistent
with those used for estimating the GMDB liabilities.

The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to
surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that
are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization
benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company
issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary
guarantee or a guaranteed paid-up benefit.

234

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to

annuity and universal and variable life contracts was as follows:

Annuity Contracts

Universal and Variable
Life Contracts

GMDBs

GMIBs

Secondary
Guarantees

(In millions)

Paid-Up
Guarantees

Total

1,851

4,698

266

Direct and Assumed:

Balance at January 1, 2014

Incurred guaranteed benefits (1)

Paid guaranteed benefits

Balance at December 31, 2014

Incurred guaranteed benefits (1)

Paid guaranteed benefits

Balance at December 31, 2015

Incurred guaranteed benefits (1)

Paid guaranteed benefits

Balance at December 31, 2016

Ceded:

Balance at January 1, 2014

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2014

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2015

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2016

Net:

Balance at January 1, 2014

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2014

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2015

Incurred guaranteed benefits

Paid guaranteed benefits

Balance at December 31, 2016

__________________

685

310

(59)

936

319

(48)

1,207

440

(75)

1,572

(12)

(36)

(51)

644

301

(47)

898

287

(12)

1,173

383

(24)

262

—

2,113

417

(1)

2,529

409

(1)

2,937

—

1,844

262

—

2,106

417

(1)

2,522

409

(1)

411

(17)

5,092

452

(28)

5,516

1,044

(28)

6,532

928

134

—

1,062

195

—

1,257

—

1,325

3,770

277

(17)

4,030

257

(28)

4,259

976

(28)

1,532

2,930

5,207

—

288

—

306

—

331

187

—

202

—

215

—

232

—

7,500

1,005

(76)

8,429

1,206

(77)

9,558

1,918

(104)

11,372

1,163

158

(12)

1,309

240

(36)

1,513

142

(51)

1,604

6,337

847

(64)

7,120

966

(41)

8,045

1,776

(53)

9,768

(1) Secondary guarantees include the effects of foreign currency translation of $119 million, ($80) million and ($343) million

at December 31, 2016, 2015 and 2014, respectively.

235

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding the Company’s guarantee exposure, which includes direct and assumed business, but excludes

offsets from hedging or reinsurance, if any, was as follows at:

2016

2015

December 31,

In the
Event of Death

At
Annuitization

In the
Event of Death

At
Annuitization

(Dollars in millions)

177,895

150,118

8,679 (4)

66 years

N/A

89,839

86,355

3,834

(5)

66 years

181,413

151,901

10,339 (4)

66 years

1,393

490

(6)

50 years

N/A

91,240

87,841

2,762

(5)

66 years

1,560

422

(6)

51 years

December 31,

2016

2015

Secondary
Guarantees

Paid-Up
Guarantees

Secondary
Guarantees

Paid-Up
Guarantees

(Dollars in millions)

17,689

172,860

58 years

3,337

17,785

62 years

17,211

175,958

57 years

3,461

19,047

62 years

Annuity Contracts (1):

Variable Annuity Guarantees:

Total account value (2), (3)

Separate account value

Net amount at risk (2)

Average attained age of contractholders

Other Annuity Guarantees:

Total account value (3)

Net amount at risk

Average attained age of contractholders

Universal and Variable Life Contracts (1):

Total account value (3)

Net amount at risk (7)

Average attained age of policyholders

__________________

(1)

(2)

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.

Includes amounts, which are not reported on the consolidated balance sheets, from assumed reinsurance of certain variable
annuity products from the Company’s former operating joint venture in Japan.

(3)

Includes the contractholder’s investments in the general account and separate account, if applicable.

(4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim
that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any
additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.

(5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income
stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount
represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize
on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only
after the 10th anniversary of the contract, which not all contractholders have achieved.

(6) Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date
or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream,
based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts
represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize
on the balance sheet date.

236

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(7) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim

that the Company would incur if death claims were filed on all contracts on the balance sheet date.

Account balances of contracts with guarantees were invested in separate account asset classes as follows at:

Fund Groupings:

Balanced

Equity

Bond

Money Market

Total

December 31,

2016

2015

(In millions)

77,991

68,400

12,854

1,289

79,473

69,973

11,783

1,233

160,534

162,462

Obligations Under Funding Agreements

The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign
currencies, to certain unconsolidated special purpose entities (“SPEs”) that have issued either debt securities or commercial
paper for which payment of interest and principal is secured by such funding agreements. During the years ended December 31,
2016, 2015 and 2014, the Company issued $41.1 billion, $48.1 billion and $48.9 billion, respectively, and repaid $42.0 billion,
$49.9 billion and $45.6 billion, respectively, of such funding agreements. At December 31, 2016 and 2015, liabilities for funding
agreements outstanding, which are included in policyholder account balances, were $30.9 billion and $31.6 billion, respectively.

Certain of the Company’s subsidiaries are members of regional banks in the Federal Home Loan Bank (“FHLB”) system

(“FHLBanks”). Holdings of common stock of FHLBanks, included in equity securities, were as follows at:

FHLB of New York

FHLB of Des Moines

FHLB of Boston

FHLB of Pittsburgh

December 31,

2016

2015

(In millions)

748

666

237

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Such subsidiaries have also entered into funding agreements with FHLBanks and the Federal Agricultural Mortgage
Corporation, a federally chartered instrumentality of the U.S. (“Farmer Mac”). The liability for such funding agreements is
included in policyholder account balances. Information related to such funding agreements was as follows at:

FHLB of New York (1)

Farmer Mac (3)

FHLB of Des Moines (1)

FHLB of Boston (1)

FHLB of Pittsburgh (1)

__________________

Liability

Collateral

December 31,

2016

2015

2016

2015

14,445

2,550

720

750

(In millions)

12,570

2,550

845

250

1,820

16,828 (2)

2,645

1,077 (2)

144 (2)

4,148 (2)

14,085 (2)

2,643

999 (2)

311 (2)

2,112 (2)

(1) Represents funding agreements issued to the applicable FHLBank in exchange for cash and for which such FHLBank
has been granted a lien on certain assets, some of which are in the custody of such FHLBank, including residential
mortgage-backed securities (“RMBS”), to collateralize obligations under advances evidenced by funding agreements.
The Company is permitted to withdraw any portion of the collateral in the custody of such FHLBank as long as there is
no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon
any event of default by the Company, such FHLBank’s recovery on the collateral is limited to the amount of the Company’s
liability to such FHLBank.

(2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value.

(3) Represents funding agreements issued to a subsidiary of Farmer Mac, as well as certain SPEs that have issued debt
securities for which payment of interest and principal is secured by such funding agreements, and such debt securities
are also guaranteed as to payment of interest and principal by Farmer Mac. The obligations under these funding agreements
are secured by a pledge of certain eligible agricultural mortgage loans and may, under certain circumstances, be secured
by other qualified collateral. The amount of collateral presented is at carrying value.

Liabilities for Unpaid Claims and Claim Expenses

The following is information about incurred and paid claims development by segment as of December 31, 2016. Such
amounts are presented net of reinsurance, and are not discounted. The tables present claims development and cumulative claim
payments by incurral year. The development tables are only presented for significant short-duration product liabilities within
each segment. Where practical, up to 10 years of history has been provided. In order to eliminate potential fluctuations related
to foreign exchange rates, liabilities and payments denominated in a foreign currency have been translated using the 2016 year
end spot rates for all periods presented. The information about incurred and paid claims development prior to 2016 is presented
as supplementary information, as described in Note 1.

238

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Table of Contents

4. Insurance (continued)

U.S.

Group Life - Term

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

6,318

6,290

6,293

6,269

6,287

6,295

(Dollars in millions)

6,503

6,579

6,637

6,569

6,713

6,986

6,546

6,719

6,919

7,040

2011

2012

2013

2014

2015

2016

Total

Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims

Cumulative
Number of
Reported
Claims

825

207,139

208,441

210,597

210,347

210,838

184,085

6,568

6,720

6,913

7,015

7,125

40,636

(38,879)

1,769

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2011, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

Incurral Year

2011

2012

4,982

6,194

5,132

2011

2012

2013

2014

2015

2016

(Unaudited)

2013

(In millions)

6,239

6,472

5,216

2014

2015

2016

6,256

6,281

6,518

6,614

5,428

6,532

6,664

6,809

5,524

6,290

6,558

6,678

6,858

6,913

5,582

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

38,879

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years
Group Life - Term

78.4%

20.0%

0.7%

0.2%

0.4%

0.2%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

239

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

4. Insurance (continued)

Group Long-Term Disability

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2011

2012

2013

2014

2015

2016

(Dollars in millions)

For the Years Ended December 31,

(Unaudited)

924

923

955

916

966

894

979

1,008

914

980

1,027

1,076

2011

2012

2013

2014

2015

2016

Total

1,014

1,032

1,077

1,082

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2011, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

1,034

1,049

1,079

1,105

1,131

6,321

(2,277)

2,933

6,977

Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims

Cumulative
Number of
Reported
Claims

—

534

21,187

19,502

20,547

22,233

18,172

8,960

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

Incurral Year

2011

2012

217

2011

2012

2013

2014

2015

2016

(Unaudited)

2013

(In millions)

337

229

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

Average Annual Percentage Payout

2014

2015

2016

411

365

234

478

453

382

266

537

524

475

428

264

2,277

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years

Group Long-Term Disability

4.4%

18.9%

13.8%

8.4%

7.1%

6.3%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

Significant Methodologies and Assumptions

Group Life - Term and Group Long-Term Disability incurred but not paid (“IBNP”) liabilities are developed using
a combination of loss ratio and development methods. Claims in the course of settlement are then subtracted from the
IBNP liabilities resulting in the IBNR liabilities. The loss ratio method is used in the period in which the claims are neither
sufficient nor credible. In developing the loss ratios, any material rate increases that could change the underlying premium
without affecting the estimated incurred losses are taken into account. For periods where sufficient and credible claim
data exists, the development method is used based on the claim triangles which categorize claims according to both the
period in which they were incurred and the period in which they were paid, adjudicated or reported. The end result is a
triangle of known data that is used to develop known completion ratios and factors. Claims paid are then subtracted from
the estimated ultimate incurred claims to calculate the IBNP liability.

An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims
(IBNR and pending). This is expressed as a percentage of the underlying claims liability and is based on past experience
and the anticipated future expense structure.

240

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

For Group Life - Term and Group Long-Term Disability, first year incurred claims and allocated loss adjustment

expenses increased in 2016 compared to the 2015 incurral year due to the growth in the size of the business.

There were no significant changes in methodologies during 2016. The assumptions used in calculating the unpaid
claims and claim adjustment expenses for Group Life - Term and Group Long-Term Disability are updated annually to
reflect emerging trends in claim experience.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for Group Life - Term unpaid claims and claim adjustment expenses are not discounted.

The liabilities for Group Long-Term Disability unpaid claims and claim adjustment expenses were $5.8 billion and
$5.5 billion at December 31, 2016 and 2015, respectively. These amounts were discounted using interest rates ranging
from 3% to 8%, based on the incurral year. The total discount applied to these liabilities was $1.3 billion at both
December 31, 2016 and 2015. The amount of interest accretion recognized was $565 million, $517 million and
$481 million for the years ended December 31, 2016, 2015 and 2014, respectively. These amounts were reflected in
policyholder benefits and claims.

For Group Life - Term, claims were based upon individual death claims. For Group Long-Term Disability, claim
frequency was determined by the number of reported claims as identified by a unique claim number assigned to individual
claimants. Claim counts initially include claims that do not ultimately result in a liability. These claims are omitted from
the claim counts once it is determined that there is no liability.

The Group Long-Term Disability IBNR included in the development tables above, was developed using discounted

cash flows, and is presented on a discounted basis.

Property & Casualty - Auto Liability

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims

Cumulative
Number of
Reported
Claims

861

840

818

825

839

862

804

828

877

863

786

805

853

873

863

(Dollars in millions)

784

799

826

853

876

882

781

794

823

847

869

881

911

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2007, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

—

160

207,285

200,514

201,577

202,094

202,494

196,900

201,192

203,233

206,368

192,197

780

793

817

833

855

869

900

897

780

791

815

826

846

851

882

910

975

780

790

815

825

843

846

878

913

984

1,012

8,686

(7,509)

$ 1,205

241

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Incurral Year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

(Unaudited)

299

535

304

649

553

321

715

657

563

319

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

(In millions)

751

725

681

572

324

765

764

755

695

590

333

773

778

789

762

711

600

346

777

785

803

796

777

715

618

352

778

787

810

783

743

648

384

779

788

813

816

825

815

809

777

691

396

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

7,509

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years
Auto Liability

1
38.9%

2
31.1%

3
14.2%

4
8.2%

5
4.2%

6
1.7%

7
0.9%

8
0.4%

9
0.2%

10
0.1%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

Property & Casualty - Home

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims

Cumulative
Number of
Reported
Claims

445

436

644

423

636

506

421

599

523

573

415

590

510

589

891

(Dollars in millions)

414

588

507

587

868

714

414

589

503

584

843

713

654

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2007, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

—

86,408

127,474

106,614

115,495

166,443

146,512

107,469

113,448

106,650

98,986

414

588

501

582

840

703

652

707

412

586

498

581

835

698

635

702

759

412

585

497

580

835

696

635

704

753

740

6,437

(6,210)

229

242

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

(Unaudited)

Incurral Year

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

303

385

446

399

558

385

405

574

476

436

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

(In millions)

408

579

486

546

690

409

582

492

562

804

559

411

583

495

571

819

668

505

412

584

495

574

825

681

604

574

412

584

496

577

827

687

618

670

603

412

584

496

578

830

689

626

685

717

593

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

6,210

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years

Home

78.7%

16.6%

2.4%

1.1%

0.5%

0.3%

0.2%

—%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

Significant Methodologies and Assumptions

The liability for unpaid claim and claim adjustment expenses for the Property & Casualty business is determined by
examining the historical claims and allocated claim adjustment expenses data. This data, which is gross of salvage and
subrogation, is classified by incurral year and coverage and includes paid claims data and reported liabilities. For
homeowners and auto liability injury claims, the reported liabilities are set by the Company’s claims adjusters based on
the individual case, and a supplemental liability is added based on the historical development of reported claims. These
supplemental liabilities are estimated by coverage based on adjusted report year data triangles developed to ultimate claim
liability. Adjustments are made for settlement rates and average case liabilities. For auto non-injury claims, the Company
holds an average statistical liability for every reported claim. This statistical liability is based on an estimated average
payment that varies by coverage, report year and state. These average estimated payments are updated monthly.

For all property and casualty coverages, many actuarial methods such as adjusted loss development (adjusted for
settlement rates and average case liabilities) and loss ratio methods are employed to develop a best estimate of the IBNR
for each coverage type. Similar actuarial methods are used to determine the best estimate of the expected salvage and
subrogation; methods that look at recoveries by age and ratios of recoveries to paid loss are compared for each coverage.
A liability for unpaid allocated claim adjustment expenses is held for the future claim adjustment costs associated with
the payment of incurred but not yet paid claims. This liability is calculated as a percentage of the underlying unpaid claims
liability. The percentage is based on historical ratios of essential claim department expenses compared with paid losses.

There were no significant changes in methodologies or assumptions during 2016.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for unpaid claims and claim adjustment expenses were not discounted.

The cumulative number of reported claims for auto liability coverages are counted by individual coverages (i.e.
bodily injury and property damage) and, if multiple occupants are injured, then each injury is counted as a separate claim.
For home coverages, each exposure is counted separately, so a house fire would, for example, have separate claim counts
for the building, the contents, and additional living expenses. Claim counts include claims that do not ultimately result
in a liability. Any liability established upon receipt of these claims would subsequently be reversed.

243

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

4. Insurance (continued)

Asia

Group Disability & Group Life

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2010

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims

Cumulative
Number of
Reported
Claims

(Dollars in millions)

137

139

274

109

161

259

258

2010

2011

2012

2013

2014

2015

2016

Total

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2010, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

102

151

125

115

110

156

240

248

213

1,207

(795)

453

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

Incurral Year

2010

2011

2012

For the Years Ended December 31,

(Unaudited)

2013

(In millions)

2014

2015

2016

2010

2011

2012

2013

2014

2015

2016

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

Average Annual Percentage Payout

112

133

2,717

1,863

2,014

2,379

3,173

2,667

1,441

106

126

167

142

795

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years

Group Disability & Group Life

23.2%

25.7%

13.2%

9.7%

9.5%

11.8%

18.8%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

Significant Methodologies and Assumptions

This business line consists of employer sponsored and industry sponsored Group Life and Group Disability risks.

For Group Life, the IBNR liability is determined by using the Bornhuetter-Ferguson Method, with factors derived
by examining the experience of historical claims. A pending liability is also calculated for claims that have been reported
but have not been paid. A claim eligibility ratio based on past experience is applied to the face amount of individual
claims.

244

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

For Group Disability, the IBNR liability is calculated as a percentage of premiums in-force based on the expected
delay as evidenced by the experience in the portfolio. This is then allocated back into different incurral years based on
an assumed run-off. A claims in course of payment liability is also calculated for claims that have been admitted and are
in the course of payment. The assumptions employed are based on the economic conditions, industry experience and
adjusted for the Company’s own experience.

An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims.
This is expressed as a percentage of the underlying claims liability and is based on past experience and the future expense
structure.

The prior year estimates of ultimate losses were significantly higher in 2016 as a result of losing a litigation case
relating to a reinsurance contract. In light of the court ruling, the Company reconsidered the carrying value of the
reinsurance receivable in relation to the disputed amounts and any future reinsurance recovery and concluded that it is
no longer appropriate to assume 50% recovery from the reinsurer in relation to current or future disputed claims. For
other contracts, estimates of ultimate losses for recent years were lower due to improving claims experience.

There were no significant changes in methodologies or assumptions during 2016.

No additional premiums or return premiums have been accrued as a result of the prior year development.

The liabilities for unpaid claims and claim adjustment expenses were $627 million and $619 million at December
31, 2016 and 2015, respectively. These amounts were discounted using interest rates ranging from 3% to 7%, based on
the incurral year. The total discount applied to these liabilities was $42 million and $41 million at December 31, 2016
and 2015, respectively. The amount of interest accretion recognized was $22 million, $20 million and $16 million for the
years ended December 31, 2016, 2015 and 2014, respectively. These amounts were reflected in policyholder benefits and
claims.

The Company tracks claim frequency by the number of reported claims as identified by a unique claim number
assigned to individual claimants. Claim counts include claims that do not ultimately result in a liability. A liability is only
established for those claims that are expected to result in a liability, based on historical factors.

Latin America

Protection Life

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

Total IBNR
Liabilities Plus
Expected
Development on
Reported
Claims

Cumulative
Number of
Reported
Claims

201

267

228

271

308

250

(Dollars in millions)

273

312

322

323

273

314

329

224

155

273

314

330

230

210

172

273

314

330

231

215

240

245

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2008, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

—

163

32,175

32,470

33,001

27,667

28,088

32,048

40,661

45,852

28,762

274

314

330

232

217

247

369

320

274

314

330

232

218

248

380

456

350

2,802

(2,500)

341

245

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

(Unaudited)

Incurral Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

198

262

226

266

300

230

(In millions)

267

305

301

144

268

306

307

219

153

2008

2009

2010

2011

2012

2013

2014

2015

2016

268

306

308

225

207

168

268

306

308

226

212

233

220

268

306

309

226

213

238

326

263

268

306

309

227

214

239

331

368

238

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

2,500

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years

Protection Life

Protection Health

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

66.4%

25.4%

1.9%

0.4%

0.2%

0.1%

—%

Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance

At December 31, 2016

Incurral Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

For the Years Ended December 31,

(Unaudited)

Total IBNR
Liabilities Plus
Expected
Development on
Reported
Claims

Cumulative
Number of
Reported
Claims

127

142

146

144

163

172

(Dollars in millions)

144

165

192

144

165

193

229

199

145

166

194

231

224

216

145

166

194

232

226

244

224

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total

Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

All outstanding liabilities for incurral years prior to 2008, net of reinsurance

Total unpaid claims and claim adjustment expenses, net of reinsurance

—

825

91,276

92,466

96,316

105,917

99,446

103,077

96,075

84,206

89,884

145

166

194

232

226

245

249

192

145

166

194

232

227

246

251

219

253

1,933

(1,915)

246

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance

For the Years Ended December 31,

(Unaudited)

Incurral Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

(In millions)

127

142

146

144

163

172

2008

2009

2010

2011

2012

2013

2014

2015

2016

144

165

192

206

144

165

193

229

199

145

166

194

231

224

216

145

166

194

232

226

244

222

145

166

194

232

226

245

247

192

145

166

194

232

227

246

249

219

237

Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance

1,915

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration as of December 31, 2016:

Years

Protection Health

88.8%

10.7%

0.7%

0.3%

0.2%

0.1%

—%

0.1%

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

Significant Methodologies and Assumptions

The Latin America segment establishes liabilities for unpaid losses, which are equal to the accumulation of unpaid

reported claims, plus an estimate for claims incurred but not reported.

In general terms, for both the Protection Life and Protection Health products, the methodology for IBNR is a weighted
loss ratio combined with the Bornhuetter-Ferguson Method. The factors are derived by examining the experience of
historical claims. In the initial months, the credibility is higher on premiums and lower on claims. As the premiums are
earned, the credibility grows for the factors. For one major medical Protection Health product, a different methodology
is employed, which estimates the IBNR based on a percentage of policy cancellations and the accrued premium.

For Protection Health products, claim duration can be very long due to the multiple incidences over time that may
occur for a single claim. The number of claims reported per year is based on the original claim occurrence date for each
individual claim. Any subsequent claims that are considered part of the original claim occurrence are not counted as a
new claim. For Protection Life products, claims were based upon individual death claims.

During 2016, there was an increase in first year incurred claims and allocated loss adjustment expenses as compared
to 2015 due to an increase in claims duration experience for one product and due to an overall increase in sales of certain
plan sponsored and individual protection health products.

There were no significant changes in methodologies or assumptions during 2016.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for unpaid claims and claim adjustment expenses were not discounted.

For Protection Life and Protection Health products, claim counts initially include claims that do not ultimately result

in a liability. These claims are omitted from the claim counts once it is determined that there is no liability.

247

Table of Contents

4. Insurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim
Adjustment Expenses

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claims

adjustment expenses on the consolidated balance sheet were as follows at:

Short-Duration:

Unpaid claims and allocated claims adjustment expenses, net of reinsurance:

December 31, 2016

(In millions)

U.S.:

Group Life - Term

Group Long-Term Disability

Property & Casualty - Auto

Property & Casualty - Home

Total

Asia - Group Disability & Group Life

Latin America:

Protection Life

Protection Health

Total

Other insurance lines - all segments combined

Total unpaid claims and allocated claims adjustment expenses, net of reinsurance

Reinsurance recoverables on unpaid claims:

U.S.:

Group Life - Term

Group Long-Term Disability

Property & Casualty - Auto

Property & Casualty - Home

Total

Asia - Group Disability & Group Life

Latin America:

Protection Life

Protection Health

Total

Other insurance lines - all segments combined

Total reinsurance recoverable on unpaid claims

Total unpaid claims and allocated claims adjustment expense

Unallocated claims adjustment expenses

Discounting

Liability for unpaid claims and claim adjustment liabilities - short-duration

Liability for unpaid claims and claim adjustment liabilities - all long-duration lines

1,769

6,977

1,205

229

341

10,180

453

410

888

11,931

179

216

193

591

12,522

103

(1,319)

11,306

6,853

Total liability for unpaid claims and claim adjustment expense (included in future policy

benefits and other policy-related balances)

18,159

248

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

4. Insurance (continued)

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:

Balance at December 31,

Less: Reinsurance recoverables

Net balance at December 31,

Cumulative adjustment (2)

Net balance at January 1,

Incurred related to:

Current year

Prior years (3)

Total incurred

Paid related to:

Current year

Prior years

Total paid

Net balance at December 31,

Add: Reinsurance recoverables

Balance at December 31,

__________________

Years Ended December 31,

2016

2015 (1)

(In millions)

2014 (1)

11,388

11,036

10,630

2,042

9,346

4,988

14,334

25,085

369

25,454

(17,356)
(7,331)
(24,687)
15,101

3,058

1,876

9,160

—

9,160

9,639
(78)
9,561

(6,788)
(2,587)
(9,375)
9,346

2,042

18,159

11,388

1,661

8,969

—

8,969

9,358
(70)
9,288

(6,714)
(2,383)
(9,097)
9,160

1,876

11,036

(1)

Limited to property & casualty, group accident and non-medical health policies and contracts.

(2) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the new short-duration contracts
guidance which clarified the requirement to include claim information for long-duration contracts. The accumulated
adjustment primarily reflects unpaid claim liabilities, net of reinsurance, for long-duration contracts as of the beginning
of the period presented. Prior periods have not been restated. See Note 1.

(3) During 2016, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment
expenses associated with prior years increased due to the implementation of new guidance related to short-duration
contracts. During 2015 and 2014, 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 due to a reduction in prior year automobile bodily
injury and homeowners’ severity.

Separate Accounts

Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling
$247.5 billion and $244.6 billion at December 31, 2016 and 2015, 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 $61.1 billion and $57.0 billion at December 31, 2016 and 2015, respectively. The latter category
consisted primarily of guaranteed interest contracts. The average interest rate credited on these contracts was 2.35% and 2.37%
at December 31, 2016 and 2015, respectively.

For the years ended December 31, 2016, 2015 and 2014, there were no investment gains (losses) on transfers of assets from

the general account to the separate accounts.

249

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles

See Note 1 for a description of capitalized acquisition costs.

Nonparticipating and Non-Dividend-Paying Traditional Contracts

The Company amortizes DAC and VOBA related to these contracts (term insurance, nonparticipating whole life insurance,
traditional group life insurance, non-medical health insurance, and accident & health insurance) over the appropriate premium
paying period in proportion to the actual and expected future gross premiums that were set at contract issue. The expected
premiums are based upon the premium requirement of each policy and assumptions for mortality, morbidity, persistency and
investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include provisions for adverse deviation,
and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised
after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected
profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability
in premium volumes.

Participating, Dividend-Paying Traditional Contracts

The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion
to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition
of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality,
persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables,
such as inflation. For participating contracts within the closed block (dividend-paying traditional contracts) future gross margins
are also dependent upon changes in the policyholder dividend obligation. See Note 7. Of these factors, the Company anticipates
that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales, are reasonably
likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated
gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated
gross margins, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to
current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase,
resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously
estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts
expected future gross margins. When expected future gross margins are below those previously estimated, the DAC and VOBA
amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future
gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the
estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances.

Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts

The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion
to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition
of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to
policyholders, mortality, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance
counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company
anticipates that investment returns, expenses and persistency are reasonably likely to significantly impact the rate of DAC and
VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for
that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA
amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed
those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The
opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the
Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When
expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting
in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously
estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of
business to determine the recoverability of DAC and VOBA balances.

Credit Insurance, Property & Casualty Insurance and Other Short-Duration Contracts

The Company amortizes DAC for these contracts, which is primarily composed of commissions and certain underwriting

expenses, in proportion to actual and future earned premium over the applicable contract term.

250

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)

Factors Impacting Amortization

Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force
account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC
and VOBA. Returns that are higher than the Company’s long-term expectation produce higher account balances, which increases
the Company’s future fee expectations and decreases future benefit payment expectations on minimum death and living benefit
guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company’s
long-term expectation. The Company’s practice to determine the impact of gross profits resulting from returns on separate
accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only
changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption
when its long-term expectation changes.

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

Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract
for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such
modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written
off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the
modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue
and any acquisition costs associated with the related modification are expensed.

Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to other
expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses.
Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains
and losses had been recognized.

251

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)

Information regarding DAC and VOBA was as follows:

DAC:

Balance at January 1,

Capitalizations

Amortization related to:

Net investment gains (losses) and net derivative gains (losses)

Other expenses

Total amortization

Unrealized investment gains (losses)

Effect of foreign currency translation and other

Balance at December 31,

VOBA:

Balance at January 1,

Amortization related to:

Net investment gains (losses) and net derivative gains (losses)

Other expenses

Total amortization

Unrealized investment gains (losses)

Effect of foreign currency translation and other

Balance at December 31,

Total DAC and VOBA:

Balance at December 31,

Years Ended December 31,

2016

2015

(In millions)

2014

19,465

18,984

3,589

3,837

1,628

(3,819)

(2,191)

(196)

(300)

20,367

(3,354)

(3,343)

539

(552)

19,465

19,774

4,183

(39)

(3,372)

(3,411)

(676)

(886)

18,984

4,665

5,458

6,932

(1)

(449)

(450)

178

4,431

(20)

(573)

(593)

(299)

4,665

(1)

(720)

(721)

(26)

(727)

5,458

24,798

24,130

24,442

Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:

U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

December 31,

2016

2015

(In millions)

616

8,707

1,808

1,472

5,246

6,921

615

8,374

1,753

1,532

5,436

6,390

24,798

24,130

252

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)

Information regarding other intangibles was as follows:

DSI:

Balance at January 1,

Capitalization

Amortization

Unrealized investment gains (losses)

Effect of foreign currency translation

Balance at December 31,

VODA and VOCRA:

Balance at January 1,

Amortization

Effect of foreign currency translation

Balance at December 31,

Accumulated amortization

Negative VOBA:

Balance at January 1,

Amortization

Effect of foreign currency translation and other

Balance at December 31,

Accumulated amortization

Years Ended December 31,

2016

2015

2014

(In millions)

774

810

(111)

(2)

—

686

719

(73)

(17)

629

648

1,193

(269)

935

3,034

(106)

—

774

847

(75)

(53)

719

575

1,596

(361)

(42)

1,193

2,765

950

(130)

(64)

(2)

810

975

(82)

(46)

847

500

2,162

(442)

(124)

1,596

2,404

The estimated future amortization expense (credit) to be reported in other expenses for the next five years is as follows:

2017

2018

2019

2020

2021

6. Reinsurance

VOBA

VODA and VOCRA

Negative VOBA

(In millions)

435

388

350

303

268

(131)

(55)

(38)

(39)

(38)

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. The Company participates in reinsurance
activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth.

253

Table of Contents

6. Reinsurance (continued)

U.S.

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

For its Group Benefits business, the Company generally retains most of the risk and only cedes particular risk on certain
client arrangements. The majority of the Company’s reinsurance activity within this business relates to client agreements for
employer sponsored captive programs, risk-sharing agreements and multinational pooling.

The Company, through its Property & Casualty business, purchases reinsurance to manage its exposure to large losses
(primarily catastrophe losses) and to protect statutory surplus. The Company cedes losses and premiums based upon the exposure
of the policies subject to reinsurance. To manage exposure to large property & casualty losses, the Company purchases property
catastrophe, casualty and property per risk excess of loss reinsurance protection.

The Company’s Retirement and Income Solutions business has periodically engaged in reinsurance activities, on an

opportunistic basis. There were no such transactions during the periods presented.

Asia, Latin America and EMEA

For certain life insurance products, the Company currently reinsures risks in excess of $5 million to external reinsurers on
a yearly renewable term basis. The Company may also reinsure certain risks with external reinsurers depending upon the nature
of the risk and local regulatory requirements. For selected large corporate clients, the Company reinsures 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 also has reinsurance agreements in-force that reinsure a portion of the living and death benefit guarantees issued in
connection with variable annuity products. 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.

MetLife Holdings

For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or
on a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $2 million for most products.
In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages.
Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified
characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in
excess of the amount the Company retains. The Company also assumes portions of the risk associated with certain whole life
policies issued by an affiliate and reinsures certain term life policies and universal life policies with secondary death benefit
guarantees to an affiliate. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention
at any time.

For annuities, the Company reinsures 100% of the living and death benefit guarantees issued in connection with certain
variable annuities issued since 2004 to an affiliate and portions of the living and death benefit guarantees issued in connection
with its variable annuities issued prior to 2004 to affiliated and unaffiliated reinsurers. 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 value of
embedded derivatives on the ceded risk is determined using a methodology consistent with the guarantees directly written by
the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The Company also
assumes 100% of certain variable annuity risks issued by certain affiliates.

In addition, the Company has a reinsurance agreement in-force to reinsure the living and death benefit guarantees issued
in connection with certain variable annuity products. Under this agreement, the Company receives reinsurance fees associated
with the guarantees collected from policyholders, and provides reimbursement for benefits paid or accrued in excess of account
values, subject to certain limitations.

254

Table of Contents

6. Reinsurance (continued)

Brighthouse Financial

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or
on a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $2 million for most products.
In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages.
Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified
characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in
excess of the amount the Company retains. The Company also reinsures portions of the risk associated with certain whole life
policies to an affiliate and assumes certain term life policies and universal life policies with secondary death benefit guarantees
issued by an affiliate. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at
any time.

For annuities, the Company reinsures portions of the living and death benefit guarantees issued in connection with certain
variable annuities to unaffiliated reinsurers. 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 value of embedded derivatives on the ceded risk
is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the
input for nonperformance risk that reflects the credit of the reinsurer. The Company reinsures 100% of certain variable annuity
risks to an affiliate. The Company also assumes 100% of the living and death benefit guarantees issued in connection with certain
variable annuities issued by certain affiliates.

The Company also reinsures, through 100% quota share reinsurance agreements, certain run-off long-term care and workers’

compensation business written by MetLife USA.

Catastrophe Coverage

The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company’s results of
operations. Currently, for Asia, Latin America and EMEA, the Company purchases catastrophe coverage to insure risks within
certain countries deemed by management to be exposed to the greatest catastrophic risks. For all other segments, the Company
uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure
to larger risks.

Reinsurance Recoverables

The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes
recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and
evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable
balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable
balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with
various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance
recoverable balances are stated net of allowances for uncollectible reinsurance, which at December 31, 2016 and 2015, were
not significant.

The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured
trusts, funds withheld accounts and irrevocable letters of credit. The Company had $6.1 billion of unsecured reinsurance
recoverable balances at both December 31, 2016 and 2015.

At December 31, 2016, the Company had $14.6 billion of net ceded reinsurance recoverables. Of this total, $9.8 billion, or
67%, were with the Company’s five largest ceded reinsurers, including $2.3 billion of net ceded reinsurance recoverables which
were unsecured. At December 31, 2015, the Company had $15.3 billion of net ceded reinsurance recoverables. Of this total,
$10.8 billion, or 71%, were with the Company’s five largest ceded reinsurers, including $2.3 billion of net ceded reinsurance
recoverables which were unsecured.

The Company has reinsured with an unaffiliated third-party reinsurer, 59.25% 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.

255

Table of Contents

6. Reinsurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the

significant effects of reinsurance was as follows:

Premiums

Direct premiums

Reinsurance assumed

Reinsurance ceded

Net premiums

Universal life and investment-type product policy fees

Direct universal life and investment-type product policy fees

Reinsurance assumed

Reinsurance ceded

Net universal life and investment-type product policy fees

Policyholder benefits and claims

Direct policyholder benefits and claims

Reinsurance assumed

Reinsurance ceded

Net policyholder benefits and claims

Other expenses

Direct other expenses

Reinsurance assumed

Reinsurance ceded

Net other expenses

Years Ended December 31,

2016

2015

2014

(In millions)

40,271

39,516

1,405

(2,523)

39,153

10,183

(1,073)

9,206

43,422

1,109

(3,727)

40,804

15,163

317

(411)

1,454

(2,425)

38,545

10,424

105

(1,022)

9,507

41,233

1,023

(3,542)

38,714

16,968

130

(329)

40,049

1,472

(2,454)

39,067

10,768

126

(948)

9,946

41,573

962

(3,433)

39,102

17,334

165

(408)

15,069

16,769

17,091

The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant

effects of reinsurance was as follows at:

Assets

Premiums, reinsurance and other

receivables

Deferred policy acquisition costs and

value of business acquired
Total assets

Liabilities

Future policy benefits

Policyholder account balances

Other policy-related balances

Other liabilities

Total liabilities

December 31,

2016

2015

Direct

Assumed

Ceded

Total
Balance
Sheet

Direct

Assumed

Ceded

Total
Balance
Sheet

(In millions)

7,109

543

$ 18,429

$ 26,081

6,044

555

$ 16,103

$ 22,702

25,099

(317)

24,798

24,490

$ 32,208

559

$ 18,112

$ 50,879

$ 30,534

120

675

(480)

24,130

$ 15,623

$ 46,832

$ 198,436

$ 1,535

— $ 199,971

$ 189,817

$ 2,062

— $ 191,879

209,028

1,209

14,055

23,513

324

407

(2)

4,898

210,235

201,748

14,386

28,818

13,939

19,800

975

310

472

(1)

3,289

202,722

14,255

23,561

$ 445,032

$ 3,475

$ 4,903

$ 453,410

$ 425,304

$ 3,819

$ 3,294

$ 432,417

256

Table of Contents

6. Reinsurance (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance
risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $3.1 billion and $2.3 billion
at December 31, 2016 and 2015, respectively. The deposit liabilities on reinsurance were $32 million and $33 million at
December 31, 2016 and 2015, respectively.

7. Closed Block

On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a mutual
life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion
was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the
“Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain
individual life insurance policies of MLIC. 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.

The Company uses the same accounting principles to account for the participating policies included in the closed block as
it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings
that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed
block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) represents the estimated
maximum future earnings from the closed block expected to result from operations attributed to the closed block after income
taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain
in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the
expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence,
the actual cumulative earnings of the closed block are greater than the expected cumulative earnings of the closed block, the
Company will pay the excess 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. Amortization of the closed block DAC, which resides outside
of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s
net income continues to be sensitive to the actual performance of the closed block.

Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities,

revenues and expenses outside the closed block based on the nature of the particular item.

257

Table of Contents

7. Closed Block (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding the closed block liabilities and assets designated to the closed block was as follows at:

Closed Block Liabilities

Future policy benefits

Other policy-related balances

Policyholder dividends payable

Policyholder dividend obligation

Current income tax payable

Other liabilities

Total closed block liabilities

Assets Designated to the Closed Block

Investments:

Fixed maturity securities available-for-sale, at estimated fair value

Equity securities available-for-sale, at estimated fair value

Mortgage loans

Policy loans

Real estate and real estate joint ventures

Other invested assets

Total investments

Cash and cash equivalents

Accrued investment income

Premiums, reinsurance and other receivables

Current income tax recoverable

Deferred income tax assets

Total assets designated to the closed block

Excess of closed block liabilities over assets designated to the closed block

Amounts included in AOCI:

Unrealized investment gains (losses), net of income tax

Unrealized gains (losses) on derivatives, net of income tax

Allocated to policyholder dividend obligation, net of income tax

Total amounts included in AOCI

December 31,

2016

2015

(In millions)

40,834

41,278

257

443

1,931

196

249

468

1,783

—

380

43,665

44,158

27,220

27,556

100

5,935

4,553

655

1,246

111

6,022

4,642

462

1,066

39,709

39,859

467

—

177

40,439

3,226

1,517

(1,255)

357

236

474

234

40,870

3,288

1,382

(1,159)

299

3,587

Maximum future earnings to be recognized from closed block assets and liabilities

3,583

Information regarding the closed block policyholder dividend obligation was as follows:

Balance at January 1,

Change in unrealized investment and derivative gains (losses)

Balance at December 31,

Years Ended December 31,

2016

2015

2014

(In millions)

1,783

148

1,931

3,155

(1,372)

1,783

1,771

1,384

3,155

258

Table of Contents

7. Closed Block (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding the closed block revenues and expenses was as follows:

Years Ended December 31,

2016

2015

2014

(In millions)

Revenues

Premiums

Net investment income

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Policyholder benefits and claims

Policyholder dividends

Other expenses

Total expenses

1,804

1,850

1,902

(10)

3,721

2,563

953

133

3,649

1,982

(23)

3,836

2,564

1,015

143

3,722

114

1,918

2,093

4,038

2,598

988

155

3,741

297

104

193

Revenues, net of expenses before provision for income tax expense (benefit)

Provision for income tax expense (benefit)

Revenues, net of expenses and provision for income tax expense (benefit)

MLIC charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as
well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. MLIC also
charges the closed block for expenses of maintaining the policies included in the closed block.

8. Investments

See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies.

Investment Risks and Uncertainties

Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency
and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the
determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions,
the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The
use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on
the amounts presented within the consolidated financial statements.

