|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
13-4075851
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
200 Park Avenue, New York, N.Y.
|
|
10166-0188
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
þ
|
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
¨
|
|
|
|
|
Page
|
|
||
Item 1.
|
Financial Statements (at June 30, 2016 (Unaudited) and December 31, 2015 and for the Three Months and Six Months Ended June 30, 2016 and 2015 (Unaudited))
|
|
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $350,821 and $332,964, respectively; includes $3,548 and $4,277, respectively, relating to variable interest entities)
|
|
$
|
387,508
|
|
|
$
|
351,402
|
|
Equity securities available-for-sale, at estimated fair value (cost: $2,914 and $2,997, respectively)
|
|
3,333
|
|
|
3,321
|
|
||
Fair value option and trading securities, at estimated fair value (includes $8 and $404, respectively, of actively traded securities; and $9 and $13, respectively, relating to variable interest entities)
|
|
14,314
|
|
|
15,024
|
|
||
Mortgage loans (net of valuation allowances of $467 and $318, respectively; includes $159 and $172, respectively, at estimated fair value, relating to variable interest entities; includes $449 and $314, respectively, under the fair value option)
|
|
69,399
|
|
|
67,102
|
|
||
Policy loans (includes $0 and $4, respectively, relating to variable interest entities)
|
|
11,240
|
|
|
11,258
|
|
||
Real estate and real estate joint ventures (includes $71 and $47, respectively, of real estate held-for-sale)
|
|
9,063
|
|
|
8,433
|
|
||
Other limited partnership interests (includes $15 and $27, respectively, relating to variable interest entities)
|
|
6,982
|
|
|
7,096
|
|
||
Short-term investments, principally at estimated fair value (includes $0 and $26, respectively, relating to variable interest entities)
|
|
9,838
|
|
|
9,299
|
|
||
Other invested assets, principally at estimated fair value (includes $43 and $43, respectively, relating to variable interest entities)
|
|
31,834
|
|
|
22,524
|
|
||
Total investments
|
|
543,511
|
|
|
495,459
|
|
||
Cash and cash equivalents, principally at estimated fair value (includes $16 and $85, respectively, relating to variable interest entities)
|
|
17,067
|
|
|
12,752
|
|
||
Accrued investment income (includes $1 and $23, respectively, relating to variable interest entities)
|
|
3,884
|
|
|
3,988
|
|
||
Premiums, reinsurance and other receivables (includes $4 and $21, respectively, relating to variable interest entities)
|
|
26,035
|
|
|
22,702
|
|
||
Deferred policy acquisition costs and value of business acquired (includes $0 and $240, respectively, relating to variable interest entities)
|
|
24,748
|
|
|
24,130
|
|
||
Current income tax recoverable
|
|
51
|
|
|
161
|
|
||
Goodwill
|
|
9,852
|
|
|
9,477
|
|
||
Other assets (includes $3 and $148, respectively, relating to variable interest entities)
|
|
7,747
|
|
|
7,666
|
|
||
Separate account assets (includes $0 and $1,022, respectively, relating to variable interest entities)
|
|
309,672
|
|
|
301,598
|
|
||
Total assets
|
|
$
|
942,567
|
|
|
$
|
877,933
|
|
Liabilities and Equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Future policy benefits (includes $0 and $716, respectively, relating to variable interest entities)
|
|
$
|
204,461
|
|
|
$
|
191,879
|
|
Policyholder account balances (includes $0 and $21, respectively, relating to variable interest entities)
|
|
213,526
|
|
|
202,722
|
|
||
Other policy-related balances (includes $0 and $238, respectively, relating to variable interest entities)
|
|
14,447
|
|
|
14,255
|
|
||
Policyholder dividends payable
|
|
734
|
|
|
720
|
|
||
Policyholder dividend obligation
|
|
3,343
|
|
|
1,783
|
|
||
Payables for collateral under securities loaned and other transactions
|
|
45,790
|
|
|
36,871
|
|
||
Short-term debt
|
|
103
|
|
|
100
|
|
||
Long-term debt (includes $47 and $63, respectively, at estimated fair value, relating to variable interest entities)
|
|
16,586
|
|
|
18,023
|
|
||
Collateral financing arrangements
|
|
4,113
|
|
|
4,139
|
|
||
Junior subordinated debt securities
|
|
3,168
|
|
|
3,194
|
|
||
Deferred income tax liability
|
|
14,966
|
|
|
10,592
|
|
||
Other liabilities (includes $0 and $81, respectively, relating to variable interest entities)
|
|
32,285
|
|
|
23,561
|
|
||
Separate account liabilities (includes $0 and $1,022, respectively, relating to variable interest entities)
|
|
309,672
|
|
|
301,598
|
|
||
Total liabilities
|
|
863,194
|
|
|
809,437
|
|
||
Contingencies, Commitments and Guarantees (Note 13)
|
|
|
|
|
||||
Redeemable noncontrolling interests in partially-owned consolidated subsidiaries
|
|
—
|
|
|
77
|
|
||
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; 1,161,802,382 and 1,159,590,766 shares issued, respectively; 1,098,794,277 and 1,098,028,525 shares outstanding, respectively
|
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
|
30,783
|
|
|
30,749
|
|
||
Retained earnings
|
|
36,924
|
|
|
35,519
|
|
||
Treasury stock, at cost; 63,008,105 and 61,562,241 shares, respectively
|
|
(3,172
|
)
|
|
(3,102
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
14,632
|
|
|
4,771
|
|
||
Total MetLife, Inc.’s stockholders’ equity
|
|
79,179
|
|
|
67,949
|
|
||
Noncontrolling interests
|
|
194
|
|
|
470
|
|
||
Total equity
|
|
79,373
|
|
|
68,419
|
|
||
Total liabilities and equity
|
|
$
|
942,567
|
|
|
$
|
877,933
|
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Premiums
|
|
$
|
9,417
|
|
|
$
|
9,312
|
|
|
$
|
19,110
|
|
|
$
|
18,565
|
|
Universal life and investment-type product policy fees
|
|
2,286
|
|
|
2,434
|
|
|
4,630
|
|
|
4,828
|
|
||||
Net investment income
|
|
4,887
|
|
|
4,947
|
|
|
9,446
|
|
|
10,408
|
|
||||
Other revenues
|
|
487
|
|
|
518
|
|
|
974
|
|
|
1,013
|
|
||||
Net investment gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
|
(8
|
)
|
|
—
|
|
|
(86
|
)
|
|
(8
|
)
|
||||
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)
|
|
(6
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(12
|
)
|
||||
Other net investment gains (losses)
|
|
280
|
|
|
(131
|
)
|
|
373
|
|
|
173
|
|
||||
Total net investment gains (losses)
|
|
266
|
|
|
(133
|
)
|
|
281
|
|
|
153
|
|
||||
Net derivative gains (losses)
|
|
(2,099
|
)
|
|
(912
|
)
|
|
(764
|
)
|
|
(91
|
)
|
||||
Total revenues
|
|
15,244
|
|
|
16,166
|
|
|
33,677
|
|
|
34,876
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims
|
|
10,274
|
|
|
9,352
|
|
|
19,952
|
|
|
18,609
|
|
||||
Interest credited to policyholder account balances
|
|
1,500
|
|
|
1,298
|
|
|
2,826
|
|
|
3,293
|
|
||||
Policyholder dividends
|
|
324
|
|
|
331
|
|
|
639
|
|
|
670
|
|
||||
Other expenses
|
|
3,246
|
|
|
4,072
|
|
|
7,438
|
|
|
8,132
|
|
||||
Total expenses
|
|
15,344
|
|
|
15,053
|
|
|
30,855
|
|
|
30,704
|
|
||||
Income (loss) before provision for income tax
|
|
(100
|
)
|
|
1,113
|
|
|
2,822
|
|
|
4,172
|
|
||||
Provision for income tax expense (benefit)
|
|
(214
|
)
|
|
(6
|
)
|
|
505
|
|
|
890
|
|
||||
Net income (loss)
|
|
114
|
|
|
1,119
|
|
|
2,317
|
|
|
3,282
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
4
|
|
|
4
|
|
|
6
|
|
|
9
|
|
||||
Net income (loss) attributable to MetLife, Inc.
|
|
110
|
|
|
1,115
|
|
|
2,311
|
|
|
3,273
|
|
||||
Less: Preferred stock dividends
|
|
46
|
|
|
31
|
|
|
52
|
|
|
61
|
|
||||
Preferred stock repurchase premium
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
|
$
|
64
|
|
|
$
|
1,042
|
|
|
$
|
2,259
|
|
|
$
|
3,170
|
|
Comprehensive income (loss)
|
|
$
|
3,884
|
|
|
$
|
(3,994
|
)
|
|
$
|
12,272
|
|
|
$
|
(893
|
)
|
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax
|
|
7
|
|
|
(23
|
)
|
|
100
|
|
|
40
|
|
||||
Comprehensive income (loss) attributable to MetLife, Inc.
|
|
$
|
3,877
|
|
|
$
|
(3,971
|
)
|
|
$
|
12,172
|
|
|
$
|
(933
|
)
|
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.06
|
|
|
$
|
0.93
|
|
|
$
|
2.05
|
|
|
$
|
2.83
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
0.92
|
|
|
$
|
2.04
|
|
|
$
|
2.80
|
|
Cash dividends declared per common share
|
|
$
|
0.400
|
|
|
$
|
0.375
|
|
|
$
|
0.775
|
|
|
$
|
0.725
|
|
|
|
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, 2015
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
30,749
|
|
|
$
|
35,519
|
|
|
$
|
(3,102
|
)
|
|
$
|
4,771
|
|
|
$
|
67,949
|
|
|
$
|
470
|
|
|
$
|
68,419
|
|
Treasury stock acquired in connection with share repurchases
|
|
|
|
|
|
|
|
|
|
|
(70
|
)
|
|
|
|
(70
|
)
|
|
|
|
(70
|
)
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
34
|
|
|
|
|
34
|
|
|||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(52
|
)
|
|
|
|
|
|
(52
|
)
|
|
|
|
(52
|
)
|
|||||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
|
(854
|
)
|
|
|
|
|
|
(854
|
)
|
|
|
|
(854
|
)
|
|||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(376
|
)
|
|
(376
|
)
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
2,311
|
|
|
|
|
|
|
2,311
|
|
|
6
|
|
|
2,317
|
|
||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
|
9,861
|
|
|
9,861
|
|
|
94
|
|
|
9,955
|
|
||||||||||||||
Balance at June 30, 2016
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
30,783
|
|
|
$
|
36,924
|
|
|
$
|
(3,172
|
)
|
|
$
|
14,632
|
|
|
$
|
79,179
|
|
|
$
|
194
|
|
|
$
|
79,373
|
|
|
|
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, 2014
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
30,543
|
|
|
$
|
32,020
|
|
|
$
|
(1,172
|
)
|
|
$
|
10,649
|
|
|
$
|
72,053
|
|
|
$
|
507
|
|
|
$
|
72,560
|
|
Repurchase of preferred stock
|
|
(1
|
)
|
|
|
|
(1,459
|
)
|
|
|
|
|
|
|
|
(1,460
|
)
|
|
|
|
(1,460
|
)
|
||||||||||||||
Preferred stock repurchase premium
|
|
|
|
|
|
|
|
(42
|
)
|
|
|
|
|
|
(42
|
)
|
|
|
|
(42
|
)
|
|||||||||||||||
Preferred stock issuance
|
|
|
|
|
|
1,483
|
|
|
|
|
|
|
|
|
1,483
|
|
|
|
|
1,483
|
|
|||||||||||||||
Treasury stock acquired in connection with share repurchases
|
|
|
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
(1,000
|
)
|
|
|
|
(1,000
|
)
|
|||||||||||||||
Stock-based compensation
|
|
|
|
|
|
151
|
|
|
|
|
|
|
|
|
151
|
|
|
|
|
151
|
|
|||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(61
|
)
|
|
|
|
|
|
(61
|
)
|
|
|
|
(61
|
)
|
|||||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
|
(814
|
)
|
|
|
|
|
|
(814
|
)
|
|
|
|
(814
|
)
|
|||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
3,273
|
|
|
|
|
|
|
3,273
|
|
|
9
|
|
|
3,282
|
|
||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
|
(4,206
|
)
|
|
(4,206
|
)
|
|
31
|
|
|
(4,175
|
)
|
||||||||||||||
Balance at June 30, 2015
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
30,718
|
|
|
$
|
34,376
|
|
|
$
|
(2,172
|
)
|
|
$
|
6,443
|
|
|
$
|
69,377
|
|
|
$
|
520
|
|
|
$
|
69,897
|
|
(1)
|
Net income (loss) attributable to noncontrolling interests did not exclude any gains of redeemable noncontrolling interests in partially-owned consolidated subsidiaries at
June 30,
2016
. Net income (loss) attributable to noncontrolling interests excluded losses of redeemable noncontrolling interests in partially-owned consolidated subsidiaries of less than
$1 million
at
June 30,
2015
.