The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations
and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are
revised as conditions change and new information becomes available.

The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-
backed securities (“ABS”), certain structured investment transactions and FVO and trading securities) is dependent upon certain
factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned.

Fixed Maturity and Equity Securities AFS

Fixed Maturity and Equity Securities AFS by Sector

The following table presents the fixed maturity and equity securities AFS by sector. Redeemable preferred stock is reported
within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within
equity securities. Included within fixed maturity securities are structured securities including RMBS, ABS and commercial
mortgage-backed securities (“CMBS”) (collectively, “Structured Securities”).

259

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

December 31, 2016

Gross Unrealized

Gains

Temporary
Losses

OTTI
Losses

Cost or
Amortized
Cost

Estimated
Fair
Value

Cost or
Amortized
Cost

(In millions)

December 31, 2015

Gross Unrealized

Gains

Temporary
Losses

OTTI
Losses

Estimated
Fair
Value

$ 94,558

$ 7,351

1,056

$ — $ 100,853

96,466

$ 6,583

2,255

$ — $ 100,794

53,326

50,923

55,676

36,293

14,566

13,920

11,092

4,977

6,600

3,132

1,244

1,733

101

282

780

385

1,752

554

122

141

103

—

(1)

(10)

(1)

57,523

57,138

57,057

36,993

16,176

13,877

11,272

56,499

45,451

56,003

37,914

13,723

14,498

12,410

5,373

5,269

3,019

1,366

1,795

131

347

226

221

1,822

424

229

125

—

(1)

61,646

50,499

57,198

38,797

15,441

14,394

12,633

$ 330,354

$ 25,420

1,927

488

817

4,893

(8) $ 350,889

$ 332,964

$23,883

$ — $

2,401

1,962

397

5,369

$ 351,402

107

$ — $

2,252

—

793

1,035

—

$ — $

3,194

2,997

482

158

$ — $

1,069

3,321

Fixed maturity securities:

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate (1)

RMBS (1)

State and political subdivision

ABS

CMBS (1)

Total fixed maturity

securities

Equity securities:

Common stock

Non-redeemable preferred

stock

Total equity securities

2,744

513

__________________

(1)

The noncredit loss component of OTTI losses for foreign corporate, RMBS and CMBS was in an unrealized gain position
of $1 million, $10 million and $1 million, respectively, at December 31, 2016, due to increases in estimated fair value
subsequent to initial recognition of noncredit losses on such securities. The noncredit loss component of OTTI for CMBS
was in an unrealized gain position of $1 million at December 31, 2015, due to increases in estimated fair value subsequent
to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”

The Company held non-income producing fixed maturity securities with an estimated fair value of $6 million and

$54 million with unrealized gains (losses) of ($2) million and $12 million at December 31, 2016 and 2015, respectively.

Methodology for Amortization of Premium and Accretion of Discount on Structured Securities

Amortization of premium and accretion of discount on Structured Securities considers the estimated timing and amount
of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are
recalculated when differences arise between the originally anticipated and the actual prepayments received and currently
anticipated. Prepayment assumptions for Structured Securities are estimated using inputs obtained from third-party specialists
and based on management’s knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-
sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective
yield is recalculated on a retrospective basis.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at

December 31, 2016:

Due in One
Year or Less

Due After One
Year Through
Five Years

Due After Five
Years
Through Ten
Years

Due After Ten
Years

Structured
Securities

Total Fixed
Maturity
Securities

(In millions)

Amortized cost

Estimated fair value

15,423

15,517

68,766

72,018

67,522

70,282

117,338

130,930

61,305

62,142

330,354

350,889

260

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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

Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities
AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous
unrealized loss position at:

December 31, 2016

December 31, 2015

Less than 12 Months

Equal to or Greater
than 12 Months

Less than 12 Months

Equal to or Greater
than 12 Months

Estimated
Fair
Value

Gross
Unrealized
Losses

Estimated
Fair
Value

Gross
Unrealized
Losses

Estimated
Fair
Value

Gross
Unrealized
Losses

Estimated
Fair
Value

Gross
Unrealized
Losses

(Dollars in millions)

Fixed maturity securities:

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate

RMBS

State and political subdivision

ABS

CMBS

Total fixed maturity securities

Equity securities:

Common stock

Non-redeemable preferred stock

Total equity securities

Total number of securities in an

unrealized loss position

16,147

3,684

400

27,526

1,629

3,762

656

760

271

639

403

114

2,924

13,500

6,228

11,613

12,943

2,636

2,702

2,570

68,339

105

196

301

5,321

141

924

6,127

2,618

2,789

735

17,103

165

176

1,790

114

1,112

141

111

19,628

3,530

14,447

13,467

1,618

7,329

4,876

222

166

911

287

124

1,961

92,421

— $

203

282

6,366

3,475

105

107

298

429

5,251

2,431

168

2,823

637

15,799

200

220

1,489

626

913

196

111

1,970

Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the
cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent
in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future
earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length
of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments
when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry
sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the
potential for impairments where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted
natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more
likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost
recovers; (vii) with respect to Structured Securities, changes in forecasted cash flows after considering the quality of
underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms
of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security;
(viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed
maturity securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained
from regulators and rating agencies.

261

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as

follows:

• The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value
of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment.

• When determining collectability and the period over which value is expected to recover, the Company applies
considerations utilized in its overall impairment evaluation process which incorporates information regarding the
specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall
macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s
best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but
are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal
payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the
issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the
issuer by rating agencies.

• Additional considerations are made when assessing the unique features that apply to certain Structured Securities
including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted
loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and
the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities
and state and political subdivision securities, the estimated fair value is considered the recovery value when available
information does not indicate that another value is more appropriate. When information is identified that indicates a
recovery value other than estimated fair value, management considers in the determination of recovery value the same
considerations utilized in its overall impairment evaluation process as described above, as well as any private and public
sector programs to restructure such securities.

With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given
in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery
in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether
any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments.
When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security’s cost and
its estimated fair value with a corresponding charge to earnings.

The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the

determination is made. The Company does not change the revised cost basis for subsequent recoveries in value.

In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired
security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced
premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective
manner based on the amount and timing of estimated future cash flows.

Current Period Evaluation

Based on the Company’s current evaluation of its AFS securities in an unrealized loss position in accordance with its
impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about
holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-
than-temporarily impaired at December 31, 2016. Future OTTI will depend primarily on economic fundamentals, issuer
performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings,
collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes
in the above factors, OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities decreased $560 million during the year ended December 31, 2016
to $4.9 billion. The decrease in gross unrealized losses for the year ended December 31, 2016, was primarily attributable
to narrowing credit spreads, partially offset by an increase in interest rates and, to a lesser extent, the impact of weakening
foreign currencies on non-functional currency denominated fixed maturity securities.

262

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

At December 31, 2016, $282 million of the total $4.9 billion of gross unrealized losses were from 125 fixed maturity

securities with an unrealized loss position of 20% or more of amortized cost for six months or greater.

The change in gross unrealized losses on equity securities was not significant during the year ended December 31,

2016.

Investment Grade Fixed Maturity Securities

Of the $282 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of
amortized cost for six months or greater, $224 million, or 79%, were related to gross unrealized losses on 81 investment
grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to
widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since
purchase.

Below Investment Grade Fixed Maturity Securities

Of the $282 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of
amortized cost for six months or greater, $58 million, or 21%, were related to gross unrealized losses on 44 below investment
grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related
to U.S. and foreign corporate securities (primarily industrial and utility securities) and non-agency RMBS (primarily
alternative residential mortgage loans) and are the result of significantly wider credit spreads resulting from higher risk
premiums since purchase, largely due to economic and market uncertainty including concerns over lower oil prices in the
energy sector and valuations of residential real estate supporting non-agency RMBS. Management evaluates U.S. and foreign
corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term
prospects of the issuers and evaluates non-agency RMBS based on actual and projected cash flows after considering the
quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the
payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure
of the security.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

Mortgage loans:

Commercial

Agricultural

Residential

Subtotal (1)

Valuation allowances

Subtotal mortgage loans, net

Residential — FVO

Commercial mortgage loans held by CSEs — FVO

Total mortgage loans, net

__________________

December 31,

2016

2015

Carrying
Value

% of
Total

Carrying
Value

(Dollars in millions)

% of
Total

48,035

14,456

11,696

74,187

(344)

73,843

566

136

64.4% $

19.4

15.7

99.5

(0.5)

99.0

0.8

0.2

44,012

13,188

9,734

66,934

(318)

66,616

314

172

65.6%

19.6

14.5

99.7

(0.5)

99.2

0.5

0.3

74,545

100.0% $

67,102

100.0%

(1)

Purchases of mortgage loans were $3.6 billion and $4.2 billion for the years ended December 31, 2016 and 2015,
respectively, and were primarily comprised of residential mortgage loans.

See “— Variable Interest Entities” for discussion of CSEs.

263

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on
residential — FVO and commercial mortgage loans held by CSEs — FVO is presented in Note 10. The Company elects the
FVO for certain mortgage loans and related long-term debt that are managed on a total return basis.

Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment

Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those

modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:

Evaluated Individually for Credit Losses

Impaired Loans with a Valuation
Allowance

Impaired Loans without
a Valuation Allowance

Evaluated Collectively for
Credit Losses

Impaired Loans

Unpaid
Principal
Balance

Recorded
Investment

Valuation
Allowances

Unpaid
Principal
Balance

Recorded
Investment

Valuation
Allowances

Carrying
Value

Average
Recorded
Investment

(In millions)

— $

—

— $

—

266

305

141

220

242

281

131

209

48,023

234

14,416

11,454

73,893

43,955

13,120

9,603

343

217

66,678

315

242

293

131

253

188

330

127

274

December 31, 2016

Commercial

Agricultural

Residential

Total

December 31, 2015

Commercial

Agricultural

Residential

Total

The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $359 million,

$80 million and $19 million, respectively, for the year ended December 31, 2014.

Valuation Allowance Rollforward by Portfolio Segment

The changes in the valuation allowance, by portfolio segment, were as follows:

Commercial

Agricultural

Residential

Total

258

(In millions)

(11)

(23)

224

(19)

217

160

(4)

(1)

—

(1)

(5)

(16)

322

(29)

305

(35)

318

186

(160)

344

Balance at January 1, 2014

Provision (release)

Charge-offs, net of recoveries

Balance at December 31, 2014

Provision (release)

Charge-offs, net of recoveries

Balance at December 31, 2015

Provision (release) (1)

Charge-offs, net of recoveries (1)

Balance at December 31, 2016

(143)

234

__________________

264

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(1)

In connection with an acquisition in 2010, certain impaired commercial mortgage loans were acquired and accordingly,
were not originated by the Company. Such commercial mortgage loans have been accounted for as purchased credit
impaired (“PCI”) commercial mortgage loans. Decreases in cash flows expected to be collected on PCI commercial
mortgage loans can result in provisions for losses on mortgage loans. For the year ended December 31, 2016, in connection
with the maturity of an acquired PCI commercial mortgage loan, an increase to the commercial mortgage loan valuation
allowance of $143 million was recorded and charged-off upon maturity. The Company will recover a substantial portion
of the loss on the loan incurred through an indemnification agreement entered into in connection with the acquisition in
2010.

Valuation Allowance Methodology

Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the
Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established
using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present
value of expected future cash flows discounted at the loan’s original effective interest rate, (ii) the estimated fair value of
the loan’s underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the
loan’s observable market price. A common evaluation framework is used for establishing non-specific valuation allowances
for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each
loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances
are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not
been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan
portfolio segment-specific factors, including the Company’s experience for loan losses, defaults and loss severity, and loss
expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new
information becomes available.

Commercial and Agricultural Mortgage Loan Portfolio Segments

The Company typically uses several years of historical experience in establishing non-specific valuation allowances
which captures multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience,
management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the
loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For
evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include
increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher
risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on
historical experience in determining the non-specific valuation allowance established for commercial and agricultural
mortgage loans.

All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial
statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying
collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses
on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans
with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on
an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage
loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis.
Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances
are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by
aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation
allowances are established as described above using inputs that are unique to each segment of the loan portfolio.

For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares
a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the
lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-
to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the
loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk
of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated
annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely
updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.

265

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

For agricultural mortgage loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values
utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan
portfolio and are routinely updated.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential
mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss
reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market
conditions and the Company’s historical experience. In contrast to the commercial and agricultural mortgage loan portfolios,
residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-
specific valuation allowances are established using the evaluation framework described above for pools of loans with similar
risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation
allowances are only established on residential mortgage loans when they have been restructured and are established using
the methodology described above for all loan portfolio segments.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or
nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more
days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans
have a higher risk of experiencing a credit loss.

Credit Quality of Commercial Mortgage Loans

The credit quality of commercial mortgage loans was as follows at:

December 31, 2016

Loan-to-value ratios:

Less than 65%

65% to 75%

76% to 80%

Greater than 80%

Total

December 31, 2015

Loan-to-value ratios:

Less than 65%

65% to 75%

76% to 80%

Greater than 80%

Total

Recorded Investment

Debt Service Coverage Ratios

> 1.20x

1.00x - 1.20x

< 1.00x

Total

% of
Total

Estimated
Fair
Value

% of
Total

(Dollars in millions)

41,811

1,307

3,335

229

142

—

874

221

—

43,992

3,556

229

258

91.6% $

44,459

91.8%

7.4

0.5

3,488

215

250

7.2

0.5

45,517

1,348

1,170

48,035

100.0% $

48,412

100.0%

39,770

3,484

—

758

90.4% $

40,921

90.7%

7.9

—

1.7

3,451

—

732

7.7

—

1.6

44,012

100.0% $

45,104

100.0%

38,163

1,063

544

3,270

—

381

138

—

140

41,814

1,341

—

237

857

266

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Credit Quality of Agricultural Mortgage Loans

The credit quality of agricultural mortgage loans was as follows at:

Loan-to-value ratios:

Less than 65%

65% to 75%

76% to 80%

Greater than 80%

Total

December 31,

2016

2015

Recorded
Investment

% of
Total

Recorded
Investment

% of
Total

(Dollars in millions)

13,872

96.0% $

12,399

94.0%

479

3.3

0.1

0.6

710

5.4

0.2

0.4

14,456

100.0% $

13,188

100.0%

The estimated fair value of agricultural mortgage loans was $14.7 billion and $13.5 billion at December 31, 2016 and

2015, respectively.

Credit Quality of Residential Mortgage Loans

The credit quality of residential mortgage loans was as follows at:

Performance indicators:

Performing

Nonperforming

Total

December 31,

2016

2015

Recorded
Investment

% of
Total

Recorded
Investment

% of
Total

(Dollars in millions)

11,304

392

96.6% $

3.4

11,696

100.0% $

9,408

326

9,734

96.7%

3.3

100.0%

The estimated fair value of residential mortgage loans was $12.1 billion and $9.9 billion at December 31, 2016 and 2015,

respectively.

Past Due and Nonaccrual Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as
performing at both December 31, 2016 and 2015. The Company defines delinquency consistent with industry practice, when
mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage
loans — 90 days. The past due and nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by
portfolio segment, were as follows at:

Past Due

Greater than 90 Days Past Due and Still
Accruing Interest

Nonaccrual

December 31, 2016 December 31, 2015

December 31, 2016

December 31, 2015 December 31, 2016 December 31, 2015

Commercial $
Agricultural

Residential

Total

127

392

522

103

326

431

(In millions)

104

144

267

— $

—

355

378

—

318

364

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

8. Investments (continued)

Mortgage Loans Modified in a Troubled Debt Restructuring

The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as
troubled debt restructurings. Generally, the types of concessions include: reduction of the contractual interest rate, extension
of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The
amount, timing and extent of the concessions granted are considered in determining any impairment or changes in the specific
valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance
may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring.

During the year ended December 31, 2016, the Company had 562 residential mortgage loans modified in a troubled debt
restructuring with carrying value after specific valuation allowance of $137 million and $124 million pre-modification and
post-modification, respectively. During the year ended December 31, 2015, the Company had 460 residential mortgage loans
modified in a troubled debt restructuring with carrying value after specific valuation allowance of $108 million and $96 million
pre-modification and post-modification, respectively. There were no commercial or agricultural mortgage loans modified in
a troubled debt restructuring for both the years ended December 31, 2016 and 2015.

During the years ended December 31, 2016 and 2015, the Company did not have a significant amount of mortgage loans

modified in a troubled debt restructuring with subsequent payment default.

Other Invested Assets

Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9),

tax credit and renewable energy partnerships and leveraged and direct financing leases.

Tax Credit Partnerships

The carrying value of tax credit partnerships was $1.8 billion and $1.6 billion at December 31, 2016 and 2015, respectively.
Losses from tax credit partnerships included within net investment income were $167 million, $164 million, and $149 million
for the years ended December 31, 2016, 2015 and 2014, respectively.

Leveraged and Direct Financing Leases

Investment in leveraged and direct financing leases consisted of the following at:

Rental receivables, net

Estimated residual values

Subtotal

Unearned income

Investment in leases, net of non-recourse debt

December 31,

2016

2015

Leveraged
Leases

Direct
Financing
Leases

Leveraged
Leases

Direct
Financing
Leases

(In millions)

1,259

1,683

1,329

966

2,225

(635)

1,754

(639)

1,076

2,405

(693)

1,590

1,115

1,712

1,508

1,588

(512)

1,076

Rental receivables are generally due in periodic installments. The payment periods for leveraged leases generally range
from one to 15 years but in certain circumstances can be over 25 years, while the payment periods for direct financing leases
range from one to 20 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing
or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that
are 90 days or more past due. At December 31, 2016 and 2015, all leveraged lease receivables were performing and over 99%
of direct financing rental receivables were performing.

The deferred income tax liability related to leveraged leases was $1.5 billion at both December 31, 2016 and 2015.

268

Table of Contents

8. Investments (continued)

Cash Equivalents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The carrying value of cash equivalents, which includes securities and other investments with an original or remaining
maturity of three months or less at the time of purchase, was $12.2 billion and $7.5 billion at December 31, 2016 and 2015,
respectively.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI,
future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains
(losses), are included in net unrealized investment gains (losses) in AOCI.

The components of net unrealized investment gains (losses), included in AOCI, were as follows:

Fixed maturity securities

Fixed maturity securities with noncredit OTTI losses included in AOCI

Total fixed maturity securities

Equity securities

Derivatives

Other

Subtotal

Amounts allocated from:

Future policy benefits

DAC and VOBA related to noncredit OTTI losses recognized in AOCI

DAC, VOBA and DSI

Policyholder dividend obligation

Subtotal

Deferred income tax benefit (expense) related to noncredit OTTI losses recognized

in AOCI

Deferred income tax benefit (expense)

Net unrealized investment gains (losses)

Net unrealized investment gains (losses) attributable to noncontrolling interests

Years Ended December 31,

2016

2015

2014

(In millions)

20,300

18,164

30,367

20,308

485

2,923

23,739

(1,114)

(3)

(1,430)

(1,931)

(4,478)

(1)

(6,623)

12,637

(6)

(76)

18,088

422

2,350

287

21,147

(163)

—

(1,273)

(1,783)

(3,219)

(6,151)

11,804

(31)

(112)

30,255

608

1,761

149

32,773

(2,886)

(4)

(1,946)

(3,155)

(7,991)

(8,556)

16,268

(33)

Net unrealized investment gains (losses) attributable to MetLife, Inc.

12,631

11,773

16,235

The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:

Balance at January 1,

Noncredit OTTI losses and subsequent changes recognized

Securities sold with previous noncredit OTTI loss

Subsequent changes in estimated fair value

Balance at December 31,

269

Years Ended December 31,

2016

2015

(In millions)

(76) $

(112)

125

(95)

(76)

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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

Balance at January 1,

Fixed maturity securities on which noncredit OTTI losses have been recognized

Unrealized investment gains (losses) during the year

Unrealized investment gains (losses) relating to:

Future policy benefits

DAC and VOBA related to noncredit OTTI losses recognized in AOCI

DAC, VOBA and DSI

Policyholder dividend obligation

Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI

Deferred income tax benefit (expense)

Net unrealized investment gains (losses)

Net unrealized investment gains (losses) attributable to noncontrolling interests

Balance at December 31,

Change in net unrealized investment gains (losses)

Change in net unrealized investment gains (losses) attributable to noncontrolling interests

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

Concentrations of Credit Risk

Years Ended December 31,

2016

2015

2014

(In millions)

11,773

16,235

8,414

106

2,508

(11,662)

15,521

(951)

(3)

(157)

(148)

(28)

(472)

12,606

12,631

833

858

2,723

(1,988)

673

1,372

(15)

2,405

11,771

(10)

(756)

(1,384)

(31)

(3,600)

16,272

(37)

11,773

16,235

(4,464) $

7,858

(37)

(4,462) $

7,821

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and
its agencies, were in fixed income securities of the Japanese government and its agencies with an estimated fair value of
$24.9 billion and $20.9 billion at December 31, 2016 and 2015, respectively.

Securities Lending

Elements of the securities lending program are presented below at:

Securities on loan: (1)

Amortized cost

Estimated fair value

Cash collateral on deposit from counterparties (2)

Security collateral on deposit from counterparties (3)

Reinvestment portfolio — estimated fair value

__________________

December 31,

2016

2015

(In millions)

24,692

26,308

26,755

26,704

27,223

29,646

30,197

30,258

(1)

(2)

(3)

Included within fixed maturity securities and short-term investments.

Included within payables for collateral under securities loaned and other transactions.

Security collateral on deposit from counterparties may not be sold or re-pledged, unless the counterparty is in default,
and is not reflected on the consolidated financial statements.

270

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

December 31, 2016

December 31, 2015

Remaining Tenor of Securities
Lending Agreements

Open (1)

1 Month
or Less

1 to 6
Months

Remaining Tenor of Securities
Lending Agreements

Total

Open (1)

(In millions)

1 Month
or Less

1 to 6
Months

Total

Cash collateral liability by loaned security type:

U.S. government and agency

$ 6,608

$ 8,403

$10,125

$25,136

$ 10,116

$11,157

$ 5,986

$27,259

Foreign government

U.S. corporate

Agency RMBS

Foreign corporate

Total

__________________

—

620

523

—

144

—

274

—

764

523

274

—

510

380

951

—

486

—

600

—

998

389

1,551

—

$ 6,608

$ 9,604

$10,543

$26,755

$ 10,127

$12,998

$ 7,072

$30,197

(1)

The related loaned security could be returned to the Company on the next business day which would require the Company
to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to
meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced
to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market
conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2016
was $6.5 billion, over 99% of which were U.S. government and agency securities which, if put back to the Company, could be
immediately sold to satisfy the cash requirement.

The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including
agency RMBS, ABS, short-term investments, cash equivalents and U.S. government and agency securities) with 59% invested
in agency RMBS, short-term investments, cash equivalents, U.S. government and agency securities or held in cash. If the
securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general
account available to meet any potential cash demands when securities on loan are put back to the Company.

Repurchase Agreement Transactions

Elements of the short-term repurchase agreements are presented below at:

Securities on loan included within fixed maturity securities:

Amortized cost

Estimated fair value

Cash collateral received included within other liabilities

Reinvestment portfolio — estimated fair value

December 31, 2016

December 31, 2015

(In millions)

113

102

100

271

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

December 31, 2016

December 31, 2015

Remaining Tenor of
Repurchase Agreements

1 Month
or Less

1 to 6
Months

Remaining Tenor of
Repurchase Agreements

1 Month
or Less

1 to 6
Months

Total

(In millions)

102

— $

—

— $

Cash collateral liability by loaned security type:

Foreign corporate

All other corporate and government

Total

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

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset

classes, except mortgage loans, which are presented at carrying value at:

Invested assets on deposit (regulatory deposits)

Invested assets held in trust (collateral financing arrangements and reinsurance agreements)

Invested assets pledged as collateral (1)

Total invested assets on deposit, held in trust and pledged as collateral

__________________

December 31,

2016

2015

(In millions)

9,573

11,111

27,431

48,115

9,089

10,443

23,145

42,677

(1)

The Company has pledged invested assets in connection with various agreements and transactions, including funding
agreements (see Notes 4), collateral financing arrangements (see Note 13) and derivative transactions (see Note 9).

See “— Securities Lending” and “Repurchase Agreement Transactions” for information regarding securities on loan and

Note 7 for information regarding investments designated to the closed block.

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the
acquisition date that the Company will be unable to collect all contractually required payments are classified as PCI investments.
For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair
value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If, subsequently,
based on current information and events, it is probable that there is a significant increase in cash flows previously expected to
be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable
yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date
over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this
amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in
OTTI or the recognition of mortgage loan valuation allowances.

272

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company’s PCI investments, by invested asset class, were as follows at:

Outstanding principal and interest balance (1)

Carrying value (2)

__________________

December 31,

2016

2015

2016

2015

Fixed Maturity Securities

Mortgage Loans

7,121

5,569

(In millions)

6,410

4,883

— $

148

129

(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 PCI investments acquired during the periods indicated:

Contractually required payments (including interest)

Cash flows expected to be collected (1)

Fair value of investments acquired

__________________

Years Ended December 31,

2016

2015

2016

2015

Fixed Maturity Securities

Mortgage Loans

2,031

1,828

1,331

(In millions)

2,220

1,951

1,439

— $

—

(1) Represents undiscounted principal and interest cash flow expectations, at the date of acquisition.

The following table presents activity for the accretable yield on PCI investments:

Accretable yield, January 1,

Investments purchased

Accretion recognized in earnings

Disposals

Reclassification (to) from nonaccretable difference

Accretable yield, December 31,

Collectively Significant Equity Method Investments

Years Ended December 31,

2016

2015

2016

2015

Fixed Maturity Securities

Mortgage Loans

(In millions)

2,200

2,143

497

(337)

(15)

(183)

512

(325)

(56)

(74)

—

(9)

—

(12)

2,162

2,200

— $

—

(56)

—

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 $14.3 billion at December 31, 2016. 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 $6.0 billion at December 31, 2016. 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.

273

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-
month lag methodology and within net investment income. Aggregate net investment income from these equity method
investments exceeded 10% of the Company’s consolidated pre-tax income (loss) from continuing operations for one of the three
most recent annual periods: 2016. The Company is providing the following aggregated summarized financial data for such equity
method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized
financial data does not represent the Company’s proportionate share of the assets, liabilities, or earnings of such entities.

The aggregated summarized financial data presented below reflects the latest available financial information and is as of,
and for, the years ended December 31, 2016, 2015 and 2014. Aggregate total assets of these entities totaled $436.9 billion and
$447.5 billion at December 31, 2016 and 2015, respectively. Aggregate total liabilities of these entities totaled $56.4 billion and
$72.0 billion at December 31, 2016 and 2015, respectively. Aggregate net income (loss) of these entities totaled $26.8 billion,
$25.8 billion and $34.9 billion for the years ended December 31, 2016, 2015 and 2014, respectively. Aggregate net income (loss)
from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring
investment income and realized and unrealized investment gains (losses).

Variable Interest Entities

The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct
the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary
beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the
contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an
estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved
in the entity.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the
general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded

that it is the primary beneficiary and which are consolidated at December 31, 2016 and 2015.

December 31,

2016

2015

Total
Assets

Total
Liabilities

Total
Assets

Total
Liabilities

MRSC (collateral financing arrangement (primarily securities)) (1)

Operating joint venture (2)

CSEs (assets (primarily loans) and liabilities (primarily debt)) (3)

Other investments (4)

Total

__________________

(In millions)

3,422

— $

3,374

—

146

3,618

—

2,465

186

—

2,079

—

6,101

2,141

(1)

(2)

(3)

See Note 13 for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing
arrangement.

Following a change in the foreign investment law in India, the Company no longer consolidated its India operating joint
venture, effective January 1, 2016. Assets of the operating joint venture are primarily fixed maturity securities and separate
account assets. Liabilities of the operating joint venture are primarily future policy benefits, other policy-related balances
and separate account liabilities.

The Company consolidates entities that are structured as CMBS and as collateralized debt obligations. The assets of these
entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any
principal or interest shortfalls should any arise. The Company’s exposure was limited to that of its remaining investment
in these entities of $95 million and $105 million at estimated fair value at December 31, 2016 and 2015, respectively.

(4) Other investments is comprised of other invested assets and other limited partnership interests.

274

Table of Contents

8. Investments (continued)

Unconsolidated VIEs

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable

interest but is not the primary beneficiary and which have not been consolidated were as follows at:

December 31,

2016

2015

Carrying
Amount

Maximum
Exposure
to Loss (1)

Carrying
Amount

Maximum
Exposure
to Loss (1)

(In millions)

59,773

65,824

2,845

6,208

2,261

252

2,845

11,282

2,837

271

3,261

5,186

1,604

722

3,261

7,074

2,161

739

71,339

77,008

76,597

79,059

Fixed maturity securities AFS:

Structured Securities (2)

U.S. and foreign corporate

Other limited partnership interests

Other invested assets

Other (3)

Total

__________________

(1)

The maximum exposure to loss relating to fixed maturity securities AFS, FVO and trading securities and equity securities
AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss
relating to other limited partnership interests, mortgage loans and real estate joint ventures is equal to the carrying amounts
plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the
form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum
exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits
guaranteed by third parties of $150 million and $179 million at December 31, 2016 and 2015, respectively. Such a
maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)

For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or
asset-backed securities issued by trusts that do not have substantial equity.

(3) Other is comprised of mortgage loans, common stock, non-redeemable preferred stock, real estate joint ventures and FVO

and trading securities.

As described in Note 21, 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, 2016, 2015 and 2014.

275

Table of Contents

8. Investments (continued)

Net Investment Income

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The components of net investment income were as follows:

Investment income:

Fixed maturity securities

Equity securities

FVO and trading securities — FVO general account and Actively traded securities (1)

Mortgage loans

Policy loans

Real estate and real estate joint ventures

Other limited partnership interests

Cash, cash equivalents and short-term investments

Operating joint ventures

Other

Subtotal

Less: Investment expenses

Subtotal, net

FVO and trading securities — FVO contractholder-directed unit-linked investments (1)

FVO CSEs — interest income:

Commercial mortgage loans

Securities

Subtotal

Net investment income

__________________

Years Ended December 31,

2016

2015

2014

(In millions)

14,313

14,235

14,868

140

3,259

589

684

641

173

263

20,132

1,147

18,985

950

—

962

144

3,136

603

981

669

148

248

20,210

1,209

19,001

264

—

280

133

103

2,928

629

951

1,033

168

192

21,015

1,178

19,837

1,266

1,316

19,947

19,281

21,153

(1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods
included in net investment income were principally from FVO contractholder-directed unit-linked investments and, to a
much lesser extent, actively traded and FVO general account securities, and were $427 million, ($456) million and
$642 million for the years ended December 31, 2016, 2015, and 2014, respectively.

See “— Variable Interest Entities” for discussion of CSEs.

276

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

8. Investments (continued)

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

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

Years Ended December 31,

2016

2015

2014

(In millions)

Total gains (losses) on fixed maturity securities:

Total OTTI losses recognized — by sector and industry:

U.S. and foreign corporate securities — by industry:

Industrial

Utility

Consumer

Transportation

Communications

Total U.S. and foreign corporate securities

RMBS

ABS

CMBS

State and political subdivision

OTTI losses on fixed maturity securities recognized in earnings

Fixed maturity securities — net gains (losses) on sales and disposals

Total gains (losses) on fixed maturity securities

Total gains (losses) on equity securities:

Total OTTI losses recognized — by sector:

Common stock

Non-redeemable preferred stock

OTTI losses on equity securities recognized in earnings

Equity securities — net gains (losses) on sales and disposals

Total gains (losses) on equity securities

FVO and trading securities — FVO general account securities

Mortgage loans

Real estate and real estate joint ventures

Other limited partnership interests

Other

Subtotal

FVO CSEs:

Commercial mortgage loans

Securities

Long-term debt — related to commercial mortgage loans

Long-term debt — related to securities

Non-investment portfolio gains (losses) (1)

Subtotal

Total net investment gains (losses)

__________________

277

(79) $

(5) $

(21)

—

(3)

(103)

(24)

(2)

—

(129)

154

(77)

—

(77)

(48)

—

(224)

147

(71)

(87)

(258)

(2)

—

429

171

(21)

(28)

—

(54)

(30)

—

(6)

(90)

204

114

(39)

(1)

(40)

—

(105)

531

(67)

(6)

488

(7)

—

112

109

597

—

(7)

(2)

—

(9)

(31)

(7)

(13)

—

(60)

598

538

(13)

(23)

(36)

101

(36)

222

(78)

(110)

610

(13)

—

(1)

(812)

(807)

(197)

Table of Contents

8. Investments (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(1) Non-investment portfolio gains (losses) for the year ended December 31, 2016 includes a gain from the U.S. Retail
Advisor Force Divestiture of $102 million as more fully described in Note 3. Non-investment portfolio gains (losses) for
the year ended December 31, 2014 includes a loss of $633 million related to the disposition of MAL as more fully described
in Note 3.

See “— Variable Interest Entities” for discussion of CSEs.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $263 million,

$46 million and ($183) million for the years ended December 31, 2016, 2015 and 2014, respectively.

Sales or Disposals and Impairments of Fixed Maturity and Equity Securities

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

Years Ended December 31,

2016

2015

2014

2016

2015

2014

Fixed Maturity Securities

Equity Securities

125,979

1,231

(1,077)

(129)

115,395

1,262

(1,058)

(90)

(In millions)

82,075

1,165

(567)

(60)

326

(17)

(77)

358

(38)

(40)

114

538

(48) $

544

112

(11)

(36)

Proceeds

Gross investment gains

Gross investment losses

OTTI losses

Net investment gains (losses)

Credit Loss Rollforward

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on

fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI:

Balance at January 1,

Additions:

Initial impairments — credit loss OTTI on securities not previously impaired

Additional impairments — credit loss OTTI on securities previously impaired

Reductions:

Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI

Securities impaired to net present value of expected future cash flows

Increase in cash flows — accretion of previous credit loss OTTI

Balance at December 31,

9. Derivatives

Accounting for Derivatives

Years Ended December 31,

2016

2015

(In millions)

277

(85)

(1)

—

215

357

(124)

—

(2)

277

See Note 1 for a description of the Company’s accounting policies for derivatives and Note 10 for information about the

fair value hierarchy for derivatives.

Derivative Strategies

The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency
exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of
derivatives.

278

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads
and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain
of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-cleared”), while others
are bilateral contracts between two counterparties (“OTC-bilateral”). The types of derivatives the Company uses include swaps,
forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate
swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets.

Interest Rate Derivatives

The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including

interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards.

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter
interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap,
the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate
interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair
value, cash flow and nonqualifying hedging relationships.

The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to
acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument
such as a U.S. government and agency, or other fixed maturity security. Structured interest rate swaps are included in interest
rate swaps and are not designated as hedging instruments.

Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified
intervals, the difference between the economic risk and reward of an asset or a market index and the London Interbank Offered
Rate (“LIBOR”), calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract.
Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into
pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest
rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate
exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate
total return swaps in nonqualifying hedging relationships.

The Company purchases interest rate caps 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, 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 nonqualifying hedging relationships.

In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a
specified number of contracts, the value of which is determined by the different classes of interest rate securities, 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, to hedge against changes in interest rates on anticipated liability issuances by
replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity
products offered by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging
relationships.

Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and
invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the
Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The
Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes
swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options.

The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the
contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in
cash flow and nonqualifying hedging relationships.

279

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

9. Derivatives (continued)

Foreign Currency Exchange Rate Derivatives

The Company uses foreign currency exchange rate derivatives, including foreign currency swaps, foreign currency
forwards, currency options and exchange-traded currency futures, 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 derivatives to hedge the foreign currency exchange rate 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 notional amount. The notional amount of each currency is exchanged at the inception and termination of the
currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying hedging
relationships.

In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an
identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a
contract is made at the specified future date. The Company utilizes foreign currency forwards in fair value, net investment in
foreign operations and nonqualifying hedging relationships.

The Company enters into currency options 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 currency 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 net investment in foreign operations and nonqualifying hedging relationships.

To a lesser extent, the Company uses exchange-traded currency futures to hedge currency mismatches between assets
and liabilities, and to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The
Company utilizes exchange-traded currency futures in nonqualifying hedging relationships.

Credit Derivatives

The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its
investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a
premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may
be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in
exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit
events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations, repudiation, moratorium,
involuntary restructuring or governmental intervention. In each case, payout on a credit default swap is triggered only after
the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. (“ISDA”)
deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships.

The Company enters into written credit default swaps to synthetically create credit investments that are either more
expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and
one or more cash instruments, such as U.S. government and agency securities, or other fixed maturity securities. These credit
default swaps are not designated as hedging instruments.

The Company also enters into certain purchased and written credit default swaps held in relation to trading portfolios for
the purpose of generating profits on short-term differences in price. These credit default swaps are not designated as hedging
instruments. At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives.

The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price
is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary
purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit
spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow
hedging relationships.

280

Table of Contents

9. Derivatives (continued)

Equity Derivatives

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index

options, equity variance swaps, exchange-traded equity futures and equity total return swaps.

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable
annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into
contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on
differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement
provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge
adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company
utilizes equity index options in nonqualifying hedging relationships.

Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable
annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange
amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps
in nonqualifying hedging relationships.

In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts,
the value of which is determined by the different classes of equity securities, 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 minimum guarantees embedded in certain variable annuity products offered by the Company. The
Company utilizes exchange-traded equity futures in nonqualifying hedging relationships.

In an equity total return swap, the Company agrees with another party to exchange, at specified intervals, the difference
between the economic risk and reward of an asset or a market index and LIBOR, calculated by reference to an agreed notional
amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on
the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its
insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company
utilizes equity total return swaps in nonqualifying hedging relationships.

281

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

9. Derivatives (continued)

Primary Risks Managed by Derivatives

The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the

Company’s derivatives, excluding embedded derivatives, held at:

Primary Underlying Risk Exposure

Derivatives Designated as Hedging Instruments:

December 31,

2016

2015

Estimated Fair Value

Gross
Notional
Amount

Assets

Liabilities

Gross
Notional
Amount

(In millions)

Assets

Liabilities

Fair value hedges:

Interest rate swaps

Interest rate

5,331

$ 2,262

5,528

$ 2,215

Foreign currency swaps

Foreign currency exchange rate

Foreign currency forwards

Foreign currency exchange rate

Subtotal

Cash flow hedges:

Interest rate swaps

Interest rate forwards

Interest rate

Foreign currency swaps

Foreign currency exchange rate

Subtotal

Foreign operations hedges:

Foreign currency forwards

Foreign currency exchange rate

Currency options

Subtotal

Total qualifying hedges

Foreign currency exchange rate

Derivatives Not Designated or Not Qualifying as Hedging Instruments:

Interest rate swaps

Interest rate floors

Interest rate caps

Interest rate futures

Interest rate options

Interest rate

Interest rate forwards
Interest rate total return swaps
Synthetic GICs
Foreign currency swaps

Interest rate
Interest rate
Interest rate
Foreign currency exchange rate

Foreign currency forwards

Foreign currency exchange rate

Currency futures

Foreign currency exchange rate

Currency options
Credit default swaps — purchased Credit
Credit default swaps — written

Credit

Foreign currency exchange rate

Equity futures

Equity index options

Equity variance swaps

Equity total return swaps

Equity market

1,221

1,085

7,637

2,085

4,032

28,173

34,290

1,394

8,878

10,272

52,199

81,524

14,201

90,400

6,081

20,854

613
5,425
5,566
12,912

15,580

915

3,615

2,038

12,645

12,494

54,028

23,157

3,901

—

2,296

332

—

2,079

2,411

148

195

224

284

370

2,065

2,469

4,902

2,803

6,017

3,328

187

137

764

—
2
—
1,600

126

—

195

189

1,323

223

25
738
—
466

977

—

1,458

756

160

2,154

1,685

9,367

2,190

105

23,661

25,956

3,916

7,569

11,485

46,808

89,288

23,837

68,928

5,808

30,234

43
48
4,216
11,081

11,724

930

9,590

1,870

10,311

7,206

55,682

23,437

3,803

—

2,277

487

1,303

1,813

205

268

311

105

1,177

1
2
—
766

154

—

466

1,542

195

Total non-designated or nonqualifying derivatives

365,949

10,859

8,001

358,036

10,048

Total

$ 418,148

$15,761

10,804

$ 404,844

$14,406

282

4,358

2,074

5,109

2,247

159

223

—

1,803

—
—
—
431

220

—

189

1,041

636

4,975

7,049

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify
as part of a hedging relationship at both December 31, 2016 and 2015. The Company’s use of derivatives includes (i) derivatives
that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting
due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities that
contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the
derivatives cannot support an expectation of a highly effective hedging relationship; (iii) derivatives that economically hedge
embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded
derivatives are already recorded in net income; and (iv) written credit default swaps that are used to synthetically create credit
investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these
nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations
without an offsetting gain or loss recognized in earnings for the item being hedged.

Net Derivative Gains (Losses)

The components of net derivative gains (losses) were as follows:

Freestanding derivatives and hedging gains (losses) (1)

Embedded derivatives gains (losses)

Total net derivative gains (losses)

__________________

Years Ended December 31,

2016

2015

(In millions)

2014

(4,536) $

(2,224)

(6,760) $

277

(239)

1,638

(321)

1,317

(1)

Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships,
which are not presented elsewhere in this note.

The following table presents earned income on derivatives:

Qualifying hedges:

Net investment income

Interest credited to policyholder account balances

Other expenses

Nonqualifying hedges:

Net investment income

Net derivative gains (losses)

Policyholder benefits and claims

Total

Years Ended December 31,

2016

2015

(In millions)

2014

288

219

(1)

(12)

(1)

1,166

(6)

(5)

1,024

1,463

1,273

158

101

(3)

(4)

828

1,120

283

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Nonqualifying Derivatives and Derivatives for Purposes Other Than Hedging

The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not

designated or not qualifying as hedging instruments:

Net
Derivative
Gains (Losses)

Net
Investment
Income (1)

(In millions)

Policyholder
Benefits and
Claims (2)

Year Ended December 31, 2016

Interest rate derivatives

Foreign currency exchange rate derivatives

Credit derivatives — purchased

Credit derivatives — written

Equity derivatives

Total

Year Ended December 31, 2015

Interest rate derivatives

Foreign currency exchange rate derivatives

Credit derivatives — purchased

Credit derivatives — written

Equity derivatives

Total

Year Ended December 31, 2014

Interest rate derivatives

Foreign currency exchange rate derivatives

Credit derivatives — purchased

Credit derivatives — written

Equity derivatives

Total

__________________

(3,862) $

— $

958

(40)

(2,405)

(5,268) $

—

(22)

(22) $

(421) $

— $

547

(83)

(816)

—

(3)

—

(14)

(766) $

(17) $

1,545

— $

(344)

(12)

(634)

576

—

(18)

(18) $

(288)

(246)

(18)

—

(458)

(434)

—

(25)

(20)

—

(1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures, derivatives
held in relation to trading portfolios and derivatives held within contractholder-directed unit-linked investments.

(2) Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy

benefits.

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair
value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities; (ii) foreign
currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities; and
(iii) foreign currency forwards to hedge the foreign currency fair value exposure of foreign currency denominated investments.

284

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net

derivative gains (losses). The following table presents the amount of such net derivative gains (losses):

Derivatives in Fair Value
Hedging Relationships

Hedged Items in Fair Value
Hedging Relationships

Year Ended December 31, 2016

Interest rate swaps:

Foreign currency swaps:

Fixed maturity securities

Policyholder liabilities (1)

Foreign-denominated fixed maturity securities
Foreign-denominated policyholder account

balances (2)

Foreign currency forwards:

Foreign-denominated fixed maturity securities

Total

Year Ended December 31, 2015

Interest rate swaps:

Fixed maturity securities

Policyholder liabilities (1)

Foreign currency swaps:

Foreign-denominated fixed maturity securities

Foreign currency forwards:

Foreign-denominated fixed maturity securities

Foreign-denominated policyholder account

balances (2)

Total

Year Ended December 31, 2014

Interest rate swaps:

Foreign currency swaps:

Fixed maturity securities

Policyholder liabilities (1)

Foreign-denominated fixed maturity securities
Foreign-denominated policyholder account

balances (2)

Foreign currency forwards:

Foreign-denominated fixed maturity securities

Total

__________________

Net Derivative
Gains (Losses)
Recognized
for Derivatives

Net Derivative
Gains (Losses)
Recognized for
Hedged Items

(In millions)

Ineffectiveness
Recognized in
Net Derivative
Gains (Losses)

(10) $

(108)

(95)

127

(12)

(119)

(55) $

— $

(2)

(240)

(75)

(8)

(7)

232

(297) $

285

(1) $

681

(283)

(359)

(667)

(11)

270

330

(79) $

(2)

(18)

(3)

(14)

(10)

(8)

(7)

(12)

(13)

(29)

(22)

(1)

(2)

Fixed rate liabilities reported in policyholder account balances or future policy benefits.

Fixed rate or floating rate liabilities.

For the Company’s foreign currency forwards, the change in the estimated fair value of the derivative related to the changes
in the difference between the spot price and the forward price is excluded from the assessment of hedge effectiveness. For all
other derivatives, all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. For
the years ended December 31, 2016, 2015 and 2014, the component of the change in estimated fair value of derivatives that was
excluded from the assessment of hedge effectiveness was ($23) million, ($11) million and $3 million, respectively.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash
flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign
currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities;
(iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; (iv) interest
rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments; and (v) interest rate swaps
and interest rate forwards to hedge forecasted fixed-rate borrowings.

285

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no
longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two
months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts
were $13 million, $11 million and ($15) million for the years ended December 31, 2016, 2015 and 2014, respectively.

At both December 31, 2016 and 2015, the maximum length of time over which the Company was hedging its exposure to

variability in future cash flows for forecasted transactions did not exceed five years.

At December 31, 2016 and 2015, the balance in AOCI associated with cash flow hedges was $2.9 billion and $2.4 billion,

respectively.

The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of

operations and the consolidated statements of equity:

Derivatives in Cash Flow
Hedging Relationships

Amount of Gains
(Losses)Deferred in
AOCI on Derivatives

(Effective Portion)

Amount and Location
of Gains (Losses)
Reclassified from
AOCI into Income (Loss)

(Effective Portion)

Amount and Location
of Gains (Losses)
Recognized in Income
(Loss) on Derivatives

(Ineffective Portion)

Net Derivative
Gains (Losses)

Net Investment
Income

Other
Expenses

Net Derivative
Gains (Losses)

(In millions)

Year Ended December 31, 2016

Interest rate swaps

Interest rate forwards

Foreign currency swaps

Credit forwards

Total

Year Ended December 31, 2015

Interest rate swaps

Interest rate forwards

Foreign currency swaps

Credit forwards

Total

Year Ended December 31, 2014

Interest rate swaps

Interest rate forwards

Foreign currency swaps

Credit forwards

Total

(362)

632

—

344

(1)

(109)

—

(345)

(252) $

(720)

(19) $

(628) $

722

(139)

—

(7)

(768)

—

669

(733) $

(2)

(1)

(2)

— $

(1)

—

— $

—

— $

—

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At December 31, 2016, the Company expected to reclassify ($176) million of deferred net gains (losses) on derivatives in

AOCI to earnings within the next 12 months.

Hedges of Net Investments in Foreign Operations

The Company uses foreign currency exchange rate derivatives, which may include foreign currency forwards and currency
options, to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company
measures ineffectiveness on these derivatives based upon the change in forward rates.

When net investments in foreign operations are sold or substantially liquidated, the amounts in AOCI are reclassified to the

statement of operations.

286

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents the effects of derivatives in net investment hedging relationships on the consolidated statements

of operations and the consolidated statements of equity:

Amount of Gains (Losses) Deferred in AOCI
(Effective Portion)

Years Ended December 31,

Derivatives in Net Investment Hedging Relationships (1), (2)

2016

2015

(In millions)

2014

Foreign currency forwards

Currency options

Total

__________________

(267) $

(35)

(302) $

255

(138)

117

407

222

629

(1) During the years ended December 31, 2016 and 2015, there were no sales or substantial liquidations of net investments
in foreign operations that would have required the reclassification of gains or losses from AOCI into earnings. In May
2014, the Company sold its interest in MAL, which was a hedged item in a net investment hedging relationship. See
Note 3. As a result, during the year ended December 31, 2014, the Company released losses of $77 million from AOCI
into earnings upon the sale.

(2)

There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations. All
components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At December 31, 2016 and 2015, the cumulative foreign currency translation gain (loss) recorded in AOCI related to hedges

of net investments in foreign operations was $754 million and $1.1 billion, respectively.

Credit Derivatives

In connection with synthetically created credit 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 nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs,
as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty
the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The
Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $12.6 billion and
$10.3 billion at December 31, 2016 and 2015, respectively. The Company can terminate these contracts at any time through
cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At
December 31, 2016 and 2015, the Company would have received $180 million and $65 million, respectively, to terminate all
of these contracts.

287

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to

maturity of written credit default swaps at:

Rating Agency Designation of Referenced
Credit Obligations (1)

2016

Maximum
Amount of
Future
Payments under
Credit Default
Swaps

Estimated
Fair Value
of Credit
Default
Swaps

December 31,

Weighted
Average
Years to
Maturity (2)

Estimated
Fair Value
of Credit
Default
Swaps

(Dollars in millions)

2015

Maximum
Amount of
Future
Payments under
Credit Default
Swaps

Weighted
Average
Years to
Maturity (2)

Aaa/Aa/A

Single name credit default swaps (3)

Credit default swaps referencing indices

Subtotal

Baa

Single name credit default swaps (3)

Credit default swaps referencing indices

Subtotal

Single name credit default swaps (3)

Credit default swaps referencing indices

Subtotal

Single name credit default swaps (3)

Credit default swaps referencing indices

Subtotal

Total

__________________

106

113

(2)

—

(2)

494

2,768

3,262

931

7,946

8,877

155

—

155

281

351

180

12,645

3.0

3.6

2.3

5.0

4.7

4.0

—

4.0

1.8

5.0

4.3

4.4

(2)

(1)

(3)

—

661

1,635

2,296

1,349

5,863

7,212

100

164

—

639

10,311

2.5

3.4

3.2

2.5

4.8

4.4

2.3

1.0

1.5

—

4.9

4.1

(1)

(2)

(3)

The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s
Investors Service (“Moody’s”), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally
developed rating is used.

The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional
amounts.

Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and
political subdivisions.

The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit
obligations in the table above. As a result, the maximum amounts of potential future recoveries available to offset the $12.6 billion
and $10.3 billion from the table above were $30 million and $80 million at December 31, 2016 and 2015, respectively.

At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. At December 31, 2015, written
credit default swaps held in relation to the trading portfolio amounted to $20 million in gross notional amount and ($2) million
in estimated fair value.

Credit Risk on Freestanding Derivatives

The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives.
Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives
at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral
received pursuant to such agreements.

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Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties
and establishing and monitoring exposure limits. The Company’s OTC-bilateral derivative transactions are generally governed
by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific
counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and
bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against
payables to the same counterparty arising out of all included transactions. Substantially all of the Company’s ISDA Master
Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in
connection with its OTC-bilateral derivatives.

The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded
derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both
initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of
nonperformance by counterparties to such derivatives.

See Note 10 for a description of the impact of credit risk on the valuation of derivatives.

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master

netting agreements and collateral were as follows at:

Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement

Assets

Liabilities

Assets

Liabilities

December 31,

2016

2015

Gross estimated fair value of derivatives:

OTC-bilateral (1)

OTC-cleared (1)

Exchange-traded

Total gross estimated fair value of derivatives (1)

Amounts offset on the consolidated balance sheets

(In millions)

$ 13,387

8,650

$ 13,017

2,543

2,047

1,600

16,010

10,712

14,684

—

Estimated fair value of derivatives presented on the consolidated balance sheets (1)

16,010

10,712

14,684

Gross amounts not offset on the consolidated balance sheets:

Gross estimated fair value of derivatives: (2)

5,848

1,217

7,090

—

7,090

(4,368)

(1,200)

(1)

(7)

(10)

(20)

(6,018)

(1,068)

(5)

(4,897)

(1,427)

—

(6,018)

(1,068)

(5)

(84)

(974)

(9)

(4,368)

(1,200)

(1)

(6,140)

(378)

—

(2,069)

(2,516)

(2,078)

(1,395)

—

519

—

(3)

OTC-bilateral

OTC-cleared

Exchange-traded

Cash collateral: (3), (4)

OTC-bilateral

OTC-cleared

Exchange-traded

Securities collateral: (5)

OTC-bilateral

OTC-cleared

Exchange-traded

Net amount after application of master netting agreements and collateral

526

__________________

(1) At December 31, 2016 and 2015, derivative assets included income or (expense) accruals reported in accrued investment
income or in other liabilities of $249 million and $278 million, respectively, and derivative liabilities included (income)
or expense accruals reported in accrued investment income or in other liabilities of ($92) million and $41 million,
respectively.

289

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(2)

Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense
accruals.

(3) Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash
equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables
for collateral under securities loaned and other transactions on the balance sheet.

(4)

(5)

The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded
and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The
amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application
of netting agreements. At December 31, 2016 and 2015, the Company received excess cash collateral of $168 million
and $89 million, respectively, and provided excess cash collateral of $486 million and $204 million, respectively, which
is not included in the table above due to the foregoing limitation.

Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance
sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at
December 31, 2016, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is
reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted
by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to
the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31,
2016 and 2015, the Company received excess securities collateral with an estimated fair value of $217 million and
$100 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing
limitation. At December 31, 2016 and 2015, the Company provided excess securities collateral with an estimated fair
value of $297 million and $150 million, respectively, for its OTC-bilateral derivatives, $1.2 billion and $315 million,
respectively, for its OTC-cleared derivatives, and $569 million and $224 million, respectively, for its exchange-traded
derivatives, which are not included in the table above due to the foregoing limitation.

The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability
position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that
counterparty reaches a minimum transfer amount. A small number of these arrangements also include credit-contingent provisions
that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on
a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of MetLife, Inc. and/or the counterparty.
In addition, substantially all of the Company’s netting agreements for derivatives contain provisions that require both the Company
and the counterparty to maintain a specific investment grade credit rating from each of Moody’s and S&P. If a party’s credit or
financial strength rating, as applicable, were to fall below that specific investment grade credit rating, that party would be in
violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate
settlement and payment based on such party’s reasonable valuation of the derivatives.

290

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents the estimated fair value of the Company’s OTC-bilateral 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 MetLife, Inc. would be required to provide if there
was a one-notch downgrade in MetLife, Inc.’s senior unsecured debt rating at the reporting date or if the Company’s credit or
financial strength rating, as applicable, sustained a downgrade to a level that triggered full overnight collateralization or
termination of the derivative position at the reporting date. OTC-bilateral derivatives that are not subject to collateral agreements
are excluded from this table.

December 31,

Derivatives
Subject to
Credit-
Contingent
Provisions

2016

Derivatives
Not Subject
to Credit-
Contingent
Provisions

Total

Derivatives
Subject to
Credit-
Contingent
Provisions

2015

Derivatives
Not Subject
to Credit-
Contingent
Provisions

Total

(In millions)

Estimated Fair Value of Derivatives in a Net

Liability Position (1)

Estimated Fair Value of Collateral Provided:

Fixed maturity securities

Cash

Estimated Fair Value of Incremental Collateral

Provided Upon:

One-notch downgrade in the Company’s credit or

financial strength rating, as applicable

Downgrade in the Company’s credit or financial
strength rating, as applicable, to a level that
triggers full overnight collateralization or
termination of the derivative position

__________________

2,607

2,742

2,632

2,773

— $

1,270

1,365

207

1,477

174

— $

1,539

(1) After taking into consideration the existence of netting agreements.

Embedded Derivatives

The Company issues certain products or purchases certain investments that contain embedded derivatives that are required
to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include:
variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and certain GMIBs; ceded reinsurance of
guaranteed minimum benefits related to certain GMIBs; assumed reinsurance of guaranteed minimum benefits related to GMWBs
and GMABs; funding agreements with equity or bond indexed crediting rates; funds withheld on assumed and ceded reinsurance;
fixed annuities with equity-indexed returns; and certain debt and equity securities.

291

Table of Contents

9. Derivatives (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives

that have been separated from their host contracts at:

Balance Sheet Location

Embedded derivatives within asset host contracts:

Ceded guaranteed minimum benefits

Premiums, reinsurance and other

Funds withheld on assumed reinsurance
Options embedded in debt or equity securities

Embedded derivatives within asset host contracts

Embedded derivatives within liability host contracts:

Direct guaranteed minimum benefits

Assumed guaranteed minimum benefits

Funds withheld on ceded reinsurance

receivables

Other invested assets

Investments

Policyholder account balances and Future

policy benefits

Policyholder account balances

Other liabilities

Fixed annuities with equity indexed returns

Policyholder account balances

Embedded derivatives within liability host contracts

The following table presents changes in estimated fair value related to embedded derivatives:

December 31,

2016

2015

(In millions)

380

—

(137)

243

2,720

1,205

(30)

210

4,105

356

(220)

171

(20)

965

(14)

935

Net derivative gains (losses) (1)

Policyholder benefits and claims

__________________

Years Ended December 31,

2016

2015

2014

(In millions)

(2,224) $

(4) $

(239) $

(321)

(1)

The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net
derivative gains (losses) in connection with this adjustment were $520 million, $163 million and $13 million for the years
ended December 31, 2016, 2015 and 2014, respectively.

292

Table of Contents

10. Fair Value

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

When developing estimated fair values, 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, giving priority to observable inputs. The Company
categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input
with the lowest level in its valuation. The input levels are as follows:

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

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

Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated
fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity’s own assumptions about the
assumptions that market participants would use in pricing the asset or liability.

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

Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different

assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair

value hierarchy, including those items for which the Company has elected the FVO, are presented below at:

293

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Assets

Fixed maturity securities:

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate

RMBS

State and political subdivision

ABS

CMBS

Total fixed maturity securities

Equity securities

FVO and trading securities (1)

Short-term investments (2)

Mortgage loans:

Residential mortgage loans — FVO

Commercial mortgage loans held by CSEs — FVO

Total mortgage loans

Other investments

Derivative assets: (3)

Interest rate

Foreign currency exchange rate

Credit

Equity market

Total derivative assets

Embedded derivatives within asset host contracts (4)

Separate account assets (5)

Total assets

Liabilities

Derivative liabilities: (3)

Interest rate

Foreign currency exchange rate

Credit

Equity market

Total derivative liabilities

Embedded derivatives within liability host contracts (4)

Trading liabilities (6)

Separate account liabilities (5)

Total liabilities

December 31, 2016

Fair Value Hierarchy

Level 1

Level 2

Level 3

(In millions)

Total
Estimated
Fair Value

— $

93,639

7,214

100,853

31,153

—

31,153

1,373

11,123

4,808

—

83,538

26,370

56,848

50,344

31,896

16,149

12,624

10,757

—

290

6,713

5,097

1,253

515

298,627

21,109

1,217

2,513

2,436

—

136

9,699

4,149

165

1,249

15,262

—

223,923

604

287

566

—

566

—

299

419

380

1,159

132,161

544,185

24,571

3,402

3,799

1,604

8,854

—

1,111

—

770

1,935

4,105

—

8,870

6,047

14,932

57,523

57,138

57,057

36,993

16,176

13,877

11,272

350,889

3,194

13,923

7,291

566

136

702

157

9,713

4,229

203

1,616

15,761

380

308,620

700,917

4,525

3,853

2,377

10,804

4,105

—

294

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Assets

Fixed maturity securities:

U.S. corporate

U.S. government and agency

Foreign government

Foreign corporate

RMBS

State and political subdivision

ABS

CMBS

Total fixed maturity securities

Equity securities

FVO and trading securities (1)

Short-term investments (2)

Mortgage loans:

Residential mortgage loans — FVO

Commercial mortgage loans held by CSEs — FVO

Total mortgage loans

Other investments

Derivative assets: (3)

Interest rate

Foreign currency exchange rate

Credit

Equity market

Total derivative assets

Embedded derivatives within asset host contracts (4)

Separate account assets (5)

Total assets

Liabilities

Derivative liabilities: (3)

Interest rate

Foreign currency exchange rate

Credit

Equity market

Total derivative liabilities

Embedded derivatives within liability host contracts (4)

Trading liabilities (6)

Separate account liabilities (5)

Total liabilities

__________________

December 31, 2015

Fair Value Hierarchy

Level 1

Level 2

Level 3

(In millions)

Total
Estimated
Fair Value

— $

93,758

7,036

100,794

37,660

—

37,660

1,274

11,335

2,543

—

109

—

23,986

49,643

51,438

34,088

15,395

12,731

11,889

—

856

5,760

4,709

1,663

744

292,928

20,814

1,615

3,419

5,985

—

172

9,405

3,003

1,435

13,942

—

432

270

291

314

—

314

—

349

397

391

77,080

222,814

1,704

130,068

540,928

24,613

—

103

—

2,340

2,754

1,077

6,216

—

— $

148

658

808

935

—

61,646

50,499

57,198

38,797

15,441

14,394

12,633

351,402

3,321

15,024

8,819

314

172

486

162

9,434

3,019

106

1,847

14,406

391

301,598

695,609

2,347

2,902

1,753

7,049

935

153

—

128

6,266

1,743

8,137

(1)

In 2016, the Company reinvested its trading securities portfolio into other asset classes and, at December 31, 2016, the
Company no longer held any actively traded securities. FVO and trading securities at both December 31, 2016 and 2015
was comprised of over 90% FVO contractholder-directed unit-linked investments, with the remainder comprised of FVO
general account securities and FVO securities held by CSEs at December 31, 2015 including actively traded securities.

(2)

Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance
sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.

295

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(3) Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities
are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables
above to reflect the presentation on the consolidated balance sheets, but are presented net for purposes of the rollforward
in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.

(4)

(5)

Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and
other invested assets on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented
within policyholder account balances, future policy benefits and other liabilities on the consolidated balance sheets. At
December 31, 2016 and 2015, debt and equity securities also included embedded derivatives of ($137) million and
($220) million, respectively.

Investment performance related to separate account assets is fully offset by corresponding amounts credited to
contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to
the estimated fair value of separate account assets. Separate account liabilities presented in the tables above represent
derivative liabilities.

(6)

Trading liabilities are presented within other liabilities on the consolidated balance sheets.

The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description
includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and
Level 3 of the fair value hierarchy.

Investments

Valuation Controls and Procedures

On behalf of the Company’s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee
that is independent of the trading and investing functions and comprised of senior management, provides oversight of control
systems and valuation policies for securities, mortgage loans and derivatives. On a quarterly basis, this committee reviews
and approves new transaction types and markets, ensures that observable market prices and market-based parameters are
used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon
established policies and are applied consistently over time. This committee also provides oversight of the selection of
independent third party pricing providers and the controls and procedures to evaluate third party pricing. Periodically, the
Chief Accounting Officer reports to the Audit Committee of MetLife, Inc.’s Board of Directors regarding compliance with
fair value accounting standards.

The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary
based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input
assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to
ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include,
but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed
prices of securities sold to the fair value estimates, comparing fair value estimates to management’s knowledge of the current
market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and
ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a
determination of the observability of inputs used in estimated fair values received from independent pricing services or
brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices
received from independent brokers, also referred to herein as “consensus pricing,” represent a reasonable estimate of fair
value by considering such pricing relative to the Company’s knowledge of the current market dynamics and current pricing
for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a
significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker
quotations represent less than 1% of the total estimated fair value of fixed maturity securities and 6% of the total estimated
fair value of Level 3 fixed maturity securities at December 31, 2016.

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The Company also applies a formal process to challenge any prices received from independent pricing services that
are not considered representative of estimated fair value. If prices received from independent pricing services are not
considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations
are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair
value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the
independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio;
accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks
are generally based on available market evidence and estimates used by other market participants. In the absence of such
market-based evidence, management’s best estimate is used.

Securities, Short-term Investments, Other Investments and Trading Liabilities

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

When quoted prices in active markets are not available, the determination of estimated fair value is based on market
standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation
methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in
the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not
available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that
are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These
unobservable inputs can be based in large part on management’s judgment or estimation and cannot be supported by reference
to market activity. Even though these inputs are unobservable, management believes they are consistent with what other
market participants would use when pricing such securities and are considered appropriate given the circumstances.

The estimated fair value of investments in certain separate accounts included in FVO contractholder-directed unit-
linked investments, FVO securities held by CSEs, other investments and trading liabilities is determined on a basis consistent
with the methodologies described herein for securities.

The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing,
discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable
inputs.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

10. Fair Value (continued)

Instrument

Level 2
Observable Inputs

Fixed Maturity Securities

U.S. corporate and Foreign corporate securities

Level 3
Unobservable Inputs

Valuation Techniques: Principally the market and income approaches.

Valuation Techniques: Principally the market approach.

Key Inputs:

• quoted prices in markets that are not active

Key Inputs:

•

illiquidity premium

• benchmark yields; spreads off benchmark yields; new issuances; issuer rating

• delta spread adjustments to reflect specific credit-related issues

• trades of identical or comparable securities; duration

• credit spreads

• Privately-placed securities are valued using the additional key inputs:

• quoted prices in markets that are not active for identical or similar

• market yield curve; call provisions

• observable prices and spreads for similar public or private securities that
incorporate the credit quality and industry sector of the issuer

• delta spread adjustments to reflect specific credit-related issues

securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2

•

independent non-binding broker quotations

U.S. government and agency, Foreign government and State and political subdivision securities

Valuation Techniques: Principally the market approach.

Key Inputs:

• quoted prices in markets that are not active

•

independent non-binding broker quotations

• benchmark U.S. Treasury yield or other yields

• the spread off the U.S. Treasury yield curve for the identical security

• quoted prices in markets that are not active for identical or similar

securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2

• issuer ratings and issuer spreads; broker-dealer quotes

• credit spreads

• comparable securities that are actively traded

Structured Securities

Valuation Techniques: Principally the market and income approaches.

Key Inputs:

• quoted prices in markets that are not active

Key Inputs:

• credit spreads

• spreads for actively traded securities; spreads off benchmark yields

• quoted prices in markets that are not active for identical or similar

• expected prepayment speeds and volumes

securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2

• current and forecasted loss severity; ratings; geographic region

•

independent non-binding broker quotations

• weighted average coupon and weighted average maturity

• average delinquency rates; debt-service coverage ratios

• issuance-specific information, including, but not limited to:

• collateral type; structure of the security; vintage of the loans

• payment terms of the underlying assets

• payment priority within the tranche; deal performance

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10. Fair Value (continued)

Instrument

Equity Securities

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Level 2
Observable Inputs

Level 3
Unobservable Inputs

Valuation Techniques: Principally the market approach.

Valuation Techniques: Principally the market and income approaches.

Key Input:

Key Inputs:

• quoted prices in markets that are not considered active

• credit ratings; issuance structures

• quoted prices in markets that are not active for identical or similar

securities that are less liquid and based on lower levels of trading
activity than securities classified in Level 2

•

independent non-binding broker quotations

• FVO and trading securities and short-term investments are of a similar
nature and class to the fixed maturity and equity securities described
above; accordingly, the valuation techniques and unobservable inputs
used in their valuation are also similar to those described above.

FVO and trading securities, Short-term investments, and Other investments

• Contractholder-directed unit-linked investments include 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 net NAV provided by the fund managers, which were based on
observable inputs.

• All other investments are of a similar nature and class to the fixed maturity
and equity securities described above; accordingly, the valuation
techniques and observable inputs used in their valuation are also similar to
those described above.

Mortgage Loans — FVO

Commercial mortgage loans held by CSEs — FVO

Valuation Techniques: Principally the market approach.

• N/A

Key Input:

• quoted securitization market price determined principally by independent

pricing services using observable inputs

Residential mortgage loans — FVO

• N/A

Valuation Techniques: Principally the market approach, including matrix

pricing or other similar techniques.

Key Inputs: Inputs that are unobservable or cannot be derived principally

from, or corroborated by, observable market data

Separate Account Assets and Separate Account Liabilities (1)

Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly

Key Input:

• N/A

• quoted prices or reported NAV provided by the fund managers

Other limited partnership interests

• N/A

__________________

Valuation Techniques: Valued giving consideration to the underlying holdings
of the partnerships and by applying a premium or discount, if appropriate.

Key Inputs:

•

liquidity; bid/ask spreads; performance record of the fund manager

• other relevant variables that may impact the exit value of the particular

partnership interest

(1)

Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests,
fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term
investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments
and cash and cash equivalents are similar in nature to the instruments described under “— Securities, Short-term
Investments, Other Investments and Trading Liabilities” and “— Derivatives — Freestanding Derivatives”

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10. Fair Value (continued)

Derivatives

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded
derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of
estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and
inputs that management believes are consistent with what other market participants would use when pricing such instruments.
Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit
spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing
models. The valuation controls and procedures for derivatives are described in “— Investments.”

The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are
observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral
and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the
market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may
involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions
deemed appropriate given the circumstances and management believes they are consistent with what other market participants
would use when pricing such instruments.

Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity
adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different
methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives
and could materially affect net income.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all
OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty
after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral
and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon
specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent
with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at
such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation
process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and
collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement
to make additional credit risk adjustments is performed by the Company each reporting period.

Freestanding Derivatives

Level 2 Valuation Techniques and Key Inputs:

This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives

included within Level 1 and those derivatives with unobservable inputs as described in Level 3.

Level 3 Valuation Techniques and Key Inputs:

These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2
measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the
significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable
market data.

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10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based
derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models.
Key inputs are as follows:

Instrument

Interest Rate

Foreign Currency
Exchange Rate

Credit

Equity Market

Inputs common to Level 2 and
Level 3 by instrument type

• swap yield curves

• basis curves

• credit curves

• spot equity index levels

•

interest rate volatility (1)

• currency spot rates

•

recovery rates

• dividend yield curves

Level 3

• swap yield curves (2)

• cross currency basis

curves

• currency volatility (1)
• swap yield curves (2)

• equity volatility (1)

• swap yield curves (2)

• dividend yield curves (2)

• basis curves (2)

• credit curves (2)

• equity volatility (1), (2)

•

repurchase rates

• cross currency basis
curves (2)

• currency correlation

• currency volatility (1)

• credit spreads

• correlation between
model inputs (1)

•

repurchase rates

independent non-binding
broker quotations

__________________

(1) Option-based only.

(2)

Extrapolation beyond the observable limits of the curve(s).

Embedded Derivatives

Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, equity or bond
indexed crediting rates within certain funding agreements and annuity contracts, and those related to funds withheld on ceded
reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value
reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain
GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity
contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified
within policyholder account balances and future policy benefits on the consolidated balance sheets.

The Company’s actuarial department calculates the fair value of these embedded derivatives, which are estimated as the
present value of projected future benefits minus the present value of projected future fees using actuarial and capital market
assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, and is
performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over
multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded
instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period
are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality,
lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical
experience.

The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin
related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly
available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default
swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying
ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional
compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions
as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use
of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.
These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but
not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in
nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins
related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that
could materially affect net income.

The Company ceded the risk associated with certain of the GMIBs previously described. These reinsurance agreements
contain embedded derivatives which are included within premiums, reinsurance and other receivables on the consolidated
balance sheets with changes in estimated fair value reported in net derivative gains (losses) or policyholder benefits and claims
depending on the statement of operations 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 with the exception of the input for nonperformance risk that reflects the credit of the reinsurer.

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 previously described
in “— Investments — Securities, Short-term Investments, Other Investments and Trading Liabilities.” The estimated fair value
of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance
sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the
underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these
embedded derivatives that could materially affect net income.

The estimated fair value of the embedded equity and bond indexed derivatives contained in certain funding agreements
is determined using market standard swap valuation models and observable market inputs, including a nonperformance risk
adjustment. The estimated fair value of these embedded derivatives are included, along with their funding agreements host,
within policyholder account balances with changes in estimated fair value recorded in net derivative gains (losses). Changes
in equity and bond indices, interest rates and the Company’s credit standing may result in significant fluctuations in the
estimated fair value of these embedded derivatives that could materially affect net income.

The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity indices.
These equity indexed features are embedded derivatives which are measured at estimated fair value separately from the host
fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives
are classified within policyholder account balances on the consolidated balance sheets.

The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns
to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior,
is calculated by the Company’s actuarial department. The calculation is based on in-force business and uses standard capital
market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms
are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present
value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded
derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk.

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Embedded Derivatives Within Asset and Liability Host Contracts

Level 3 Valuation Techniques and Key Inputs:

Direct and assumed guaranteed minimum benefits

These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing
techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied
volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are
not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant
unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied
volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder
behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.

Reinsurance ceded on certain guaranteed minimum benefits

These embedded derivatives are principally valued using the income approach. The valuation techniques and
significant market standard unobservable inputs used in their valuation are similar to those described above in “— Direct
and assumed guaranteed minimum benefits” and also include counterparty credit spreads.

Transfers between Levels

Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers

into or out of any level are assumed to occur at the beginning of the period.

Transfers between Levels 1 and 2:

For assets and liabilities measured at estimated fair value and still held at December 31, 2016, transfers between Levels
1 and 2 were not significant. For assets and liabilities measured at estimated fair value and still held at December 31, 2015,
transfers between Levels 1 and 2 were $203 million.

Transfers into or out of Level 3:

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable
data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are
not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and
liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with
market observable data. This may be due to a significant increase in market activity, a specific event, or one or more
significant input(s) becoming observable.

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents certain quantitative information about the significant unobservable inputs used in the fair
value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset
and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:

Valuation Techniques

Significant
Unobservable Inputs

Range

Weighted
Average (1)

Range

Weighted
Average (1)

December 31, 2016

December 31, 2015

Fixed maturity securities (3)

U.S. corporate and foreign

• Matrix pricing

• Offered quotes (4)

138

105

corporate

• Delta spread

adjustments (5)

• Market pricing

• Quoted prices (4)

• Consensus pricing

• Offered quotes (4)

Foreign government

• Market pricing

• Quoted prices (4)

RMBS

ABS

Derivatives

Interest rate

• Market pricing

• Quoted prices (4)

• Market pricing

• Quoted prices (4)

• Consensus pricing

• Offered quotes (4)

• Present value
techniques

• Swap yield (7)

Foreign currency exchange rate

Credit

• Present value
techniques

• Repurchase rates (9)

• Swap yield (7)

• Credit spreads (10)

• Consensus pricing

• Offered quotes (11)

114

104

100

200

(44)

700

120

124

137

106

102

300

328

156

113

100

(65)

—

307

111

240

780

121

135

292

109

105

317

381

100

Impact of
Increase in Input
on Estimated
Fair Value (2)

Increase

Decrease

Increase

Increase (6)

Increase (8)

Decrease (8)

Increase (8)

Decrease (8)

Equity market

• Present value

• Volatility (12)

12% -

32%

15% -

36%

Increase (8)

techniques or
option pricing
models

• Correlation (13)

40% -

40%

70% -

70%

Embedded derivatives

Direct, assumed and ceded
guaranteed minimum
benefits

• Option pricing
techniques

• Mortality rates:

Ages 0 - 40

Ages 41 - 60

Ages 61 - 115

• Lapse rates:

- 0.21%

0.01% - 0.78%

0.04% -

100%

Durations 1 - 10

Durations 11 - 20

0.25% -

100%

Durations 21 - 116

1.25% -

100%

• Utilization rates

• Withdrawal rates

• Long-term equity

volatilities

9.95% -

25%

20%

33%

0.21%

0.01% -

0.78%

0.04% -

100%

0.25% -

100%

8.79% -

100%

25%

20%

33%

Decrease (14)

Decrease (15)

Increase (16)

(17)

Increase (18)

• Nonperformance risk

0.04% - 1.70%

(0.47)% -

1.31%

Decrease (19)

spread

__________________

(1)

(2)

The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities.

The impact of a decrease in input would have the opposite impact on estimated fair value. For embedded derivatives,
changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed
minimum benefits are based on asset positions.

(3)

Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher)
valuations.

(4) Range and weighted average are presented in accordance with the market convention for fixed maturity securities of

dollars per hundred dollars of par.

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Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

10. Fair Value (continued)

(5) Range and weighted average are presented in basis points.

(6) Changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the
assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates.

(7) Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are
utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present
value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a
range is more representative of the unobservable input used in the valuation.

(8) Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short

U.S. dollar net asset positions.

(9) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented

in basis points.

(10) Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with

significant unobservable inputs are primarily comprised of written credit default swaps.

(11) At both December 31, 2016 and 2015, independent non-binding broker quotations were used in the determination of less

than 1% of the total net derivative estimated fair value.

(12) Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a
range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the
unobservable input used in the valuation.

(13) Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting
a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases)
in correlation in isolation will increase (decrease) the significance of the change in valuations.

(14) Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on
company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary
throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.

(15) Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values
and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges.
A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in
the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender
charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for
purposes of valuing the embedded derivative.

(16) The utilization rate assumption estimates the percentage of contract holders with a GMIB or lifetime withdrawal benefit
who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by
which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the
policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for
purposes of valuing the embedded derivative.

(17) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from
the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors
such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are
projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates
results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase
(decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.

(18) Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are
available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are
projected for purposes of valuing the embedded derivative.

(19) Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk
spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded
derivative.

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value
measurement of assets and liabilities classified within Level 3 that are not included in the preceding table. Generally, all other
classes of securities classified within Level 3, including those within separate account assets, and embedded derivatives within
funds withheld related to certain ceded and assumed reinsurance, use the same valuation techniques and significant
unobservable inputs as previously described for Level 3 securities. This includes matrix pricing and discounted cash flow
methodologies, inputs such as quoted prices for identical or similar securities that are less liquid and based on lower levels
of trading activity than securities classified in Level 2, as well as independent non-binding broker quotations. The residential
mortgage loans — FVO are valued using independent non-binding broker quotations and internal models including matrix
pricing and discounted cash flow methodologies using current interest rates. The sensitivity of the estimated fair value to
changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the
preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more
significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable
inputs (Level 3) are summarized in “— Nonrecurring Fair Value Measurements.”

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Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring

basis using significant unobservable inputs (Level 3):

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Fixed Maturity Securities

Corporate (1)

Foreign
Government

Structured
Securities

State and
Political
Subdivision

Equity
Securities

FVO and
Trading
Securities (2)

(In millions)

Balance, January 1, 2015

13,432

1,311

7,392

— $

345

567

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

Purchases (5)

Sales (5)

Issuances (5)

Settlements (5)

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

Balance, December 31, 2015

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

Purchases (5)

Sales (5)

Issuances (5)

Settlements (5)

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

Balance, December 31, 2016

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2014: (7)

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2015: (7)

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2016: (7)

Gains (Losses) Data for the year ended December 31,

2014:

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

(761)

2,556

(1,425)

—

918

(1,993)

12,796

3,198

(1,295)

—

1,089

(1,897)

(25)

212

(45)

—

(617)

856

(42)

(45)

—

124

(91)

3,167

(1,585)

—

(1,957)

7,116

138

2,519

(1,815)

—

(539)

(1,208)

(38)

(64)

128

(96)

—

107

(10)

432

(24)

(41)

—

457

(250)

13,927

290

6,865

604

(30)

—

(127)

—

(247)

270

—

(35)

—

(67)

287

— $

(5) $

(7)

125

— $

(1) $

(27)

131

(29) $

353

(110) $

— $

(80) $

—

307

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Balance, January 1, 2015

336

308

(300) $

430

1,922

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Short-term
Investments

Residential
Mortgage
Loans - FVO

Net
Derivatives (8)

Net Embedded
Derivatives (9)

Separate
Accounts (10)

(In millions)

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

Purchases (5)

Sales (5)

Issuances (5)

Settlements (5)

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

Balance, December 31, 2015

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

Purchases (5)

Sales (5)

Issuances (5)

Settlements (5)

Transfers into Level 3 (6)

Transfers out of Level 3 (6)

Balance, December 31, 2016

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2014: (7)

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2015: (7)

Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2016: (7)

Gains (Losses) Data for the year ended December 31,

2014:

Total realized/unrealized gains (losses) included in net

income (loss) (3) (4)

Total realized/unrealized gains (losses) included in AOCI

__________________

(1)

292

(27)

—

(310)

291

(51)

—

(250)

—

136

(121)

—

(29)

—

314

—

297

(11)

—

(42)

—

(223)

(159)

—

(411)

(734)

(363)

—

(46)

—

(817)

—

(544)

(2,271)

(18)

—

(892)

—

566

(1,516) $

(3,725) $

(67) $

(173) $

— $

(234) $

(176) $

(743) $

(2,311) $

— $

(83) $

101

(173) $

191

—

572

(527)

(60)

(310)

1,704

(3)

—

377

(644)

(51)

(312)

1,152

—

103

—

(1) Comprised of U.S. and foreign corporate securities.