|
|
Six Months
Ended June 30, |
||||||
|
2016
|
|
2015
|
||||
Net cash provided by (used in) operating activities
|
$
|
6,255
|
|
|
$
|
6,888
|
|
Cash flows from investing activities
|
|
|
|
||||
Sales, maturities and repayments of:
|
|
|
|
||||
Fixed maturity securities
|
67,505
|
|
|
77,865
|
|
||
Equity securities
|
893
|
|
|
184
|
|
||
Mortgage loans
|
6,751
|
|
|
6,494
|
|
||
Real estate and real estate joint ventures
|
171
|
|
|
503
|
|
||
Other limited partnership interests
|
450
|
|
|
582
|
|
||
Purchases of:
|
|
|
|
||||
Fixed maturity securities
|
(74,049
|
)
|
|
(72,892
|
)
|
||
Equity securities
|
(776
|
)
|
|
(227
|
)
|
||
Mortgage loans
|
(9,088
|
)
|
|
(10,545
|
)
|
||
Real estate and real estate joint ventures
|
(674
|
)
|
|
(334
|
)
|
||
Other limited partnership interests
|
(401
|
)
|
|
(669
|
)
|
||
Cash received in connection with freestanding derivatives
|
2,478
|
|
|
1,524
|
|
||
Cash paid in connection with freestanding derivatives
|
(2,709
|
)
|
|
(2,600
|
)
|
||
Cash received under repurchase agreements (Note 6)
|
—
|
|
|
199
|
|
||
Cash paid under reverse repurchase agreements (Note 6)
|
—
|
|
|
(199
|
)
|
||
Purchases of investments in operating joint ventures
|
(39
|
)
|
|
—
|
|
||
Net change in policy loans
|
107
|
|
|
(5
|
)
|
||
Net change in short-term investments
|
(415
|
)
|
|
(6,233
|
)
|
||
Net change in other invested assets
|
133
|
|
|
(257
|
)
|
||
Other, net
|
(245
|
)
|
|
(150
|
)
|
||
Net cash provided by (used in) investing activities
|
(9,908
|
)
|
|
(6,760
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Policyholder account balances:
|
|
|
|
||||
Deposits
|
41,348
|
|
|
44,433
|
|
||
Withdrawals
|
(39,893
|
)
|
|
(46,372
|
)
|
||
Net change in payables for collateral under securities loaned and other transactions
|
8,594
|
|
|
205
|
|
||
Net change in short-term debt
|
3
|
|
|
—
|
|
||
Long-term debt issued
|
—
|
|
|
1,492
|
|
||
Long-term debt repaid
|
(1,264
|
)
|
|
(1,020
|
)
|
||
Collateral financing arrangements repaid
|
(26
|
)
|
|
(32
|
)
|
||
Treasury stock acquired in connection with share repurchases
|
(70
|
)
|
|
(1,000
|
)
|
||
Preferred stock issued, net of issuance costs
|
—
|
|
|
1,485
|
|
||
Repurchase of preferred stock
|
—
|
|
|
(905
|
)
|
||
Preferred stock repurchase premium
|
—
|
|
|
(27
|
)
|
||
Dividends on preferred stock
|
(52
|
)
|
|
(61
|
)
|
||
Dividends on common stock
|
(854
|
)
|
|
(814
|
)
|
||
Other, net
|
(170
|
)
|
|
52
|
|
||
Net cash provided by (used in) financing activities
|
7,616
|
|
|
(2,564
|
)
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
|
352
|
|
|
(298
|
)
|
||
Change in cash and cash equivalents
|
4,315
|
|
|
(2,734
|
)
|
||
Cash and cash equivalents, beginning of period
|
12,752
|
|
|
10,808
|
|
||
Cash and cash equivalents, end of period
|
$
|
17,067
|
|
|
$
|
8,074
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Net cash paid (received) for:
|
|
|
|
||||
Interest
|
$
|
623
|
|
|
$
|
587
|
|
Income tax
|
$
|
393
|
|
|
$
|
344
|
|
Non-cash transactions:
|
|
|
|
||||
Reduction of fixed maturity securities in connection with a reinsurance transaction
|
$
|
224
|
|
|
$
|
—
|
|
Deconsolidation of operating joint venture (Note 6):
|
|
|
|
||||
Reduction of fixed maturity securities
|
$
|
917
|
|
|
$
|
—
|
|
Reduction of noncontrolling interests
|
$
|
373
|
|
|
$
|
—
|
|
•
|
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB Fees”);
|
•
|
Net investment income: (i) includes investment hedge adjustments which represent 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.
|
•
|
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 deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs and (iii) Market Value Adjustments;
|
•
|
Amortization of negative VOBA excludes amounts related to Market Value Adjustments;
|
•
|
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition, integration and other costs.
|
|
|
Operating Results
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended June 30, 2016
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
1,695
|
|
|
$
|
4,276
|
|
|
$
|
517
|
|
|
$
|
716
|
|
|
$
|
7,204
|
|
|
$
|
1,681
|
|
|
$
|
519
|
|
|
$
|
13
|
|
|
$
|
9,417
|
|
|
$
|
—
|
|
|
$
|
9,417
|
|
Universal life and investment-type product policy fees
|
|
1,156
|
|
|
197
|
|
|
61
|
|
|
269
|
|
|
1,683
|
|
|
370
|
|
|
95
|
|
|
25
|
|
|
2,173
|
|
|
113
|
|
|
2,286
|
|
|||||||||||
Net investment income
|
|
1,950
|
|
|
458
|
|
|
1,421
|
|
|
247
|
|
|
4,076
|
|
|
678
|
|
|
83
|
|
|
44
|
|
|
4,881
|
|
|
6
|
|
|
4,887
|
|
|||||||||||
Other revenues
|
|
224
|
|
|
117
|
|
|
72
|
|
|
9
|
|
|
422
|
|
|
16
|
|
|
19
|
|
|
27
|
|
|
484
|
|
|
3
|
|
|
487
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
266
|
|
|
266
|
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,099
|
)
|
|
(2,099
|
)
|
|||||||||||
Total revenues
|
|
5,025
|
|
|
5,048
|
|
|
2,071
|
|
|
1,241
|
|
|
13,385
|
|
|
2,745
|
|
|
716
|
|
|
109
|
|
|
16,955
|
|
|
(1,711
|
)
|
|
15,244
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
2,937
|
|
|
3,990
|
|
|
1,181
|
|
|
645
|
|
|
8,753
|
|
|
1,324
|
|
|
283
|
|
|
25
|
|
|
10,385
|
|
|
213
|
|
|
10,598
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
525
|
|
|
37
|
|
|
313
|
|
|
84
|
|
|
959
|
|
|
324
|
|
|
30
|
|
|
1
|
|
|
1,314
|
|
|
186
|
|
|
1,500
|
|
|||||||||||
Capitalization of DAC
|
|
(245
|
)
|
|
(39
|
)
|
|
(1
|
)
|
|
(96
|
)
|
|
(381
|
)
|
|
(426
|
)
|
|
(106
|
)
|
|
(2
|
)
|
|
(915
|
)
|
|
—
|
|
|
(915
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
487
|
|
|
39
|
|
|
4
|
|
|
75
|
|
|
605
|
|
|
304
|
|
|
103
|
|
|
3
|
|
|
1,015
|
|
|
(894
|
)
|
|
121
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
(4
|
)
|
|
—
|
|
|
(61
|
)
|
|
(6
|
)
|
|
(67
|
)
|
|||||||||||
Interest expense on debt
|
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
299
|
|
|
303
|
|
|
3
|
|
|
306
|
|
|||||||||||
Other expenses
|
|
1,124
|
|
|
685
|
|
|
109
|
|
|
373
|
|
|
2,291
|
|
|
877
|
|
|
336
|
|
|
155
|
|
|
3,659
|
|
|
142
|
|
|
3,801
|
|
|||||||||||
Total expenses
|
|
4,829
|
|
|
4,713
|
|
|
1,608
|
|
|
1,081
|
|
|
12,231
|
|
|
2,346
|
|
|
642
|
|
|
481
|
|
|
15,700
|
|
|
(356
|
)
|
|
15,344
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
12
|
|
|
114
|
|
|
161
|
|
|
32
|
|
|
319
|
|
|
140
|
|
|
10
|
|
|
(184
|
)
|
|
285
|
|
|
(499
|
)
|
|
(214
|
)
|
|||||||||||
Operating earnings
|
|
$
|
184
|
|
|
$
|
221
|
|
|
$
|
302
|
|
|
$
|
128
|
|
|
$
|
835
|
|
|
$
|
259
|
|
|
$
|
64
|
|
|
$
|
(188
|
)
|
|
970
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,711
|
)
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
356
|
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
114
|
|
|
|
|
$
|
114
|
|
|
|
Operating Results
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended June 30, 2015
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated
|
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
1,747
|
|
|
$
|
4,104
|
|
|
$
|
319
|
|
|
$
|
783
|
|
|
$
|
6,953
|
|
|
$
|
1,809
|
|
|
$
|
525
|
|
|
$
|
26
|
|
|
$
|
9,313
|
|
|
$
|
(1
|
)
|
|
$
|
9,312
|
|
Universal life and investment-type product policy fees
|
|
1,252
|
|
|
183
|
|
|
59
|
|
|
301
|
|
|
1,795
|
|
|
400
|
|
|
114
|
|
|
26
|
|
|
2,335
|
|
|
99
|
|
|
2,434
|
|
|||||||||||
Net investment income
|
|
2,003
|
|
|
481
|
|
|
1,526
|
|
|
283
|
|
|
4,293
|
|
|
679
|
|
|
84
|
|
|
129
|
|
|
5,185
|
|
|
(238
|
)
|
|
4,947
|
|
|||||||||||
Other revenues
|
|
263
|
|
|
114
|
|
|
77
|
|
|
7
|
|
|
461
|
|
|
28
|
|
|
19
|
|
|
19
|
|
|
527
|
|
|
(9
|
)
|
|
518
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
(133
|
)
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(912
|
)
|
|
(912
|
)
|
|||||||||||
Total revenues
|
|
5,265
|
|
|
4,882
|
|
|
1,981
|
|
|
1,374
|
|
|
13,502
|
|
|
2,916
|
|
|
742
|
|
|
200
|
|
|
17,360
|
|
|
(1,194
|
)
|
|
16,166
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
2,373
|
|
|
3,805
|
|
|
933
|
|
|
744
|
|
|
7,855
|
|
|
1,375
|
|
|
265
|
|
|
8
|
|
|
9,503
|
|
|
180
|
|
|
9,683