(2) Comprised of FVO contractholder-directed unit-linked investments, FVO general account securities, FVO general account

securities held by CSEs and actively traded securities.

(3) Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net
income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential
mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are
included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss)
for net derivatives and net embedded derivatives are reported in net derivatives gains (losses).

(4)

(5)

Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to
embedded derivatives are included in settlements.

308

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

(6) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at
the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the
rollforward.

(7) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of
the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives
and net embedded derivatives are reported in net derivative gains (losses).

(8)

(9)

(10)

Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

Investment performance related to separate account assets is fully offset by corresponding amounts credited to
contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in
net income (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses).
Separate account assets and liabilities are presented net for the purposes of the rollforward.

Fair Value Option

The following table presents information for certain assets and liabilities accounted for under the FVO. These assets and

liabilities were initially measured at fair value.

Assets

Unpaid principal balance

Difference between estimated fair value and unpaid principal balance

Carrying value at estimated fair value

Loans in nonaccrual status

Loans more than 90 days past due

Loans in nonaccrual status or more than 90 days past due, or both —

difference between aggregate estimated fair value and unpaid principal
balance

Liabilities

Contractual principal balance

Difference between estimated fair value and contractual principal balance

Carrying value at estimated fair value

__________________

Residential Mortgage
Loans — FVO

Certain Assets
and Liabilities
of CSEs — FVO (1)

December 31,

2016

2015

2016

2015

(In millions)

794

(228)

566

214

137

436

(122)

314

122

136

— $

121

172

—

(150) $

(52) $

— $

—

(12)

(11)

(1)

These assets and liabilities are comprised of commercial mortgage loans and long-term debt. Changes in estimated fair
value on these assets and liabilities and gains or losses on sales of these assets are recognized in net investment gains
(losses). Interest income on commercial mortgage loans held by CSEs — FVO is recognized in net investment income.
Interest expense from long-term debt of CSEs — FVO is recognized in other expenses.

309

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

10. Fair Value (continued)

Nonrecurring Fair Value Measurements

The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the
periods and still held at the reporting dates (for example, when there is evidence of impairment). The estimated fair values for
these assets were determined using significant unobservable inputs (Level 3).

At December 31,

Years Ended December 31,

2016

2015

2014

2016

2015

2014

Carrying Value After Measurement

Gains (Losses)

Mortgage loans (1)

Other limited partnership interests (2)

Other assets (3)

Goodwill (4)

__________________

— $

(In millions)

147

— $

(66) $

(44) $

(260) $

(1) $

(32) $

— $

(76)

—

(1)

(2)

Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using
unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based
on the estimated fair value of the underlying collateral or the present value of the expected future cash flows.

For these cost method investments, estimated fair value is determined from information provided on the financial
statements of the underlying entities including NAV data. These investments include private equity and debt funds that
typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy,
timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt
funds. Distributions will be generated from investment gains, from operating income from the underlying investments
of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the
funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31,
2016 and 2015 were not significant.

(3) As discussed in Note 3, during the year ended December 31, 2016, the Company recognized an impairment of computer

software in connection with the U.S. Retail Advisor Force Divestiture.

(4) As discussed in Note 11, during the year ended December 31, 2016, the Company recorded an impairment of goodwill

associated with the reporting units within the Brighthouse Financial segment.

Fair Value of Financial Instruments Carried at Other Than Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts
other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment
income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments
that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the
“— Recurring Fair Value Measurements” section. The estimated fair value of the excluded financial instruments, which are
primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes
there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from
the tables below are not considered financial instruments subject to this disclosure.

310

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair

value hierarchy, are summarized as follows at:

December 31, 2016

Fair Value Hierarchy

Carrying
Value

Level 1

Level 2

Level 3

(In millions)

Total
Estimated
Fair Value

Assets

Mortgage loans

Policy loans

Real estate joint ventures

Other limited partnership interests

Other invested assets

Premiums, reinsurance and other receivables

Other assets

Liabilities

Policyholder account balances

Long-term debt

Collateral financing arrangements

Junior subordinated debt securities

Other liabilities

Separate account liabilities

Assets

Mortgage loans

Policy loans

Real estate joint ventures

Other limited partnership interests

Other invested assets

Premiums, reinsurance and other receivables

Other assets

Liabilities

Policyholder account balances

Long-term debt

Collateral financing arrangements

Junior subordinated debt securities

Other liabilities

Separate account liabilities

73,843

11,028

384

506

5,140

237

124,475

16,459

4,071

3,169

2,028

119,498

Carrying
Value

66,616

11,258

524

537

2,822

235

125,040

17,954

4,139

3,194

2,249

112,119

311

— $

145

— $

155

— $

1,115

— $

1,982

198

75,129

11,900

413

360

3,179

— $

127,833

75,129

13,015

413

505

5,161

269

127,833

18,016

— $

18,016

— $

3,775

— $

488

3,775

3,982

2,028

3,982

1,540

— $

119,498

— $

119,498

December 31, 2015

Fair Value Hierarchy

Level 1

Level 2

Level 3

(In millions)

Total
Estimated
Fair Value

— $

1,279

— $

484

207

68,539

12,072

104

615

380

2,421

— $

130,125

68,539

13,351

104

615

537

2,905

267

130,125

19,360

— $

19,360

— $

3,899

4,029

865

— $

1,385

— $

112,119

— $

112,119

3,899

4,029

2,250

Table of Contents

10. Fair Value (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial

instruments are summarized as follows:

Mortgage Loans

The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and
discounting them using current interest rates for similar mortgage loans with similar credit risk, or is determined from pricing
for similar loans.

Policy Loans

Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined
using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying
insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal
balance of the respective group of policy loans and an estimated average maturity determined through experience studies of
the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current
risk-free interest rates with no adjustment for borrower credit risk, as these loans are fully collateralized by the cash surrender
value of the underlying insurance policy. Policy loans with variable interest rates are classified within Level 2 and the estimated
fair value approximates carrying value due to the absence of borrower credit risk and the short time period between interest
rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates.

Real Estate Joint Ventures and Other Limited Partnership Interests

The estimated fair values of these cost method investments are generally based on the Company’s share of the NAV as
provided on the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium
or discount when it has sufficient evidence to support applying such adjustments.

Other Invested Assets

These other invested assets are principally comprised of various interest-bearing assets held in foreign subsidiaries and
certain amounts due under contractual indemnifications. For 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.

Premiums, Reinsurance and Other Receivables

Premiums, reinsurance and other receivables are principally comprised of certain amounts recoverable under reinsurance
agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and
amounts receivable for securities sold but not yet settled.

Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant
risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation
is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined
using interest rates determined to reflect the appropriate credit standing of the assuming counterparty.

The amounts on deposit for derivative settlements, classified within Level 2, essentially represent the equivalent of demand
deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair
value approximates carrying value.

Other Assets

These other assets are principally comprised of a receivable for cash paid to an unaffiliated financial institution under the
MetLife Reinsurance Company of Charleston (“MRC”) collateral financing arrangement described in Note 13. The estimated
fair value of the receivable for the cash paid to the unaffiliated financial institution under the MRC collateral financing
arrangement is determined by discounting the expected future cash flows using a discount rate that reflects the credit rating
of the unaffiliated financial institution.

312

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

10. Fair Value (continued)

Policyholder Account Balances

These policyholder account balances include investment contracts which primarily include certain funding agreements,
fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts (“TCA”). The
valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs.
The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance
risk in the liability.

Long-term Debt, Collateral Financing Arrangements and Junior Subordinated Debt Securities

The estimated fair values of long-term debt, collateral financing arrangements and junior subordinated debt securities are

principally determined using market standard valuation methodologies.

Valuations of instruments classified as Level 2 are based primarily on quoted prices in markets that are not active or using
matrix pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable
yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable
inputs including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or
privately traded issues.

Valuations of instruments classified as Level 3 are based primarily on discounted cash flow methodologies that utilize
unobservable discount rates that can vary significantly based upon the specific terms of each individual arrangement. The
determination of estimated fair values of collateral financing arrangements incorporates valuations obtained from the
counterparties to the arrangements, as part of the collateral management process.

Other Liabilities

Other liabilities consist primarily of interest payable, amounts due for securities purchased but not yet settled, and funds
withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance
agreements. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate
estimated fair values, which are not materially different from the carrying values, with the exception of certain deposit type
reinsurance payables. For such payables, the estimated fair value is determined as the present value of expected future cash
flows, which are discounted using an interest rate determined to reflect the appropriate credit standing of the assuming
counterparty.

Separate Account Liabilities

Separate account liabilities represent those balances due to policyholders under contracts that are classified as investment

contracts.

Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant
mortality risk to the Company such that the death benefit is equal to the account balance, funding agreements related to group
life contracts and certain contracts that provide for benefit funding.

Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized
at estimated fair value as described in the section “— Recurring Fair Value Measurements,” the value of those assets
approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate
account liabilities are similar to those described for separate account assets.

313

Table of Contents

11. Goodwill

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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. The goodwill impairment process requires a comparison
of the estimated fair value of a reporting unit to its carrying value. The Company tests goodwill for impairment by either
performing a qualitative assessment or a two-step quantitative test. The qualitative assessment is an assessment of historical
information and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, including goodwill. The Company may elect not to perform the qualitative assessment for
some or all of its reporting units and perform a two-step quantitative impairment test. In performing the two-step quantitative
impairment test, the Company may determine the fair values of its reporting units by applying a market multiple, discounted
cash flow, and/or an actuarial based valuation approach.

The market multiple valuation approach utilizes market multiples of companies with similar businesses and the projected
operating earnings of the reporting unit. The discounted cash flow valuation approach requires judgments about revenues,
operating earnings projections, capital market assumptions and discount rates. The actuarial based approaches such as embedded
value or cash flow testing estimate the net worth of the reporting unit and the value of existing and new business. The actuarial
based approaches require judgments and assumptions about level of economic capital required to support the mix of business,
long-term growth rates, 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.

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.

In anticipation of the Separation, in the third quarter of 2016, MetLife reorganized its businesses into six segments: U.S.;
Asia; Latin America; EMEA; MetLife Holdings; and Brighthouse Financial, as well as Corporate & Other. In connection with
the reorganization, MetLife realigned certain businesses among its existing and new segments. As a result, the Company
reallocated goodwill according to the relative fair values of the realigned businesses and reporting units.

Based on a quantitative analysis performed in the third quarter of 2016 for the life and run-off reporting units within the
Brighthouse Financial segment, the Company concluded that the carrying values of these reporting units exceeded their estimated
fair values, indicating a potential for goodwill impairment. Accordingly, the Company performed Step 2 of the goodwill
impairment process for each of the reporting units, which compares the implied estimated fair value of the reporting unit’s
goodwill with its carrying value. This analysis indicated that the goodwill associated with these reporting units was not
recoverable. As a result, the Company recorded a non-cash charge in the aggregate of $260 million ($223 million, net of income
tax) for the impairment of the entire goodwill balance, which is reported in goodwill impairment on the consolidated statements
of operations for the year ended December 31, 2016.

The Company performed its annual goodwill impairment tests of all other reporting units using a qualitative assessment
and/or quantitative assessments under the market multiple, discounted cash flow and/or actuarial based valuation approaches
and concluded that the estimated fair values of all such reporting units were in excess of their carrying values and, therefore,
goodwill was not impaired.

314

Table of Contents

11. Goodwill (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding goodwill by segment, as well as Corporate & Other, was as follows:

Balance at January 1, 2014

Goodwill

Accumulated impairment (2)

Total goodwill, net

Dispositions (3)

Effect of foreign currency translation and other

Balance at December 31, 2014

Goodwill

Accumulated impairment

Total goodwill, net

Effect of foreign currency translation and other

Balance at December 31, 2015

Goodwill

Accumulated impairment

Total goodwill, net

Dispositions (4)

Impairment (5)

Effect of foreign currency translation and other

Balance at December 31, 2016

Goodwill

Accumulated impairment

Total goodwill, net

__________________

U.S.

Asia (1)

Latin
America

EMEA

MetLife
Holdings

Brighthouse
Financial

Corporate
& Other

Total

(In millions)

1,451

4,898

1,588

1,356

1,567

1,508

—

1,451

—

1,451

—

1,451

—

1,451

—

1,451

—

1,451

—

4,898

(3)

(280)

4,615

—

4,615

(107)

4,508

—

4,508

—

4,596

—

1,588

—

(203)

1,385

—

1,385

(199)

1,186

—

1,186

—

1,226

—

1,356

(7)

(117)

1,232

—

1,232

(89)

1,143

—

1,143

—

(83)

1,060

—

(680)

887

—

1,567

(680)

887

—

1,567

(680)

887

—

1,567

(680)

(1,188)

320

(60)

—

1,448

(1,188)

260

—

1,448

(1,188)

260

—

(260)

—

1,448

(1,448)

—

(42)

—

$ 12,410

(1,868)

10,542

(70)

(600)

11,740

(1,868)

9,872

(395)

11,345

(1,868)

9,477

(42)

(260)

11,348

(2,128)

1,451

4,596

1,226

1,060

887

— $

9,220

(1)

(2)

(3)

(4)

(5)

Includes goodwill of $4.4 billion, $4.3 billion and $4.4 billion from the Japan operations at December 31, 2016, 2015
and 2014, respectively.

The $680 million and $1.2 billion accumulated impairment in the MetLife Holdings and Brighthouse Financial segments,
respectively, relates to the retail annuities business, which was impaired in 2012 and includes the allocated goodwill from
Corporate & Other. This accumulated impairment balance was allocated between the two segments based on estimated
fair value.

In connection with the sale of MAL, goodwill in the run-off reporting unit within the Brighthouse Financial segment was
reduced by $60 million during the year ended December 31, 2014. See Note 3.

In connection with the U.S. Retail Advisor Force Divestiture, goodwill in Corporate & Other was reduced by $42 million
for the year ended December 31, 2016. See Note 3.

For the year ended December 31, 2016, of the $260 million goodwill impairment for the Brighthouse Financial segment,
$147 million (with no income tax impact) was reflected on MetLife, Inc.

315

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

12. Long-term and Short-term Debt

Long-term and short-term debt outstanding was as follows:

Interest Rates (1)

2016

2015

December 31,

Range

Weighted
Average

Maturity

Face
Value

Unamortized
Discount

Unamortized
Issuance
Costs

Carrying
Value

Face
Value

Unamortized
Discount

Unamortized
Issuance
Costs

Carrying
Value (2)

Senior notes

1.76% - 7.72%

Surplus notes

7.63% - 7.88%

Other notes

1.62% - 7.03%

4.94%

7.79%

4.47%

Capital lease

obligations

Total long-
term
debt (3)

Total short-term

debt

Total

__________________

2017 - 2046

$15,597

(30)

(62)

$ 15,505

$17,025

(31)

(67)

$ 16,927

(In millions)

2024 - 2025

2017 - 2030

507

457

16,569

242

(4)

—

(34)

—

(2)

(4)

—

501

453

507

458

(68)

16,467

17,999

—

242

100

(5)

—

(36)

—

(2)

(5)

—

500

453

(74)

17,889

—

100

$16,811

(34)

(68)

$ 16,709

$18,099

(36)

(74)

$ 17,989

(1) Range of interest rates and weighted average interest rates are for the year ended December 31, 2016.

(2) Net of $74 million of unamortized issuance costs, which were reported in other assets at December 31, 2015.

(3)

Excludes $35 million and $60 million of long-term debt relating to CSEs — FVO at December 31, 2016 and 2015,
respectively. See Note 10.

The aggregate maturities of long-term debt at December 31, 2016 for the next five years and thereafter are $1.0 billion in

2017, $1.0 billion in 2018, $1.0 billion in 2019, $840 million in 2020, $1.0 billion in 2021 and $11.5 billion thereafter.

Capital lease obligations are collateralized and rank highest in priority, followed by unsecured senior notes and other notes,
followed by subordinated debt which consists of junior subordinated debt securities (see Note 14). Payments of interest and
principal on the Company’s surplus notes, which are subordinate to all other obligations at the operating company level and are
senior to obligations at MetLife, Inc., may be made only with the prior approval of the insurance department of the state of
domicile. Collateral financing arrangements (see Note 13) are supported by either surplus notes of subsidiaries or financing
arrangements with MetLife, Inc. and, accordingly, have priority consistent with other such obligations.

Certain of the Company’s debt instruments and committed facilities, as well as its credit facility, contain various
administrative, reporting, legal and financial covenants. The Company believes it was in compliance with all applicable covenants
at December 31, 2016.

Senior Notes — Senior Debt Securities Underlying Common Equity Units

In November 2010, in connection with the financing of the acquisition of American Life Insurance Company (“American
Life”) and Delaware American Life Insurance Company (“DelAm”), (collectively “ALICO”), MetLife, Inc. issued to ALICO
Holdings LLC (now AM Holdings LLC (“AM Holdings”)) $3.0 billion (estimated fair value of $3.0 billion) of three series of
debt securities (the “Series C Debt Securities,” the “Series D Debt Securities,” and the “Series E Debt Securities,” collectively,
the “Debt Securities”), which constituted a part of the common equity units more fully described in Note 15.

In October 2014, MetLife, Inc. closed the successful remarketing of senior debt securities underlying the common equity
units. The Series E Debt Securities were remarketed in September and October 2014 as 1.903% Series E senior debt securities
Tranche 1 due December 2017 and 4.721% Series E senior debt securities Tranche 2 due December 2044. The Series D Debt
Securities and the Series C Debt Securities were previously remarketed in 2013 and 2012, respectively. MetLife, Inc. did not
receive any proceeds from the remarketings.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

12. Long-term and Short-term Debt (continued)

Senior Notes — Other Issuances and Repayment

In November 2015, MetLife, Inc. issued $500 million of senior notes due in November 2025 which bear interest at a fixed
rate of 3.60%, payable semi-annually. Also in November 2015, MetLife, Inc. issued $750 million of senior notes due in May
2046 which bear interest at a fixed rate of 4.60%, payable semi-annually. In connection with the issuances, MetLife, Inc. incurred
$10 million of related costs which have been capitalized and are being amortized over the terms of the senior notes.

In March 2015, MetLife, Inc. issued $500 million of senior notes due in March 2025 which bear interest at a fixed rate of
3.00%, payable semi-annually. Also in March 2015, MetLife, Inc. issued $1.0 billion of senior notes due in March 2045 which
bear interest at a fixed rate of 4.05%, payable semi-annually. In connection with the issuances, MetLife, Inc. incurred $12 million
of related costs which have been capitalized and are being amortized over the terms of the senior notes.

In May 2014, MetLife, Inc. redeemed $200 million aggregate principal amount of its 5.875% senior notes due November

2033 at par.

In April 2014, MetLife, Inc. issued $1.0 billion of senior notes due April 2024 which bear interest at a fixed rate of 3.60%,
payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $5 million of related costs which have been
capitalized and are being amortized over the term of the senior notes.

Other Notes

In December 2015, MetLife Private Equity Holdings, LLC (“MPEH”), a wholly-owned indirect investment subsidiary of
MLIC, entered into a five-year credit agreement (the “MPEH Credit Agreement”) and borrowed $350 million under term loans
that mature in December 2020. The loans bear interest at a variable rate of three-month LIBOR plus 3.70%, payable quarterly.
In connection with the borrowing, $6 million of costs were incurred which have been capitalized and are being amortized over
the term of the loans. Additionally, the MPEH Credit Agreement provides for MPEH to borrow up to $100 million on a revolving
basis at a variable rate of three-month LIBOR plus 3.70%, payable quarterly. There were no revolving loans outstanding under
the MPEH Credit Agreement at both December 31, 2015 and 2016. Term loans and revolving loans borrowed under the MPEH
Credit Agreement are non-recourse to MLIC and MetLife, Inc.

Short-term Debt

Short-term debt with maturities of one year or less was as follows:

Commercial paper

Short-term borrowings

Total short-term debt

Average daily balance

Average days outstanding

December 31,

2016

2015

(Dollars in millions)

100

142

242

135

100

—

100

21 days

68 days

During the years ended December 31, 2016, 2015 and 2014, the weighted average interest rate on short-term debt was

1.32%, 0.15% and 0.10%, respectively.

Interest Expense

Interest expense included in other expenses was $877 million, $894 million and $874 million for the years ended
December 31, 2016, 2015 and 2014, respectively. Such amounts do not include interest expense on long-term debt related to
CSEs — FVO, collateral financing arrangements, or junior subordinated debt securities. See Notes 8, 13 and 14.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

12. Long-term and Short-term Debt (continued)

Credit and Committed Facilities

At December 31, 2016, the Company maintained a $4.0 billion unsecured revolving credit facility and certain committed
facilities aggregating $11.5 billion. As discussed further below, in December 2016, Brighthouse entered into a $3.0 billion three-
year senior unsecured delayed draw term loan agreement and a $2.0 billion five-year senior unsecured revolving credit facility
(collectively, the “Brighthouse Credit Facilities”). When drawn upon, these facilities bear interest at varying rates in accordance
with the respective agreements.

Credit Facilities

The Company’s unsecured revolving credit facility is used for general corporate purposes, to support the borrowers’
commercial paper programs and for the issuance of letters of credit. Total fees associated with this unsecured credit facility
were $15 million, $13 million and $12 million for the years ended December 31, 2016, 2015 and 2014, respectively, and were
included in other expenses. Information on the unsecured credit facility at December 31, 2016 was as follows:

Borrower(s)

Expiration

Maximum
Capacity

Letters of
Credit
Issued

Drawdowns

Unused
Commitments

(In millions)

MetLife, Inc. and MetLife Funding, Inc.

May 2019 (1), (2)

4,000 (1) (2)

730

— $

3,270

__________________

(1) All borrowings under this unsecured revolving credit facility must be repaid by May 30, 2019, except that letters of credit

outstanding upon termination may remain outstanding until May 30, 2020.

(2)

In December 2016, MetLife, Inc. and MetLife Funding, Inc. entered into an agreement to amend their existing $4.0 billion
unsecured revolving credit facility, which provides, among other things, that the facility will be amended and restated
upon the completion of the proposed Separation and the satisfaction of certain other conditions. As amended and restated,
the unsecured revolving credit facility will provide for borrowings and the issuance of letters of credit in an aggregate
amount of up to $3.0 billion. All borrowings under this amended unsecured revolving credit facility must be repaid by
December 20, 2021, except that letters of credit outstanding upon termination may remain outstanding until December 20,
2022.

Brighthouse Credit Facilities

In December 2016, Brighthouse entered into a $3.0 billion three-year senior unsecured delayed draw term loan
agreement and a $2.0 billion five-year senior unsecured revolving credit facility. Brighthouse incurred costs of $16 million
related to the Brighthouse Credit Facilities, which have been capitalized and included in other assets. Borrowings under
the term loan agreement may be used for general corporate purposes, including payment of a portion of the dividends to
be paid by Brighthouse Financial, Inc. to MetLife, Inc. in connection with the Separation. The term loan agreement provides
that borrowings may be made prior to the Separation. Amounts under the term loan agreement are available after the
completion of the contribution by MetLife, Inc. of entities to Brighthouse Intermediate Company (“Initial Contribution”)
and the completion of the contribution by MetLife, Inc. of Brighthouse Intermediate Company to Brighthouse.
Alternatively, after the Initial Contribution, Brighthouse may draw down amounts from available commitments provided
that Brighthouse Intermediate Company provides a guaranty of repayment of such obligations.

Borrowings and letters of credit under the revolving credit agreement may be used for general corporate purposes,
including payment of a portion of the dividends to be paid by Brighthouse to MetLife, Inc. in connection with the Separation.
Borrowings and issuances of letters of credit may commence after completion of the Separation, and shortly prior to the
Separation if certain conditions are satisfied.

Both the term loan agreement and the revolving credit facility contain certain administrative, reporting, legal and
financial covenants, including requirements to maintain a specified minimum consolidated net worth and to maintain a
ratio of indebtedness to total capitalization not in excess of a specified percentage, and limitations on the dollar amount
of indebtedness that may be incurred by subsidiaries of Brighthouse, which could restrict the operations and use of funds
of Brighthouse.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

12. Long-term and Short-term Debt (continued)

Total fees associated with the Brighthouse Credit Facilities were $1 million for the year ended December 31, 2016 and
were included in other expenses. There were no outstanding borrowings under the Brighthouse Credit Facilities as of
December 31, 2016.

Committed Facilities

The committed facilities are used for collateral for certain of the Company’s affiliated reinsurance liabilities. Total fees
associated with these committed facilities were $96 million, $90 million and $95 million for the years ended December 31,
2016, 2015 and 2014, respectively, and were included in other expenses. Information on these committed facilities at
December 31, 2016 was as follows:

Account Party/Borrower(s)

Expiration

Maximum
Capacity

Letters of
Credit
Issued

Drawdowns

Unused
Commitments

(In millions)

MetLife, Inc.

June 2018 (1)

425

— $

MetLife Reinsurance Company of
Vermont and MetLife, Inc.

December 2024 (2), (3)

MetLife Reinsurance Company of South

Carolina and MetLife, Inc.

June 2037 (4)

MetLife Reinsurance Company of
Vermont and MetLife, Inc.

Total

__________________

December 2037 (2), (5)

September 2038 (6)

400

3,500

2,896

4,250

355

—

2,261

3,000

—

2,797

—

11,471

6,041

2,797

—

703

635

1,250

2,633

(1) Capacity at December 31, 2016 of $425 million decreases in June 2017, March 2018 and June 2018 to $395 million,

$200 million and $0, respectively.

(2) MetLife, Inc. is a guarantor under the applicable facility.

(3) Capacity at December 31, 2016 of $400 million decreases in June 2022, December 2022, June 2023, December 2023 and

December 2024 to $380 million, $360 million, $310 million, $260 million and $0, respectively.

(4) Capacity at December 31, 2016 of $3.5 billion decreases to $0 upon maturity in June 2037. The drawdown on this facility

is associated with a collateral financing arrangement described more fully in Note 13.

(5) Capacity at December 31, 2016 of $2.4 billion increases periodically to a maximum of $2.9 billion in 2024, decreases
periodically commencing in 2025 to $2.0 billion in 2037, and decreases to $0 after maturity in December 2037. Unused
commitment of $635 million is based on maximum capacity.

(6) Capacity at December 31, 2016 of $4.3 billion decreases periodically commencing in April 2028 to $3.1 billion in
September 2038, and decreases to $0 upon maturity in September 2038. Unused commitment of $1.3 billion is based on
maximum capacity. MetLife Reinsurance Company of Vermont (“MRV”) is responsible only for reimbursement
obligations relating to the $3.0 billion of letters of credit outstanding as of December 31, 2016. MetLife, Inc. is not
responsible for those reimbursement obligations.

In addition to the above committed facilities, see also “— Other Notes” for information about the undrawn line of credit

facility in the amount of $100 million.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

13. Collateral Financing Arrangements

Associated with the Closed Block

Information related to the collateral financing arrangement associated with the closed block was as follows at:

Surplus notes outstanding (1)

Receivable from unaffiliated financial institution (1)

Pledged collateral (2)

Assets held in trust (2)

__________________

(1) Carrying value.

(2)

Estimated fair value.

December 31,

2016

2015

(In millions)

1,274

166

160

1,211

1,342

174

1,181

Interest expense on the collateral financing arrangement was $24 million, $20 million and $19 million for the years ended

December 31, 2016, 2015 and 2014, respectively, which is included in other expenses.

In December 2007, MLIC reinsured a portion of its closed block liabilities to MRC, a wholly-owned subsidiary of
MetLife, Inc. 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 three-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.

Simultaneously with the issuance of the surplus notes, MetLife, Inc. entered into an agreement with the unaffiliated financial
institution, under which MetLife, Inc. is entitled to the interest paid by MRC on the surplus notes of three-month LIBOR plus
0.55% in exchange for the payment of three-month LIBOR plus 1.12%, payable quarterly on such amount as adjusted, as
described below. MetLife, Inc. 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 are accounted for as a receivable and
included in other assets on the Company’s consolidated balance sheets and do not reduce the principal amount outstanding of
the surplus notes. Such payments, however, reduce the amount of interest payments due from MetLife, Inc. under the agreement.
Any payment received from the unaffiliated financial institution reduces the receivable by an amount equal to such payment
and also increases the amount of interest payments due from MetLife, Inc. under the agreement. In addition, the unaffiliated
financial institution may be required to pledge collateral to MetLife, Inc. related to any increase in the estimated fair value of
the surplus notes. MetLife, Inc. may also be required to make a payment to the unaffiliated financial institution in connection
with any early termination of this agreement.

During 2016 and 2015, following regulatory approval, MRC repurchased $68 million and $57 million, respectively, in
aggregate principal amount of the surplus notes. Cumulatively, since December 2007, MRC repurchased $1.2 billion in aggregate
principal amount of the surplus notes as of December 31, 2016. Payments made by the Company in 2016 and 2015 associated
with the repurchases were exclusive of accrued interest on the surplus notes. In connection with the repurchases during 2016
and 2015, the Company received payments in the aggregate amount of $8 million each year from the unaffiliated financial
institution, which reduced the amount receivable from the unaffiliated financial institution by $8 million each year. No other
payments related to an increase or decrease in the estimated fair value of the surplus notes were made by MetLife, Inc. or received
from the unaffiliated financial institution during 2016, 2015 or 2014.

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 the years ended December 31,
2016, 2015 and 2014, MRC transferred $1 million, $30 million and $467 million, respectively, out of the trust to its general
account. 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 on the Company’s consolidated
statements of operations.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

13. Collateral Financing Arrangements (continued)

Associated with Secondary Guarantees

Information related to the collateral financing arrangement associated with the secondary guarantees was as follows at:

Liability outstanding (1)

Assets held in trust (2)

__________________

(1) Carrying value.

(2)

Estimated fair value.

December 31,

2016

2015

(In millions)

2,797

3,422

2,797

3,374

Interest expense on the collateral financing arrangement was $39 million, $28 million and $27 million for the years ended

December 31, 2016, 2015 and 2014, respectively, which is included in other expenses.

In May 2007, MetLife, Inc. and MRSC, a wholly-owned subsidiary of MetLife, Inc., entered into a 30-year collateral
financing arrangement with an unaffiliated financial institution that provides up to $3.5 billion of statutory reserve support for
MRSC associated with reinsurance obligations under intercompany reinsurance agreements. Such statutory reserves are
associated with ULSG and are required under U.S. Valuation of Life Policies Model Regulation (commonly referred to as
Regulation A-XXX). 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. The assets are principally
invested in fixed maturity securities and are presented as such within the Company’s balance sheets, with the related income
included within net investment income on the Company’s statements of operations. The collateral financing arrangement may
be extended by agreement of MetLife, Inc. and the unaffiliated financial institution on each anniversary of the closing.

In connection with the collateral financing arrangement, MetLife, Inc. entered into an agreement with the same unaffiliated
financial institution under which MetLife, Inc. 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 three-month LIBOR plus 0.70%, payable quarterly. MetLife, Inc. 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 2016, 2015 and 2014, no payments were made or received by MetLife, Inc. Cumulatively, since May 2007, MetLife, Inc.
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 as of December 31, 2016.

In addition, MetLife, Inc. may be required to pledge collateral to the unaffiliated financial institution under this agreement.

At both December 31, 2016 and 2015, MetLife, Inc. had pledged no collateral under this agreement.

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14. Junior Subordinated Debt Securities

Outstanding Junior Subordinated Debt Securities

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Outstanding junior subordinated debt securities and exchangeable surplus trust securities which are exchangeable for junior subordinated debt securities prior to redemption

or repayment, were as follows:

2016

2015

December 31,

Issuer

Issue
Date

Interest
Rate (1)

Scheduled
Redemption
Date

Interest Rate
Subsequent to
Scheduled
Redemption
Date (2)

Final
Maturity

Face
Value

Unamortized
Discount

Unamortized
Issuance
Costs

Carrying
Value

Face
Value

Unamortized
Discount

Unamortized
Issuance
Costs

Carrying
Value (3)

(In millions)

MetLife, Inc.

July 2009

10.750% August 2039

LIBOR + 7.548%

MetLife Capital

Trust X (4), (5)

April 2008

9.250%

April 2038

LIBOR + 5.540%

MetLife Capital
Trust IV (4)

December 2007

7.875% December 2037

LIBOR + 3.960%

MetLife, Inc.

December 2006

6.400% December 2036

LIBOR + 2.205%

August
2069

April

2068

December
2067
December
2066

$ 500

— $

(4) $

496

$ 500

— $

(4) $

496

750

700

1,250

—

(4)

(2)

(6)

(9)

744

690

750

700

1,239

1,250

—

(4)

(2)

(6)

(7)

(9)

744

689

1,239

$3,200

(6) $

(25) $ 3,169

$3,200

(6) $

(26) $ 3,168

_________________

(1)

(2)

Prior to the scheduled redemption date, interest is payable semiannually in arrears.

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 three-month LIBOR
plus the indicated margin, payable quarterly in arrears.

(3) Net of $26 million of unamortized issuance costs, which were reported in other assets at December 31, 2015.

(4) MetLife Capital Trust X and MetLife Capital Trust IV are VIEs which are consolidated on the financial statements of the Company. The securities issued by these
entities are exchangeable surplus trust securities, which are exchangeable for a like amount of MetLife, Inc.’s junior subordinated debt securities on the scheduled
redemption date; mandatorily under certain circumstances, and at any time upon MetLife, Inc. exercising its option to redeem the securities.

(5)

See Note 23 for the information regarding the Junior Subordinated Debt Securities exchange transaction in February 2017.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

14. Junior Subordinated Debt Securities (continued)

In connection with each of the securities described above, MetLife, Inc. 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. MetLife, Inc. also has the right to, and in
certain circumstances the requirement to, defer interest payments on the securities for a period up to 10 years. Interest compounds
during such periods of deferral. If interest is deferred for more than five consecutive years, MetLife, Inc. is required to use
proceeds from the sale of its common stock or warrants on common stock to satisfy this interest payment obligation. In connection
with each of the securities described above, MetLife, Inc. entered into a separate replacement capital covenant (“RCC”). As part
of each RCC, MetLife, Inc. agreed that it will not repay, redeem, or purchase the securities on or before a date 10 years prior to
the final maturity date of each issuance, unless, subject to certain limitations, it has received cash proceeds during a specified
period from the sale of specified replacement securities. Each RCC will terminate upon the occurrence of certain events, including
an acceleration of the applicable securities due to the occurrence of an event of default. The RCCs are not intended for the benefit
of holders of the securities and may not be enforced by them. Rather, each RCC is for the benefit of the holders of a designated
series of MetLife, Inc.’s other indebtedness (the “Covered Debt”). Initially, the Covered Debt for each of the securities described
above was MetLife, Inc.’s 5.700% senior notes due 2035 (the “5.700% Senior Notes”). As a result of the issuance of
MetLife, Inc.’s 10.750% Fixed-to-Floating Rate Junior Subordinated Debentures due 2069 (the “10.750% JSDs”), the
10.750% JSDs became the Covered Debt with respect to, and in accordance with, the terms of the RCC relating to MetLife, Inc.’s
6.40% Fixed-to-Floating Rate Junior Subordinated Debentures due 2066. The 5.700% Senior Notes continue to be the Covered
Debt with respect to, and in accordance with, the terms of the RCCs relating to each of MetLife Capital Trust IV’s 7.875% Fixed-
to-Floating Rate Exchangeable Surplus Trust Securities, MetLife Capital Trust X’s 9.250% Fixed-to-Floating Rate Exchangeable
Surplus Trust Securities and the 10.750% JSDs. MetLife, Inc. also entered into a replacement capital obligation which will
commence during the six month period prior to the scheduled redemption date of each of the securities described above and
under which MetLife, Inc. must use reasonable commercial efforts to raise replacement capital to permit repayment of the
securities through the issuance of certain qualifying capital securities.

Interest expense on outstanding junior subordinated debt securities was $258 million for each of the years ended

December 31, 2016, 2015 and 2014, which is included in other expenses.

15. Common Equity Units

In connection with the financing of the acquisition of ALICO in November 2010, MetLife, Inc. issued to AM Holdings
40 million common equity units with an aggregate stated amount at issuance of $3.0 billion and an estimated fair value of
$3.2 billion. Each common equity unit had an initial stated amount of $75 per unit and initially consisted 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 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 $1.0 billion. On March 8, 2011, AM Holdings sold, in a public offering, all
the common equity units it received as consideration from MetLife in connection with the acquisition of ALICO.

As discussed in Note 12, in October 2014, September 2013 and October 2012, MetLife, Inc. closed the successful
remarketings of senior debt securities underlying the common equity units. Most holders of the common equity units used the
remarketing proceeds to settle their payment obligations under the applicable Purchase Contracts. The subsequent settlement
of the Purchase Contracts provided proceeds to MetLife, Inc. of $1.0 billion in each of October 2014, September 2013 and
October 2012 in exchange for shares of MetLife, Inc.’s common stock. See Note 16.

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16. Equity

Preferred Stock

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Preferred stock authorized, issued and outstanding was as follows at both December 31, 2016 and 2015:

Series

Floating Rate Non-Cumulative Preferred Stock, Series A

5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C

Series A Junior Participating Preferred Stock

Not designated

Total

Shares
Authorized

Shares
Issued

Shares
Outstanding

27,600,000

1,500,000

10,000,000

160,900,000

200,000,000

24,000,000

1,500,000

24,000,000

1,500,000

—

25,500,000

As discussed below, MetLife, Inc. repurchased or redeemed and canceled the 6.50% Non-Cumulative Preferred Stock,
Series B (the “Series B preferred stock”) in 2015. On November 3, 2015, MetLife, Inc. filed a Certificate of Elimination (the
“Certificate of Elimination”) of 6.50% Non-Cumulative Preferred Stock, Series B with the Secretary of State of the State of
Delaware to eliminate all references to the Series B preferred stock in MetLife, Inc.’s Amended and Restated Certificate of
Incorporation (the “Certificate of Incorporation”), including the related Certificate of Designations. As a result of the filing of
the Certificate of Elimination, MetLife, Inc.’s Certificate of Incorporation was amended to eliminate all references therein to
the Series B preferred stock, and the shares that were designated to such series were returned to the status of authorized but
unissued shares of preferred stock, par value $0.01 per share, of MetLife, Inc., without designation as to series.

In June 2015, MetLife, Inc. issued 1,500,000 shares of 5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock,
Series C (the "Series C preferred stock"), with a $0.01 par value per share and a liquidation preference of $1,000 per share, for
aggregate proceeds of $1.5 billion. In connection with the offering of the Series C preferred stock, MetLife, Inc. incurred
$17 million of issuance costs which have been recorded as a reduction of additional paid-in capital.

In June 2015, MetLife, Inc. conducted a tender offer for up to 59,850,000 of its 60,000,000 shares of Series B preferred
stock, liquidation preference $25 per share, at a purchase price of $25 per share, plus an amount equal to accrued, unpaid and
undeclared dividends from, and including, June 15, 2015 to, but excluding, June 29, 2015, the settlement date of the tender offer.
In June 2015, MetLife, Inc. also delivered a notice of redemption to the holders of the Series B preferred stock, pursuant to
which it would redeem any shares of Series B preferred stock not purchased by it in the tender offer at a redemption price of
$25 per share, without any payment for accrued, unpaid and undeclared dividends on the Series B preferred stock from, and
including, June 15, 2015 to, but excluding, July 1, 2015, the redemption date. On June 29, 2015, MetLife, Inc. repurchased and
canceled 37,192,413 shares of Series B preferred stock in the tender offer for $932 million in cash. On July 1, 2015, MetLife, Inc.
redeemed and canceled the remaining 22,807,587 shares of Series B preferred stock not tendered in the tender offer for an
aggregate redemption price of $570 million in cash. In connection with the tender offer and redemption, MetLife, Inc. recognized
a preferred stock repurchase premium of $42 million (calculated as the difference between the carrying value of the Series B
preferred stock and the total amount paid by MetLife, Inc. to the holders of the Series B preferred stock in connection with the
tender offer and redemption), which was reflected as a reduction to retained earnings on the consolidated balance sheet.