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
551
|
|
|
38
|
|
|
294
|
|
|
89
|
|
|
972
|
|
|
328
|
|
|
34
|
|
|
8
|
|
|
1,342
|
|
|
(44
|
)
|
|
1,298
|
|
|||||||||||
Capitalization of DAC
|
|
(257
|
)
|
|
(36
|
)
|
|
(4
|
)
|
|
(100
|
)
|
|
(397
|
)
|
|
(398
|
)
|
|
(132
|
)
|
|
—
|
|
|
(927
|
)
|
|
—
|
|
|
(927
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
400
|
|
|
39
|
|
|
6
|
|
|
86
|
|
|
531
|
|
|
336
|
|
|
133
|
|
|
1
|
|
|
1,001
|
|
|
(104
|
)
|
|
897
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(78
|
)
|
|
(4
|
)
|
|
—
|
|
|
(83
|
)
|
|
(9
|
)
|
|
(92
|
)
|
|||||||||||
Interest expense on debt
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
306
|
|
|
307
|
|
|
1
|
|
|
308
|
|
|||||||||||
Other expenses
|
|
1,220
|
|
|
681
|
|
|
130
|
|
|
419
|
|
|
2,450
|
|
|
869
|
|
|
389
|
|
|
174
|
|
|
3,882
|
|
|
4
|
|
|
3,886
|
|
|||||||||||
Total expenses
|
|
4,287
|
|
|
4,527
|
|
|
1,360
|
|
|
1,237
|
|
|
11,411
|
|
|
2,432
|
|
|
685
|
|
|
497
|
|
|
15,025
|
|
|
28
|
|
|
15,053
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
288
|
|
|
124
|
|
|
215
|
|
|
21
|
|
|
648
|
|
|
59
|
|
|
7
|
|
|
(175
|
)
|
|
539
|
|
|
(545
|
)
|
|
(6
|
)
|
|||||||||||
Operating earnings
|
|
$
|
690
|
|
|
$
|
231
|
|
|
$
|
406
|
|
|
$
|
116
|
|
|
$
|
1,443
|
|
|
$
|
425
|
|
|
$
|
50
|
|
|
$
|
(122
|
)
|
|
1,796
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,194
|
)
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
545
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,119
|
|
|
|
|
$
|
1,119
|
|
|
|
Operating Results
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Six Months Ended June 30, 2016
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
|
Adjustments
|
|
Total
Consolidated |
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
3,435
|
|
|
$
|
8,570
|
|
|
$
|
875
|
|
|
$
|
1,407
|
|
|
$
|
14,287
|
|
|
$
|
3,339
|
|
|
$
|
1,019
|
|
|
$
|
39
|
|
|
$
|
18,684
|
|
|
$
|
426
|
|
|
$
|
19,110
|
|
Universal life and investment-type product policy fees
|
|
2,305
|
|
|
382
|
|
|
141
|
|
|
537
|
|
|
3,365
|
|
|
720
|
|
|
190
|
|
|
49
|
|
|
4,324
|
|
|
306
|
|
|
4,630
|
|
|||||||||||
Net investment income
|
|
3,830
|
|
|
905
|
|
|
2,763
|
|
|
504
|
|
|
8,002
|
|
|
1,296
|
|
|
163
|
|
|
126
|
|
|
9,587
|
|
|
(141
|
)
|
|
9,446
|
|
|||||||||||
Other revenues
|
|
439
|
|
|
248
|
|
|
142
|
|
|
16
|
|
|
845
|
|
|
33
|
|
|
39
|
|
|
54
|
|
|
971
|
|
|
3
|
|
|
974
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
281
|
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(764
|
)
|
|
(764
|
)
|
|||||||||||
Total revenues
|
|
10,009
|
|
|
10,105
|
|
|
3,921
|
|
|
2,464
|
|
|
26,499
|
|
|
5,388
|
|
|
1,411
|
|
|
268
|
|
|
33,566
|
|
|
111
|
|
|
33,677
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
5,395
|
|
|
8,024
|
|
|
2,143
|
|
|
1,262
|
|
|
16,824
|
|
|
2,560
|
|
|
544
|
|
|
50
|
|
|
19,978
|
|
|
613
|
|
|
20,591
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
1,047
|
|
|
74
|
|
|
623
|
|
|
164
|
|
|
1,908
|
|
|
643
|
|
|
59
|
|
|
5
|
|
|
2,615
|
|
|
211
|
|
|
2,826
|
|
|||||||||||
Capitalization of DAC
|
|
(500
|
)
|
|
(75
|
)
|
|
(1
|
)
|
|
(193
|
)
|
|
(769
|
)
|
|
(811
|
)
|
|
(207
|
)
|
|
(4
|
)
|
|
(1,791
|
)
|
|
(105
|
)
|
|
(1,896
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
860
|
|
|
79
|
|
|
9
|
|
|
148
|
|
|
1,096
|
|
|
590
|
|
|
205
|
|
|
5
|
|
|
1,896
|
|
|
(780
|
)
|
|
1,116
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
(7
|
)
|
|
—
|
|
|
(128
|
)
|
|
(38
|
)
|
|
(166
|
)
|
|||||||||||
Interest expense on debt
|
|
3
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
615
|
|
|
3
|
|
|
618
|
|
|||||||||||
Other expenses
|
|
2,273
|
|
|
1,397
|
|
|
229
|
|
|
744
|
|
|
4,643
|
|
|
1,728
|
|
|
669
|
|
|
329
|
|
|
7,369
|
|
|
397
|
|
|
7,766
|
|
|||||||||||
Total expenses
|
|
9,078
|
|
|
9,500
|
|
|
3,007
|
|
|
2,125
|
|
|
23,710
|
|
|
4,589
|
|
|
1,263
|
|
|
992
|
|
|
30,554
|
|
|
301
|
|
|
30,855
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
215
|
|
|
210
|
|
|
317
|
|
|
74
|
|
|
816
|
|
|
235
|
|
|
21
|
|
|
(365
|
)
|
|
707
|
|
|
(202
|
)
|
|
505
|
|
|||||||||||
Operating earnings
|
|
$
|
716
|
|
|
$
|
395
|
|
|
$
|
597
|
|
|
$
|
265
|
|
|
$
|
1,973
|
|
|
$
|
564
|
|
|
$
|
127
|
|
|
$
|
(359
|
)
|
|
2,305
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111
|
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(301
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
202
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,317
|
|
|
|
|
$
|
2,317
|
|
|
|
Operating Results
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Six Months Ended June 30, 2015
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Total
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
|
Adjustments
|
|
Total
Consolidated |
||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Premiums
|
|
$
|
3,496
|
|
|
$
|
8,221
|
|
|
$
|
737
|
|
|
$
|
1,482
|
|
|
$
|
13,936
|
|
|
$
|
3,561
|
|
|
$
|
1,033
|
|
|
$
|
36
|
|
|
$
|
18,566
|
|
|
$
|
(1
|
)
|
|
$
|
18,565
|
|
Universal life and investment-type product policy fees
|
|
2,488
|
|
|
371
|
|
|
113
|
|
|
595
|
|
|
3,567
|
|
|
797
|
|
|
216
|
|
|
49
|
|
|
4,629
|
|
|
199
|
|
|
4,828
|
|
|||||||||||
Net investment income
|
|
3,983
|
|
|
959
|
|
|
2,956
|
|
|
501
|
|
|
8,399
|
|
|
1,363
|
|
|
167
|
|
|
238
|
|
|
10,167
|
|
|
241
|
|
|
10,408
|
|
|||||||||||
Other revenues
|
|
514
|
|
|
227
|
|
|
148
|
|
|
17
|
|
|
906
|
|
|
56
|
|
|
29
|
|
|
39
|
|
|
1,030
|
|
|
(17
|
)
|
|
1,013
|
|
|||||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|
153
|
|
|||||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
(91
|
)
|
|||||||||||
Total revenues
|
|
10,481
|
|
|
9,778
|
|
|
3,954
|
|
|
2,595
|
|
|
26,808
|
|
|
5,777
|
|
|
1,445
|
|
|
362
|
|
|
34,392
|
|
|
484
|
|
|
34,876
|
|
|||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
4,822
|
|
|
7,640
|
|
|
1,924
|
|
|
1,325
|
|
|
15,711
|
|
|
2,715
|
|
|
504
|
|
|
20
|
|
|
18,950
|
|
|
329
|
|
|
19,279
|
|
|||||||||||
Interest credited to policyholder account balances
|
|
1,093
|
|
|
75
|
|
|
587
|
|
|
175
|
|
|
1,930
|
|
|
665
|
|
|
64
|
|
|
14
|
|
|
2,673
|
|
|
620
|
|
|
3,293
|
|
|||||||||||
Capitalization of DAC
|
|
(504
|
)
|
|
(72
|
)
|
|
(10
|
)
|
|
(211
|
)
|
|
(797
|
)
|
|
(833
|
)
|
|
(265
|
)
|
|
—
|
|
|
(1,895
|
)
|
|
—
|
|
|
(1,895
|
)
|
|||||||||||
Amortization of DAC and VOBA
|
|
775
|
|
|
80
|
|
|
11
|
|
|
164
|
|
|
1,030
|
|
|
662
|
|
|
261
|
|
|
1
|
|
|
1,954
|
|
|
(32
|
)
|
|
1,922
|
|
|||||||||||
Amortization of negative VOBA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(164
|
)
|
|
(8
|
)
|
|
—
|
|
|
(173
|
)
|
|
(19
|
)
|
|
(192
|
)
|
|||||||||||
Interest expense on debt
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
603
|
|
|
604
|
|
|
2
|
|
|
606
|
|
|||||||||||
Other expenses
|
|
2,396
|
|
|
1,345
|
|
|
254
|
|
|
844
|
|
|
4,839
|
|
|
1,773
|
|
|
751
|
|
|
319
|
|
|
7,682
|
|
|
9
|
|
|
7,691
|
|
|||||||||||
Total expenses
|
|
8,581
|
|
|
9,068
|
|
|
2,768
|
|
|
2,296
|
|
|
22,713
|
|
|
4,818
|
|
|
1,307
|
|
|
957
|
|
|
29,795
|
|
|
909
|
|
|
30,704
|
|
|||||||||||
Provision for income tax expense (benefit)
|
|
557
|
|
|
251
|
|
|
411
|
|
|
52
|
|
|
1,271
|
|
|
207
|
|
|
18
|
|
|
(363
|
)
|
|
1,133
|
|
|
(243
|
)
|
|
890
|
|
|||||||||||
Operating earnings
|
|
$
|
1,343
|
|
|
$
|
459
|
|
|
$
|
775
|
|
|
$
|
247
|
|
|
$
|
2,824
|
|
|
$
|
752
|
|
|
$
|
120
|
|
|
$
|
(232
|
)
|
|
3,464
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
484
|
|
|
|
|
|
|||||||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(909
|
)
|
|
|
|
|
|||||||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
243
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,282
|
|
|
|
|
$
|
3,282
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(In millions)
|
||||||
Retail
|
|
$
|
364,611
|
|
|
$
|
347,257
|
|
Group, Voluntary & Worksite Benefits
|
|
51,721
|
|
|
46,476
|
|
||
Corporate Benefit Funding
|
|
236,311
|
|
|
225,015
|
|
||
Latin America
|
|
68,971
|
|
|
65,266
|
|
||
Asia
|
|
131,537
|
|
|
113,895
|
|
||
EMEA
|
|
27,007
|
|
|
26,767
|
|
||
Corporate & Other
|
|
62,409
|
|
|
53,257
|
|
||
Total
|
|
$
|
942,567
|
|
|
$
|
877,933
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
||||||||||||||||
|
|
In the
Event of Death
|
|
At
Annuitization
|
|
In the
Event of Death
|
|
At
Annuitization
|
|
||||||||||||
|
|
(Dollars in millions)
|
|
||||||||||||||||||
Annuity Contracts (1):
|
|
|
|
|
|
|
|
|
|
||||||||||||
Variable Annuity Guarantees:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total account value (2), (3)
|
|
$
|
180,789
|
|
|
$
|
91,042
|
|
|
$
|
181,413
|
|
|
$
|
91,240
|
|
|
||||
Separate account value
|
|
$
|
151,174
|
|
|
$
|
87,414
|
|
|
$
|
151,901
|
|
|
$
|
87,841
|
|
|
||||
Net amount at risk (2)
|
|
$
|
9,916
|
|
(4
|
)
|
$
|
4,150
|
|
(5
|
)
|
$
|
10,339
|
|
(4
|
)
|
$
|
2,762
|
|
(5
|
)
|
Average attained age of contractholders
|
|
66 years
|
|
|
66 years
|
|
|
66 years
|
|
|
66 years
|
|
|
||||||||
Other Annuity Guarantees:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total account value (3)
|
|
N/A
|
|
|
$
|
1,514
|
|
|
N/A
|
|
|
$
|
1,560
|
|
|
||||||
Net amount at risk
|
|
N/A
|
|
|
$
|
401
|
|
(6
|
)
|
N/A
|
|
|
$
|
422
|
|
(6
|
)
|
||||
Average attained age of contractholders
|
|
N/A
|
|
|
51 years
|
|
|
N/A
|
|
|
51 years
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Secondary
Guarantees
|
|
Paid-Up
Guarantees
|
|
Secondary
Guarantees
|
|
Paid-Up
Guarantees
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Universal and Variable Life Contracts (1):
|
|
|
|
|
|
|
|
|
||||||||
Total account value (3)
|
|
$
|
17,273
|
|
|
$
|
3,408
|
|
|
$
|
17,211
|
|
|
$
|
3,461
|
|
Net amount at risk (7)
|
|
$
|
175,990
|
|
|
$
|
18,514
|
|
|
$
|
175,958
|
|
|
$
|
19,047
|
|
Average attained age of policyholders
|
|
57 years
|
|
|
62 years
|
|
|
57 years
|
|
|
62 years
|
|
(1)
|
The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.
|
(2)
|
Includes amounts, which are not reported on the 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.
|
(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.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(In millions)
|
||||||
Closed Block Liabilities
|
|
|
|
|
||||
Future policy benefits
|
|
$
|
40,976
|
|
|
$
|
41,278
|
|
Other policy-related balances
|
|
240
|
|
|
249
|
|
||
Policyholder dividends payable
|
|
491
|
|
|
468
|
|
||
Policyholder dividend obligation
|
|
3,343
|
|
|
1,783
|
|
||
Other liabilities
|
|
726
|
|
|
380
|
|
||
Total closed block liabilities
|
|
45,776
|
|
|
44,158
|
|
||
Assets Designated to the Closed Block
|
|
|
|
|
||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities available-for-sale, at estimated fair value
|
|
29,404
|
|
|
27,556
|
|
||
Equity securities available-for-sale, at estimated fair value
|
|
110
|
|
|
111
|
|
||
Mortgage loans
|
|
5,825
|
|
|
6,022
|
|
||
Policy loans
|
|
4,558
|
|
|
4,642
|
|
||
Real estate and real estate joint ventures
|
|
566
|
|
|
462
|
|
||
Other invested assets
|
|
1,106
|
|
|
1,066
|
|
||
Total investments
|
|
41,569
|
|
|
39,859
|
|
||
Cash and cash equivalents
|
|
220
|
|
|
236
|
|
||
Accrued investment income
|
|
463
|
|
|
474
|
|
||
Premiums, reinsurance and other receivables
|
|
51
|
|
|
56
|
|
||
Current income tax recoverable
|
|
—
|
|
|
11
|
|
||
Deferred income tax assets
|
|
200
|
|
|
234
|
|
||
Total assets designated to the closed block
|
|
42,503
|
|
|
40,870
|
|
||
Excess of closed block liabilities over assets designated to the closed block
|
|
3,273
|
|
|
3,288
|
|
||
Amounts included in accumulated other comprehensive income (loss) (“AOCI”)
|
|
|
|
|
||||
Unrealized investment gains (losses), net of income tax
|
|
2,435
|
|
|
1,382
|
|
||
Unrealized gains (losses) on derivatives, net of income tax
|
|
100
|
|
|
76
|
|
||
Allocated to policyholder dividend obligation, net of income tax
|
|
(2,173
|
)
|
|
(1,159
|
)
|
||
Total amounts included in AOCI
|
|
362
|
|
|
299
|
|
||
Maximum future earnings to be recognized from closed block assets and liabilities
|
|
$
|
3,635
|
|
|
$
|
3,587
|
|
|
|
Six Months
Ended June 30, 2016 |
|
Year
Ended December 31, 2015 |
||||
|
|
(In millions)
|
||||||
Balance, beginning of period
|
|
$
|
1,783
|
|
|
$
|
3,155
|
|
Change in unrealized investment and derivative gains (losses)
|
|
1,560
|
|
|
(1,372
|
)
|
||
Balance, end of period
|
|
$
|
3,343
|
|
|
$
|
1,783
|
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Premiums
|
|
$
|
444
|
|
|
$
|
457
|
|
|
$
|
861
|
|
|
$
|
887
|
|
Net investment income
|
|
469
|
|
|
498
|
|
|
949
|
|
|
1,013
|
|
||||
Net investment gains (losses)
|
|
12
|
|
|
2
|
|
|
(16
|
)
|
|
1
|
|
||||
Net derivative gains (losses)
|
|
4
|
|
|
(13
|
)
|
|
(7
|
)
|
|
12
|
|
||||
Total revenues
|
|
929
|
|
|
944
|
|
|
1,787
|
|
|
1,913
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims
|
|
632
|
|
|
643
|
|
|
1,242
|
|
|
1,251
|
|
||||
Policyholder dividends
|
|
246
|
|
|
244
|
|
|
491
|
|
|
484
|
|
||||
Other expenses
|
|
35
|
|
|
36
|
|
|
67
|
|
|
73
|
|
||||
Total expenses
|
|
913
|
|
|
923
|
|
|
1,800
|
|
|
1,808
|
|
||||
Revenues, net of expenses before provision for income tax expense (benefit)
|
|
16
|
|
|
21
|
|
|
(13
|
)
|
|
105
|
|
||||
Provision for income tax expense (benefit)
|
|
6
|
|
|
8
|
|
|
(5
|
)
|
|
37
|
|
||||
Revenues, net of expenses and provision for income tax expense (benefit)
|
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
(8
|
)
|
|
$
|
68
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||||||||||
|
Cost or
Amortized
Cost
|
|
Gross Unrealized
|
|
Estimated
Fair
Value
|
|
Cost or
Amortized
Cost
|
|
Gross Unrealized
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||||||
|
Gains
|
|
Temporary
Losses
|
|
OTTI
Losses
|
|
Gains
|
|
Temporary
Losses
|
|
OTTI
Losses
|
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. corporate
|
$
|
95,218
|
|
|
$
|
10,302
|
|
|
$
|
905
|
|
|
$
|
—
|
|
|
$
|
104,615
|
|
|
$
|
96,466
|
|
|
$
|
6,583
|
|
|
$
|
2,255
|
|
|
$
|
—
|
|
|
$
|
100,794
|
|
U.S. government and agency
|
59,591
|
|
|
10,167
|
|
|
21
|
|
|
—
|
|
|
69,737
|
|
|
56,499
|
|
|
5,373
|
|
|
226
|
|
|
—
|
|
|
61,646
|
|
||||||||||
Foreign corporate
|
56,813
|
|
|
3,865
|
|
|
1,466
|
|
|
—
|
|
|
59,212
|
|
|
56,003
|
|
|
3,019
|
|
|
1,822
|
|
|
2
|
|
|
57,198
|
|
||||||||||
Foreign government
|
52,293
|
|
|
10,113
|
|
|
145
|
|
|
—
|
|
|
62,261
|
|
|
45,451
|
|
|
5,269
|
|
|
221
|
|
|
—
|
|
|
50,499
|
|
||||||||||
RMBS
|
43,223
|
|
|
1,790
|
|
|
364
|
|
|
51
|
|
|
44,598
|
|
|
37,914
|
|
|
1,366
|
|
|
424
|
|
|
59
|
|
|
38,797
|
|
||||||||||
State and political subdivision
|
14,403
|
|
|
3,024
|
|
|
11
|
|
|
6
|
|
|
17,410
|
|
|
13,723
|
|
|
1,795
|
|
|
67
|
|
|
10
|
|
|
15,441
|
|
||||||||||
ABS
|
16,689
|
|
|
141
|
|
|
309
|
|
|
3
|
|
|
16,518
|
|
|
14,498
|
|
|
131
|
|
|
229
|
|
|
6
|
|
|
14,394
|
|
||||||||||
CMBS (1)
|
12,591
|
|
|
660
|
|
|
95
|
|
|
(1
|
)
|
|
13,157
|
|
|
12,410
|
|
|
347
|
|
|
125
|
|
|
(1
|
)
|
|
12,633
|
|
||||||||||
Total fixed maturity securities
|
$
|
350,821
|
|
|
$
|
40,062
|
|
|
$
|
3,316
|
|
|
$
|
59
|
|
|
$
|
387,508
|
|
|
$
|
332,964
|
|
|
$
|
23,883
|
|
|
$
|
5,369
|
|
|
$
|
76
|
|
|
$
|
351,402
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock
|
$
|
2,013
|
|
|
$
|
431
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
2,426
|
|
|
$
|
1,962
|
|
|
$
|
397
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
2,252
|
|
Non-redeemable preferred stock
|
901
|
|
|
70
|
|
|
64
|
|
|
—
|
|
|
907
|
|
|
1,035
|
|
|
85
|
|
|
51
|
|
|
—
|
|
|
1,069
|
|
||||||||||
Total equity securities
|
$
|
2,914
|
|
|
$
|
501
|
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
3,333
|
|
|
$
|
2,997
|
|
|
$
|
482
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
3,321
|
|
(1)
|
The noncredit loss component of other-than-temporary impairment (“OTTI”) losses for CMBS was in an unrealized gain position of
$1 million
at both
June 30, 2016
and
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).”