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16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The outstanding preferred stock ranks senior to MetLife, Inc.’s common stock with respect to the payment of dividends and
distributions upon liquidation, dissolution or winding-up. Holders of the outstanding preferred stock are entitled to receive
dividend payments only when, as and if declared by MetLife, Inc.’s Board of Directors or a duly authorized committee of the
Board. Dividends on the preferred stock are not cumulative or mandatory. Accordingly, if dividends are not declared on the
preferred stock of the applicable series for any dividend period, then any accrued dividends for that dividend period will cease
to accrue and be payable. If a dividend is not declared before the dividend payment date for any such dividend period, MetLife, Inc.
will have no obligation to pay dividends accrued for such dividend period whether or not dividends are declared for any future
period. No dividends may be paid or declared on MetLife, Inc.’s common stock (or any other securities ranking junior to the
preferred stock) and MetLife, Inc. may not purchase, redeem, or otherwise acquire its common stock (or other such junior stock)
unless the full dividends for the latest completed dividend period on all outstanding shares of preferred stock, and any parity
stock, have been declared and paid or provided for. If dividends are declared on MetLife, Inc.’s Floating Rate Non-Cumulative
Preferred Stock, Series A (the “Series A preferred stock”), they will be payable quarterly, in arrears, at an annual rate of the
greater of: (i) 1.00% above three-month LIBOR on the related LIBOR determination date; or (ii) 4.00%. If dividends are declared
on the Series C preferred stock for any dividend period, they are calculated on a non-cumulative basis at a fixed rate per annum
of 5.25% from the date of original issue to, but excluding, June 15, 2020, and will be calculated at a floating rate per annum
equal to three-month LIBOR plus 3.575% on the related LIBOR determination date from and after June 15, 2020. Dividends
on the Series C preferred stock for any dividend period are payable, if declared, semi-annually in arrears on the 15th day of June
and December of each year commencing on December 15, 2015 and ending on June 15, 2020, and thereafter quarterly in arrears
on the 15th day of September, December, March and June of each year. Information on payments of dividends on the Series B
preferred stock is set forth in the table below.

MetLife, Inc. is prohibited from declaring dividends on the outstanding preferred stock if it fails to meet specified capital
adequacy, net income and stockholders’ equity levels. Beginning on January 1, 2019, MetLife, Inc. will no longer be subject to
such limitations with respect to the Series C preferred stock. See “— Dividend Restrictions — MetLife, Inc.”

Holders of the preferred stock do not have voting rights except in certain circumstances, including 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 stock have certain voting rights with respect to members of the Board
of Directors of MetLife, Inc.

The preferred stock is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar
provisions. The Series A preferred stock is redeemable at MetLife, Inc.’s option in whole or in part, at a redemption price of
$25 per share of preferred stock, plus declared and unpaid dividends. MetLife, Inc. may, at its option, redeem the Series C
preferred stock, (i) in whole but not in part, at any time prior to June 15, 2020, within 90 days after the occurrence of a “regulatory
capital event,” and (ii) in whole or in part, from time to time, on or after June 15, 2020, in each case, at a redemption price equal
to $1,000 per Series C preferred share, plus an amount equal to any dividends per share that have accrued but not been declared
and paid for the then-current dividend period to, but excluding, such redemption date. A “regulatory capital event” could occur
as a result of a change or proposed change in capital adequacy rules (or the interpretation or application thereof) that would
apply to MetLife, Inc. from rules (or the interpretation or application thereof) in effect with respect to bank holding companies
as of June 1, 2015 that would create a more than insubstantial risk, as determined by MetLife, Inc., that the Series C preferred
stock would not be treated as “Tier 1 Capital” or as capital with attributes similar to those of Tier 1 Capital.

In December 2008, MetLife, Inc. entered into an RCC related to the Series A and Series B preferred stock and, in June 2015,
MetLife, Inc. entered into an RCC related to the Series C preferred stock. As part of each such RCC, MetLife, Inc. agreed that
it will not repay, redeem or purchase the preferred stock on or before December 31, 2018, unless, subject to certain limitations,
it has received proceeds during a specified period from the sale of specified replacement securities. The repurchase and redemption
of Series B preferred stock as described above was in compliance with the terms of the applicable RCC. The RCC is, in each
case, for the benefit of the holders of the related Covered Debt, which is currently MetLife, Inc.’s 10.750% JSDs. The RCC will
terminate upon the occurrence of certain events, including the date on which MetLife, Inc. has no series of outstanding eligible
debt securities.

325

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information on the declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the

Series A, Series B and Series C preferred stock was as follows:

Declaration Date

Record Date

Payment Date

Series A
Per Share

Series A
Aggregate

Series B
Per Share

Series B
Aggregate

Series C
Per Share

Series C
Aggregate

(In millions, except per share data)

Dividend

November 15, 2016

November 30, 2016

December 15, 2016

August 15, 2016

August 31, 2016

September 15, 2016

May 16, 2016

March 7, 2016

May 31, 2016

June 15, 2016

February 29, 2016

March 15, 2016

November 16, 2015

November 30, 2015

December 15, 2015

August 17, 2015

August 31, 2015

September 15, 2015

May 15, 2015

March 5, 2015

May 31, 2015

June 15, 2015

February 28, 2015

March 16, 2015

November 17, 2014

November 30, 2014

December 15, 2014

August 15, 2014

August 31, 2014

September 15, 2014

May 15, 2014

March 5, 2014

May 31, 2014

June 16, 2014

February 28, 2014

March 17, 2014

0.253

0.256

0.253

0.256

0.250

0.253

0.256

0.250

See Note 23 for information on subsequent preferred stock dividends declared.

Common Stock

Issuances

— $

26.250

—

— $

—

— $

26.250

— $

—

— $

28.292

—

0.406

— $

—

— $

—

In October 2014, MetLife, Inc. issued 22,907,960 new shares of its common stock for $1.0 billion. The issuances were

made in connection with the settlement of stock purchase contracts. See Note 15.

During the years ended December 31, 2016, 2015 and 2014, 4,439,219 new shares, 5,592,622 new shares and
5,866,160 new shares of common stock were issued for $166 million, $216 million and $220 million, respectively, in
connection with stock option exercises and other stock-based awards. There were no shares of common stock issued from
treasury stock during any of the years ended December 31, 2016, 2015 and 2014.

Repurchase Authorizations

On December 12, 2014, MetLife, Inc. announced that its Board of Directors authorized $1.0 billion of common stock
repurchases in addition to previously authorized repurchases and on September 22, 2015, MetLife, Inc. announced that its
Board of Directors authorized additional repurchases of $739 million of its common stock, bringing MetLife, Inc.’s available
repurchase authorization under the December 2014 and September 2015 authorizations as of such date to $1.0 billion. On
November 10, 2016, MetLife, Inc. announced that its Board of Directors authorized $3.0 billion of common stock repurchases.

During the years ended December 31, 2016, 2015 and 2014, MetLife, Inc. repurchased 6,948,739 shares, 39,491,991
shares and 18,876,363 shares under these repurchase authorizations for $372 million, $1.9 billion, and $1.0 billion,
respectively. At December 31, 2016, MetLife, Inc. had $2.7 billion remaining under its common stock repurchase
authorizations. See Note 23 for information on subsequent common stock repurchases.

Under these authorizations, MetLife, Inc. 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 (“Exchange Act”)), and in privately negotiated transactions. Common stock repurchases are
dependent upon several factors, including the Company’s capital position, liquidity, financial strength and credit ratings,
general market conditions, the market price of MetLife, Inc.’s common stock compared to management’s assessment of the
stock’s underlying value and applicable regulatory approvals, as well as other legal and accounting factors.

326

Table of Contents

16. Equity (continued)

Dividends

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The table below presents declaration, record and payment dates, as well as per share and aggregate dividend amounts,

for common stock:

Declaration Date

Record Date

Payment Date

Per Share

Aggregate

(In millions, except per share data)

Dividend

October 25, 2016

November 7, 2016

July 7, 2016

April 26, 2016

January 6, 2016

August 8, 2016

May 9, 2016

February 5, 2016

October 27, 2015

November 6, 2015

July 7, 2015

April 28, 2015

January 6, 2015

August 7, 2015

May 11, 2015

February 6, 2015

October 28, 2014

November 7, 2014

July 7, 2014

April 22, 2014

January 6, 2014

August 8, 2014

May 9, 2014

February 6, 2014

December 13, 2016

September 13, 2016

June 13, 2016

March 14, 2016

December 11, 2015

September 11, 2015

June 12, 2015

March 13, 2015

December 12, 2014

September 12, 2014

June 13, 2014

March 13, 2014

0.400

0.375

0.350

0.275

441

413

1,736

419

420

394

1,653

398

395

311

1,499

See Note 23 for information on subsequent common stock dividends declared.

The funding of the cash dividends and operating expenses of MetLife, Inc. is primarily provided by cash dividends from
MetLife, Inc.’s insurance subsidiaries. The statutory capital and surplus, or net assets, of MetLife, Inc.’s insurance subsidiaries
are subject to regulatory restrictions except to the extent that dividends are allowed to be paid in a given year without prior
regulatory approval. Dividends exceeding these limitations can generally be made subject to regulatory approval. The nature
and amount of these dividend restrictions, as well as the statutory capital and surplus of MetLife, Inc.’s U.S. insurance
subsidiaries, are disclosed in “— Statutory Equity and Income” and “— Dividend Restrictions — Insurance Operations.”
MetLife, Inc.’s principal non-U.S. insurance operations are branches or subsidiaries of American Life, a U.S. insurance
subsidiary of the Company. In addition, the payment of dividends by MetLife, Inc. to its shareholders is also subject to
restrictions. See “— Dividend Restrictions — MetLife, Inc.”

Stock-Based Compensation Plans

Plans for Employees and Agents

Under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan (the “2015 Stock Plan”), MetLife, Inc. may grant
awards to employees and agents 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 applicable,
as defined in the 2015 Stock Plan with reference to shares of MetLife, Inc. common stock (“Shares”)). Awards under the 2015
Stock Plan and its predecessor plan, the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the “2005 Stock Plan”)
were outstanding at December 31, 2016. MetLife, Inc. granted all awards to employees and agents in 2016 under the 2015
Stock Plan.

327

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The aggregate number of Shares authorized for issuance under the 2015 Stock Plan at December 31, 2016 was 30,225,064.

MetLife recognizes compensation expense related to awards under the 2005 Stock Plan or 2015 Stock Plan based on the
number of awards it expects 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, MetLife recognizes any adjustment necessary to reflect differences in actual experience 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.
Under the 2015 Stock Plan, compensation expense principally relates to Stock Options, Unit Options, Performance Shares,
Performance Units, Restricted Stock Units and Restricted Units. MetLife, Inc. granted the majority of each year’s awards
under the 2005 Stock Plan and 2015 Stock Plan in the first quarter of the year.

Deferred Shares are Shares that are covered by awards that have become payable under a plan, but the issuance of which
has been deferred. Deferred Shares payable to employees or agents related to awards under the 2005 Stock Plan, 2015 Stock
Plan, or earlier applicable plans equaled 1,385,725 Shares at December 31, 2016.

Certain stock-based awards provide solely for cash settlement based in whole or in part on the price of Shares or changes
in the price of Shares (“Phantom Stock-Based Awards”). MetLife granted such awards under the MetLife, Inc. International
Unit Option Incentive Plan, the MetLife International Performance Unit Incentive Plan, and the MetLife International
Restricted Unit Incentive Plan prior to 2015, and under the 2015 Stock Plan in 2015 and later.

Plans for Non-Management Directors

Under the MetLife, Inc. 2015 Non-Management Director Stock Compensation Plan (the “2015 Director Stock Plan”),
MetLife, Inc. may grant non-management Directors of MetLife, Inc. awards in the form of nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock or Restricted Stock Units, or Stock-Based Awards (each, as applicable, as defined in
the 2015 Director Stock Plan with reference to Shares). The only awards MetLife, Inc. granted under the 2015 Director Stock
Plan and its predecessor plan, the MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan (the “2005 Director
Stock Plan”), through December 31, 2016 vested immediately and no awards under the 2005 Director Stock Plan or 2015
Director Stock Plan remained outstanding at December 31, 2016.

The aggregate number of Shares authorized for issuance under the 2015 Director Stock Plan at December 31, 2016 was

1,561,333.

MetLife recognizes compensation expense related to awards under the 2015 Director Stock Plan based on the number of
Shares awarded. The only awards made under the 2005 Director Stock Plan and under the 2015 Director Stock Plan through
December 31, 2016 were Stock-Based Awards that vested immediately. MetLife, Inc. granted the majority of the awards in
2015 and 2016 under the 2015 Director Stock Plan in the second quarter of each year.

Deferred Shares payable to Directors related to awards under the 2005 Director Stock Plan, 2015 Director Stock Plan,

or earlier applicable plans equaled 193,253 Shares at December 31, 2016.

328

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Compensation Expense Related to Stock-Based Compensation

The components of compensation expense related to stock-based compensation includes compensation expense related
to Phantom Stock-Based Awards, and excludes the insignificant compensation expense related to the 2015 Director Stock
Plan. Those components were:

Stock Options and Unit Options

Performance Shares and Performance Units (1)

Restricted Stock Units and Restricted Units

Total compensation expense

Income tax benefit

__________________

Years Ended December 31,

2016

2015

2014

(In millions)

160

154

111

192

(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

Equity Awards

Stock Options

December 31, 2016

Expense

(In millions)

Weighted Average
Period

(Years)

1.65

1.73

1.80

Stock Options are the contingent right of award holders to purchase Shares at a stated price for a limited time. All Stock
Options have an exercise price equal to the closing price of a Share reported on the New York Stock Exchange on the date
of grant, and have a maximum term of 10 years. The vast majority of Stock Options granted has 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 meet specified age and service criteria and in certain other limited circumstances.

329

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

A summary of the activity related to Stock Options was as follows:

Outstanding at January 1, 2016

Granted

Exercised

Expired

Forfeited

Outstanding at December 31, 2016

Vested and expected to vest at December 31, 2016
Exercisable at December 31, 2016

__________________

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term

Shares
Under
Option

Aggregate
Intrinsic
Value (1)

23,506,764

900,764
$
(2,432,001) $
(2,429,009) $
(64,130) $
$

19,482,388

19,314,192
17,913,612

$
$

44.50

38.42

34.36

50.50

45.90

44.73

44.72
44.79

(Years)

(In millions)

4.09

166

3.68

3.69
3.28

$
$

218

217
202

(1)

The intrinsic value of each Stock Option is the closing price on a particular date less the exercise price of the Stock Option,
so long as the difference is greater than zero. The aggregate intrinsic value of all outstanding Stock Options is computed
using the closing Share price on December 31, 2016 of $53.89 and December 31, 2015 of $48.21, as applicable.

MetLife estimates the fair value of Stock Options on the date of grant using a binomial lattice model. The significant
assumptions the Company uses in its binomial lattice model are further described below. The assumptions include: expected
volatility of the price of Shares; risk-free rate of return; dividend yield on Shares; exercise multiple; and the post-vesting
termination rate.

Expected volatility is based upon an analysis of historical prices of Shares and call options on Shares 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 Shares. The Company chose a monthly measurement interval for historical volatility as this interval reflects
the Company’s view that employee option exercise decisions are based on longer-term trends in the price of the underlying
Shares rather than on daily price movements.

The binomial lattice model used by the Company incorporates different 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.

Dividend yield is determined based on historical dividend distributions compared to the price of the underlying Shares

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 term of the Stock Options. The model also 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 termination of employment. From these factors, the model derives an expected life of the Stock Option.
The exercise behavior in the model is a multiple that reflects the ratio of stock price at the time of exercise over the exercise
price of the Stock Option at the time the model expects holders to exercise. The model derives the exercise multiple from
actual exercise activity. The model determines the post-vesting termination rate from actual exercise experience and
expiration activity under the Incentive Plans.

330

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents the weighted average assumptions, with the exception of risk-free rate, which is expressed

as a range, that the model uses to determine the fair value of unexercised Stock Options that MetLife, Inc. has granted:

Dividend yield

Risk-free rate of return

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

Years Ended December 31,

2016

3.90%

2015

2.72%

2014

2.18%

0.62% - 2.85%

0.20% - 3.04%

0.12% - 5.07%

33.58%

1.43

2.58%

32.56%

1.44

2.73%

33.26%

1.45

2.93%

38.42

9.26

51.39

13.29

50.53

13.84

The following table presents a summary of Stock Option exercise activity:

Total intrinsic value of stock options exercised

Cash received from exercise of stock options

Income tax benefit realized from stock options exercised

Performance Shares

Years Ended December 31,

2016

2015

(In millions)

2014

121

156

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. MetLife accounts for Performance Shares as equity awards. MetLife, Inc.
does not credit Performance Shares with dividend-equivalents for dividends paid on Shares. 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 meet specified age and service criteria, and in certain other limited circumstances.

For awards granted for the 2014 – 2016 and later performance periods in progress through December 31, 2016, the
vested Performance Shares will be multiplied by a performance factor of 0% to 175%. Assuming that MetLife, Inc. has met
threshold performance goals related to its adjusted income or total shareholder return, the MetLife, Inc. Compensation
Committee will determine the performance factor in its discretion. In doing so, the Compensation Committee may consider
MetLife, Inc.’s total shareholder return relative to the performance of its competitors and operating return on MetLife, Inc.’s
common stockholder’s equity relative to its financial plan. MetLife estimates the fair value of Performance Shares each
quarter until they become payable. The performance factor for the 2013 - 2015 performance period was 86.2%.

Restricted Stock Units

Restricted Stock Units are units that, if they vest, are payable in an equal number of Shares. MetLife accounts for
Restricted Stock Units as equity awards. MetLife, Inc. does not credit Restricted Stock Units with dividend-equivalents for
dividends paid on Shares. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing price
of Shares on the date of grant, reduced by the present value of estimated dividends to be paid on that stock.

The vast majority of Restricted Stock Units normally vest in thirds on or shortly after the first three anniversaries of
their grant date. Other Restricted Stock Units normally vest in their entirety on the third or later anniversary of their grant
date. Vesting is subject to continued service, except for employees who meet specified age and service criteria and in certain
other limited circumstances.

331

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table presents a summary of Performance Share and Restricted Stock Unit activity:

Outstanding at January 1, 2016

Granted

Forfeited

Payable (1)

Outstanding at December 31, 2016

Vested and expected to vest at December 31, 2016

__________________

Performance Shares

Restricted Stock Units

Weighted
Average
Fair Value (2)

Units

Weighted
Average
Fair Value (2)

3,907,174

$
1,661,925
(159,358) $
(1,592,641) $
$
3,817,100

3,637,175

44.08

49.65

49.91

44.57

49.88

49.89

3,078,959

$
2,075,089
(192,248) $
(1,539,787) $
$
3,422,013

3,279,076

43.50

33.67

39.88

40.52

39.08

39.23

(1)

Includes both Shares paid and Deferred Shares for later payment.

(2) Values for shares outstanding at January 1, 2016, represent weighted average number of shares multiplied by the fair
value per share at December 31, 2015. Otherwise, all values represent weighted average of number of shares multiplied
by the fair value per share at December 31, 2016. Fair value per share of Restricted Stock Units on December 31, 2016
was equal to Grant Date fair value per share.

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, 2016, the performance period for the 2014 — 2016 Performance Share grants was completed, but the
performance factor had not yet been calculated. Included in the immediately preceding table are 1,066,076 outstanding
Performance Shares to which the 2014 — 2016 performance factor will be applied.

Liability Awards (Phantom Stock-Based Awards)

Certain MetLife subsidiaries have a liability for Phantom Stock-Based Awards in the form of Unit Options, Restricted
Units, and/or Performance Units. These Share-based cash settled awards are recorded as liabilities until payout is made. Unlike
Share-settled awards, which have a fixed grant-date fair value, the fair value of unsettled or unvested liability awards is
remeasured at the end of each reporting period based on the change in fair value of one Share. The liability and corresponding
expense are adjusted accordingly until the award is settled.

Unit Options

Each Unit Option is the contingent right of the holder to receive a cash payment equal to the closing price of a Share
on the surrender date, less the closing price on the grant date, if the difference is greater than zero. The vast majority of Unit
Options has become or will become eligible for surrender at a rate of one-third of each award on each of the first three
anniversaries of the grant date. Other Unit Options have become or will become eligible for surrender on the third anniversary
of the grant date. Vesting is subject to continued service, except for employees who meet specified age and service criteria
and in certain other limited circumstances.

Restricted Units

Restricted Units are units that, if they vest, are payable in cash equal to the closing price of a Share on the last day of
the restriction period. The vast majority of Restricted Units normally vest in thirds on or shortly after the first three
anniversaries of their grant date. Other Restricted Units normally vest in their entirety on the third or later anniversary of
their grant date. Vesting is subject to continued service, except for employees meet specified age and service criteria and
in certain other limited circumstances. Restricted Units are accounted for as liability awards. They are not credited with
dividend-equivalents for actual dividends paid on Shares during the performance period.

332

Table of Contents

16. Equity (continued)

Performance Units

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Performance Units are units that, if they vest, are multiplied by a performance factor to produce a number of final
Performance Units which are payable in cash equal to the closing price of a Share on a date following the last day of the
three-year performance period. The performance factor for the Performance Units for any given period is determined on
the identical basis as the performance factor for Performance Shares for the same performance period. Performance Units
are accounted for as liability awards. They are not credited with dividend-equivalents for dividends paid on Shares.
Accordingly, the estimated fair value of Performance Units is based upon the closing price of a Share on the date of grant,
reduced by the present value of estimated dividends to be paid on that stock during the performance period.

See “— Equity Awards — Performance Shares” for a discussion of the Performance Shares vesting period and award

calculation, which is also used for Performance Units.

The following table presents a summary of Liability Awards activity:

Outstanding at January 1, 2016

Granted

Exercised

Forfeited

Paid

Outstanding at December 31, 2016

Vested and expected to vest at December 31, 2016

Statutory Equity and Income

Unit
Options

Restricted
Units

Performance
Units

975,529
27,800
(91,752)
(55,680)
—

855,897

770,307

661,892
485,171

—
(76,651)
(306,689)
763,723

687,351

611,272
278,833

—
(39,086)
(235,663)
615,356

553,820

The states of domicile of MetLife, Inc.’s U.S. insurance subsidiaries each impose risk-based capital (“RBC”) requirements
that were developed by the National Association of Insurance Commissioners (“NAIC”). American Life does not write business
in Delaware or any other domestic state and, as such, is exempt from RBC requirements by Delaware law. Regulatory compliance
is determined by a ratio of a company’s total adjusted capital, calculated in the manner prescribed by the NAIC (“TAC”) to its
authorized control level RBC, calculated in the manner prescribed by the NAIC (“ACL RBC”), based on the statutory-based
filed financial statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of
which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL
RBC (“Company Action Level RBC”). While not required by or filed with insurance regulators, the Company also calculates
an internally defined combined RBC ratio (“Statement-Based Combined RBC Ratio”), which is determined by dividing the sum
of TAC for MetLife, Inc.’s principal U.S. insurance subsidiaries, excluding American Life, by the sum of Company Action Level
RBC for such subsidiaries. The Company’s Statement-Based Combined RBC Ratio was in excess of 400% at both December 31,
2016 and December 31, 2015. In addition, all non-exempted U.S. insurance subsidiaries individually exceeded Company Action
Level RBC for all periods presented.

MetLife, Inc.’s foreign insurance operations are regulated by applicable authorities of the countries in which each entity
operates and are subject to minimum capital and solvency requirements in those countries before corrective action commences.
At December 31, 2016 and 2015, the adjusted capital of American Life’s insurance subsidiary in Japan, the Company’s largest
foreign insurance operation, was in excess of four times the 200% solvency margin ratio that would require corrective action.
Excluding Japan, the aggregate required capital and surplus of the Company’s other foreign insurance operations was $3.1 billion
and the aggregate actual regulatory capital and surplus of such operations was $10.9 billion as of the date of the most recent
required capital adequacy calculation for each jurisdiction. Each of those other foreign insurance operations exceeded minimum
capital and solvency requirements of their respective countries for all periods presented.

333

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

MetLife, Inc.’s insurance subsidiaries prepare statutory-basis financial statements in accordance with statutory accounting
practices prescribed or permitted by the insurance department of the state of domicile or applicable foreign jurisdiction. The
NAIC has adopted the Codification of Statutory Accounting Principles (“Statutory Codification”). Statutory Codification is
intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting
principles continue to be established by individual state laws and permitted practices. Modifications by the various state insurance
departments may impact the effect of Statutory Codification on the statutory capital and surplus of MetLife, Inc.’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. MetLife, Inc.’s U.S.
insurance subsidiaries have no material state prescribed accounting practices, except as described below.

New York has adopted certain prescribed accounting practices, primarily consisting of the continuous Commissioners’
Annuity Reserve Valuation Method, which impacts deferred annuities, and the New York Special Consideration Letter, which
mandates certain assumptions in asset adequacy testing. The collective impact of these prescribed accounting practices decreased
the statutory capital and surplus of MLIC for the years ended December 31, 2016 and 2015 by an amount of $909 million and
$1.2 billion, respectively, in excess of the amount of the decrease had capital and surplus been measured under NAIC guidance.

American Life calculates its policyholder reserves on insurance written in each foreign jurisdiction in accordance with the
reserve standards required by such jurisdiction. Additionally, American Life’s insurance subsidiaries are valued based on each
respective subsidiary’s underlying local statutory equity, adjusted in a manner consistent with the reporting prescribed for its
branch operations. The prescribed practice exempts American Life from calculating and disclosing the impact to its statutory
capital and surplus. The tables below present amounts from MetLife, Inc.’s U.S. insurance subsidiaries, which are derived from
the statutory-basis financial statements as filed with the insurance regulators.

Statutory net income (loss) was as follows:

Company

State of Domicile

2016

2015

2014

Years Ended December 31,

Metropolitan Life Insurance Company (1)

American Life Insurance Company

MetLife Insurance Company USA

Metropolitan Property and Casualty Insurance Company

Metropolitan Tower Life Insurance Company

New England Life Insurance Company

General American Life Insurance Company

Other

__________________

New York

Delaware

Rhode Island

Delaware

Massachusetts

Missouri

Various

(In millions)

3,444

341

1,186

171

109

(2) $

(70) $

3,703

335

(1,022) $

204

(42) $

157

204

1,487

(36)

1,543

291

303

129

(1)

In December 2016, MLIC transferred all of the issued and outstanding shares of the common stock of each of NELICO
and General American Life Insurance Company (“GALIC”) to MetLife, Inc., in the form of a non-cash extraordinary
dividend.

334

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

16. Equity (continued)

Statutory capital and surplus was as follows at:

Company

Metropolitan Life Insurance Company (1)

American Life Insurance Company

MetLife Insurance Company USA

Metropolitan Property and Casualty Insurance Company

Metropolitan Tower Life Insurance Company

New England Life Insurance Company

General American Life Insurance Company

Other

__________________

December 31,

2016

2015

(In millions)

11,195

5,235

4,374

2,271

669

455

923

303

14,485

(2)

6,115

5,942

2,335

710

632

984

417

(2)

(1)

In December 2016, MLIC transferred all of the issued and outstanding shares of the common stock of each of NELICO
and GALIC to MetLife, Inc. in the form of a non-cash extraordinary dividend.

(2)

In 2015, NELICO and GALIC’s capital and surplus was included in MLIC’s total as they were subsidiaries of MLIC.

The Company’s domestic captive life reinsurance subsidiaries, which reinsure risks including the closed block, level premium
term life and ULSG assumed from other MetLife subsidiaries, have no state prescribed accounting practices, except for MRV
and MetLife Reinsurance Company of Delaware (“MRD”). MRV, with the explicit permission of the Commissioner of Insurance
of the State of Vermont, has included, as admitted assets, the value of letters of credit serving as collateral for reinsurance credit
taken by various affiliated cedants, in connection with reinsurance agreements entered into between MRV and the various
affiliated cedants, which resulted in higher statutory capital and surplus of $5.6 billion and $6.0 billion for the years ended
December 31, 2016 and 2015, respectively. MRV’s RBC would have triggered a regulatory event without the use of the state
prescribed practice. MRD, with the explicit permission of the Commissioner of Insurance of the State of Delaware, has included,
as admitted assets, the value of letters of credit issued to MRD, which resulted in higher statutory capital and surplus of
$260 million and $200 million for the years ended December 31, 2016 and 2015, respectively. MRD’s RBC would not have
triggered a regulatory event without the use of the state prescribed practice. The combined statutory net income (loss) of
MetLife, Inc.’s domestic captive life reinsurance subsidiaries was ($344) million, ($336) million and ($320) million for the years
ended December 2016, 2015 and 2014, respectively, and the combined statutory capital and surplus, including the aforementioned
prescribed practice, was $4.4 billion and $5.0 billion at December 31, 2016 and 2015, respectively.

335

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Table of Contents

16. Equity (continued)

Dividend Restrictions

Insurance Operations

The table below sets forth the dividends permitted to be paid by MetLife, Inc.’s primary insurance subsidiaries without

insurance regulatory approval and dividends paid:

Company

Metropolitan Life Insurance Company

American Life Insurance Company

MetLife Insurance Company USA

Metropolitan Property and Casualty Insurance Company

Metropolitan Tower Life Insurance Company

New England Life Insurance Company

General American Life Insurance Company

__________________

2017

2016

Permitted Without
Approval (1)

Paid (2)

(In millions)

2015

Paid (2)

2,723

— $

473

106

5,740

(3) $

1,489

—

261

228

295

(4) $

—

500

235

102

199

—

(4)

(2) Reflects all amounts paid, including those requiring regulatory approval.

(3)

(4) Dividends paid by NELICO in 2015 were paid to its former parent, MLIC. Dividends paid by NELICO in 2016, including

a $295 million extraordinary cash dividend, were paid to its new parent, MetLife, Inc.

Effective for dividends paid during 2016 and going forward, the New York Insurance Law was amended permitting MLIC,
without prior insurance regulatory clearance, to pay stockholder dividends to MetLife, Inc. in any calendar year based on
either of two standards. Under one standard, MLIC is permitted, without prior insurance regulatory clearance, to pay dividends
out of earned surplus (defined as positive “unassigned funds (surplus)” excluding 85% of the change in net unrealized capital
gains or losses (less capital gains tax), for the immediately preceding calendar year), in an amount up to the greater of: (i) 10%
of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from
operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to
policyholders as of the end of the immediately preceding calendar year. In addition, under this standard, MLIC may not,
without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year
for which its net gain from operations, excluding realized capital gains, was negative. Under the second standard, if dividends
are paid out of other than earned surplus, MLIC may, without prior insurance regulatory clearance, pay an amount up to the
lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory
net gain from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, MLIC
will be permitted to pay a dividend to MetLife, Inc. in excess of the amounts allowed under both standards only if it files
notice of its intention to declare such a dividend and the amount thereof with the New York Superintendent of Financial
Services (the “Superintendent”) and the Superintendent either approves the distribution of the dividend or does not disapprove
the dividend within 30 days of its filing. Under New York Insurance Law, the Superintendent has broad discretion in determining
whether the financial condition of a stock life insurance company would support the payment of such dividends to its
stockholders.

336

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Under Delaware Insurance Code, each of American Life, MetLife USA and Metropolitan Tower Life Insurance Company
(“MTL”) is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to MetLife, Inc. 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 net statutory
gain from operations for the immediately preceding calendar year (excluding realized capital gains), not including pro rata
distributions of each insurer's own securities. Each of American Life, MetLife USA, and MTL will be permitted to pay a
dividend to MetLife, Inc. in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend
and the amount thereof with the Delaware Commissioner 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 (surplus)”) as of the immediately
preceding calendar year requires insurance regulatory approval. Under Delaware Insurance Code, 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 stockholders.

Under the Rhode Island Insurance Code, Metropolitan Property and Casualty Insurance Company (“MPC”) is permitted,
without prior insurance regulatory clearance, to pay a stockholder dividend to MetLife, Inc. as long as the aggregate amount
of all such dividends in any 12 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, not including pro rata distributions of MPC’s own securities. In determining whether a dividend is
extraordinary, MPC may include carry forward net income from the previous two calendar years, excluding realized capital
gains less dividends paid in the second and immediately preceding calendar years. MPC will be permitted to pay a dividend
to MetLife, Inc. 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 either approves the distribution of the dividend or does not disapprove the distribution within 30 days
of its filing. Under the Rhode Island Insurance Code, the Rhode Island 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 stockholders.

Under Massachusetts State Insurance Law, NELICO is permitted, without prior insurance regulatory clearance, to pay a
stockholder dividend to MetLife, Inc. as long as the amount of the dividend, when aggregated with all other dividends paid
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, not including
pro rata distributions of NELICO’s own securities. NELICO will be permitted to pay a dividend to MetLife, Inc. in excess of
the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with the
Massachusetts Commissioner of Insurance (the “Massachusetts Commissioner”) and the Massachusetts 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 (surplus)”) as of the last filed annual statutory statement
requires insurance regulatory approval. Under Massachusetts State Insurance Law, the Massachusetts 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 stockholders.

Under Missouri State Insurance Law, GALIC is permitted, without prior insurance regulatory clearance, to pay a
stockholder dividend to MetLife, Inc. as long as the amount of such 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
net realized capital gains), not including pro rata distributions of GALIC’s own securities. GALIC will be permitted to pay a
dividend to MetLife, Inc. in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend
and the amount thereof with the Missouri Director of Insurance (the “Missouri Director”) and the Missouri Director 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 by us to mean “unassigned funds (surplus)”) as of the last filed annual statutory
statement requires insurance regulatory approval. Under Missouri State Insurance Law, the Missouri Director has broad
discretion in determining whether the financial condition of a stock life insurance company would support the payment of
such dividends to its stockholders.

337

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

In addition to regulatory restrictions on the payment of dividends by its insurance subsidiaries to MetLife, Inc., the payment
of dividends by MetLife, Inc. to its stockholders is also subject to other restrictions. The declaration and payment of dividends
is subject to the discretion of MetLife, Inc.’s Board of Directors, and will depend on its financial condition, results of operations,
cash requirements, future prospects and other factors deemed relevant by the Board. In addition, the payment of dividends on
MetLife, Inc.’s common stock, and MetLife, Inc.’s ability to repurchase its common stock, may be subject to restrictions
described below arising out of (i) potential regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”) and the Federal Reserve Bank of New York (collectively, with the Federal Reserve Board, the “Federal
Reserve”) if MetLife, Inc. were re-designated by the Financial Stability Oversight Council (“FSOC”) as a non-bank
systemically important financial institution (“non-bank SIFI”), and (ii) restrictions under the terms of MetLife, Inc.’s preferred
stock and junior subordinated debentures in situations where MetLife, Inc. may be experiencing financial stress, as described
below. For purposes of this discussion, “junior subordinated debentures” are deemed to include MetLife, Inc.’s Fixed-to-
Floating Rate Exchangeable Surplus Trust Securities, as discussed in Note 14.

Regulatory Restrictions. On December 18, 2014, the FSOC designated MetLife, Inc. as a non-bank SIFI subject to
regulation by the Federal Reserve and the Federal Deposit Insurance Corporation, and to enhanced supervision and prudential
standards. On January 13, 2015, MetLife, Inc. filed an action in the U.S. District Court for the District of Columbia
(“D.C. District Court”) asking the court to review and rescind the FSOC’s designation of MetLife, Inc. as a non-bank SIFI.
On March 30, 2016, the D.C. District Court ordered that the designation of MetLife, Inc. as a non-bank SIFI by the FSOC be
rescinded. On April 8, 2016, the FSOC appealed the D.C. District Court’s order to the United States Court of Appeals for the
District of Columbia, and oral argument was heard on October 24, 2016.

If the FSOC prevails on appeal or re-designates MetLife, Inc. as systemically important as part of its ongoing review of
non-bank financial companies, MetLife, Inc. could once again be subject to supervision by the Federal Reserve Board and
subject to enhanced prudential standards which the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-
Frank”) requires the Federal Reserve Board to adopt. These enhanced prudential standards include RBC requirements and
leverage limits, liquidity requirements, overall risk management requirements, resolution plan and credit exposure report
requirements, and concentration limits. Dodd-Frank also authorizes the Federal Reserve Board to adopt other standards
applicable to non-bank SIFIs, including contingent capital requirements, enhanced public disclosures, short-term debt limits,
and other appropriate standards. In addition, non-bank SIFIs are subject to stress testing and must pay a variety of assessments.
The Federal Reserve Board has not yet fully implemented most of the standards that will apply to non-bank SIFIs. Accordingly,
the manner in which the ultimate standards might apply to MetLife, Inc., were it to be re-designated as a non-bank SIFI, and
the full impact of such standards, remains unclear. If MetLife, Inc. were to be re-designated as a non-bank SIFI, however, it
is possible that such regulations could constrain MetLife, Inc.’s ability to pay dividends, repurchase common stock or other
securities or engage in other transactions that could affect its capital, or cause the Company to raise the price of the products
it offers, reduce the amount of risk it takes on, or stop offering certain products altogether. However, following the transition
occurring in the United States government and the priorities of the Trump Administration, the Company cannot predict with
certainty whether any such regulations will be adopted.

On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. See Note 2. There can be no assurance
that any actions taken in furtherance of this plan will affect any decision the FSOC may make to re-designate MetLife, Inc.
as a non-bank SIFI.

MetLife, Inc. has also been designated as a global systemically important insurer by the Financial Stability Board. As
such, it could be subject to enhanced capital standards and supervision and other additional requirements that would not apply
to companies that are not so designated. These policy proposals would need to be implemented by legislation or regulation
in each applicable jurisdiction, and the impact on MetLife, Inc. is uncertain.

338

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

“Dividend Stopper” Provisions in the Preferred Stock and Junior Subordinated Debentures. Certain terms of
MetLife, Inc.’s preferred stock and junior subordinated debentures (sometimes referred to as “dividend stoppers”) may prevent
it from repurchasing its common or preferred stock or paying dividends on its common or preferred stock in certain
circumstances. If MetLife, Inc. has not paid the full dividends on its preferred stock for the latest completed divided period,
MetLife, Inc. may not repurchase or pay dividends on its common stock during a dividend period. Under the junior subordinated
debentures, if MetLife, Inc. has not paid in full the accrued interest on its junior subordinated debentures through the most
recent interest payment date, it may not repurchase or pay dividends on its common stock or other capital stock (including
the preferred stock), subject to certain exceptions. The junior subordinated debentures provide that MetLife may, at its option
and provided that certain conditions are met, defer payment of interest without giving rise to an event of default for periods
of up to 10 years. In that case, after five years MetLife, Inc. would be obligated to use commercially reasonable efforts to sell
equity securities to raise proceeds to pay the interest. MetLife, Inc. would not be subject to limitations on the number of
deferral periods that MetLife, Inc. could begin, so long as all accrued and unpaid interest is paid with respect to prior deferral
periods. If MetLife, Inc. were to defer payments of interest, the “dividend stopper” provisions in the junior subordinated
debentures would thus prevent MetLife, Inc. from repurchasing or paying dividends on its common stock or other capital
stock (including the preferred stock) during the period of deferral, subject to exceptions.

In addition, the preferred stock and the junior subordinated debentures contain provisions that would automatically suspend
the payment of preferred stock dividends and interest on junior subordinated debentures if MetLife, Inc. fails to meet certain
risk based capital ratio, net income and stockholders’ equity tests at specified times. In such cases, however, MetLife would
be permitted to make the payments to the extent of the net proceeds from the issuance of certain securities during specified
periods.

MetLife, Inc. is a party to certain RCCs which limit its ability to eliminate these restrictions through the repayment,
redemption or purchase of preferred stock or junior subordinated debentures by requiring MetLife, Inc., with some limitations,
to receive cash proceeds during a specified period from the sale of specified replacement securities prior to any repayment,
redemption or purchase. See “— Preferred Stock” for a description of such covenants in effect with respect to the preferred
stock, and Note 14 for a description of such covenants in effect with respect to junior subordinated debentures.