|
|
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
|
$
|
13,404
|
|
|
$
|
80,755
|
|
|
$
|
69,842
|
|
|
$
|
114,317
|
|
|
$
|
72,503
|
|
|
$
|
350,821
|
|
Estimated fair value
|
$
|
13,499
|
|
|
$
|
85,064
|
|
|
$
|
74,476
|
|
|
$
|
140,196
|
|
|
$
|
74,273
|
|
|
$
|
387,508
|
|
|
June 30, 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
|
$
|
7,932
|
|
|
$
|
394
|
|
|
$
|
5,581
|
|
|
$
|
511
|
|
|
$
|
27,526
|
|
|
$
|
1,629
|
|
|
$
|
3,762
|
|
|
$
|
626
|
|
U.S. government and agency
|
1,026
|
|
|
3
|
|
|
164
|
|
|
18
|
|
|
19,628
|
|
|
222
|
|
|
298
|
|
|
4
|
|
||||||||
Foreign corporate
|
8,135
|
|
|
585
|
|
|
6,477
|
|
|
881
|
|
|
14,447
|
|
|
911
|
|
|
5,251
|
|
|
913
|
|
||||||||
Foreign government
|
1,298
|
|
|
83
|
|
|
807
|
|
|
62
|
|
|
3,530
|
|
|
166
|
|
|
429
|
|
|
55
|
|
||||||||
RMBS
|
5,221
|
|
|
183
|
|
|
3,033
|
|
|
232
|
|
|
13,467
|
|
|
287
|
|
|
2,431
|
|
|
196
|
|
||||||||
State and political subdivision
|
172
|
|
|
3
|
|
|
89
|
|
|
14
|
|
|
1,618
|
|
|
55
|
|
|
168
|
|
|
22
|
|
||||||||
ABS
|
5,136
|
|
|
176
|
|
|
4,555
|
|
|
136
|
|
|
7,329
|
|
|
124
|
|
|
2,823
|
|
|
111
|
|
||||||||
CMBS
|
900
|
|
|
45
|
|
|
982
|
|
|
49
|
|
|
4,876
|
|
|
81
|
|
|
637
|
|
|
43
|
|
||||||||
Total fixed maturity securities
|
$
|
29,820
|
|
|
$
|
1,472
|
|
|
$
|
21,688
|
|
|
$
|
1,903
|
|
|
$
|
92,421
|
|
|
$
|
3,475
|
|
|
$
|
15,799
|
|
|
$
|
1,970
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock
|
$
|
114
|
|
|
$
|
18
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
203
|
|
|
$
|
105
|
|
|
$
|
20
|
|
|
$
|
2
|
|
Non-redeemable preferred stock
|
50
|
|
|
6
|
|
|
168
|
|
|
58
|
|
|
79
|
|
|
2
|
|
|
200
|
|
|
49
|
|
||||||||
Total equity securities
|
$
|
164
|
|
|
$
|
24
|
|
|
$
|
175
|
|
|
$
|
58
|
|
|
$
|
282
|
|
|
$
|
107
|
|
|
$
|
220
|
|
|
$
|
51
|
|
Total number of securities in an unrealized loss position
|
2,783
|
|
|
|
|
1,965
|
|
|
|
|
6,366
|
|
|
|
|
1,489
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
Mortgage loans:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
45,165
|
|
|
65.1
|
%
|
|
$
|
44,012
|
|
|
65.6
|
%
|
Agricultural
|
13,434
|
|
|
19.4
|
|
|
13,188
|
|
|
19.6
|
|
||
Residential
|
10,659
|
|
|
15.4
|
|
|
9,734
|
|
|
14.5
|
|
||
Subtotal (1)
|
69,258
|
|
|
99.9
|
|
|
66,934
|
|
|
99.7
|
|
||
Valuation allowances
|
(467
|
)
|
|
(0.7
|
)
|
|
(318
|
)
|
|
(0.5
|
)
|
||
Subtotal mortgage loans, net
|
68,791
|
|
|
99.2
|
|
|
66,616
|
|
|
99.2
|
|
||
Residential — FVO
|
449
|
|
|
0.6
|
|
|
314
|
|
|
0.5
|
|
||
Commercial mortgage loans held by CSEs — FVO
|
159
|
|
|
0.2
|
|
|
172
|
|
|
0.3
|
|
||
Total mortgage loans, net
|
$
|
69,399
|
|
|
100.0
|
%
|
|
$
|
67,102
|
|
|
100.0
|
%
|
(1)
|
Purchases of mortgage loans were
$1.2 billion
and
$1.4 billion
for the
three months
and
six months ended
June 30, 2016
,
respectively, and
$785 million
and
$2.2 billion
for the
three months
and
six months ended
June 30, 2015
, respectively.
|
|
Evaluated Individually for Credit Losses
|
|
Evaluated Collectively for Credit Losses
|
|
Impaired Loans
|
||||||||||||||||||||||||||
|
Impaired Loans with a
Valuation Allowance
|
|
Impaired Loans without a Valuation Allowance
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Unpaid Principal Balance
|
|
Recorded
Investment
|
|
Valuation
Allowances |
|
Unpaid Principal Balance
|
|
Recorded
Investment |
|
Recorded
Investment |
|
Valuation
Allowances |
|
Carrying
Value |
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
176
|
|
|
$
|
157
|
|
|
$
|
143
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
44,996
|
|
|
$
|
224
|
|
|
$
|
26
|
|
Agricultural
|
16
|
|
|
13
|
|
|
1
|
|
|
39
|
|
|
38
|
|
|
13,383
|
|
|
40
|
|
|
50
|
|
||||||||
Residential
|
—
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|
189
|
|
|
10,470
|
|
|
59
|
|
|
189
|
|
||||||||
Total
|
$
|
192
|
|
|
$
|
170
|
|
|
$
|
144
|
|
|
$
|
256
|
|
|
$
|
239
|
|
|
$
|
68,849
|
|
|
$
|
323
|
|
|
$
|
265
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
57
|
|
|
$
|
43,955
|
|
|
$
|
217
|
|
|
$
|
57
|
|
Agricultural
|
49
|
|
|
47
|
|
|
3
|
|
|
22
|
|
|
21
|
|
|
13,120
|
|
|
39
|
|
|
65
|
|
||||||||
Residential
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
131
|
|
|
9,603
|
|
|
59
|
|
|
131
|
|
||||||||
Total
|
$
|
49
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
220
|
|
|
$
|
209
|
|
|
$
|
66,678
|
|
|
$
|
315
|
|
|
$
|
253
|
|
|
Six Months
Ended June 30, |
||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||||||||||
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
217
|
|
|
$
|
42
|
|
|
$
|
59
|
|
|
$
|
318
|
|
|
$
|
224
|
|
|
$
|
39
|
|
|
$
|
42
|
|
|
$
|
305
|
|
Provision (release)
|
150
|
|
|
1
|
|
|
7
|
|
|
158
|
|
|
4
|
|
|
2
|
|
|
23
|
|
|
29
|
|
||||||||
Charge-offs, net of recoveries
|
—
|
|
|
(2
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||||
Balance, end of period
|
$
|
367
|
|
|
$
|
41
|
|
|
$
|
59
|
|
|
$
|
467
|
|
|
$
|
228
|
|
|
$
|
41
|
|
|
$
|
56
|
|
|
$
|
325
|
|
|
|
Recorded Investment
|
|
Estimated
Fair Value |
|
% of
Total
|
||||||||||||||||||||
|
|
Debt Service Coverage Ratios
|
|
|
|
% of
Total
|
|
|||||||||||||||||||
|
|
> 1.20x
|
|
1.00x - 1.20x
|
|
< 1.00x
|
|
Total
|
|
|||||||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
|
$
|
39,346
|
|
|
$
|
1,095
|
|
|
$
|
670
|
|
|
$
|
41,111
|
|
|
91.0
|
%
|
|
$
|
43,055
|
|
|
91.6
|
%
|
65% to 75%
|
|
3,330
|
|
|
76
|
|
|
171
|
|
|
3,577
|
|
|
7.9
|
|
|
3,627
|
|
|
7.7
|
|
|||||
76% to 80%
|
|
26
|
|
|
—
|
|
|
2
|
|
|
28
|
|
|
0.1
|
|
|
25
|
|
|
0.1
|
|
|||||
Greater than 80%
|
|
384
|
|
|
53
|
|
|
12
|
|
|
449
|
|
|
1.0
|
|
|
295
|
|
|
0.6
|
|
|||||
Total
|
|
$
|
43,086
|
|
|
$
|
1,224
|
|
|
$
|
855
|
|
|
$
|
45,165
|
|
|
100
|
%
|
|
$
|
47,002
|
|
|
100
|
%
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
|
$
|
38,163
|
|
|
$
|
1,063
|
|
|
$
|
544
|
|
|
$
|
39,770
|
|
|
90.4
|
%
|
|
$
|
40,921
|
|
|
90.7
|
%
|
65% to 75%
|
|
3,270
|
|
|
138
|
|
|
76
|
|
|
3,484
|
|
|
7.9
|
|
|
3,451
|
|
|
7.7
|
|
|||||
76% to 80%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Greater than 80%
|
|
381
|
|
|
140
|
|
|
237
|
|
|
758
|
|
|
1.7
|
|
|
732
|
|
|
1.6
|
|
|||||
Total
|
|
$
|
41,814
|
|
|
$
|
1,341
|
|
|
$
|
857
|
|
|
$
|
44,012
|
|
|
100.0
|
%
|
|
$
|
45,104
|
|
|
100.0
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Recorded
Investment
|
|
% of
Total
|
|
Recorded
Investment
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
||||||
Less than 65%
|
$
|
12,711
|
|
|
94.6
|
%
|
|
$
|
12,399
|
|
|
94.0
|
%
|
65% to 75%
|
656
|
|
|
4.9
|
|
|
710
|
|
|
5.4
|
|
||
76% to 80%
|
20
|
|
|
0.1
|
|
|
21
|
|
|
0.2
|
|
||
Greater than 80%
|
47
|
|
|
0.4
|
|
|
58
|
|
|
0.4
|
|
||
Total
|
$
|
13,434
|
|
|
100.0
|
%
|
|
$
|
13,188
|
|
|
100.0
|
%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
|
Recorded
Investment
|
|
% of
Total
|
|
Recorded
Investment
|
|
% of
Total
|
||||||
|
|
(Dollars in millions)
|
||||||||||||
Performance indicators:
|
|
|
|
|
|
|
|
|
||||||
Performing
|
|
$
|
10,326
|
|
|
96.9
|
%
|
|
$
|
9,408
|
|
|
96.7
|
%
|
Nonperforming
|
|
333
|
|
|
3.1
|
|
|
326
|
|
|
3.3
|
|
||
Total
|
|
$
|
10,659
|
|
|
100.0
|
%
|
|
$
|
9,734
|
|
|
100.0
|
%
|
|
|
Past Due
|
|
Nonaccrual Status
|
||||||||||||
|
|
June 30, 2016
|
|
December 31, 2015
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Commercial
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agricultural
|
|
118
|
|
|
103
|
|
|
39
|
|
|
46
|
|
||||
Residential
|
|
333
|
|
|
326
|
|
|
320
|
|
|
318
|
|
||||
Total
|
|
$
|
451
|
|
|
$
|
431
|
|
|
$
|
359
|
|
|
$
|
364
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(In millions)
|
||||||
Fixed maturity securities
|
|
$
|
36,633
|
|
|
$
|
18,164
|
|
Fixed maturity securities with noncredit OTTI losses included in AOCI
|
|
(59
|
)
|
|
(76
|
)
|
||
Total fixed maturity securities
|
|
36,574
|
|
|
18,088
|
|
||
Equity securities
|
|
558
|
|
|
422
|
|
||
Derivatives
|
|
3,766
|
|
|
2,350
|
|
||
Other
|
|
333
|
|
|
287
|
|
||
Subtotal
|
|
41,231
|
|
|
21,147
|
|
||
Amounts allocated from:
|
|
|
|
|
||||
Future policy benefits
|
|
(4,410
|
)
|
|
(163
|
)
|
||
DAC and VOBA related to noncredit OTTI losses recognized in AOCI
|
|
(2
|
)
|
|
—
|
|
||
DAC, VOBA and DSI
|
|
(2,380
|
)
|
|
(1,273
|
)
|
||
Policyholder dividend obligation
|
|
(3,343
|
)
|
|
(1,783
|
)
|
||
Subtotal
|
|
(10,135
|
)
|
|
(3,219
|
)
|
||
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
|
23
|
|
|
27
|
|
||
Deferred income tax benefit (expense)
|
|
(10,473
|
)
|
|
(6,151
|
)
|
||
Net unrealized investment gains (losses)
|
|
20,646
|
|
|
11,804
|
|
||
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
|
(11
|
)
|
|
(31
|
)
|
||
Net unrealized investment gains (losses) attributable to MetLife, Inc.