339

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

16. Equity (continued)

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI attributable to MetLife, Inc., was as follows:

Balance at December 31, 2013

OCI before reclassifications

Deferred income tax benefit (expense)

AOCI before reclassifications, net of income tax

Amounts reclassified from AOCI

Deferred income tax benefit (expense)

Amounts reclassified from AOCI, net of income tax

Sale of subsidiary (2)

Deferred income tax benefit (expense)

Sale of subsidiary, net of income tax

Balance at December 31, 2014

OCI before reclassifications

Deferred income tax benefit (expense)

AOCI before reclassifications, net of income tax

Amounts reclassified from AOCI

Deferred income tax benefit (expense)

Amounts reclassified from AOCI, net of income tax

Balance at December 31, 2015

OCI before reclassifications

Deferred income tax benefit (expense)

AOCI before reclassifications, net of income tax

Amounts reclassified from AOCI

Deferred income tax benefit (expense)

Amounts reclassified from AOCI, net of income tax

Balance at December 31, 2016

__________________

Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)

Unrealized Gains
(Losses) on
Derivatives

Foreign
Currency
Translation
Adjustments

(In millions)

Defined
Benefit
Plans
Adjustment

Total

8,183

11,197

(3,419)

15,961

(811)

249

(562)

(320)

(240)

15,159

(7,218)

2,519

10,460

(223)

(145)

10,315

764

(325)

10,754

(9)

231

669

(261)

639

717

(280)

437

—

1,076

(19)

1,063

608

(213)

395

1,458

344

(100)

1,702

229

(66)

163

(1,659) $

(1,651) $

(1,492)

(208)

(3,359)

(27)

—

(3,303)

(1,646)

(1)

(4,950)

—

(4,950)

(476)

114

(5,312)

—

(1,150)

401

(2,400)

180

(63)

117

—

(2,283)

125

(43)

(2,201)

229

(80)

149

(2,052)

(62)

(2,090)

193

(75)

118

5,104

9,224

(3,487)

10,841

163

(121)

(314)

(234)

10,649

(8,758)

2,481

4,372

614

(215)

399

4,771

570

(287)

5,054

443

(150)

293

10,766

1,865

(5,312) $

(1,972) $

5,347

(1)

See Note 8 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the
policyholder dividend obligation.

(2)

See Note 3.

340

Table of Contents

16. Equity (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:

AOCI Components

Net unrealized investment gains (losses):

Net unrealized investment gains (losses)

Net unrealized investment gains (losses), before

income tax

Income tax (expense) benefit

Net unrealized investment gains (losses), net of

income tax

Unrealized gains (losses) on derivatives - cash flow

hedges:

Interest rate swaps

Interest rate forwards

Foreign currency swaps

Credit forwards

Gains (losses) on cash flow hedges, before

income tax

Income tax (expense) benefit

Gains (losses) on cash flow hedges, net of

income tax

Foreign currency translation adjustment

Income tax (expense) benefit

Foreign currency translation adjustment, net of

income tax

Defined benefit plans adjustment: (1)

Amortization of net actuarial gains (losses)

Amortization of prior service (costs) credit

Amortization of defined benefit plan items,

before income tax

Income tax (expense) benefit

Amortization of defined benefit plan items, net

of income tax

Amounts Reclassified from AOCI

Years Ended December 31,

2016

2015

(In millions)

2014

Consolidated Statement of
Operations and
Comprehensive Income (Loss)
Locations

(30) $

129

603 Net investment gains (losses)

(33)

(21)

(12)

(345)

(2)

(229)

(163)

—

(199)

(193)

(118)

223

(78)

145

(720)

(1)

(608)

213

(395)

—

(233)

(229)

(149)

67 Net investment income

141 Net derivative gains (losses)

811

(249)

562

42 Net derivative gains (losses)

9 Net investment income

(7) Net derivative gains (losses)

4 Net investment income

2 Other expenses

(768) Net derivative gains (losses)

(2) Net investment income

2 Other expenses

— Net derivative gains (losses)

1 Net investment income

(717)

280

(437)

(77) Net investment gains (losses)

(50)

(180)

—

(180)

(117)

(42)

Total reclassifications, net of income tax

(293) $

(399) $

__________________

(1)

These AOCI components are included in the computation of net periodic benefit costs. See Note 18.

341

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

17. Other Expenses

Information on other expenses was as follows:

Compensation

Pension, postretirement and postemployment benefit costs

Commissions

Volume-related costs

Capitalization of DAC

Amortization of DAC and VOBA

Amortization of negative VOBA

Interest expense on debt

Premium taxes, licenses and fees

Professional services

Rent and related expenses, net of sublease income

Other (1)

Total other expenses (2)

__________________

Years Ended December 31,

2016

2015

2014

(In millions)

4,785

4,938

415

4,311

934

(3,589)

2,641

(269)

1,201

750

1,550

364

1,976

400

4,517

1,002

(3,837)

3,936

(361)

1,208

766

1,511

328

2,361

4,894

473

5,153

859

(4,183)

4,132

(442)

1,216

801

1,457

361

2,370

15,069

16,769

17,091

(1)

(2)

See Note 19 for information on the charge related to income tax for the year ended December 31, 2015.

Includes $212 million of expenses, primarily in professional services, for the year ended December 31, 2016 in connection
with the Separation. See Note 2 for further information on the Separation.

Capitalization of DAC and Amortization of DAC and VOBA

See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See also

Note 7 for a description of the DAC amortization impact associated with the closed block.

Interest Expense on Debt

See Notes 12, 13, and 14 for attribution of interest expense by debt issuance. Interest expense on debt includes interest

expense related to CSEs. See Note 8.

Restructuring Charges

The Company announced in 2016 a unit cost improvement program related to the Company’s refreshed enterprise strategy.
This global strategy focuses on transforming the Company to become more digital, driving efficiencies and innovation to achieve
competitive advantage, and simplified, decreasing the costs and risks associated with the Company’s highly complex industry
to customers and shareholders. For the year ended December 31, 2016, the Company recorded $35 million, primarily related to
severance, in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate & Other.
Management anticipates further restructuring charges through the year ending December 31, 2019. However, such restructuring
plans were not sufficiently developed to enable management to make an estimate of such restructuring charges at December 31,
2016.

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

17. Other Expenses (continued)

In 2016, the Company completed a previous enterprise-wide strategic initiative. These restructuring charges are included
in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate & Other. Information
regarding restructuring charges was as follows:

Years Ended December 31,

2016

Lease and
Asset
Impairment

Severance

Total

Severance

2015

Lease and
Asset
Impairment

(In millions)

2014

Lease and
Asset
Impairment

Total

Severance

Balance at January 1,

Restructuring charges

Cash payments

Balance at December 31,

Total restructuring

charges incurred since
inception of initiative

18. Employee Benefit Plans

—

(17)

$ 22

(4)

(21)

(73)

(6)

$ 37

(79)

(92)

$ 22

$ 46

(8)

(100)

$ 37

383

$ 430

383

$ 429

323

$ 365

Pension and Other Postretirement Benefit Plans

Certain subsidiaries of MetLife, Inc. sponsor and/or administer various U.S. qualified and nonqualified defined benefit
pension plans and other postretirement employee benefit plans covering employees and sales representatives who meet specified
eligibility requirements. U.S. pension benefits are provided utilizing either a traditional formula or cash balance formula. The
traditional formula provides benefits that are primarily based upon years of credited service and either final average or career
average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits
equal to a percentage of eligible pay, as well as interest credits, determined annually based upon the annual rate of interest on
30-year U.S. Treasury securities, for each account balance. The U.S. nonqualified pension plans provide supplemental benefits
in excess of limits applicable to a qualified plan. The non-U.S. pension plans generally provide benefits based upon either years
of credited service and earnings preceding-retirement or points earned on job grades and other factors in years of service.

These subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance
benefits for U.S. retired employees. Employees of these 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.

343

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

The benefit obligations, funded status and net periodic benefit costs related to these pension and other postretirement benefits

were comprised of the following:

December 31, 2016

December 31, 2015

Pension Benefits

Other
Postretirement
Benefits

Pension
Benefits (1)

Other
Postretirement
Benefits

(In millions)

10,506

1,924

11,001

2,145

272

432

—

367

(36)

(11)

(591)

(117)

(44)

(117)

(3)

276

423

—

(627)

(4)

—

(531)

(32)

10,960

1,796

10,506

8,751

630

(7)

—

378

(591)

9,164

1,382

(2)

(117)

(2)

1,386

9,003

(127)

(3)

—

424

(531)

(15)

8,751

(1,796) $

(410) $

(1,755) $

(1,801)

(1,796) $

2,993

(11)

2,982

10,559

(411)

(1,760)

(410) $

(1,755) $

(49)

N/A $

2,945

—

2,945

10,082

(235)

(2)

(7)

(109)

(5)

1,924

1,436

(4)

(109)

(1)

1,382

(542)

(543)

(542)

222

(14)

208

N/A

(1)

Includes nonqualified unfunded plans, for which the aggregate PBO was $1.2 billion and $1.1 billion at December 31,
2016 and 2015, respectively.

345

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

Information for pension plans with PBOs in excess of plan assets and accumulated benefit obligations (“ABO”) in excess

of plan assets was as follows at:

December 31,

2016

2015

2016

2015

PBO Exceeds Estimated Fair Value
of Plan Assets

ABO Exceeds Estimated Fair Value
of Plan Assets

10,736

10,384

8,979

(In millions)

10,437

10,052

8,715

1,960

1,851

228

2,476

2,340

839

Projected benefit obligations

Accumulated benefit obligations

Estimated fair value of plan assets

Net Periodic Benefit Costs

The components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in OCI

were as follows:

Years Ended December 31,

2016

2015

2014

Pension
Benefits

Other
Postretirement
Benefits

Pension
Benefits

Other
Postretirement
Benefits

Pension
Benefits

Other
Postretirement
Benefits

Net periodic benefit costs:

Service costs

Interest costs

Settlement and curtailment costs (1)

Expected return on plan assets

Amortization of net actuarial

(gains) losses

Amortization of prior service costs

(credit)

Total net periodic benefit costs

(credit)

Other changes in plan assets and

benefit obligations recognized in
OCI:

Net actuarial (gains) losses

Prior service costs (credit)

Amortization of net actuarial

(gains) losses

Amortization of prior service

(costs) credit

Total recognized in OCI
Total recognized in net periodic

benefit costs and OCI

__________________

272

432

(535)

190

—

361

238

(11)

(190)

—

(75)

(6)

(124)

(41)

(9)

(168)

(In millions)

276

423

(1)

(542)

191

(1)

346

—

(191)

(147)

(80)

(3)

(161)

(7)

(42)

(207)

262

456

(482)

169

425

960

(20)

(169)

(1)

770

(76)

(1)

223

(13)

(11)

200

248

398

(116) $

199

(138) $

1,195

(1)

The Company recognized curtailment charges in 2016 on certain postretirement benefit plans in connection with the U.S
Retail Advisor Force Divestiture. See Note 3.

The estimated net actuarial (gains) losses and prior service costs (credit) for the defined benefit pension plans and other
postretirement benefit plans that will be amortized from AOCI into net periodic benefit costs over the next year are $177 million
and ($1) million, and less than ($1) million and ($22) million, respectively.

346

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

Assumptions

Assumptions used in determining benefit obligations for the U.S. plans were as follows:

December 31, 2016

Weighted average discount rate

Rate of compensation increase

December 31, 2015

Weighted average discount rate

Rate of compensation increase

Pension Benefits

Other Postretirement Benefits

4.30%

2.25% - 8.50%

4.50%

2.25% - 8.50%

4.45%

N/A

4.60%

N/A

Assumptions used in determining net periodic benefit costs for the U.S. Plans were as follows:

Year Ended December 31, 2016

Weighted average discount rate

Weighted average expected rate of return on plan assets

Rate of compensation increase

Year Ended December 31, 2015

Weighted average discount rate

Weighted average expected rate of return on plan assets

Rate of compensation increase

Year Ended December 31, 2014

Weighted average discount rate

Weighted average expected rate of return on plan assets

Rate of compensation increase

Pension Benefits

Other Postretirement Benefits

4.13%

6.00%

2.25% - 8.50%

4.10%

6.25%

2.25% - 8.50%

5.15%

6.25%

3.50% - 7.50%

4.37%

5.53%

N/A

4.10%

5.70%

N/A

5.15%

5.70%

N/A

The weighted average discount rate for the U.S. 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 PBO when due.

The weighted average expected rate of return on plan assets for the U.S. plans 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 long-term expectations on the performance
of the markets. While the precise expected rate of return derived using this approach will fluctuate from year to year, the policy
is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate.

The weighted average expected rate of return on plan assets for use in that plan’s valuation in 2017 is currently anticipated

to be 6.00% for U.S. pension benefits and 5.35% for U.S. other postretirement benefits.

The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:

Following year

Ultimate rate to which cost increase is assumed to decline

Year in which the ultimate trend rate is reached

347

December 31,

2016

2015

Before
Age 65

Age 65 and
older

Before
Age 65

Age 65 and
older

6.8%

4.0%

2077

13.0%

4.3%

2092

6.3%

4.2%

2086

10.3%

4.6%

2091

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A 1%
change in assumed healthcare costs trend rates would have the following effects on the U.S. Plans as of December 31, 2016:

Effect on total of service and interest costs components

Effect of accumulated postretirement benefit obligations

Plan Assets

One Percent
Increase

One Percent
Decrease

(In millions)

215

(10)

(178)

Certain U.S. subsidiaries provide employees with benefits under various Employee Retirement Income Security Act of
1974 (“ERISA”) benefit plans. These include qualified pension plans, postretirement medical plans and certain retiree life
insurance coverage. The assets of these U.S. subsidiaries’ qualified pension plans are held in an insurance group annuity
contract, and the vast majority of the assets of the postretirement medical plan and backing the retiree life coverage are held
in a trust which largely utilizes insurance contracts to hold the assets. All of these contracts are issued by the Company’s
insurance affiliates, and the assets under the contracts are held in insurance separate accounts that have been established by
the Company. The underlying assets of the separate accounts are principally comprised of cash and cash equivalents, short-
term investments, fixed maturity and equity securities, derivatives, real estate, private equity investments and hedge fund
investments.

The insurance contract provider engages investment management firms (“Managers”) to serve as sub-advisors for the
separate accounts based on the specific investment needs and requests identified by the plan fiduciary. These Managers have
portfolio management discretion over the purchasing and selling of securities and other investment assets pursuant to the
respective investment management agreements and guidelines established for each insurance separate account. The assets of
the qualified pension plans and postretirement medical plans (the “Invested Plans”) are well diversified across multiple asset
categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given
asset category or with any of the given Managers.

The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with
investment policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters.
Specifically, investment policies are oriented toward (i) maximizing the Invested Plan’s funded status; (ii) minimizing the
volatility of the Invested Plan’s funded status; (iii) generating asset returns that exceed liability increases; and (iv) targeting
rates of return in excess of a custom benchmark and industry standards over appropriate reference time periods. These goals
are expected to be met through identifying appropriate and diversified asset classes and allocations, ensuring adequate liquidity
to pay benefits and expenses when due and controlling the costs of administering and managing the Invested Plan’s investments.
Independent investment consultants are periodically used to evaluate the investment risk of the Invested Plan’s assets relative
to liabilities, analyze the economic and portfolio impact of various asset allocations and management strategies and recommend
asset allocations.

Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of
an asset or asset class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an
asset, asset class, interest rates or any other financial variable. Derivatives are also prohibited for use in creating exposures
to securities, currencies, indices or any other financial variable that is otherwise restricted.

348

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

The table below summarizes the actual weighted average allocation of the estimated fair value of total plan assets by
asset class at December 31 for the years indicated and the approved target allocation by major asset class at December 31,
2016 for the Invested Plans:

December 31,

2016

2015

U.S. Pension
Benefits

U.S. Other
Postretirement
Benefits (2)

Target

Actual
Allocation

Target

Actual
Allocation

U.S. Pension
Benefits

Actual
Allocation

U.S. Other
Postretirement
Benefits (2)

Actual
Allocation

82%

10%
8%

81%

11%
8%
100%

76%

24%
—%

76%

24%
—%
100%

75%

15%
10%
100%

75%

25%
—%
100%

Asset Class (1)
Fixed maturity securities
Equity securities (3)

Alternative securities (4)

Total assets

__________________

(1) Certain prior year amounts have been reclassified from alternative securities into fixed maturity securities to conform to

the current year presentation.

(2) U.S. other postretirement benefits do not reflect postretirement life’s plan assets invested in fixed maturity securities.

(3)

Equity securities percentage includes derivative assets.

(4) Alternative securities primarily include hedges, private equity and real estate funds.

Estimated Fair Value

The pension and other postretirement benefit plan assets are categorized into a three-level fair value hierarchy, as
described in Note 10, based upon the significant input with the lowest level in its valuation. The Level 2 asset category
includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The estimated fair
value of such separate accounts is based upon reported NAV provided by fund managers and this value represents the amount
at which transfers into and out of the respective separate account are effected. These separate accounts provide reasonable
levels of price transparency and can be corroborated through observable market data. Directly held investments are primarily
invested in U.S. and foreign government and corporate securities. The Level 3 asset category includes separate accounts
that are invested in assets that provide little or no price transparency due to the infrequency with which the underlying assets
trade and generally require additional time to liquidate in an orderly manner. Accordingly, the values for separate accounts
invested in these alternative asset classes are based on inputs that cannot be readily derived from or corroborated by observable
market data.

349

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

The pension and other postretirement plan assets measured at estimated fair value on a recurring basis and their

corresponding placement in the fair value hierarchy are summarized as follows:

December 31, 2016

Pension Benefits

Fair Value Hierarchy

Other Postretirement Benefits

Fair Value Hierarchy

Level 1

Level 2

Level 3

Total
Estimated
Fair Value

Level 1

Level 2

Level 3

Total
Estimated
Fair Value

(In millions)

Assets

Fixed maturity securities:

Corporate

U.S. government bonds

Foreign bonds

Federal agencies

Municipals

Short-term investments

Other (2)

Equity securities:

Common stock - domestic

Common stock - foreign

Total equity securities

Other investments

Derivative assets

Total assets

Total fixed maturity securities

1,814

5,536

— $

3,552

— $

3,552

306

— $

1,694

—

120

—

876

201

317

219

367

490

396

886

—

105

(3)

—

637

1,698

210

876

201

317

339

376

7,359

490

465

955

772

—

243

113

122

235

—

416

907

—

326

211

429

1,150

113

122

235

—

2,746

5,707

711

9,164

479

907

— $

1,386

350

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

December 31, 2015

Pension Benefits

Fair Value Hierarchy

Other Postretirement Benefits

Fair Value Hierarchy

Level 1

Level 2

Level 3

Total
Estimated
Fair Value

Level 1

Level 2

Level 3

Total
Estimated
Fair Value

(In millions)

Assets

Fixed maturity securities:

Corporate

U.S. government bonds

Foreign bonds

Federal agencies

Municipals

Short-term investments (1)

Other (1), (2)

— $

2,979

994

—

493

764

228

302

309

403

—

781

228

302

319

419

Total fixed maturity securities

1,013

5,478

102

6,593

3,057

281

1,487

193

—

212

126

111

237

—

431

930

—

300

205

432

1,143

126

111

237

—

1,382

751

378

1,129

—

723

775

439

1,214

839

105

2,200

5,650

901

8,751

451

930

Equity securities:

Common stock - domestic

Common stock - foreign

Total equity securities

Other investments

Derivative assets

Total assets

__________________

(1)

The prior year amounts have been reclassified into fixed maturity securities to conform to the current year presentation.

(2) Other primarily includes money market securities, mortgage-backed securities, collateralized mortgage obligations and

ABS.

351

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a recurring

basis using significant unobservable (Level 3) inputs was as follows:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Pension Benefits

Fixed Maturity Securities:

Corporate

Foreign
Bonds

Other
Investments

Derivative
Assets

Other (1)

(In millions)

(4)

(7)

(21)

(62)

— $

—

(1)

—

(3)

(11)

— $

—

(1)

(2)

—

745

—

(77)

—

723

—

(119)

—

637

(11)

(9)

—

(18)

(2)

Balance, January 1, 2015

Realized gains (losses)

Unrealized gains (losses)

Purchases, sales, issuances and settlements, net

Transfers into and/or out of Level 3

Balance, December 31, 2015

Realized gains (losses)

Unrealized gains (losses)

Purchases, sales, issuances and settlements, net

Transfers into and/or out of Level 3

Balance, December 31, 2016

__________________

(1) Other includes ABS and collateralized mortgage obligations.

Other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant

unobservable (Level 3) inputs were not significant for the years ended December 31, 2016 and 2015.

Expected Future Contributions and Benefit Payments

It is the subsidiaries’ practice to make contributions to the U.S. qualified pension plan to comply with minimum funding
requirements of ERISA. In accordance with such practice, no contributions are required for 2017. The subsidiaries expect to
make discretionary contributions to the qualified pension plan of $225 million in 2017. For information on employer
contributions, see “— Obligations and Funded Status.”

Benefit payments due under the U.S. nonqualified pension plans are primarily funded from the subsidiaries’ general assets
as they become due under the provision of the plans, therefore benefit payments equal employer contributions. The U.S.
subsidiaries expect to make contributions of $75 million to fund the benefit payments in 2017.

Postretirement benefits 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. As permitted under the terms of the governing trust
document, the subsidiaries may be reimbursed from plan assets for postretirement medical claims paid from their general
assets. The U.S. subsidiaries expect to make contributions of $50 million towards benefit obligations in 2017 to pay
postretirement medical claims.

352

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

18. Employee Benefit Plans (continued)

Gross benefit payments for the next 10 years, which reflect expected future service where appropriate, are expected to

be as follows:

2017

2018

2019

2020

2021

2022-2026

Additional Information

Pension Benefits

Other Postretirement Benefits

(In millions)

579

600

617

639

655

3,566

100

515

As previously discussed, most of the assets of the U.S. pension benefit plans are held in a group annuity contract issued
by the subsidiaries while some of the assets of the U.S. postretirement benefit plans are held in a trust which largely utilizes
life insurance contracts issued by the subsidiaries to hold such assets. Total revenues from these contracts recognized on the
consolidated statements of operations were $58 million, $55 million and $50 million for the years ended December 31, 2016,
2015 and 2014, respectively, and included policy charges and net investment income from investments backing the contracts
and administrative fees. Total investment income (loss), including realized and unrealized gains (losses), credited to the account
balances was $672 million, ($130) million and $1.2 billion for the years ended December 31, 2016, 2015 and 2014,
respectively. The terms of these contracts are consistent in all material respects with those the subsidiaries offer to unaffiliated
parties that are similarly situated.

Defined Contribution Plans

Certain subsidiaries sponsor defined contribution plans under which a portion of employee contributions are matched. These
subsidiaries contributed $81 million, $80 million and $77 million for the years ended December 31, 2016, 2015 and 2014,
respectively.

353

Table of Contents

19. Income Tax

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The provision for income tax from continuing operations was as follows:

Years Ended December 31,

2016

2015

2014

Current:

Federal

State and local

Foreign

Subtotal

Deferred:

Federal

State and local

Foreign

Subtotal

(In millions)

584

556

1,150

701

—

297

998

634

677

(2,058)
—

382
(1,676)

Provision for income tax expense (benefit)

(999) $

2,148

(56)
9

779

732

1,597
(1)
137

1,733
2,465

The Company’s income (loss) from continuing operations before income tax expense (benefit) from domestic and foreign

operations were as follows:

Income (loss) from continuing operations:

Domestic

Foreign

Total

Years Ended December 31,

2016

2015

2014

(In millions)

(4,096) $
3,901
(195) $

3,743

3,727

7,470

6,043

2,761

8,804

354

Table of Contents

19. Income Tax (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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:

Tax provision at U.S. statutory rate

Tax effect of:

Dividend received deduction

Tax-exempt income
Prior year tax (1)

Low income housing tax credits

Other tax credits
Foreign tax rate differential (2), (3), (4)

Change in valuation allowance

Goodwill impairment

Other, net

2016

Years Ended December 31,
2015
(In millions)

2014

(68) $

2,615

3,081

(192)
(88)
11
(274)
(116)
(315)
(9)
(12)
64
(999) $

(216)
(73)
555
(225)
(80)
(465)
5

—

(204)
(92)
21
(209)
(77)
(118)
(3)
—

2,148

2,465

Provision for income tax expense (benefit)

__________________

(1) As discussed further below, for the year ended December 31, 2015, prior year tax includes a $557 million non-cash charge

related to an uncertain tax position.

(2)

(3)

For the year ended December 31, 2016, foreign tax rate differential includes a tax benefit of $110 million in Japan related
to a change in tax rate offset by a tax charge of $19 million in Chile related to a change in tax rate.

For the year ended December 31, 2015, foreign tax rate differential includes tax benefits of $174 million related to a
Japan tax rate change, $61 million related to restructuring in Chile, $57 million related to the repatriation of earnings
from Japan, $41 million related to certain non-portfolio net investment gains that were non-taxable and $31 million related
to the devaluation of the peso in Argentina. These benefits were partially offset by charges of $88 million related to the
impact of foreign exchange on investment gains in Argentina and $36 million as a result of a deferred tax liability true-
up in Japan.

(4)

For the year ended December 31, 2014, foreign tax rate differential includes a tax charge of $54 million related to tax
reform in Chile and $45 million related to the repatriation of earnings from Japan, partially offset by a tax benefit of
$13 million related to the change in repatriation assumption for foreign earnings of the United Arab Emirates (“UAE”).

355

Table of Contents

19. Income Tax (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net

deferred income tax assets and liabilities consisted of the following at:

Deferred income tax assets:

Policyholder liabilities and receivables

Net operating loss carryforwards

Employee benefits

Capital loss carryforwards

Tax credit carryforwards

Litigation-related and government mandated

Other

Total gross deferred income tax assets

Less: Valuation allowance

Total net deferred income tax assets

Deferred income tax liabilities:

Investments, including derivatives

Intangibles

Net unrealized investment gains

DAC

Other

Total deferred income tax liabilities

Net deferred income tax asset (liability)

December 31,

2016

2015

(In millions)

1,405

1,420

1,099

1,574

256

798
6,561

161

6,400

2,615

1,505

6,093

5,367

187

1,734

1,229

1,094

1,264

260

858
6,448

203

6,245

4,469

1,606

5,639

5,000

123

15,767
(9,367) $

16,837
(10,592)

The Company also has recorded a valuation allowance benefit of $9 million related to certain state and foreign net operating
loss carryforwards for the year ended December 31, 2016. In addition, a $10 million reduction was related to foreign currency
movement and a $23 million reduction was recorded as a balance sheet reclassification with other deferred tax assets for the
year ended December 31, 2016. 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 and state net operating loss carryforwards
will not be realized. The tax benefit will be recognized when management believes that it is more likely than not that these
deferred income tax assets are realizable.

356

Table of Contents

19. Income Tax (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

The following table sets forth the domestic, state, and foreign net operating loss carryforwards and the domestic capital loss

carryforwards for tax purposes at December 31, 2016.

Expiration:

2017-2021
2022-2026

2027-2031
2032-2036

Indefinite

Net Operating Loss Carryforwards

Capital Loss
Carryforwards

Domestic

State

Foreign

Domestic

—

3,805

—

(In millions)

—

41
(6)
354

3,882

128

511

—

The following table sets forth the general business credits, foreign tax credits, and other credit carryforwards for tax purposes

at December 31, 2016.

Expiration:

2017-2021
2022-2026

2027-2031
2032-2036

Indefinite

General Business
Credits

Tax Credit Carryforwards
Foreign Tax
Credits
(In millions)

Other

— $

—

181

669

—

611

—

850

620

—

384

The Company has not provided U.S. deferred taxes on cumulative earnings of certain non-U.S. affiliates that have been
reinvested indefinitely. These earnings relate to ongoing operations and have been reinvested in active non-U.S. business
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 when the Company plans to remit those earnings. At December 31, 2016, the Company had not
made a provision for U.S. taxes on approximately $5.4 billion of the excess of the amount for financial reporting over the tax
bases 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 considers the earnings of Japan and the Middle East (excluding the UAE and Turkey) to be available for
repatriation. Earnings from the remaining foreign countries, including the UAE, are considered to be permanently reinvested.

357

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19. Income Tax (continued)

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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 and
subsidiary. The Company is no longer subject to U.S. federal, state, or local income tax examinations for years prior to 2007,
except for i) 2000 through 2002 where the IRS disallowance relates to certain tax credits claimed - in April 2015, the Company
received a Statutory Notice of Deficiency (the “Notice”) and paid the tax thereon in September 2015 (see note (1) below); and
ii) 2003 through 2006, where the IRS disallowance relates predominantly to certain tax credits claimed and the Company is
engaged with IRS Appeals. Management believes it has established adequate tax liabilities and final resolution for the years
2000 through 2006 is not expected to have a material impact on the Company’s consolidated financial statements. The IRS audit
cycle for the years 2007-2009, which began in December of 2015, is scheduled to conclude in 2017. In material foreign
jurisdictions, the Company is no longer subject to income tax examinations for years prior to 2009.

The Company’s liability for unrecognized tax benefits may increase or decrease in the next 12 months. A reasonable estimate
of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution
of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of
income tax matters could impact the Company’s effective tax rate for a particular future period.

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

Balance at January 1,

Additions for tax positions of prior years (1)

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

Balance at December 31,

Unrecognized tax benefits that, if recognized would impact the effective

rate

__________________

2016

Years Ended December 31,
2015
(In millions)

2014

1,323

779

26
(124)
28

—
(49)
1,204

1,170

579
(24)
28
(1)
(38)
1,323

1,268

774

74
(88)
23

—
(4)
779

690

(1)

The significant increase in 2015 is related to a non-cash charge the Company recorded to net income of $792 million, net
of tax. The charge was related to an uncertain tax position and was comprised of a $557 million charge included in
provision for income tax expense (benefit) and a $362 million ($235 million, net of tax) charge included in other expenses.
This charge is the result of the Company’s consideration of recent decisions of the U.S. Court of Appeals for the Second
Circuit upholding the disallowance of foreign tax credits claimed by other corporate entities not affiliated with the
Company. The Company’s action relates to tax years from 2000 to 2009, during which MLIC held non-U.S. investments
in support of its life insurance business through a United Kingdom investment subsidiary that was structured as a joint
venture at the time.

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.

358

Table of Contents

19. Income Tax (continued)

Interest was as follows:

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

Interest recognized on the consolidated statements of operations (1)

(42) $

388

Years Ended December 31,

2016

2015

2014

(In millions)

Interest included in other liabilities on the consolidated balance sheets (1)

__________________

(1)

The significant increase in 2015 is related to the non-cash charge discussed above.

December 31,

2016

2015

(In millions)
629

671

The Company had insignificant penalties for the years ended December 31, 2016, 2015 and 2014.

There has been no change in the Company’s position on the disallowance of its foreign tax credits by the IRS. The Company
continues to contest the disallowance of these foreign tax credits by the IRS as management believes the facts strongly support
the Company’s position. The Company will defend its position vigorously and does not expect any additional charges related
to this matter.

Also related to the aforementioned foreign tax credit matter, on April 9, 2015, the IRS issued the Notice to the Company.
The Notice asserted that the Company owes additional taxes and interest for 2000 through 2002 primarily due to the disallowance
of foreign tax credits. The transactions that are the subject of the Notice continue through 2009, and it is likely that the IRS will
seek to challenge these later periods. On September 18, 2015, the Company paid the assessed tax and interest of $444 million
for 2000 through 2002 and will subsequently file a claim for a refund. On November 19, 2015, $9 million of this amount was
refunded from the IRS as an overpayment of interest.

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, 2016, 2015, and 2014, the Company recognized an income tax benefit of $164 million, $220 million
and $234 million, respectively, related to the separate account DRD. The 2016 benefit included an expense of $22 million related
to a true-up of the 2015 tax return. The 2015 and 2014 benefit included a benefit of $12 million and $38 million related to a
true-up of the 2014 and 2013 tax returns, respectively.

359

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

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,

2016

2015

2014

(In millions, except per share data)

1,100.5

1,117.8

1,128.7

—

8.0

—

10.5

2.9

10.9

1,108.5

1,128.3

1,142.5

804

5,322

6,339

103

—

697

0.63

116

5,152

4.61

4.57

— $

—

— $

—

— $

122

—

6,190

5.48

5.42

(3)

—

(3)
—

—

804

5,322

6,336

103

—

697

0.63

116

5,152

4.61

4.57

122

—

6,187

5.48

5.42

Weighted Average Shares:

Weighted average common stock outstanding for basic earnings per

common share

Incremental common shares from assumed:

Stock purchase contracts underlying common equity units (1)
Exercise or issuance of stock-based awards

Weighted average common stock outstanding for diluted earnings

per common share

Income (Loss) from Continuing Operations:

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

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

attributable to noncontrolling interests

Less: Preferred stock dividends

Preferred stock repurchase premium

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

available to MetLife, Inc.’s common shareholders

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

Preferred stock repurchase premium

Net income (loss) available to MetLife, Inc.’s common

shareholders

Basic

Diluted

__________________

(1)

See Note 15 for a description of the Company’s common equity units.

360

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees

Contingencies

Litigation

The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate
amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation
in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages
sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court.
In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible
verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company
in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management
that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular
points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary
evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in
the context of the pleadings or evidence presented, whether by motion practice, 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.

The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has
been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the
matters noted below. It is possible that some of the matters could require the Company to pay damages or make other
expenditures or establish accruals in amounts that could not be reasonably estimated at December 31, 2016. While the potential
future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information
currently known to management, management does not believe any such charges are likely to have a material effect on the
Company’s financial position.

Matters as to Which an Estimate Can Be Made

For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For such
matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of December 31,
2016, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these
matters to be $0 to $425 million.

Matters as to Which an Estimate Cannot Be Made

For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range
of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have
provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage
demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions
or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company
reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of
reasonably possible losses or ranges of loss based on such reviews.

361

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

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
disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos
litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings
in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted
against 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. 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.

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:

Asbestos personal injury claims at year end

Number of new claims during the year

Settlement payments during the year (1)

__________________

2016

December 31,
2015
(In millions, except number of claims)
67,223

67,787

2014

4,146
50.2

3,856
56.1

68,460

4,636
46.0

(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.

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 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.

362

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years
further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably
estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the
asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges
could be material in the particular quarterly or annual periods in which they are recorded, based on information currently
known by management, management does not believe any such charges are likely to have a material effect on the Company’s
financial position.

The Company believes adequate provision has been made in its consolidated financial statements for all probable and
reasonably estimable losses for asbestos-related claims. 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.

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 U.S., 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 2014, MLIC increased
its recorded liability for asbestos-related claims to $690 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, 2016.

Regulatory Matters

The Company receives and responds to subpoenas or other inquiries seeking a broad range of information from state
regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal
regulators, including the SEC; federal governmental authorities, including congressional committees; and the Financial
Industry Regulatory Authority (“FINRA”), as well as from local and national regulators and government authorities in
countries outside the United States where MetLife conducts business. The issues involved in information requests and
regulatory matters vary widely. The Company cooperates in these inquiries.

In the Matter of Chemform, Inc. Site, Pompano Beach, Broward County, Florida

In July 2010, the Environmental Protection Agency (“EPA”) advised 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 such third party for past costs and an
additional amount for future environmental testing costs at the Chemform Site. In September 2012, the EPA, MLIC and
the third party executed an Administrative Order on Consent under which MLIC and the third party have agreed to be
responsible for certain environmental testing at the Chemform Site. The Company estimates that its costs for the
environmental testing will not exceed $100,000. The September 2012 Administrative Order on Consent does not resolve
the EPA’s claim for past clean-up costs. The EPA may seek additional costs if the environmental testing identifies issues.
The Company estimates that the aggregate cost to resolve this matter will not exceed $1 million.

363

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Sales Practices Regulatory Matters

Regulatory authorities in a number of states and FINRA, and occasionally the SEC, have had investigations or
inquiries relating to sales of individual life insurance policies or annuities or other products by MLIC, MetLife USA,
NELICO, GALIC, FMLI and broker-dealer, MSI. These investigations often focus on the conduct of particular financial
services representatives and the sale of unregistered or unsuitable products or the misuse of client assets. Over the past
several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments
and certain other relief, including restitution payments. The Company may continue to resolve investigations in a similar
manner. The Company believes adequate provision has been made in its consolidated financial statements for all probable
and reasonably estimable losses for these sales practices-related investigations or inquiries.

Unclaimed Property Litigation

West Virginia Lawsuits

On September 20, 2012, the West Virginia Treasurer filed an action against MLIC in West Virginia state court (West
Virginia ex rel. John D. Perdue v. Metropolitan Life Insurance Company, Circuit Court of Putnam County, Civil Action
No. 12-C-295) alleging that MLIC violated the West Virginia Uniform Unclaimed Property Act (the “Act”), seeking to
compel compliance with the Act, and seeking payment of unclaimed property, interest, and penalties. On November 14,
2012, November 21, 2012, December 28, 2012, and January 9, 2013, the Treasurer filed substantially identical suits
against MetLife Investors USA, NELICO, MetLife Insurance Company of Connecticut and GALIC, respectively. On
January 31, 2017, the parties entered into a settlement agreement resolving these actions.

City of Westland Police and Fire Retirement System v. MetLife, Inc., et. al. (S.D.N.Y., filed January 12, 2012)

Seeking to represent a class of persons who purchased MetLife, Inc. common shares between February 2, 2010, and
October 6, 2011, the plaintiff filed a third amended complaint alleging that MetLife, Inc. and several current and former
directors and executive officers of MetLife, Inc. violated the Securities Act of 1933 (“Securities Act”), as well as the
Exchange Act and Rule 10b-5 promulgated thereunder by issuing, or causing MetLife, Inc. to issue, materially false and
misleading statements concerning MetLife, Inc.’s potential liability for millions of dollars in insurance benefits that should
have been paid to beneficiaries or escheated to the states. Plaintiff seeks unspecified compensatory damages and other
relief. The defendants intend to defend this action vigorously.

City of Birmingham Retirement and Relief System v. MetLife, Inc., et al. (Circuit Court of Jefferson County Alabama,
filed July 5, 2012)

Seeking to represent a class of persons who purchased MetLife, Inc. common equity units in or traceable to a public
offering in March 2011, the plaintiff filed an action alleging that MetLife, Inc., certain current and former directors and
executive officers of MetLife, Inc., and various underwriters violated several provisions of the Securities Act related to
the filing of the registration statement by issuing, or causing MetLife, Inc. to issue, materially false and misleading
statements and/or omissions concerning MetLife, Inc.’s potential liability for millions of dollars in insurance benefits that
should have been paid to beneficiaries or escheated to the states. Plaintiff seeks unspecified compensatory damages and
other relief. On December 7, 2016, the court entered an order granting preliminary approval of the proposed settlement,
under which MetLife, Inc. agreed to pay $9.75 million, and conditionally certifying a settlement class.

Total Control Accounts Litigation

MLIC is a defendant in a lawsuit related to its use of retained asset accounts, known as TCA, as a settlement option

for death benefits.

Owens v. Metropolitan Life Insurance Company (N.D. Ga., filed April 17, 2014)

Plaintiff filed this putative class action lawsuit on behalf of all persons for whom MLIC established a retained asset
account, known as a TCA, to pay death benefits under an ERISA plan. The action alleges that MLIC’s use of the TCA as
the settlement option for life insurance benefits under some group life insurance policies violates MLIC’s fiduciary duties
under ERISA. As damages, plaintiff seeks disgorgement of profits that MLIC realized on accounts owned by members
of the putative class. On September 27, 2016, the court denied MLIC’s summary judgment motion in full and granted
plaintiff’s partial summary judgment motion. The Company intends to defend this action vigorously.

364

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Reinsurance Litigation

Robainas, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., December 16, 2014)

Plaintiffs filed this putative class action lawsuit on behalf of themselves and all persons and entities who, directly or
indirectly, purchased, renewed or paid premiums on life insurance policies issued by MLIC from 2009 through 2014 (the
“Policies”). Two similar actions were subsequently filed, Yale v. Metropolitan Life Ins. Co. (S.D.N.Y., January 12, 2015)
and International Association of Machinists and Aerospace Workers District Lodge 15 v. Metropolitan Life Ins. Co.
(E.D.N.Y., February 2, 2015). Both of these actions were consolidated with the Robainas action. The consolidated
complaint alleges that MLIC inadequately disclosed in its statutory annual statements that certain reinsurance transactions
with affiliated reinsurance companies were collateralized using “contractual parental guarantees,” and thereby allegedly
misrepresented its financial condition and the adequacy of its reserves. The lawsuit sought recovery under Section 4226
of the New York Insurance Law of a statutory penalty in the amount of the premiums paid for the Policies. On October 9,
2015, the court granted MLIC’s motion to dismiss the consolidated complaint, finding that plaintiffs lacked Article III
standing because they did not allege any concrete injury as a result of the alleged conduct. On February 23, 2017, the
Second Circuit Court of Appeals affirmed this decision.

Intoccia v. Metropolitan Life Insurance Company (S.D.N.Y., April 20, 2015)

Plaintiffs filed this putative class action on behalf of themselves and all persons and entities who, directly or indirectly,
purchased, renewed or paid premiums for Guaranteed Benefits Insurance Riders attached to variable annuity contracts
with MLIC from 2009 through 2015 (the “Annuities”). The court consolidated Weilert v. Metropolitan Life Ins. Co.
(S.D.N.Y., April 30, 2015) with the Intoccia case, and the consolidated, amended complaint alleges that MLIC inadequately
disclosed in its statutory annual statements that certain reinsurance transactions with affiliated reinsurance companies
were collateralized using “contractual parental guarantees,” and thereby allegedly misrepresented its financial condition
and the adequacy of its reserves. The lawsuits seek recovery under Section 4226 of the New York Insurance Law of a
statutory penalty in the amount of the premiums paid for Guaranteed Benefits Insurance Riders attached to the Annuities.
The Court granted MLIC’s motion to dismiss, adopting the reasoning of the Robainas decision. On February 23, 2017,
the Second Circuit Court of Appeals affirmed this decision.

Diversified Lending Group Litigations

Hartshorne v. MetLife, Inc., et al. (Los Angeles County Superior Court, filed March 25, 2015)

Plaintiffs have named MetLife, Inc., MSI and NELICO in 12 related lawsuits in California state court alleging various
causes of action including multiple negligence and statutory claims relating to a Ponzi scheme involving the Diversified
Lending Group (“DLG”). In August 2016, a trial of claims by one of the plaintiffs, Christine Ramirez, resulted in a verdict
against MetLife, Inc., MSI, and NELICO for approximately $200 thousand in compensatory damages and $15 million
in punitive damages. On November 30, 2016, Ramirez consented to the court’s reduction of punitive damages to
approximately $7 million. These companies have filed a notice appealing this judgment to the Second Appellate District
of the State of California.

Other Litigation

Sun Life Assurance Company of Canada Indemnity Claim

In 2006, Sun Life Assurance Company of Canada (“Sun Life”), as successor to the purchaser of MLIC’s Canadian
operations, filed a lawsuit in Toronto, seeking a declaration that MLIC remains liable for “market conduct claims” related
to certain individual life insurance policies sold by MLIC that were subsequently transferred to Sun Life. In January 2010,
the court found that Sun Life had given timely notice of its claim for indemnification but, because it found that Sun Life
had not yet incurred an indemnifiable loss, granted MLIC’s motion for summary judgment. Both parties agreed to consider
the indemnity claim through arbitration. In September 2010, Sun Life notified MLIC that a purported class action lawsuit
was filed against Sun Life in Toronto alleging sales practices claims regarding the policies sold by MLIC and transferred
to Sun Life. On August 30, 2011, Sun Life notified MLIC that another purported class action lawsuit was filed against
Sun Life in Vancouver, BC alleging sales practices claims regarding certain of the same policies sold by 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
these lawsuits. These sales practices cases against Sun Life are ongoing, and the Company is unable to estimate the
reasonably possible loss or range of loss arising from this litigation.

365

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Fauley v. Metropolitan Life Insurance Company, et al. (Circuit Court of the 19th Judicial Circuit, Lake County, Ill., July 3,
2014).

On September 28, 2016, the Illinois Supreme Court denied an objector’s petition for leave to appeal from an order
approving MLIC’s $23 million settlement of a class action alleging violation of the Telephone Consumer Protection Act.
MLIC paid out the settlement funds in January 2017.

MetLife, Inc. v. Financial Stability Oversight Council (D. D.C., January 13, 2015).

MetLife, Inc. filed this action in D.C. District Court seeking to overturn the FSOC’s designation of MetLife, Inc. as
a non-bank SIFI. The suit is brought under the section of Dodd-Frank providing that a company designated as a non-bank
SIFI may petition the federal courts for review, and seeks an order requiring that the final determination be rescinded.
The D.C. District Court issued a decision on March 30, 2016 granting, in part, MetLife, Inc.’s cross motion for summary
judgment and rescinding the FSOC’s designation of MetLife, Inc. as a non-bank SIFI. On April 8, 2016, the FSOC
appealed the D.C. District Court’s order to the United States Court of Appeals for the District of Columbia.

Voshall v. Metropolitan Life Insurance Company (Superior Court of the State of California, County of Los Angeles,
April 8, 2015)

Plaintiff filed this putative class action lawsuit on behalf of himself and all persons covered under a long-term group
disability income insurance policy issued by MLIC to public entities in California between April 8, 2011 and April 8,
2015. Plaintiff alleges that MLIC improperly reduced benefits by including cost of living adjustments and employee paid
contributions in the employer retirement benefits and other income that reduces the benefit payable under such policies.
Plaintiff asserts causes of action for declaratory relief, violation of the California Business & Professions Code, breach
of contract and breach of the implied covenant of good faith and fair dealing. The Company intends to defend this action
vigorously.

Martin v. Metropolitan Life Insurance Company, (Superior Court of the State of California, County of Contra Costa, filed
December 17, 2015)

Plaintiffs filed this putative class action lawsuit on behalf of themselves and all California persons who have been
charged compound interest by MLIC in life insurance policy and/or premium loan balances within the last four years.
Plaintiffs allege that MLIC has engaged in a pattern and practice of charging compound interest on life insurance policy
and premium loans without the borrower authorizing such compounding, and that this constitutes an unlawful business
practice under California law. Plaintiff asserts causes of action for declaratory relief, violation of California’s Unfair
Competition Law and Usury Law, and unjust enrichment. Plaintiff seeks declaratory and injunctive relief, restitution of
interest, and damages in an unspecified amount. On April 12, 2016, the court granted MLIC’s motion to dismiss. Plaintiffs
have filed an appeal of this ruling.

Lau v. Metropolitan Life Insurance Company (S.D.N.Y. filed, December 3, 2015)

This putative class action lawsuit was filed by a single defined contribution plan participant on behalf of all ERISA
plans whose assets were invested in MetLife’s “Group Annuity Contract Stable Value Funds” within the past six years.
The suit alleges breaches of fiduciary duty under ERISA and challenges the “spread” with respect to the stable value fund
group annuity products sold to retirement plans. The allegations focus on the methodology MetLife uses to establish and
reset the crediting rate, the terms under which plan participants are permitted to transfer funds from a stable value option
to another investment option, the procedures followed if an employer terminates a contract, and the level of disclosure
provided. Plaintiff seeks declaratory and injunctive relief, as well as damages in an unspecified amount. The Company
intends to defend this action vigorously.

Newman v. Metropolitan Life Insurance Company (N.D. Ill., filed March 23, 2016)

Plaintiff filed this putative class action alleging causes of action for breach of contract, fraud, and violations of the
Illinois Consumer Fraud and Deceptive Business Practices Act, based on MLIC’s class-wide increase in premiums charged
for long-term care insurance policies. Plaintiff alleges a class consisting of herself and all persons over age 65 who selected
a Reduced Pay at Age 65 payment feature and whose premium rates were increased after age 65. Plaintiff asserts that
premiums could not be increased for these class members and/or that marketing material was misleading as to MLIC’s
right to increase premiums. Plaintiff seeks unspecified compensatory, statutory and punitive damages as well as
recessionary and injunctive relief. The Company intends to defend this action vigorously.

366

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Thrivent Financial for Lutherans v. MetLife Insurance Company USA, (E.D. Wis., filed September 12, 2016)

Plaintiff filed a complaint against MetLife USA contending that its use of the Brighthouse Financial trademark and
logo will infringe on its trademarks. Alleging violations of federal and state law, plaintiff seeks preliminary and permanent
injunctions, compensatory damages, and other relief. On December 23, 2016, plaintiff filed an amended complaint adding
Brighthouse as an additional defendant. The parties have resolved this matter, and the action was voluntarily dismissed
on February 15, 2017.

Sales Practices Claims

Over the past several years, the Company has faced numerous claims, including class action lawsuits, alleging
improper marketing or sales of individual life insurance policies, annuities, mutual funds, other products or the misuse
of client assets. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys’
fees. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate
provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales
practices matters.

Summary

Putative or certified class action litigation and other litigation and claims and assessments against the Company, in
addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements,
have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an
insurer, 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 of all pending investigations and legal proceedings. In some of the
matters referred to previously, very large and/or indeterminate amounts, including punitive and treble damages, are sought.
Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material effect
upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion,
the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given
the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it
is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s
consolidated net income or cash flows in particular quarterly or annual periods.

Insolvency Assessments

Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within
the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to
insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits,
on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers
in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to
recover assessments paid through full or partial premium tax offsets. In addition, Japan has established the Life Insurance
Policyholders Protection Corporation of Japan as a contingency to protect policyholders against the insolvency of life insurance
companies in Japan through assessments to companies licensed to provide life insurance.

367

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Assets and liabilities held for insolvency assessments were as follows:

Other Assets:

Premium tax offset for future discounted and undiscounted assessments

Premium tax offsets currently available for paid assessments

Total

Other Liabilities:

Insolvency assessments

December 31,

2016

2015

(In millions)

109

368

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

Commitments

Leases

The Company, as lessee, has entered into various lease and sublease agreements for office space, information technology,
aircrafts, automobiles, and other equipment. Future minimum gross rental payments relating to these lease arrangements are
as follows:

2017

2018

2019

2020

2021

Thereafter

Total

Amount

(In millions)

289

256

219

211

189

996

2,160

Total minimum rentals to be received in the future under non-cancelable subleases were $376 million as of December 31,
2016. Operating lease expense was $383 million, $364 million and $347 million for the years ended December 31, 2016, 2015
and 2014, respectively.

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan

commitments were $4.3 billion and $4.4 billion at December 31, 2016 and 2015, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond
Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and
private corporate bond investments. The amounts of these unfunded commitments were $8.2 billion and $7.1 billion at
December 31, 2016 and 2015, respectively.

Guarantees

In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third
parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment
and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and
other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of
representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company
provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities,
such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual
limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential
obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to
$329 million, with a cumulative maximum of $1.1 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.

369

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

21. Contingencies, Commitments and Guarantees (continued)

The Company has also minimum fund yield requirements on certain international pension 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.

The Company’s recorded liabilities were $10 million and $8 million at December 31, 2016 and 2015, respectively, for

indemnities, guarantees and commitments.

370

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MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

22. Quarterly Results of Operations (Unaudited)

The unaudited quarterly results of operations for 2016 and 2015 are summarized in the table below:

2016

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

Preferred stock repurchase premium

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

Basic earnings per common share

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

Inc.’s common shareholders

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

MetLife, Inc.

Net income (loss) attributable to MetLife, Inc.

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

Diluted earnings per common share (1)

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

Inc.’s common shareholders

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

MetLife, Inc.

Net income (loss) attributable to MetLife, Inc.

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

2015

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

Preferred stock repurchase premium

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

Basic earnings per common share

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

MetLife, Inc.’s common shareholders

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

MetLife, Inc.

Net income (loss) attributable to MetLife, Inc.

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

Diluted earnings per common share

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

MetLife, Inc.’s common shareholders

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

MetLife, Inc.

Net income (loss) attributable to MetLife, Inc.

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

__________________

371

Three Months Ended

March 31,

June 30,

September 30,

December 31,

(In millions, except per share data)

18,433

15,511

2,203

— $

2,203

2,201

— $

2,195

15,244

15,344

114

— $

114

110

— $

17,723

17,175

573

— $

573

(4)

577

— $

571

1.99

0.06

0.52

— $

2.00

1.99

— $

0.10

0.06

— $

0.52

1.98

0.06

0.51

— $

1.99

1.98

18,710

15,651

2,163

0.10

0.06

16,166

15,053

1,119

— $

2,163

2,158

— $

2,128

1,119

1,115

1,042

0.52

0.51

18,031

15,868

1,198

— $

1,198

(5)

1,203

— $

1,197

1.89

0.93

1.07

— $

1.92

1.89

— $

1.00

0.93

— $

1.08

1.07

1.87

0.92

1.06

— $

1.90

1.87

— $

0.99

0.92

— $

1.06

12,076

15,641

(2,086)

—

(2,086)

(2,088)

—

(2,133)

(1.94)

—

(1.90)

(1.94)

—

(1.90)

(1.94)

17,044

15,909

842

—

842

834

—

785

0.71

—

0.75

0.71

0.70

—

0.74

0.70

Table of Contents

MetLife, Inc.

Notes to the Consolidated Financial Statements — (continued)

22. Quarterly Results of Operations (Unaudited) (continued)

(1)

For the three months ended December 31, 2016, 9.2 million shares related to the assumed exercise or issuance of stock-
based awards have been excluded from the weighted average common shares outstanding - diluted, as to include these
assumed shares would be anti-dilutive to net income (loss) available to common shareholders per common share - diluted.

23. Subsequent Events

Common Stock Repurchases

In 2017, through February 23, 2017, MetLife, Inc. repurchased 8,718,054 shares of its common stock in the open market

for $468 million.

Dividends

Preferred Stock

On February 17, 2017, MetLife, Inc. announced a first quarter 2017 dividend of $0.25 per share, for a total of $6 million,
on its Series A preferred stock, subject to the final confirmation that it has met the financial tests specified in the certificate
of designation for the Series A preferred stock, which the Company anticipates will be made and announced on or about
March 6, 2017. The dividend will be payable March 15, 2017 to shareholders of record as of February 28, 2017.

Common Stock

On January 6, 2017, the MetLife, Inc. Board of Directors declared a first quarter 2017 common stock dividend of $0.40 per
share payable on March 13, 2017 to shareholders of record as of February 6, 2017. The Company estimates that the aggregate
dividend payment will be $438 million.

Junior Subordinated Debt Securities

372

Table of Contents

Types of Investments

Fixed maturity securities:

Bonds:

U.S. government and agency securities

Foreign government securities

State and political subdivision securities

Public utilities

All other corporate bonds

Total bonds

Mortgage-backed and asset-backed securities

Redeemable preferred stock

Total fixed maturity securities

FVO and trading securities

Equity securities:

Common stock:

Industrial, miscellaneous and all other

Banks, trust and insurance companies

Public utilities

Non-redeemable preferred stock

Total equity securities

Mortgage loans

Policy loans

Real estate and real estate joint ventures

Real estate acquired in satisfaction of debt

Other limited partnership interests

Short-term investments

Other invested assets

Total investments

__________________

MetLife, Inc.

Schedule I

Consolidated Summary of Investments —
Other Than Investments in Related Parties
December 31, 2016

(In millions)

Cost or
Amortized Cost (1)

Estimated Fair
Value

Amount at
Which Shown on
Balance Sheet

53,326

57,523

50,923

14,566

13,783

135,199

267,797

61,305

1,252

330,354

12,288

1,730

101

817

2,744

74,545

11,028

8,982

6,778

7,810

23,185

477,773

57,138

16,176

15,057

141,465

287,359

62,142

1,388

350,889

13,923

2,123

144

134

793

3,194

57,523

57,138

16,176

15,057

141,465

287,359

62,142

1,388

350,889

13,923

2,123

144

134

793

3,194

74,545

11,028

8,982

6,778

7,810

23,185

500,393

(1)

The FVO and trading securities portfolio is mainly comprised of fixed maturity and equity securities, including mutual
funds and, to a lesser extent, short-term investments and cash and cash equivalents. Cost or amortized cost for fixed
maturity securities and mortgage loans represents original cost reduced by repayments, valuation allowances and
impairments from other-than-temporary declines in estimated fair value that are charged to earnings and adjusted for
amortization of premiums or accretion of discounts; for equity securities, cost represents original cost reduced by
impairments from other-than-temporary declines in estimated fair value; for real estate, cost represents original cost
reduced by impairments and depreciation; for investees, cost represents original cost reduced for impairments or original
cost adjusted for equity in earnings and distributions.

373

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MetLife, Inc.

Schedule II

Condensed Financial Information
(Parent Company Only)
December 31, 2016 and 2015

(In millions, except share and per share data)

Condensed Balance Sheets

Assets

Investments:

Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $3,900 and

$5,023, respectively)

Short-term investments, principally at estimated fair value

Other invested assets, at estimated fair value

Total investments

Cash and cash equivalents

Accrued investment income

Investment in subsidiaries

Loans to subsidiaries

Other assets

Total assets

Liabilities and Stockholders’ Equity

Liabilities

Payables for collateral under derivatives transactions

Long-term debt — unaffiliated

Long-term debt — affiliated

Collateral financing arrangements

Junior subordinated debt securities

Payables to subsidiaries

Other liabilities

Total liabilities

Stockholders’ Equity

Preferred stock, par value $0.01 per share; $2,100 aggregate liquidation preference
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,164,029,985 and

1,159,590,766 shares issued, respectively; 1,095,519,005 and 1,098,028,525 shares outstanding,
respectively

Additional paid-in capital

Retained earnings

Treasury stock, at cost; 68,510,980 and 61,562,241 shares, respectively

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

2016

2015

3,894

148

499

4,541

334

85,207

1,200

1,529

92,885

147

15,505

3,100

2,797

1,734

—

2,294

25,577

—

30,944

34,480

(3,474)

5,347

67,309

92,886

5,028

268

830

6,126

421

85,977

1,200

1,177

94,977

227

16,994

3,314

2,797

1,748

147

1,801

27,028

—

30,749

35,519

(3,102)

4,771

67,949

94,977

See accompanying notes to the condensed financial information.

374

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MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Condensed Statements of Operations

Revenues

Equity in earnings of subsidiaries

Net investment income

Other revenues

Net investment gains (losses)

Net derivative gains (losses)

Total revenues

Expenses

Interest expense

Goodwill impairment

Other expenses

Total expenses

Income (loss) before provision for income tax

Provision for income tax expense (benefit)

Net income (loss)

Less: Preferred stock dividends

Preferred stock repurchase premium

Net income (loss) available to common shareholders

Comprehensive income (loss)

2016

2015

2014

1,783

5,985

129

151

(68)

2,081

1,152

147

390

1,689

392

(408)

800

103

—

697

1,376

170

124

(7)

6,284

1,171

—

180

1,351

4,933

(377)

5,310

116

6,907

371

128

(287)

165

7,284

1,151

—

197

1,348

5,936

(373)

6,309

122

—

5,152

(568) $

6,187

11,854

See accompanying notes to the condensed financial information.

375

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MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

2016

2015

2014

800

5,310

(1,783)

4,470

147

113

3,747

8,603

(7,409)

311

(561)

291

(68)

140

(140)

(1,733)

120

(18)

(384)

(80)

—

(1,250)

—

(372)

—

(103)

(1,736)

(3,450)

(5,985)

2,335

—

(54)

1,606

7,952

(7,957)

930

(510)

—

(40)

761

(300)

(667)

110

286

(122)

2,739

(1,000)

—

(1,930)

1,483

(1,460)

(42)

(116)

(1,653)

187

(1,914)

(87)

421

334

(22)

443

421

6,309

(6,907)

2,388

—

825

2,615

6,611

(7,181)

438

(281)

(54)

832

(370)

—

(1,262)

182

101

(977)

264

1,000

(1,550)

1,000

(1,000)

—

(122)

(1,499)

(1,843)

(205)

648

443

Condensed Statements of Cash Flows

Cash flows from operating activities

Net income (loss)

Earnings of subsidiaries

Dividends from subsidiaries

Goodwill impairment

Other, net

Net cash provided by (used in) operating activities

Cash flows from investing activities

Sales of fixed maturity securities

Purchases of fixed maturity securities

Cash received in connection with freestanding derivatives

Cash paid in connection with freestanding derivatives

Sales of businesses

Expense paid on behalf of subsidiaries

Receipts on loans to subsidiaries

Issuances of loans to subsidiaries

Returns of capital from subsidiaries

Capital contributions to subsidiaries

Net change in short-term investments

Other, net

Net cash provided by (used in) investing activities

Cash flows from financing activities

Net change in payables for collateral under derivative transactions

Long-term debt issued

Long-term debt repaid

Common stock issued, net of issuance costs

Treasury stock acquired in connection with share repurchases

Preferred stock issued, net of issuance costs

Repurchase of preferred stock

Preferred stock repurchase premium

Dividends on preferred stock

Dividends on common stock

Other, net

Net cash provided by (used in) financing activities

Change in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

376

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MetLife, Inc.

Schedule II

Condensed Financial Information — (continued)
(Parent Company Only)
For the Years Ended December 31, 2016, 2015 and 2014

(In millions)

Supplemental disclosures of cash flow information

Net cash paid (received) for:

Interest

Income tax:

Amounts paid to (received from) subsidiaries, net

Income tax paid (received) by MetLife, Inc., net

Total income tax, net

Non-cash transactions:

Dividends from subsidiary

Returns of capital from subsidiaries

Capital contributions to subsidiaries

Payables to subsidiaries for future capital contributions

Allocation of interest expense to subsidiary

Allocation of interest income to subsidiary

2016

2015

2014

1,146

1,133

1,138

(569) $

136

(433) $

2,652

372

157

— $

(226) $

(171) $

— $

4,284

4,120

120

(1,247)

385

(862)

6,308

6,388

445

377

Table of Contents

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information
(Parent Company Only)

1. Basis of Presentation

The condensed financial information of MetLife, Inc. (the “Parent Company”) should be read in conjunction with the
consolidated financial statements of MetLife, Inc. and its subsidiaries and the notes thereto (the “Consolidated Financial
Statements”). These condensed unconsolidated financial statements reflect the results of operations, financial position and cash
flows for MetLife, Inc. Investments in subsidiaries are accounted for using the equity method of accounting.

The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management
to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and assumptions
relate to the fair value measurements, the accounting for goodwill and identifiable intangible assets and the provision for potential
losses that may arise from litigation and regulatory proceedings and tax audits, which may affect the amounts reported in the
condensed unconsolidated financial statements and accompanying notes. Actual results could differ from these estimates.

2. Investment in Subsidiaries

In December 2016, MLIC transferred the issued and outstanding shares of the common stock of each of NELICO and

GALIC to MetLife, Inc. in the form of a non-cash extraordinary dividend of $2.7 billion.

In February 2016, MetLife, Inc., paid in cash, a capital contribution of $1.5 billion to MetLife USA in connection with the

Separation.

In December 2015, MetLife, Inc. accrued $50 million, $45 million and $25 million in capital contributions payable to the
following captive reinsurers: MRV, MRD and MRSC, respectively, which were included in payables to subsidiaries at
December 31, 2015. The payables were settled for cash in February 2016.

In December 2014, MetLife, Inc. accrued $350 million and $95 million in capital contributions payable to MRV and MRD,
respectively, which were included in payables to subsidiaries at December 31, 2014. The payables were settled for cash in
February 2015.

In 2014, in connection with the mergers into MetLife USA of certain of its affiliates and a subsidiary, MetLife, Inc. recorded
$5.7 billion in non-cash returns of capital from subsidiaries, including $2.0 billion of Exeter Reassurance Company, Ltd.’s
(“Exeter”) preferred stock, and correspondingly recorded $5.7 billion of non-cash capital contributions to subsidiaries. In
November 2014, upon the consummation of the mergers, the $2.0 billion of outstanding preferred stock of Exeter was canceled.
Consequently, MetLife, Inc.’s preferred capital stock investment was added to its common capital stock investment in MetLife
USA.

3. Loans to Subsidiaries

MetLife, Inc. lends funds, as necessary, to its subsidiaries, some of which are regulated, to meet their capital requirements.
Payments of interest and principal on surplus notes of regulated subsidiaries, which are subordinate to all other obligations of
the issuing company, may be made only with the prior approval of the insurance department of the state of domicile.

In April 2016, American Life issued a $140 million short-term note to MetLife, Inc. which was repaid in July 2016. The

short-term note bore interest at six-month LIBOR plus 1.00%.

In May 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June 2015. The

short-term note bore interest at six-month LIBOR plus 1.00%.

In April 2015, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in May 2015. The

short-term note bore interest at six-month LIBOR plus 0.875%.

In December 2014, American Life issued a $100 million surplus note to MetLife, Inc. The surplus note bears interest at a

fixed rate of 3.17%, payable semi-annually and matures in June 2020.

378

Table of Contents

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information — (continued)

(Parent Company Only)

3. Loans to Subsidiaries (continued)

In August 2014, American Life issued a $120 million short-term note to MetLife, Inc. which was repaid in December 2014.
In February 2014, American Life issued a $150 million short-term note to MetLife, Inc. which was repaid in June 2014. Both
short-term notes bore interest at six-month LIBOR plus 0.875%.

In July 2013, MetLife Ireland Treasury d.a.c. (formerly known as MetLife Ireland Treasury Limited) (“MIT”) borrowed
the Chilean peso equivalent of $1.5 billion from MetLife, Inc., which was due July 2023. The loan bore interest at a fixed rate
of 8.5%, payable annually. In December, September and June 2015, MIT made loan payments of the Chilean peso equivalent
of $77 million, $153 million and $231 million, respectively. In December 2014 and June 2014, MIT made loan payments of the
Chilean peso equivalent of $493 million and $69 million, respectively. At December 31, 2015, the loan was fully paid.

Interest income earned on loans to subsidiaries of $64 million, $91 million and $155 million for the years ended

December 31, 2016, 2015 and 2014, respectively, is included in net investment income.

4. Long-term Debt

Long-term debt outstanding was as follows:

Interest Rates (1)

Range

Weighted
Average

December 31,

Maturity

2016

2015

(Dollars in millions)

Senior notes — unaffiliated (2)

Senior notes — affiliated

Other affiliated debt

1.76% - 7.72%

3.03% - 5.86%

—

4.94%

4.86%

1.31%

2017 - 2046

15,505

2019 - 2033

—

3,100

—

16,927

3,100

214

Total

__________________

18,605

20,241

(1) Range of interest rates and weighted average interest rates are for the year ended December 31, 2016.

(2) Net of $62 million of unamortized issuance costs and $30 million of unamortized net premiums and discounts at
December 31, 2016. Net of $67 million of unamortized issuance costs, which were reported in other assets, and $31 million
of unamortized net premiums and discounts at December 31, 2015.

See Note 12 of the Notes to the Consolidated Financial Statements.

The aggregate maturities of long-term debt at December 31, 2016 for the next five years and thereafter are $1.0 billion in

2017, $1.0 billion in 2018, $1.8 billion in 2019, $742 million in 2020, $2.0 billion in 2021 and $12.0 billion thereafter.

Affiliated Credit Facility

In June 2016, MetLife, Inc. entered into a five-year agreement with an indirect wholly-owned subsidiary, MIT, to borrow
up to $1.3 billion on a revolving basis, at interest rates based on the IRS safe harbor interest rate in effect at the time of the
borrowing. MetLife, Inc. may borrow funds under the agreement at MIT’s discretion and subject to the availability of funds.
There were no outstanding borrowings at December 31, 2016.

Other Affiliated Debt

In June 2016, March 2016 and December 2015, MetLife, Inc. repaid $204 million, $10 million and $286 million of affiliated
long-term debt to MetLife Exchange Trust I, at maturity, in exchange for a return of capital. The long-term notes bore interest
at three-month LIBOR plus 0.7%.

379

Table of Contents

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information — (continued)

(Parent Company Only)

4. Long-term Debt (continued)

Senior Notes – Affiliated

In September 2016, a $250 million senior note issued to MLIC matured and, subsequently, in September 2016 MetLife, Inc.
issued a new $250 million senior note to MLIC. The senior note matures in September 2020 and bears interest at a rate per
annum of 3.03%, payable semi-annually.

In June 2014, a $500 million senior note payable to MLIC matured and, subsequently, MetLife, Inc. issued a new $500 million

senior note to MLIC. This note matures in June 2019 and bears interest at a fixed rate of 3.54%, payable semi-annually.

Interest Expense

Interest expense was comprised of the following:

Long-term debt — unaffiliated

Long-term debt — affiliated

Collateral financing arrangements

Junior subordinated debt securities

Total

2016

Years Ended December 31,
2015
(In millions)

2014

811

160

134

833

168

134

809

173

134

1,152

1,171

1,151

See Notes 13 and 14 of the Notes to the Consolidated Financial Statements for information about the collateral financing

arrangements and junior subordinated debt securities.

5. Support Agreements

MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these
arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has guaranteed
certain contractual obligations.

MetLife, Inc., in connection with MRD’s reinsurance of certain universal life and term life risks, entered into capital
maintenance agreements pursuant to which MetLife, Inc. agreed, without limitation as to amount, to cause the first and second
protected cells of MRD to maintain total adjusted capital equal to or greater than 200% of each such protected cell’s Company
Action Level RBC, as defined in state insurance statutes. In addition, MetLife, Inc. entered into an agreement with the Delaware
Department of Insurance to increase such capital maintenance threshold to 300% of each such protected cell’s Company Action
Level RBC, in the event of specified downgrades in the senior unsecured debt ratings of MetLife, Inc.

MetLife, Inc. guarantees the obligations of its subsidiary, DelAm, under a stop loss reinsurance agreement with RGA
Reinsurance (Barbados) Inc. (“RGARe”), pursuant to which RGARe retrocedes to DelAm a portion of the whole life medical
insurance business that RGARe assumed from American Life on behalf of its Japan operations. Also, MetLife, Inc. guarantees
the obligations of its subsidiary, Missouri Reinsurance, Inc. (“MoRe”), under a retrocession agreement with RGARe, pursuant
to which MoRe retrocedes certain group term life insurance liabilities (which retrocession was terminated effective as of January,
2016) and a portion of the closed block liabilities associated with industrial life and ordinary life insurance policies that it assumed
from MLIC.

MetLife, Inc. guarantees the obligations of MetLife Reinsurance Company of Bermuda, Ltd. (“MrB”), a Bermuda insurance
affiliate and an indirect, wholly-owned subsidiary of MetLife, Inc. under a reinsurance agreement with Mitsui Sumitomo Primary
Life Insurance Co., Ltd. (“Mitsui”), a former affiliate that is now an unaffiliated third party, under which MrB reinsures certain
variable annuity business written by Mitsui.

380

Table of Contents

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information — (continued)

(Parent Company Only)

5. Support Agreements (continued)

MetLife, Inc. guarantees the obligations of MrB in an aggregate amount up to $1.0 billion, under a reinsurance agreement
with MetLife Europe d.a.c. (“MEL”) (formerly known as MetLife Europe Limited), under which MrB reinsured the guaranteed
living benefits and guaranteed death benefits associated with certain unit-linked annuity contracts issued by MEL.

MetLife, Inc., 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
the three protected cells of MRV to maintain total adjusted capital in an amount that is equal to or greater than 200% of each
such protected cell’s authorized control level RBC, as defined in Vermont state insurance statutes. See Note 12 of the Notes to
the Consolidated Financial Statements.

MetLife, Inc., 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 in an amount that is equal
to or greater than 200% of the Company Action Level RBC, as defined in South Carolina 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 Note 13 of the Notes to the Consolidated Financial Statements.

MetLife, Inc., in connection with the collateral financing arrangement associated with MRSC’s reinsurance of ULSG,
committed to the South Carolina Department of Insurance to take necessary action to cause MRSC to maintain the greater of
capital and surplus of $250,000 or total adjusted capital in an amount that is equal to or greater than 100% of authorized control
level RBC, as defined in South Carolina state insurance statutes. See Note 13 of the Notes to the Consolidated Financial
Statements.

MetLife, Inc. has a net worth maintenance agreement with its insurance subsidiary, FMLI. Under this agreement, as amended,
MetLife, Inc. agreed, without limitation as to the amount, to cause FMLI to have capital and surplus of $10 million, total adjusted
capital in an amount that is equal to or greater than 150% of the Company Action Level RBC, as defined by applicable state
insurance statutes, and liquidity necessary to enable it to meet its current obligations on a timely basis. In connection with the
Separation, this support agreement will be terminated.

MetLife, Inc. guarantees obligations arising from derivatives of the following subsidiaries: MrB, MetLife International
Holdings, LLC and MetLife Worldwide Holdings, LLC. These subsidiaries are exposed to various risks relating to their ongoing
business operations, including interest rate, foreign currency exchange rate, credit and equity market. These subsidiaries use a
variety of strategies to manage these risks, including the use of derivatives. Further, all of the subsidiaries’ derivatives are subject
to industry standard netting agreements and collateral agreements that limit the unsecured portion of any open derivative position.
On a net counterparty basis at December 31, 2016 and 2015, derivative transactions with positive mark-to-market values (in-
the-money) were $495 million and $583 million, respectively, and derivative transactions with negative mark-to-market values
(out-of-the-money) were $237 million and $32 million, respectively. To secure the obligations represented by the out of-the-
money transactions, the subsidiaries had provided collateral to their counterparties with an estimated fair value of $233 million
and $32 million at December 31, 2016 and 2015, respectively. Accordingly, unsecured derivative liabilities guaranteed by
MetLife, Inc. were $4 million and $0 at December 31, 2016 and 2015, respectively.

MetLife, Inc. also guarantees the obligations of certain of its subsidiaries under committed facilities with third-party banks.

See Note 12 of the Notes to the Consolidated Financial Statements.

381

Table of Contents

MetLife, Inc.

Schedule II

Notes to the Condensed Financial Information — (continued)

6. Subsequent Event

Junior Subordinated Debt Securities

(Parent Company Only)

On February 10, 2017, MetLife, Inc. exchanged $750 million aggregate principal amount of its 9.250% Fixed-to-Floating
Rate Junior Subordinated Debentures due 2068 for $750 million aggregate liquidation preference of the 9.250% Fixed-to-
Floating Rate Exchangeable Surplus Trust Securities of MetLife Capital Trust X. As a result of the exchange, MetLife, Inc. is
the sole beneficial owner of the Trust, a special purpose entity which issued the exchangeable surplus trust securities to investors,
and is the beneficiary of $750 million of 8.595% surplus notes held by the Trust that were issued by MetLife USA. MetLife,
Inc. has stated that it will take steps to terminate the Trust prior to the Separation, after which it will become the direct holder
of the surplus notes. MetLife, Inc. has also stated that, prior to the Separation, it intends to forgive MetLife USA’s obligations
to pay the principal amount of such surplus notes.

382

Table of Contents

Segment

2016
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

2015
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

2014
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

__________________

MetLife, Inc.

Schedule III

Consolidated Supplementary Insurance Information
December 31, 2016, 2015 and 2014

(In millions)

Future Policy Benefits,
Other Policy-Related
Balances and
Policyholder Dividend
Obligation

DAC
and
VOBA

Policyholder
Account
Balances

Policyholder
Dividends
Payable

Unearned
Premiums (1), (2)

Unearned
Revenue (1)

616

61,206

67,539

— $

8,707

1,808

1,472

5,246

6,921

$24,798

615

8,374

1,753

1,532

5,436

6,390

$24,130

593

8,217

1,987

1,709

5,387

6,537

36,308

9,163

5,439

72,284

36,473

(4,585)

216,288

59,074

34,416

8,142

5,837

70,818

34,332

(4,702)

207,917

57,521

33,711

8,914

6,514

71,169

32,546

(3,212)

53,114

5,597

12,636

34,664

37,526

(841)

210,235

63,986

49,094

5,880

13,172

33,818

37,521

(749)

202,722

65,615

52,772

6,425

14,006

33,738

37,367

(629)

—

604

(9)

1,843

2,167

448

204

(2)

708

4,743

— $

—

621

(11)

1,820

1,859

491

171

720

4,421

— $

—

612

(9)

1,801

1,711

508

179

912

563

372

209

530

—

2,616

974

597

336

218

529

—

2,687

924

651

313

229

546

—

$24,442

207,163

209,294

684

4,272

2,704

(1) Amounts are included within the future policy benefits, other policy-related balances and policyholder dividend obligation

column.

(2)

Includes premiums received in advance.

383

Table of Contents

Segment

2016
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

2015
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

2014
U.S.

Asia

Latin America

EMEA

MetLife Holdings

Brighthouse Financial

Corporate & Other

Total

______________

MetLife, Inc.

Schedule III

Consolidated Supplementary Insurance Information — (continued)
December 31, 2016, 2015 and 2014

(In millions)

Premiums and
Universal Life
and Investment-Type
Product Policy Fees

Net
Investment
Income

Policyholder
Benefits and
Claims and
Interest Credited
to Policyholder
Account Balances

Amortization of
DAC and
VOBA
Charged to
Other
Expenses

Other
Operating
Expenses (1)

22,490

5,942

22,859

471

8,913

3,554

2,442

6,034

5,005

(79)

48,359

21,804

8,491

3,702

2,455

6,116

5,684

(200)

48,052

21,152

9,270

4,038

2,832

5,964

5,771

(14)

2,807

1,133

1,229

5,670

3,207

(41)

19,947

6,046

2,859

1,046

347

5,867

3,098

19,281

6,001

3,279

1,257

1,238

6,012

3,078

288

6,896

2,770

2,064

7,532

4,984

(19)

47,086

22,038

6,817

2,853

1,109

7,226

4,432

(151)

44,324

21,292

7,748

3,310

1,978

7,087

4,545

1,338

184

408

424

(192)

2,641

471

1,265

271

492

701

737

(1)

3,936

458

1,394

313

626

199

1,150

(8)

3,244

1,795

1,007

924

3,392

2,269

1,053

13,684

3,197

1,619

1,075

998

3,597

2,258

1,477

14,221

3,080

1,724

1,192

1,176

3,636

2,285

1,242

49,013

21,153

46,045

4,132

14,335

(1)

Includes other expenses and policyholder dividends, excluding amortization of DAC and VOBA charged to other expenses.

384

Table of Contents

2016
Life insurance in-force

Insurance premium

Life insurance (1)

Accident & health insurance

Property & casualty insurance

Total insurance premium

2015
Life insurance in-force

Insurance premium

Life insurance (1)

Accident & health insurance

Property & casualty insurance

Total insurance premium

2014
Life insurance in-force

Insurance premium

Life insurance (1)

Accident & health insurance

Property & casualty insurance

Total insurance premium

__________________

MetLife, Inc.

Schedule IV

Consolidated Reinsurance
December 31, 2016, 2015 and 2014

(Dollars in millions)

Gross Amount

Ceded

Assumed

Net Amount

% Amount
Assumed
to Net

4,752,050

23,006

13,698

3,567

40,271

4,718,278

23,308

12,695

3,513

39,516

4,572,115

23,575

13,015

3,459

680,460

2,001

447

2,523

751,199

1,964

385

2,425

719,154

2,034

340

613,693

1,133

255

1,405

602,213

1,221

220

1,454

649,032

1,224

239

40,049

2,454

1,472

4,685,283

13.1%

22,138

13,506

3,509

39,153

5.1%

1.9%

0.5%

3.6%

4,569,292

13.2%

22,565

12,530

3,450

38,545

5.4%

1.8%

0.4%

3.8%

4,501,993

14.4%

22,765

12,914

3,388

39,067

5.4%

1.9%

0.3%

3.8%

(1)

Includes annuities with life contingencies.

385

Table of Contents

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange Act
Rule 13a-15(e) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

There were no changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15
(f) during the quarter ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.

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 GAAP.

Management has documented and evaluated the effectiveness of the internal control of the Company at December 31, 2016
pertaining to financial reporting in accordance with the criteria established in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In the opinion of management, MetLife, Inc. maintained effective internal control over financial reporting at December 31,

2016.

Deloitte & Touche LLP, an independent registered public accounting firm, has audited the consolidated financial statements
and consolidated financial statement schedules included in the Annual Report on Form 10-K for the year ended December 31,
2016. The Report of the Independent Registered Public Accounting Firm on their audit of the consolidated financial statements
and consolidated financial statement schedules is included on page 386.

Report of the Company’s Registered Public Accounting Firm

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued their report on their audit

of the effectiveness of internal control over financial reporting which is set forth below.

386

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
MetLife, Inc.
New York, New York

We have audited the internal control over financial reporting of MetLife, Inc. and subsidiaries (the “Company”) as of
December 31, 2016, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. 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, 2016, based on the criteria established in Internal Control — Integrated Framework (2013) 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 and financial statement schedules as of and for the year ended December 31, 2016, of the
Company and our report dated February 28, 2017, expressed an unqualified opinion on those consolidated financial statements
and financial statement schedules.