|
|
$
|
20,635
|
|
|
$
|
11,773
|
|
|
|
Six Months
Ended June 30, 2016 |
|
Year
Ended December 31, 2015 |
||||
|
|
(In millions)
|
||||||
Balance, beginning of period
|
|
$
|
(76
|
)
|
|
$
|
(112
|
)
|
Noncredit OTTI losses and subsequent changes recognized
|
|
6
|
|
|
6
|
|
||
Securities sold with previous noncredit OTTI loss
|
|
23
|
|
|
125
|
|
||
Subsequent changes in estimated fair value
|
|
(12
|
)
|
|
(95
|
)
|
||
Balance, end of period
|
|
$
|
(59
|
)
|
|
$
|
(76
|
)
|
|
|
Six Months
Ended June 30, 2016 |
||
|
|
(In millions)
|
||
Balance, beginning of period
|
|
$
|
11,773
|
|
Fixed maturity securities on which noncredit OTTI losses have been recognized
|
|
17
|
|
|
Unrealized investment gains (losses) during the period
|
|
20,067
|
|
|
Unrealized investment gains (losses) relating to:
|
|
|
||
Future policy benefits
|
|
(4,247
|
)
|
|
DAC and VOBA related to noncredit OTTI losses recognized in AOCI
|
|
(2
|
)
|
|
DAC, VOBA and DSI
|
|
(1,107
|
)
|
|
Policyholder dividend obligation
|
|
(1,560
|
)
|
|
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
|
(4
|
)
|
|
Deferred income tax benefit (expense)
|
|
(4,322
|
)
|
|
Net unrealized investment gains (losses)
|
|
20,615
|
|
|
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
|
20
|
|
|
Balance, end of period
|
|
$
|
20,635
|
|
Change in net unrealized investment gains (losses)
|
|
$
|
8,842
|
|
Change in net unrealized investment gains (losses) attributable to noncontrolling interests
|
|
20
|
|
|
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.
|
|
$
|
8,862
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(In millions)
|
||||||
Securities on loan: (1)
|
|
|
|
|
||||
Amortized cost
|
|
$
|
26,471
|
|
|
$
|
27,223
|
|
Estimated fair value
|
|
$
|
31,392
|
|
|
$
|
29,646
|
|
Cash collateral on deposit from counterparties (2)
|
|
$
|
32,006
|
|
|
$
|
30,197
|
|
Security collateral on deposit from counterparties (3)
|
|
$
|
198
|
|
|
$
|
50
|
|
Reinvestment portfolio — estimated fair value
|
|
$
|
32,330
|
|
|
$
|
30,258
|
|
(1)
|
Included within fixed maturity securities, short-term investments and cash equivalents. At
June 30, 2016
, both amortized cost and estimated fair value also included
$106 million
, at estimated fair value, of securities which are not reflected on the consolidated financial statements.
|
(2)
|
Included within payables for collateral under securities loaned and other transactions.
|
(3)
|
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.
|
|
|
June 30, 2016
|
|||||||||||||||||
|
|
Remaining Tenor of Securities Lending Agreements
|
|
|
|
|
|||||||||||||
|
|
Open (1)
|
|
1 Month or Less
|
|
1 to 6 Months
|
|
Total
|
|
% of
Total
|
|||||||||
|
|
(Dollars in millions)
|
|||||||||||||||||
Cash collateral liability by loaned security type:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agency
|
|
$
|
8,379
|
|
|
$
|
9,517
|
|
|
$
|
11,514
|
|
|
$
|
29,410
|
|
|
91.9
|
%
|
Agency RMBS
|
|
—
|
|
|
—
|
|
|
1,265
|
|
|
1,265
|
|
|
4.0
|
|
||||
Foreign government
|
|
—
|
|
|
911
|
|
|
—
|
|
|
911
|
|
|
2.8
|
|
||||
U.S. corporate
|
|
7
|
|
|
401
|
|
|
—
|
|
|
408
|
|
|
1.3
|
|
||||
Foreign corporate
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Total
|
|
$
|
8,386
|
|
|
$
|
10,841
|
|
|
$
|
12,779
|
|
|
$
|
32,006
|
|
|
100
|
%
|
|
|
December 31, 2015
|
|||||||||||||||||
|
|
Remaining Tenor of Securities Lending Agreements
|
|
|
|
|
|||||||||||||
|
|
Open (1)
|
|
1 Month or Less
|
|
1 to 6 Months
|
|
Total
|
|
% of
Total
|
|||||||||
|
|
(Dollars in millions)
|
|||||||||||||||||
Cash collateral liability by loaned security type:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agency
|
|
$
|
10,116
|
|
|
$
|
11,157
|
|
|
$
|
5,986
|
|
|
$
|
27,259
|
|
|
90.3
|
%
|
Agency RMBS
|
|
—
|
|
|
951
|
|
|
600
|
|
|
1,551
|
|
|
5.1
|
|
||||
Foreign government
|
|
2
|
|
|
510
|
|
|
486
|
|
|
998
|
|
|
3.3
|
|
||||
U.S. corporate
|
|
9
|
|
|
380
|
|
|
—
|
|
|
389
|
|
|
1.3
|
|
||||
Foreign corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
10,127
|
|
|
$
|
12,998
|
|
|
$
|
7,072
|
|
|
$
|
30,197
|
|
|
100
|
%
|
(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.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(In millions)
|
||||||
Invested assets on deposit (regulatory deposits)
|
|
$
|
10,353
|
|
|
$
|
9,089
|
|
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)
|
|
11,767
|
|
|
10,443
|
|
||
Invested assets pledged as collateral (1)
|
|
28,606
|
|
|
23,145
|
|
||
Total invested assets on deposit, held in trust and pledged as collateral
|
|
$
|
50,726
|
|
|
$
|
42,677
|
|
(1)
|
The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Notes 4 and
12
of the Notes to the Consolidated Financial Statements included in the
2015
Annual Report), collateral financing arrangements (see
Note 13
of the Notes to the Consolidated Financial Statements included in the
2015
Annual Report) and derivative transactions (see
Note 7
).
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Total
Assets
|
|
Total
Liabilities
|
|
Total
Assets
|
|
Total
Liabilities
|
||||||||
|
|
(In millions)
|
||||||||||||||
MRSC (collateral financing arrangement (primarily securities)) (1)
|
|
$
|
3,559
|
|
|
$
|
—
|
|
|
$
|
3,374
|
|
|
$
|
—
|
|
Operating joint venture (2)
|
|
—
|
|
|
—
|
|
|
2,465
|
|
|
2,079
|
|
||||
CSEs (assets (primarily loans) and liabilities (primarily debt)) (3)
|
|
172
|
|
|
47
|
|
|
186
|
|
|
62
|
|
||||
Other investments (4)
|
|
67
|
|
|
—
|
|
|
76
|
|
|
—
|
|
||||
Total
|
|
$
|
3,798
|
|
|
$
|
47
|
|
|
$
|
6,101
|
|
|
$
|
2,141
|
|
(1)
|
See
Note 13
of the Notes to the Consolidated Financial Statements included in the
2015
Annual Report for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement.
|
(2)
|
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.
|
(3)
|
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
$106 million
and
$105 million
at estimated fair value at
June 30, 2016
and
December 31, 2015
, respectively. The long-term debt bears interest primarily at fixed rates ranging from
2.25%
to
5.57%
, payable primarily on a monthly basis. Interest expense related to these obligations, included in other expenses, was
$2 million
and
$3 million
for the
three months
and
six months ended
June 30, 2016
, respectively, and
$1 million
and
$2 million
for the
three months
and
six months ended
June 30, 2015
, respectively.
|
(4)
|
Other investments is primarily comprised of other invested assets and other limited partnership interests.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Amount
|
|
Maximum
Exposure
to Loss (1)
|
|
Carrying
Amount
|
|
Maximum
Exposure
to Loss (1)
|
||||||||
|
|
(In millions)
|
||||||||||||||
Fixed maturity securities AFS:
|
|
|
|
|
|
|
|
|
||||||||
Structured Securities (2)
|
|
$
|
74,273
|
|
|
$
|
74,273
|
|
|
$
|
65,824
|
|
|
$
|
65,824
|
|
U.S. and foreign corporate
|
|
3,173
|
|
|
3,173
|
|
|
3,261
|
|
|
3,261
|
|
||||
Other limited partnership interests
|
|
6,267
|
|
|
10,470
|
|
|
5,186
|
|
|
7,074
|
|
||||
Other invested assets
|
|
2,131
|
|
|
2,747
|
|
|
1,604
|
|
|
2,161
|
|
||||
FVO and trading securities
|
|
546
|
|
|
546
|
|
|
586
|
|
|
586
|
|
||||
Real estate joint ventures
|
|
118
|
|
|
148
|
|
|
65
|
|
|
82
|
|
||||
Other (3)
|
|
117
|
|
|
117
|
|
|
71
|
|
|
71
|
|
||||
Total
|
|
$
|
86,625
|
|
|
$
|
91,474
|
|
|
$
|
76,597
|
|
|
$
|
79,059
|
|
(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
$162 million
and
$179 million
at
June 30, 2016
and
December 31, 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, non-redeemable preferred stock and a loan receivable.