/s/ DELOITTE & TOUCHE LLP
New York, New York
February 28, 2017

387

Table of Contents

None.

Item 9B. Other Information

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information called for by this Item pertaining to Directors is incorporated herein by reference to the sections entitled
“Proxy Summary — Director Nominees,” “Proposal 1 — Election of Directors For a One-Year Term Ending at the 2018 Annual
Meeting of Shareholders — Director Nominees” and “Proposal 1 — Election of Directors For a One-Year Term Ending at the
2018 Annual Meeting of Shareholders — Corporate Governance — Board and Committee Information” and “Other
Information — Section 16(a) Beneficial Ownership Reporting Compliance” in MetLife, Inc.’s definitive proxy statement for
the Annual Meeting of Shareholders to be held on June 13, 2017, to be filed by MetLife, Inc. with the SEC pursuant to
Regulation 14A within 120 days after the year ended December 31, 2016 (the “2017 Proxy Statement”).

The information called for by this Item pertaining to Executive Officers appears in “Business — Executive Officers” in this
Annual Report on Form 10-K and “Other Information — Section 16(a) Beneficial Ownership Reporting Compliance” in the
2017 Proxy Statement.

The Company has adopted the MetLife Financial Management Code of Professional Conduct (the “Financial Management
Code”), a “code of ethics” as defined under the rules of the SEC, that applies to MetLife, Inc.’s Chief Executive Officer, Chief
Financial Officer, Chief Accounting Officer and all professionals in finance and finance-related departments. In addition, the
Company has adopted the Directors’ Code of Business Conduct and Ethics (the “Directors’ Code”) which applies to all members
of MetLife, Inc.’s Board of Directors, including the Chief Executive Officer, and the Code of Conduct (together with the Financial
Management Code and the Directors’ Code, collectively, the “Ethics Codes”), which applies to all employees of the Company,
including MetLife, Inc.’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Ethics Codes are
available on the Company’s website at http://www.metlife.com/about/corporate-profile/corporate-governance/corporate-
conduct/index.html. The Company intends to satisfy its disclosure obligations under Item 5.05 of Form 8-K by posting
information about amendments to, or waivers from a provision of, the Ethics Codes that apply to MetLife, Inc.’s Chief Executive
Officer, Chief Financial Officer and Chief Accounting Officer on the Company’s website at the address given above.

Item 11. Executive Compensation

The information called for by this Item is incorporated herein by reference to the sections entitled “Proposal 1 — Election
of Directors for a One-Year Term Ending at the 2018 Annual Meeting of Shareholders — Corporate Governance — Board and
Committee Information,” “Proposal 1 — Election of Directors for a One-Year Term Ending at the 2018 Annual Meeting of
Shareholders — Director Compensation in 2016,” and “Proposal 3 — Advisory Vote to Approve the Compensation Paid to the
Company’s Named Executive Officers” in the 2017 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information called for by this Item pertaining to ownership of shares of MetLife, Inc.’s common stock (“Shares”) is
incorporated herein by reference to the sections entitled “Other Information — Security Ownership of Directors and Executive
Officers” and “Other Information — Security Ownership of Certain Beneficial Owners” in the 2017 Proxy Statement.

388

Table of Contents

The following table provides information, at December 31, 2016, regarding MetLife, Inc.’s equity compensation plans:

Equity Compensation Plan Information at December 31, 2016

Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights (1)
(a)

Weighted-average
Exercise Price of
Outstanding
Options, Warrants
and Rights (2)
(b)

Number of
Securities
Remaining
Available for Future
Issuance Under
Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a))(3)
(c)

31,163,304

—

31,163,304

44.73

—

44.73

31,786,397

—

31,786,397

Plan Category
Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Total

______________

(1) Column (a) reflects the following items outstanding as of December 31, 2016:

Stock Options

Restricted Stock Units

Performance Shares (assuming future payout at maximum performance factor)

Deferred Shares

Shares that will or may be issued

As of December 31, 2016:

19,482,388

3,422,013

6,679,925

1,578,978

31,163,304

•

Stock Options under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan (the “2015 Stock Plan”) and its
predecessor plan, the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the “2005 Stock Plan) were
outstanding;

• Restricted Stock Units and Performance Shares under the 2015 Stock Plan were outstanding; and

• Deferred Shares related to awards under the 2015 Stock Plan, MetLife, Inc. 2015 Non-Management Directors Stock
Compensation Plan (the “2015 Director Stock Plan”), 2005 Stock Plan, MetLife, Inc. 2005 Non-Management Directors
Stock Compensation Plan (the “2005 Director Stock Plan”), and earlier plans, were outstanding. Deferred Shares are
Shares that are covered by awards that have become payable under any plan, but the issuance of which has been deferred.

The maximum performance factor for Performance Shares granted in 2014, 2015, and 2016 was 175%. The number of

Performance Shares outstanding as of December 31, 2016 at target (100%) performance factor was 3,817,100.

MetLife, Inc. may issue Shares pursuant to awards (including Stock Option exercises, if any) under any plan using Shares

held in treasury by MetLife, Inc. or by issuing new Shares.

For a general description of how the number of Shares paid out on account of Performance Shares and Restricted Stock
Units is determined, and the vesting periods applicable to Performance Shares and Restricted Stock Units, see Note 16 of the
Notes to the Consolidated Financial Statements.

(2) Column (b) reflects the weighted average exercise price of all Stock Options under any plan that, as of December 31,
2016, had been granted but not forfeited, expired, or exercised. Performance Shares, Restricted Stock Units, and Deferred
Shares are not included in determining the weighted average in column (b) because they have no exercise price.

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(3) Column (c) reflects the following items outstanding as of December 31, 2016:

At January 15, 2015, the effective date of the 2015 Stock Plan and 2015 Director Stock Plan:

Shares newly authorized for issuance under the 2015 Stock Plan

Shares remaining authorized for issuance under the 2005 Stock Plan or other plans that were not covered
by awards (*)

Shares authorized for issuance under the 2015 Director Stock Plan (**)

Total Shares authorized for issuance at January 1, 2015

Additional Shares recovered for issuance (***) in:

2015

2016

Total Shares recovered for issuance since January 1, 2015

Less: Shares covered by new awards and new imputed reinvested dividends on Deferred Shares (****) in:

2015

2016
Total Shares covered by new awards and new imputed reinvested dividends on Deferred Shares since
January 1, 2015

Shares remaining available for future issuance under the 2015 Stock Plan and 2015 Director Stock Plan

______________

Number of
Shares

11,750,000

18,023,959

1,642,208

31,416,167

4,475,737

6,344,455

10,820,192

4,413,785

6,036,177

10,449,962

31,786,397

(*)

(**)

Consisting of those that were not covered by awards, including shares previously covered by awards but recovered due
to forfeiture of awards or other reasons and once again available for issuance.

Consists of shares remaining authorized for issuance under the predecessor plan, the 2005 Director Stock Plan, that
were not covered by awards, including shares previously covered by awards but recovered due to forfeiture of awards
or other reasons and once again available.

(***) Consists of Shares utilized under the 2005 Stock Plan or 2015 Stock Plan that were recovered during each of the
indicated calendar years, and therefore once again available for issuance, due to: (i) termination of the award by
expiration, forfeiture, cancellation, lapse, or otherwise without issuing Shares; (ii) settlement of the award in cash either
in lieu of Shares or otherwise; (iii) exchange of the award for awards not involving Shares; (iv) payment of the exercise
price of a Stock Option, or the tax withholding requirements with respect to an award, satisfied by tendering Shares to
MetLife, Inc. (by either actual delivery or by attestation); (v) satisfaction of tax withholding requirements with respect
to an award satisfied by MetLife, Inc. withholding Shares otherwise issuable; and (vi) the payout of Performance Shares
at any performance factor less than the maximum performance factor.

(****) Consists of Shares covered by awards granted under the 2015 Stock Plan (including Performance Shares assuming
future payout at maximum performance factor). Shares covered by awards granted under the 2015 Directors Stock Plan
and Shares covered by imputed reinvested dividends credited on Deferred Shares owed to directors, employees or
agents, in each case during each of the indicated calendar years.

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Each Share MetLife, Inc. issues in connection with awards granted under the MetLife, Inc. 2005 Stock Plan other than
Stock Options or Stock Appreciation Rights (such as Shares payable on account of Performance Shares or Restricted Stock
Units under that plan, including any Deferred Shares resulting from such awards) reduces the number of Shares remaining for
issuance by 1.179 (“2005 Stock Plan Share Award Ratio”). Each Share MetLife, Inc. issues in connection with a Stock Option
or Stock Appreciation Right granted under the 2005 Stock Plan, or in connection with any award under any other plan for
employees and agents (including any Deferred Shares resulting from such awards), reduces the number of Shares remaining for
issuance by 1.0. (“Standard Award Ratio”). Shares related to awards that are recovered, and therefore authorized for issuance
under the 2015 Stock Plan, are recovered with consideration of the 2005 Stock Plan Share Award Ratio and Standard Award
Ratio, as applicable. Each Share MetLife, Inc. issues under the 2005 Director Stock Plan or 2015 Director Stock Plan (including
any Deferred Shares resulting from such awards) reduces the number of Shares remaining for issuance under that plan by one.
Shares related to awards that are recovered, and therefore authorized for issuance under the 2015 Director Stock Plan are recovered
with consideration of this ratio. If MetLife, Inc. was to grant a Share-settled Stock Appreciation Right under the 2015 Stock
Plan and the award holder exercised it, only the number of Shares MetLife, Inc. issued, net of the Shares tendered, if any, would
be deemed delivered for purposes of determining the maximum number of Shares MetLife, Inc. may issue under the 2015 Stock
Plan.

Any Shares covered by awards under the 2015 Director Stock Plan that were to be recovered due to (i) termination of the
award by expiration, forfeiture, cancellation, lapse, or otherwise without issuing Shares; (ii) settlement of the award in cash
either in lieu of Shares or otherwise; (iii) exchange of the award for awards not involving Shares; and (iv) payment of the exercise
price of a Stock Option, or the tax withholding requirements with respect to an award, satisfied by tendering Shares to MetLife,
Inc. (by either actual delivery or by attestation) would be available to be issued under the 2015 Director Stock Plan. In addition,
if MetLife, Inc. was to grant a Share-settled Stock Appreciation Right under the 2015 Director Stock Plan, only the number of
Shares issued, net of the Shares tendered, if any, would be deemed delivered for purposes of determining the maximum number
of Shares available for issuance under the 2015 Director Stock Plan.

Under both the 2015 Stock Plan and the 2015 Director Stock Plan, in the event of a corporate event or transaction (including,
but not limited to, a change in the Shares or the capitalization of MetLife) such as a merger, consolidation, reorganization,
recapitalization, separation, stock dividend, extraordinary dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of MetLife, combination of securities, exchange of securities, dividend in kind, or other like
change in capital structure or distribution (other than normal cash dividends) to shareholders of MetLife, or any similar corporate
event or transaction, the appropriate committee of the Board of Directors of MetLife, in order to prevent dilution or enlargement
of participants’ rights under the applicable plan, shall substitute or adjust, as applicable, the number and kind of Shares that may
be issued under that plan and shall adjust the number and kind of Shares subject to outstanding awards. Any Shares related to
awards under either plan which: (i) terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of Shares;
(ii) are settled in cash either in lieu of Shares or otherwise; or (iii) are exchanged with the appropriate committee’s permission
for awards not involving Shares, are available again for grant under the applicable plan. If the option price of any Stock Option
granted under either plan or the tax withholding requirements with respect to any award granted under either plan is satisfied
by tendering Shares to MetLife (by either actual delivery or by attestation), or if a Stock Appreciation Right is exercised, only
the number of Shares issued, net of the Shares tendered, if any, will be deemed delivered for purposes of determining the
maximum number of Shares available for issuance under that plan. The maximum number of Shares available for issuance under
either plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or
credited as additional Restricted Stock or Restricted Stock Units.

For a description of the kinds of awards that have been or may be made under the 2015 Stock Plan and 2015 Director Stock
Plan and awards that remained outstanding under the 2005 Stock Plan, see Note 16 of the Notes to the Consolidated Financial
Statements.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information called for by this Item is incorporated herein by reference to the sections entitled “Proposal 1 — Election
of Directors for a One-Year Term Ending at the 2018 Annual Meeting of Shareholders — Corporate Governance — Procedures
for Reviewing Related Person Transactions,” “Proposal 1 — Election of Directors for a One-Year Term Ending at the 2018
Annual Meeting of Shareholders — Corporate Governance — Related Person Transactions” and “Proposal 1 — Election of
Directors for a One-Year Term Ending at the 2018 Annual Meeting of Shareholders — Corporate Governance — Board and
Committee Information — Composition and Independence of the Board of Directors” in the 2017 Proxy Statement.

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Item 14. Principal Accountant Fees and Services

The information called for by this item is incorporated herein by reference to the section entitled “Proposal 2 — Ratification

of Appointment of the Independent Auditor” in the 2017 Proxy Statement.

Part IV

Item 15. Exhibits and Financial Statement Schedules

The following documents are filed as part of this report:

1. Financial Statements

The financial statements are listed in the Index to Consolidated Financial Statements, Notes and Schedules on page 199.

2. Financial Statement Schedules

The financial statement schedules are listed in the Index to Consolidated Financial Statements, Notes and Schedules on

page 199.

3. Exhibits

The exhibits are listed in the Exhibit Index which begins on page E-1.

392

Table of Contents

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 28, 2017

Signatures

METLIFE, INC.

By /s/ Steven A. Kandarian

Name: Steven A. Kandarian
Title: Chairman of the Board, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/s/ Cheryl W. Grisé

Cheryl W. Grisé

/s/ Carlos M. Gutierrez

Carlos M. Gutierrez

/s/ David L. Herzog

David L. Herzog

/s/ R. Glenn Hubbard

R. Glenn Hubbard

/s/ Alfred F. Kelly, Jr.

Alfred F. Kelly, Jr.

/s/ Edward J. Kelly, III

Edward J. Kelly, III

/s/ William E. Kennard

William E. Kennard

/s/ James M. Kilts

James M. Kilts

/s/ Catherine R. Kinney

Catherine R. Kinney

/s/ Denise M. Morrison

Denise M. Morrison

/s/ Kenton J. Sicchitano

Kenton J. Sicchitano

/s/ Lulu C. Wang

Lulu C. Wang

Date

February 28, 2017

Title

Director

393

Table of Contents

Signature

Title

Date

/s/ Steven A. Kandarian
Steven A. Kandarian

Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)

February 28, 2017

/s/ John C. R. Hele
John C. R. Hele

Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

February 28, 2017

/s/ Peter M. Carlson
Peter M. Carlson

Executive Vice President and
Chief Accounting Officer
(Principal Accounting Officer)

February 28, 2017

394

Table of Contents

Exhibit Index

(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this Annual
Report on Form 10-K, please remember that they are included to provide you with information regarding their terms and are
not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or affiliates, or the other
parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable
agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable
agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the
risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to
the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected
in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to
investors; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified
in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not
describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife,
Inc., its subsidiaries and affiliates may be found elsewhere in this Annual Report on Form 10-K and MetLife, Inc.’s other public
filings, which are available without charge through the SEC’s website at www.sec.gov.)

Exhibit No.

Description

2.1

2.2

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

4.1

4.2

Plan of Reorganization. (Incorporated by reference to Exhibit 2.1 to MetLife, Inc.'s Registration Statement on Form S-1 (No. 333-91517)
(the "S-1 Registration Statement")).

Amendment to Plan of Reorganization, dated as of March 9, 2000. (Incorporated by reference to Exhibit 2.2 to the S-1 Registration
Statement).

Amended and Restated Certificate of Incorporation of MetLife, Inc.

Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of MetLife, Inc., filed with the Secretary
of State of Delaware on April 7, 2000.

Certificate of Designations of Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc., filed with the Secretary of State
of Delaware on June 10, 2005.

Certificate of Amendment of Amended and Restated Certificate of Incorporation of MetLife, Inc., dated April 29, 2011.

Certificate of Retirement of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock of MetLife,
Inc., filed with the Secretary of State of Delaware on November 5, 2013. (Incorporated by reference to Exhibit 3.6 to MetLife, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2013).

Certificate of Amendment of Amended and Restated Certificate of Incorporation of MetLife, Inc., dated April 29, 2015. (Incorporated by
reference to Exhibit 3.1 to MetLife, Inc.'s Current Report on Form 8-K dated April 30, 2015).

Certificate of Designations of 5.250% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C, of MetLife, Inc., filed with the
Secretary of State of Delaware on May 28, 2015. (Incorporated by reference to Exhibit 3.1 to MetLife, Inc.’s Current Report on Form

dated May 28, 2015).

Certificate of Elimination of 6.500% Non-Cumulative Preferred Stock, Series B, of MetLife, Inc., filed with the Secretary of State of
Delaware on November 3, 2015. (Incorporated by reference to Exhibit 3.7 to MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2015).*

Amended and Restated By-Laws of MetLife, Inc., effective September 27, 2016. (Incorporated by reference to Exhibit 3.2 to MetLife,
Inc.'s Current Report on Form 8-K dated September 29, 2016).

Form of Certificate for Common Stock, par value $0.01 per share. (Incorporated by reference to Exhibit 4.1 to the S-1 Registration
Statement).

Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of MetLife, Inc., filed with the Secretary
of State of Delaware on April 7, 2000. (See Exhibit 3.2 above).

E-1

Table of Contents

Exhibit No.

Description

4.3

4.4

4.5

4.6

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

Certificate of Designations of Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc., filed with the Secretary of State
of Delaware on June 10, 2005. (See Exhibit 3.3 above).

Form of Stock Certificate, Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc. (Incorporated by reference to Exhibit
99.6 to MetLife, Inc.'s Registration Statement on Form 8-A filed on June 10, 2005).

Form of Stock Certificate, 5.250% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C, of MetLife, Inc. (Incorporated by
reference to Exhibit 4.2 to MetLife, Inc.'s Current Report on Form 8-K dated May 28, 2015).

Certain instruments defining the rights of holders of long-term debt of MetLife, Inc. and its consolidated subsidiaries are omitted pursuant
to Item 601(b)(4)(iii) of Regulation S-K. MetLife, Inc. hereby agrees to furnish to the Securities and Exchange Commission, upon request,
copies of such instruments.

MetLife Executive Severance Plan (as amended and restated, effective June 14, 2010). (Incorporated by reference to Exhibit 10.1 to
MetLife, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the "2014 Annual Report")). *

Offer Letter, dated March 25, 2009, between American Life Insurance Company and Michel Khalaf.*

Adjustment of certain compensation items for Michel Khalaf, effective July 1, 2012. (Incorporated by reference to Exhibit 10.2 to MetLife,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012).*

Employment Agreement between Christopher G. Townsend and MetLife Asia Pacific Limited, dated May 11, 2012. (Incorporated by
reference to Exhibit 10.1 to MetLife, Inc.'s Current Report on Form 8-K dated May 16, 2012 (the "May 16, 2012 Form 8-K")).*

Letter Agreement dated June 11, 2015 between MetLife, Inc. and Christopher Townsend. (Incorporated by reference to Exhibit 10.1 to
MetLife, Inc.’s Current Report on Form 8-K dated June 15, 2015). *

Tax Equalization Agreement dated June 10, 2015 between MetLife, Inc. and Michel Khalaf. (Incorporated by reference to Exhibit 10.1
to MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).*

Separation Agreement, Waiver and General Release, dated July 30, 2015, between MetLife Group, Inc. and William J. Wheeler.
(Incorporated by reference to Exhibit 10.1 to MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2015).*

Agreement to Protect Corporate Property executed by William J. Wheeler on June 21, 2001. (Incorporated by reference to Exhibit 10.2
to MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).*

Agreement to Protect Corporate Property, dated January 1, 2015, executed by Esther S. Lee. (Incorporated by reference to Exhibit 10.13
to MetLife, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the "2015 Annual Report")).*

Form of Agreement to Protect Corporate Property executed by Steven A. Kandarian, Steven J. Goulart, and Maria M. Morris. (Incorporated
by reference to Exhibit 10.14 to the 2015 Annual Report).*

Form of Agreement to Protect Corporate Property executed by Ricardo A. Anzaldua, John C. R. Hele, Frans Hijkoop, and Esther Lee on
May 25, 2016; Steven A. Kandarian on May 31, 2016; Steven J. Goulart on June 2, 2016; and Maria M. Morris on June 8, 2016. (Incorporated
by reference to Exhibit 10.1 to MetLife, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).*

MetLife, Inc. 2005 Stock and Incentive Compensation Plan, effective April 15, 2005 (the "2005 SIC Plan"). (Incorporated by reference
to Exhibit 10.24 to the 2014 Annual Report).*

Form of Management Stock Option Agreement under the 2005 SIC Plan (effective as of April 25, 2007). (Incorporated by reference to
Exhibit 10.24 to the 2012 Annual Report). *

Amendment to Stock Option Agreements under the 2005 SIC Plan (effective as of April 25, 2007). (Incorporated by reference to Exhibit
10.25 to the 2012 Annual Report).*

Form of Management Stock Option Agreement under the 2005 SIC Plan (effective December 15, 2009). (Incorporated by reference to
Exhibit 10.28 to the 2014 Annual Report).*

Form of Management Stock Option Agreement under the 2005 SIC Plan. (Incorporated by reference to Exhibit 10.29 to the 2014 Annual
Report).*

Form of Stock Option Agreement under the 2005 SIC Plan (effective February 11, 2013). (Incorporated by reference to Exhibit 10.9 to
MetLife, Inc.'s Current Report on Form 8-K dated February 15, 2013 (the "February 15, 2013 Form 8-K")).*

Form of Stock Option Agreement (Three-Year "Cliff" Exercisability) under the 2005 SIC Plan (effective February 11, 2013). (Incorporated
by reference to Exhibit 10.10 to the February 15, 2013 Form 8-K).*

Form of Restricted Stock Unit Agreement (effective February 11, 2013). (Incorporated by reference to Exhibit 10.4 to the February 15,
2013 Form 8-K).*

Form of Restricted Stock Unit Agreement (Three-Year "Cliff" Period of Restriction; No Code 162(m) Goals) (effective February 11,
2013). (Incorporated by reference to Exhibit 10.5 to the February 15, 2013 Form 8-K).*

Form of Performance Share Agreement (effective February 11, 2013). (Incorporated by reference to Exhibit 10.1 to the February 15, 2013
Form 8-K).*

MetLife International Performance Unit Incentive Plan (as amended and restated effective February 11, 2013). (Incorporated by reference
to Exhibit 10.2 to the February 15, 2013 Form 8-K).*

E-2

Table of Contents

Exhibit No.

Description

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

Form of Performance Unit Agreement (effective February 11, 2013). (Incorporated by reference to Exhibit 10.3 to the February 15, 2013
Form 8-K).*

MetLife International Unit Option Incentive Plan, dated July 21, 2011 (as amended and restated effective February 23, 2011).*

Form of Unit Option Agreement under the MetLife International Unit Option Incentive Plan (effective February 23, 2011).*

MetLife International Unit Option Incentive Plan (as amended and restated December 3, 2012). (Incorporated by reference to Exhibit
10.11 to the February 15, 2013 Form 8-K).*

Form of Unit Option Agreement (effective February 11, 2013). (Incorporated by reference to Exhibit 10.12 to the February 15, 2013 Form
8-K).*

Form of Unit Option Agreement (Three-Year "Cliff" Exercisability) (effective February 11, 2013). (Incorporated by reference to Exhibit
10.13 to the February 15, 2013 Form 8-K).*

MetLife International Restricted Unit Incentive Plan (as amended and restated effective February 11, 2013). (Incorporated by reference
to Exhibit 10.6 to the February 15, 2013 Form 8-K).*

Form of Restricted Unit Agreement (effective February 11, 2013). (Incorporated by reference to Exhibit 10.7 to the February 15, 2013
Form 8-K).*

Form of Restricted Unit Agreement (Three-Year "Cliff" Period of Restriction; No Code 162(m) Goals) (effective February 11, 2013).
(Incorporated by reference to Exhibit 10.8 to the February 15, 2013 Form 8-K).*

MetLife Policyholder Trust Agreement. (Incorporated by reference to Exhibit 10.12 to the S-1 Registration Statement).

Amendment to MetLife Policyholder Trust Agreement. (Incorporated by reference to Exhibit 10.62 to the 2012 Annual Report).

Five-Year Credit Agreement, dated as of May 30, 2014, among MetLife, Inc. and MetLife Funding, Inc., as borrowers, and the other parties
signatory thereto, amending and restating (i) the Five-Year Credit Agreement, dated as of August 12, 2011, among MetLife, Inc. and
MetLife Funding, Inc., as borrowers, and the other parties signatory thereto and (ii) the Five-Year Credit Agreement dated as of September
13, 2012 among MetLife, Inc. and MetLife Funding, Inc., as borrowers, and the other parties signatory thereto. (Incorporated by reference
to Exhibit 10.1 to MetLife, Inc.’s Current Report on Form 8-K dated June 4, 2014).

First Amendment dated as of November 20, 2015 to the Five-Year Credit Agreement dated as of May 30, 2014, among MetLife, Inc. and
MetLife Funding, Inc., as Borrowers, Bank of America, N.A., as Administrative Agent, Fronting L/C Issuer, Several L/C Agent and a
Limited Fronting Lender, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Fronting L/C Issuers and Limited
Fronting Lenders, and the other Lenders party thereto. (Incorporated by reference to Exhibit 10.1 to MetLife, Inc.’s Current Report on
Form 8-K dated November 24, 2015).

Second Amendment dated December 20, 2016 to the Five-Year Credit Agreement, dated as of May 30, 2014, among MetLife, Inc. and
MetLife Funding, Inc., as borrowers, and the other parties signatory thereto, providing for the amendment and restatement of such Credit
Agreement. (Incorporated by reference to Exhibit 10.1 to MetLife, Inc.’s Current Report on Form 8-K dated December 21, 2016).

Metropolitan Life Auxiliary Savings and Investment Plan (as amended and restated, effective January 1, 2008). (Incorporated by reference
to Exhibit 10.72 to the 2012 Annual Report).*

Amendment 1 to the Metropolitan Life Auxiliary Savings and Investment Plan (as amended and restated, effective January 1, 2008).
(Incorporated by reference to Exhibit 10.74 to the 2014 Annual Report).*

Amendment Number 2 to the Metropolitan Life Auxiliary Savings and Investment Plan (Amended and Restated Effective January 1, 2008).
(Incorporated by reference to Exhibit 10.48 to the 2015 Annual Report).*

Amendment Number 3 to the Metropolitan Life Auxiliary Savings and Investment Plan (Amended and Restated Effective January 1, 2008).
(Incorporated by reference to Exhibit 10.75 to the 2012 Annual Report).*

Amendment Number 4 to the Metropolitan Life Auxiliary Savings and Investment Plan (Amended and Restated Effective January 1, 2008).
(Incorporated by reference to Exhibit 10.77 to the 2013 Annual Report).*

MetLife Deferred Compensation Plan for Officers, as amended and restated, effective November 1, 2003. (Incorporated by reference to
Exhibit 10.78 to the 2013 Annual Report).*

Amendment Number One to the MetLife Deferred Compensation Plan for Officers (as amended and restated as of November 1, 2003),
dated May 4, 2005. (Incorporated by reference to Exhibit 10.52 to the 2015 Annual Report).*

Amendment Number Two to the MetLife Deferred Compensation Plan for Officers (as amended and restated as of November 1, 2003,
effective December 14, 2005). (Incorporated by reference to Exhibit 10.53 to the 2015 Annual Report).*

Amendment Number Three to the MetLife Deferred Compensation Plan for Officers (as amended and restated as of November 1, 2003,
effective February 26, 2007).*

E-3

Table of Contents

Exhibit No.

Description

10.46

10.47

10.48

10.49

10.50

10.51

10.52

10.53

10.54

10.55

10.56

10.57

10.58

10.59

10.60

10.61

10.62

10.63

10.64

10.65

10.66

10.67

10.68

10.69

10.70

10.71

10.72

10.73

MetLife Leadership Deferred Compensation Plan, dated November 2, 2006 (as amended and restated, effective with respect to salary and
cash incentive compensation, January 1, 2005, and with respect to stock compensation, April 15, 2005).*

Amendment Number One to the MetLife Leadership Deferred Compensation Plan, dated December 13, 2007 (effective as of December
31, 2007). (Incorporated by reference to Exhibit 10.81 to the 2012 Annual Report).*

Amendment Number Two to the MetLife Leadership Deferred Compensation Plan, dated December 11, 2008 (effective December 31,
2008). (Incorporated by reference to Exhibit 10.84 to the 2013 Annual Report).*

Amendment Number Three to the MetLife Leadership Deferred Compensation Plan, dated December 11, 2009 (effective January 1,
2010). (Incorporated by reference to Exhibit 10.85 to the 2014 Annual Report).*

Amendment Number Four to the MetLife Leadership Deferred Compensation Plan, dated December 11, 2009 (effective December 31,
2009). (Incorporated by reference to Exhibit 10.86 to the 2014 Annual Report).*

Amendment Number Five to the MetLife Leadership Deferred Compensation Plan, dated December 11, 2009 (effective January 1, 2011).
(Incorporated by reference to Exhibit 10.60 to the 2015 Annual Report).*

Amendment Number Six to the MetLife Leadership Deferred Compensation Plan, dated December 27, 2011 (effective January 1, 2011).*

Amendment Number Seven to the MetLife Leadership Deferred Compensation Plan, dated December 26, 2012 (effective January 1,
2013).*

Amendment Number Eight to the MetLife Leadership Deferred Compensation Plan, dated December 17, 2013 (effective January 1,
2014).*

Amendment Number Nine to the MetLife Leadership Deferred Compensation Plan, dated December 30, 2014 (effective January 1, 2015).
(Incorporated by reference to Exhibit 10.88 to the 2014 Annual Report).*

Amendment Number Ten to the MetLife Leadership Deferred Compensation Plan, dated September 30, 2016 (effective October 1, 2016).*

Amendment Number Eleven to the MetLife Leadership Deferred Compensation Plan, dated September 30, 2016 (effective October 1,
2016).*

MetLife Non-Management Director Deferred Compensation Plan (as amended and restated, effective January 1, 2005). (Incorporated by
reference to Exhibit 4.1 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-214710).*

MetLife, Inc. Director Indemnity Plan (dated and effective July 22, 2008). (Incorporated by reference to Exhibit 10.94 to the 2013 Annual
Report).*

MetLife Auxiliary Pension Plan, dated August 7, 2006 (as amended and restated, effective June 30, 2006).*

MetLife Auxiliary Pension Plan, dated December 21, 2006 (amending and restating Part I thereof, effective January 1, 2007).*

MetLife Auxiliary Pension Plan, dated December 21, 2007 (amending and restating Part I thereof, effective January 1, 2008). (Incorporated
by reference to Exhibit 10.95 to the 2012 Annual Report).*

Amendment #1 to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008), dated October 24, 2008
(effective October 1, 2008). (Incorporated by reference to Exhibit 10.98 to the 2013 Annual Report).*

Amendment Number Two to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008), dated December
12, 2008 (effective December 31, 2008). (Incorporated by reference to Exhibit 10.99 to the 2013 Annual Report).*

Amendment Number Three to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008) dated March 25,
2009 (effective January 1, 2009). (Incorporated by reference to Exhibit 10.71 to the 2015 Annual Report).*

Amendment Number Four to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008), dated December
16, 2009 (effective January 1, 2010). (Incorporated by reference to Exhibit 10.102 to the 2014 Annual Report). *

Amendment Number Five to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008) dated December
21, 2010 (effective January 1, 2010). (Incorporated by reference to Exhibit 10.73 to the 2015 Annual Report).*

Amendment Number Six to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008) dated December
20, 2012 (effective January 1, 2012). (Incorporated by reference to Exhibit 10.101 to the 2012 Annual Report).*

Amendment Number Seven to the MetLife Auxiliary Pension Plan (as amended and restated, effective January 1, 2008) dated December
27, 2013 (effective December 10, 2013).*

Alico Overseas Pension Plan, dated January 2009.*

Amendment Number One to the Alico Overseas Pension Plan (effective November 1, 2010), dated December 20, 2010.*

Amendment Number Two to the Alico Overseas Pension Plan (effective as of November 1, 2011), dated December 13, 2011.*

Amendment Number Three to the Alico Overseas Pension Plan, dated May 1, 2012 (effective January 1, 2012). (Incorporated by reference
to Exhibit 10.1 to MetLife, Inc.'s Current Report on Form 8-K dated May 4, 2012).*

E-4

Table of Contents

Exhibit No.

Description

10.74

10.75

10.76

10.77

10.78

10.79

10.80

10.81

10.82

10.83

10.84

10.85

10.86

10.87

10.88

10.89

10.90

10.91

10.92

10.93

10.94

10.95

10.96

10.97

10.98

10.99

Member's Explanatory Handbook for the Metropolitan Life Insurance Company of Hong Kong Limited Healthcare Plan (2014).
(Incorporated by reference to Exhibit 10.79 to the 2015 Annual Report).*

MetLife Plan for Transition Assistance for Officers, dated April 21, 2014 (as amended and restated, effective April 1, 2014 (the "MPTA")).
(Incorporated by reference to Exhibit 10.2 to MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).*

Amendment Number One to the MPTA, dated December 30, 2014 (effective January 1, 2015). (Incorporated by reference to Exhibit
10.111 to the 2014 Annual Report).*

Amendment Number Two to the MPTA, dated March 30, 2016 (effective April 1, 2016).*

Amendment Number Three to the MPTA, dated June 30, 2016 (effective June 30, 2016).*

Amendment Number Four to the MPTA, dated October 24, 2016 (effective October 31, 2016).*

Amendment Number Five to the MPTA, dated November 3, 2016 (effective October 1, 2016).*

MetLife, Inc. 2015 Non-Management Director Stock Compensation Plan, effective January 1, 2015. (Incorporated by reference to
Exhibit 4.1 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198141).*

MetLife, Inc. 2015 Stock and Incentive Plan, effective January 1, 2015 (the “2015 SIC Plan”). (Incorporated by reference to Exhibit 4.1
to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198145)).*

Form of Performance Share Agreement under the 2015 SIC Plan. (Incorporated by reference to Exhibit 10.1 to MetLife, Inc.’s Current
Report on Form 8-K dated December 11, 2014 (the “December 11, 2014 Form 8-K”).*

Form of Performance Unit Agreement under the 2015 SIC Plan. (Incorporated by reference to Exhibit 10.2 to the December 11, 2014
Form 8-K).*

Form of Restricted Stock Unit Agreement (Ratable Period of Restriction Ends in Thirds; Code Section 162(m) Goals) under the 2015 SIC
Plan (Incorporated by reference to Exhibit 10.3 to the December 11, 2014 Form 8-K).*

Form of Restricted Stock Unit Agreement (Three-Year “Cliff” Period of Restriction; No Code Section 162(m) Goals) (Incorporated by
reference to Exhibit 10.4 to the December 11, 2014 Form 8-K).*

Form of Restricted Unit Agreement (Ratable Period of Restriction Ends in Thirds; Code Section 162(m) Goals) (Incorporated by reference
to Exhibit 10.5 to the December 11, 2014 Form 8-K).*

Form of Restricted Unit Agreement (Three-Year “Cliff” Period of Restriction; No Code Section 162(m) Goals) (Incorporated by reference
to Exhibit 10.6 to the December 11, 2014 Form 8-K).*

Form of Stock Option Agreement (Ratable Exercisability in Thirds) (Incorporated by reference to Exhibit 10.7 to the December 11, 2014
Form 8-K).*

Form of Stock Option Agreement (Three-Year “Cliff” Exercisability) (Incorporated by reference to Exhibit 10.8 to the December 11, 2014
Form 8-K).*

Form of Unit Option Agreement (Ratable Exercisability in Thirds) (Incorporated by reference to Exhibit 10.9 to the December 11, 2014
Form 8-K).*

Form of Unit Option Agreement (Three-Year “Cliff” Exercisability) (Incorporated by reference to Exhibit 10.10 to the December 11, 2014
Form 8-K).*

MetLife Annual Variable Incentive Plan (effective as amended and restated January 1, 2015) (Incorporated by reference to Exhibit 10.11
to the December 11, 2014 Form 8-K).*

Form of Performance Share Agreement under the 2015 SIC Plan, effective January 1, 2016. (Incorporated by reference to Exhibit 10.95
to the 2015 Annual Report).*

Form of Performance Unit Agreement under the 2015 SIC Plan, effective January 1, 2016. (Incorporated by reference to Exhibit 10.96
to the 2015 Annual Report).*

Form of Restricted Stock Unit Agreement (Ratable Period of Restriction Ends in Thirds; Code Section 162(m) Goals) under the 2015 SIC
Plan, effective January 1, 2016. (Incorporated by reference to Exhibit 10.97 to the 2015 Annual Report).*

Form of Restricted Stock Unit Agreement (Three-Year “Cliff” Period of Restriction; No Code Section 162(m) Goals), effective January
1, 2016. (Incorporated by reference to Exhibit 10.98 to the 2015 Annual Report).*

Form of Restricted Unit Agreement (Ratable Period of Restriction Ends in Thirds; Code Section 162(m) Goals), effective January 1,
2016. (Incorporated by reference to Exhibit 10.99 to the 2015 Annual Report).*

Form of Restricted Unit Agreement (Three-Year “Cliff” Period of Restriction; No Code Section 162(m) Goals), effective January 1,
2016. (Incorporated by reference to Exhibit 10.100 to the 2015 Annual Report).*

10.100

Form of Stock Option Agreement (Ratable Exercisability in Thirds), effective January 1, 2016. (Incorporated by reference to Exhibit
10.101 to the 2015 Annual Report).*

E-5

Table of Contents

Exhibit No.

Description

10.101

10.102

10.103

10.104

10.105

10.106

10.107

10.108

10.109

10.110

10.111

12.1

21.1

23.1

31.1

31.2

32.1

32.2

Form of Stock Option Agreement (Three-Year “Cliff” Exercisability), effective January 1, 2016. (Incorporated by reference to Exhibit
10.102 to the 2015 Annual Report).*

Form of Unit Option Agreement (Ratable Exercisability in Thirds), effective January 1, 2016. (Incorporated by reference to Exhibit
10.103 to the 2015 Annual Report).*

Form of Unit Option Agreement (Three-Year “Cliff” Exercisability), effective January 1, 2016. (Incorporated by reference to Exhibit
10.104 to the 2015 Annual Report).*

Award Agreement Supplement, effective January 1, 2016. (Incorporated by reference to Exhibit 10.105 to the 2015 Annual Report).*

MetLife Individual Distribution Sales Deferred Compensation Plan, effective January 1, 2010. (Incorporated by reference to Exhibit
4.1 to MetLife, Inc. ’s Registration Statement on Form S-8 (No. 333-198143)).*

Amendment Number One to the MetLife Individual Distribution Sales Deferred Compensation Plan, effective January 1, 2010.
(Incorporated by reference to Exhibit 4.2 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198143)).*

Amendment Number Two to the MetLife Individual Distribution Sales Deferred Compensation Plan, effective January 1, 2010.
(Incorporated by reference to Exhibit 4.3 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198143)).*

Amendment Number Three to the MetLife Individual Distribution Sales Deferred Compensation Plan, effective January 1, 2013.
(Incorporated by reference to Exhibit 4.4 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198143)).*

Amendment Number Four to the MetLife Individual Distribution Sales Deferred Compensation Plan, effective January 1, 2014.
(Incorporated by reference to Exhibit 4.5 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198143)).*

Amendment Number Five to the MetLife Individual Distribution Sales Deferred Compensation Plan, effective June 1, 2014. (Incorporated
by reference to Exhibit 4.6 to MetLife, Inc.’s Registration Statement on Form S-8 (No. 333-198143)).*

Purchase Agreement by and among MetLife, Inc. and Massachusetts Mutual Life Insurance Company, dated as of February 28, 2016.
(Incorporated by reference to Exhibit 10.1 to MetLife, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016).

Statement re: Computation of Ratios of Earnings to Fixed Charges.

Subsidiaries of the Registrant.

Consent of Deloitte & Touche LLP.

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

______________

* Indicates management contracts or compensatory plans or arrangements.

E-6