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Investment income:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
$
|
3,564
|
|
|
$
|
3,672
|
|
|
$
|
7,218
|
|
|
$
|
7,213
|
|
Equity securities
|
33
|
|
|
35
|
|
|
70
|
|
|
66
|
|
||||
FVO and trading securities — Actively traded and FVO general account securities (1)
|
10
|
|
|
2
|
|
|
16
|
|
|
39
|
|
||||
Mortgage loans
|
851
|
|
|
801
|
|
|
1,658
|
|
|
1,531
|
|
||||
Policy loans
|
147
|
|
|
151
|
|
|
296
|
|
|
303
|
|
||||
Real estate and real estate joint ventures
|
149
|
|
|
323
|
|
|
306
|
|
|
534
|
|
||||
Other limited partnership interests
|
120
|
|
|
250
|
|
|
166
|
|
|
465
|
|
||||
Cash, cash equivalents and short-term investments
|
43
|
|
|
37
|
|
|
83
|
|
|
72
|
|
||||
Operating joint ventures
|
11
|
|
|
8
|
|
|
23
|
|
|
16
|
|
||||
Other
|
51
|
|
|
30
|
|
|
92
|
|
|
152
|
|
||||
Subtotal
|
4,979
|
|
|
5,309
|
|
|
9,928
|
|
|
10,391
|
|
||||
Less: Investment expenses
|
285
|
|
|
313
|
|
|
581
|
|
|
615
|
|
||||
Subtotal, net
|
4,694
|
|
|
4,996
|
|
|
9,347
|
|
|
9,776
|
|
||||
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)
|
191
|
|
|
(55
|
)
|
|
94
|
|
|
622
|
|
||||
FVO CSEs — interest income:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage loans
|
2
|
|
|
5
|
|
|
5
|
|
|
9
|
|
||||
Securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Subtotal
|
193
|
|
|
(49
|
)
|
|
99
|
|
|
632
|
|
||||
Net investment income
|
$
|
4,887
|
|
|
$
|
4,947
|
|
|
$
|
9,446
|
|
|
$
|
10,408
|
|
(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 as follows:
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Actively traded and FVO general account securities
|
$
|
(1
|
)
|
|
$
|
(38
|
)
|
|
$
|
(1
|
)
|
|
$
|
(40
|
)
|
FVO contractholder-directed unit-linked investments
|
$
|
80
|
|
|
$
|
(288
|
)
|
|
$
|
(120
|
)
|
|
$
|
261
|
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(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:
|
|
|
|
|
|
|
|
|
||||||||
Consumer
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Industrial
|
|
(8
|
)
|
|
—
|
|
|
(79
|
)
|
|
(2
|
)
|
||||
Communications
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Total U.S. and foreign corporate securities
|
|
(8
|
)
|
|
—
|
|
|
(82
|
)
|
|
(5
|
)
|
||||
RMBS
|
|
(4
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|
(15
|
)
|
||||
ABS
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
OTTI losses on fixed maturity securities recognized in earnings
|
|
(14
|
)
|
|
(2
|
)
|
|
(92
|
)
|
|
(20
|
)
|
||||
Fixed maturity securities — net gains (losses) on sales and disposals
|
|
165
|
|
|
117
|
|
|
263
|
|
|
268
|
|
||||
Total gains (losses) on fixed maturity securities
|
|
151
|
|
|
115
|
|
|
171
|
|
|
248
|
|
||||
Total gains (losses) on equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Total OTTI losses recognized — by sector:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
(16
|
)
|
|
(9
|
)
|
|
(67
|
)
|
|
(9
|
)
|
||||
OTTI losses on equity securities recognized in earnings
|
|
(16
|
)
|
|
(9
|
)
|
|
(67
|
)
|
|
(9
|
)
|
||||
Equity securities — net gains (losses) on sales and disposals
|
|
13
|
|
|
17
|
|
|
19
|
|
|
25
|
|
||||
Total gains (losses) on equity securities
|
|
(3
|
)
|
|
8
|
|
|
(48
|
)
|
|
16
|
|
||||
Mortgage loans
|
|
(98
|
)
|
|
(9
|
)
|
|
(162
|
)
|
|
(52
|
)
|
||||
Real estate and real estate joint ventures
|
|
45
|
|
|
(33
|
)
|
|
47
|
|
|
(6
|
)
|
||||
Other limited partnership interests
|
|
(14
|
)
|
|
(9
|
)
|
|
(41
|
)
|
|
7
|
|
||||
Other
|
|
(57
|
)
|
|
(27
|
)
|
|
(75
|
)
|
|
(4
|
)
|
||||
Subtotal
|
|
24
|
|
|
45
|
|
|
(108
|
)
|
|
209
|
|
||||
FVO CSEs:
|
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage loans
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
||||
Securities
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Long-term debt — related to commercial mortgage loans
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Non-investment portfolio gains (losses)
|
|
243
|
|
|
(180
|
)
|
|
388
|
|
|
(56
|
)
|
||||
Subtotal
|
|
242
|
|
|
(178
|
)
|
|
389
|
|
|
(56
|
)
|
||||
Total net investment gains (losses)
|
|
$
|
266
|
|
|
$
|
(133
|
)
|
|
$
|
281
|
|
|
$
|
153
|
|
|
|
Three Months
Ended June 30, |
||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
Fixed Maturity Securities
|
|
Equity Securities
|
||||||||||||
|
|
(In millions)
|
||||||||||||||
Proceeds
|
|
$
|
26,267
|
|
|
$
|
29,321
|
|
|
$
|
28
|
|
|
$
|
103
|
|
Gross investment gains
|
|
$
|
283
|
|
|
$
|
338
|
|
|
$
|
14
|
|
|
$
|
20
|
|
Gross investment losses
|
|
(118
|
)
|
|
(221
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
OTTI losses
|
|
(14
|
)
|
|
(2
|
)
|
|
(16
|
)
|
|
(9
|
)
|
||||
Net investment gains (losses)
|
|
$
|
151
|
|
|
$
|
115
|
|
|
$
|
(3
|
)
|
|
$
|
8
|
|
|
|
Six Months
Ended June 30, |
||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
Fixed Maturity Securities
|
|
Equity Securities
|
||||||||||||
|
|
(In millions)
|
||||||||||||||
Proceeds
|
|
$
|
58,261
|
|
|
$
|
59,327
|
|
|
$
|
87
|
|
|
$
|
156
|
|
Gross investment gains
|
|
$
|
715
|
|
|
$
|
676
|
|
|
$
|
24
|
|
|
$
|
35
|
|
Gross investment losses
|
|
(452
|
)
|
|
(408
|
)
|
|
(5
|
)
|
|
(10
|
)
|
||||
OTTI losses
|
|
(92
|
)
|
|
(20
|
)
|
|
(67
|
)
|
|
(9
|
)
|
||||
Net investment gains (losses)
|
|
$
|
171
|
|
|
$
|
248
|
|
|
$
|
(48
|
)
|
|
$
|
16
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
270
|
|
|
$
|
357
|
|
|
$
|
277
|
|
|
$
|
357
|
|
Additions:
|
|
|
|
|
|
|
|
||||||||
Initial impairments — credit loss OTTI on securities not previously impaired
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Additional impairments — credit loss OTTI on securities previously impaired
|
6
|
|
|
2
|
|
|
8
|
|
|
13
|
|
||||
Reductions:
|
|
|
|
|
|
|
|
||||||||
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI
|
(17
|
)
|
|
(78
|
)
|
|
(26
|
)
|
|
(91
|
)
|
||||
Securities impaired to net present value of expected future cash flows
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Increase in cash flows — accretion of previous credit loss OTTI
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Balance, end of period
|
$
|
258
|
|
|
$
|
280
|
|
|
$
|
258
|
|
|
$
|
280
|
|
Statement of Operations Presentation:
|
Derivative:
|
|
Policyholder benefits and claims
|
•
|
Economic hedges of variable annuity guarantees included in future policy benefits
|
Net investment income
|
•
|
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
|
•
|
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 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.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Freestanding derivatives and hedging gains (losses) (1)
|
|
$
|
2,525
|
|
|
$
|
(1,733
|
)
|
|
$
|
5,029
|
|
|
$
|
(885
|
)
|
Embedded derivatives gains (losses)
|
|
(4,624
|
)
|
|
821
|
|
|
(5,793
|
)
|
|
794
|
|
||||
Total net derivative gains (losses)
|
|
$
|
(2,099
|
)
|
|
$
|
(912
|
)
|
|
$
|
(764
|
)
|
|
$
|
(91
|
)
|
(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.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Qualifying hedges:
|
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
|
$
|
73
|
|
|
$
|
45
|
|
|
$
|
130
|
|
|
$
|
103
|
|
Interest credited to policyholder account balances
|
|
1
|
|
|
13
|
|
|
7
|
|
|
15
|
|
||||
Other expenses
|
|
(4
|
)
|
|
1
|
|
|
(6
|
)
|
|
(2
|
)
|
||||
Nonqualifying hedges:
|
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Net derivative gains (losses)
|
|
248
|
|
|
240
|
|
|
531
|
|
|
501
|
|
||||
Policyholder benefits and claims
|
|
6
|
|
|
4
|
|
|
11
|
|
|
8
|
|
||||
Total
|
|
$
|
323
|
|
|
$
|
302
|
|
|
$
|
672
|
|
|
$
|
623
|
|
|
|
Net
Derivative
Gains (Losses)
|
|
Net
Investment Income (1) |
|
Policyholder
Benefits and Claims (2) |
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
||||||
Interest rate derivatives
|
|
$
|
1,657
|
|
|
$
|
—
|
|
|
$
|
55
|
|
Foreign currency exchange rate derivatives
|
|
1,196
|
|
|
—
|
|
|
(11
|
)
|
|||
Credit derivatives — purchased
|
|
(22
|
)
|
|
(10
|
)
|
|
—
|
|
|||
Credit derivatives — written
|
|
3
|
|
|
9
|
|
|
—
|
|
|||
Equity derivatives
|
|
(213
|
)
|
|
(3
|
)
|
|
(65
|
)
|
|||
Total
|
|
$
|
2,621
|
|
|
$
|
(4
|
)
|
|
$
|
(21
|
)
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||
Interest rate derivatives
|
|
$
|
(1,459
|
)
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
Foreign currency exchange rate derivatives
|
|
(590
|
)
|
|
—
|
|
|
—
|
|
|||
Credit derivatives — purchased
|
|
4
|
|
|
1
|
|
|
—
|
|
|||
Credit derivatives — written
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|||
Equity derivatives
|
|
(186
|
)
|
|
(3
|
)
|
|
(27
|
)
|
|||
Total
|
|
$
|
(2,265
|
)
|
|
$
|
(2
|
)
|
|
$
|
(45
|
)
|
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
||||||
Interest rate derivatives
|
|
$
|
3,629
|
|
|
$
|
—
|
|
|
$
|
97
|
|
Foreign currency exchange rate derivatives
|
|
1,719
|
|
|
—
|
|
|
(12
|
)
|
|||
Credit derivatives — purchased
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|||
Credit derivatives — written
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Equity derivatives
|
|
(260
|
)
|
|
(14
|
)
|
|
(33
|
)
|
|||
Total
|
|
$
|
5,058
|
|
|
$
|
(14
|
)
|
|
$
|
52
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||
Interest rate derivatives
|
|
$
|
(907
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
Foreign currency exchange rate derivatives
|
|
79
|
|
|
—
|
|
|
—
|
|
|||
Credit derivatives — purchased
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||
Credit derivatives — written
|
|
(31
|
)
|
|
1
|
|
|
—
|
|
|||
Equity derivatives
|
|
(648
|
)
|
|
(7
|
)
|
|
(126
|
)
|
|||
Total
|
|
$
|
(1,514
|
)
|
|
$
|
(6
|
)
|
|
$
|
(133
|
)
|
(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.
|
Derivatives in Fair Value
Hedging Relationships
|
|
Hedged Items in Fair Value
Hedging Relationships
|
|
Net Derivative
Gains (Losses)
Recognized
for Derivatives
|
|
Net Derivative
Gains (Losses)
Recognized for
Hedged Items
|
|
Ineffectiveness
Recognized in
Net Derivative
Gains (Losses)
|
||||||
|
|
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2016
|
|
|
||||||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
|
Policyholder liabilities (1)
|
|
197
|
|
|
(200
|
)
|
|
(3
|
)
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
7
|
|
|
(8
|
)
|
|
(1
|
)
|
|||
|
|
Foreign-denominated policyholder account balances (2)
|
|
(51
|
)
|
|
48
|
|
|
(3
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
137
|
|
|
(126
|
)
|
|
11
|
|
|||
Total
|
|
$
|
287
|
|
|
$
|
(286
|
)
|
|
$
|
1
|
|
||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
4
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
|
Policyholder liabilities (1)
|
|
(366
|
)
|
|
362
|
|
|
(4
|
)
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
(3
|
)
|
|
5
|
|
|
2
|
|
|||
|
|
Foreign-denominated policyholder account balances (2)
|
|
110
|
|
|
(112
|
)
|
|
(2
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
(81
|
)
|
|
74
|
|
|
(7
|
)
|
|||
Total
|
|
$
|
(336
|
)
|
|
$
|
327
|
|
|
$
|
(9
|
)
|
||
Six Months Ended June 30, 2016
|
|
|
||||||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(11
|
)
|
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
|
Policyholder liabilities (1)
|
|
543
|
|
|
(548
|
)
|
|
(5
|
)
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|||
|
|
Foreign-denominated policyholder account balances (2)
|
|
(26
|
)
|
|
23
|
|
|
(3
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
276
|
|
|
(254
|
)
|
|
22
|
|
|||
Total
|
|
$
|
788
|
|
|
$
|
(778
|
)
|
|
$
|
10
|
|
||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
Fixed maturity securities
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
4
|
|
|
|
Policyholder liabilities (1)
|
|
(169
|
)
|
|
164
|
|
|
(5
|
)
|
|||
Foreign currency swaps:
|
|
Foreign-denominated fixed maturity securities
|
|
7
|
|
|
(3
|
)
|
|
4
|
|
|||
|
|
Foreign-denominated policyholder account balances (2)
|
|
(139
|
)
|
|
133
|
|
|
(6
|
)
|
|||
Foreign currency forwards:
|
|
Foreign-denominated fixed maturity securities
|
|
(98
|
)
|
|
90
|
|
|
(8
|
)
|
|||
Total
|
|
$
|
(400
|
)
|
|
$
|
389
|
|
|
$
|
(11
|
)
|
(1)
|
Fixed rate liabilities reported in policyholder account balances or future policy benefits.
|
(2)
|
Fixed rate or floating rate liabilities.
|
Derivatives in Cash Flow
Hedging Relationships
|
|
Amount of Gains
(Losses) Deferred in
AOCI on Derivatives
|
|
Amount and Location
of Gains (Losses)
Reclassified from
AOCI into Income (Loss)
|
|
Amount and Location
of Gains (Losses) Recognized in Income (Loss) on Derivatives |
||||||||||||||
|
|
(Effective Portion)
|
|
(Effective Portion)
|
|
(Ineffective Portion)
|
||||||||||||||
|
|
|
|
Net Derivative
Gains (Losses)
|
|
Net Investment
Income
|
|
Other
Expenses
|
|
Net Derivative
Gains (Losses)
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
140
|
|
|
$
|
18
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest rate forwards
|
|
38
|
|
|
(1
|
)
|
|
2
|
|
|
1
|
|
|
—
|
|
|||||
Foreign currency swaps
|
|
622
|
|
|
(269
|
)
|
|
(1
|
)
|
|
—
|
|
|
4
|
|
|||||
Credit forwards
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
800
|
|
|
$
|
(249
|
)
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
(269
|
)
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Interest rate forwards
|
|
(20
|
)
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency swaps
|
|
(106
|
)
|
|
290
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|||||
Credit forwards
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(395
|
)
|
|
$
|
298
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
353
|
|
|
$
|
28
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate forwards
|
|
47
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|||||
Foreign currency swaps
|
|
1,096
|
|
|
37
|
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|||||
Credit forwards
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,496
|
|
|
$
|
69
|
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
$
|
(95
|
)
|
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest rate forwards
|
|
(5
|
)
|
|
4
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|||||
Foreign currency swaps
|
|
(108
|
)
|
|
(277
|
)
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|||||
Credit forwards
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
(208
|
)
|
|
$
|
(261
|
)
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Derivatives in Net Investment Hedging Relationships (1), (2)
|
|
Amount of Gains (Losses) Deferred in AOCI
(Effective Portion) |
||
|
|
(In millions)
|
||
Three Months Ended June 30, 2016
|
|
|
||
Foreign currency forwards
|
|
$
|
(104
|
)
|
Currency options
|
|
(146
|
)
|
|
Total
|
|
$
|
(250
|
)
|
Three Months Ended June 30, 2015
|
|
|
||
Foreign currency forwards
|
|
$
|
45
|
|
Currency options
|
|
(2
|
)
|
|
Total
|
|
$
|
43
|
|
Six Months Ended June 30, 2016
|
|
|
||
Foreign currency forwards
|
|
$
|
(335
|
)
|
Currency options
|
|
(314
|
)
|
|
Total
|
|
$
|
(649
|
)
|
Six Months Ended June 30, 2015
|
|
|
||
Foreign currency forwards
|
|
$
|
156
|
|
Currency options
|
|
(43
|
)
|
|
Total
|
|
$
|
113
|
|
(1)
|
During both the
three months
and
six months ended
June 30, 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.
|
(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.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||
Rating Agency Designation of Referenced
Credit Obligations (1)
|
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount of Future Payments under Credit Default Swaps |
|
Weighted
Average Years to Maturity (2) |
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount of Future Payments under Credit Default Swaps |
|
Weighted
Average Years to Maturity (2) |
||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||
Aaa/Aa/A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (corporate)
|
|
$
|
5
|
|
|
$
|
529
|
|
|
3.2
|
|
|
$
|
6
|
|
|
$
|
661
|
|
|
2.5
|
|
Credit default swaps referencing indices
|
|
14
|
|
|
1,936
|
|
|
3.7
|
|
|
6
|
|
|
1,635
|
|
|
3.4
|
|
||||
Subtotal
|
|
19
|
|
|
2,465
|
|
|
3.6
|
|
|
12
|
|
|
2,296
|
|
|
3.2
|
|
||||
Baa
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (corporate)
|
|
5
|
|
|
956
|
|
|
2.4
|
|
|
8
|
|
|
1,349
|
|
|
2.5
|
|
||||
Credit default swaps referencing indices
|
|
66
|
|
|
7,471
|
|
|
4.9
|
|
|
37
|
|
|
5,863
|
|
|
4.8
|
|
||||
Subtotal
|
|
71
|
|
|
8,427
|
|
|
4.6
|
|
|
45
|
|
|
7,212
|
|
|
4.4
|
|
||||
Ba
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (corporate)
|
|
(1
|
)
|
|
60
|
|
|
1.7
|
|
|
(2
|
)
|
|
64
|
|
|
2.3
|
|
||||
Credit default swaps referencing indices
|
|
—
|
|
|
100
|
|
|
0.5
|
|
|
(1
|
)
|
|
100
|
|
|
1.0
|
|
||||
Subtotal
|
|
(1
|
)
|
|
160
|
|
|
0.9
|
|
|
(3
|
)
|
|
164
|
|
|
1.5
|
|
||||
B
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (corporate)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit default swaps referencing indices
|
|
7
|
|
|
131
|
|
|
4.1
|
|
|
11
|
|
|
639
|
|
|
4.9
|
|
||||
Subtotal
|
|
7
|
|
|
131
|
|
|
4.1
|
|
|
11
|
|
|
639
|
|
|
4.9
|
|
||||
Total
|
|
$
|
96
|
|
|
$
|
11,183
|
|
|
4.3
|
|
|
$
|
65
|
|
|
$
|
10,311
|
|
|
4.1
|
|
(1)
|
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
|
(2)
|
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement (6)
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
(In millions)
|
||||||||||||||
Gross estimated fair value of derivatives:
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral (1)
|
|
$
|
19,961
|
|
|
$
|
6,710
|
|
|
$
|
13,017
|
|
|
$
|
5,848
|
|
OTC-cleared (1)
|
|
3,836
|
|
|
1,801
|
|
|
1,600
|
|
|
1,217
|
|
||||
Exchange-traded
|
|
4
|
|
|
208
|
|
|
67
|
|
|
25
|
|
||||
Total gross estimated fair value of derivatives (1)
|
|
23,801
|
|
|
8,719
|
|
|
14,684
|
|
|
7,090
|
|
||||
Amounts offset on the consolidated balance sheets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Estimated fair value of derivatives presented on the consolidated balance sheets (1)
|
|
23,801
|
|
|
8,719
|
|
|
14,684
|
|
|
7,090
|
|
||||
Gross amounts not offset on the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
||||||||
Gross estimated fair value of derivatives: (2)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(5,279
|
)
|
|
(5,279
|
)
|
|
(4,368
|
)
|
|
(4,368
|
)
|
||||
OTC-cleared
|
|
(1,788
|
)
|
|
(1,788
|
)
|
|
(1,200
|
)
|
|
(1,200
|
)
|
||||
Exchange-traded
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Cash collateral: (3), (4)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(11,291
|
)
|
|
—
|
|
|
(6,140
|
)
|
|
(7
|
)
|
||||
OTC-cleared
|
|
(1,658
|
)
|
|
—
|
|
|
(378
|
)
|
|
(10
|
)
|
||||
Exchange-traded
|
|
—
|
|
|
(107
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Securities collateral: (5)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(3,109
|
)
|
|
(1,332
|
)
|
|
(2,078
|
)
|
|
(1,395
|
)
|
||||
OTC-cleared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exchange-traded
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Net amount after application of master netting agreements and collateral
|
|
$
|
675
|
|
|
$
|
115
|
|
|
$
|
519
|
|
|
$
|
86
|
|
(1)
|
At
June 30, 2016
and
December 31, 2015
, derivative assets included income or expense accruals reported in accrued investment income or in other liabilities of
$238 million
and
$278 million
, respectively, and derivative liabilities included income or expense accruals reported in accrued investment income or in other liabilities of
$15 million
and
$41 million
, respectively.
|
(2)
|
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
|
(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)
|
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
June 30, 2016
and
December 31, 2015
, the Company received excess cash collateral of
$792 million
and
$89 million
, respectively, and provided excess cash collateral of
$305 million
and
$204 million
, respectively, which is not included in the table above due to the foregoing limitation.
|
(5)
|
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at
June 30, 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
June 30, 2016
and
December 31, 2015
, the Company received excess securities collateral with an estimated fair value of
$336 million
and
$100 million
, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At
June 30, 2016
and
December 31, 2015
, the Company provided excess securities collateral with an estimated fair value of
$179 million
and
$150 million
, respectively, for its OTC-bilateral derivatives, and
$419 million
and
$315 million
, respectively, for its OTC-cleared derivatives, and
$343 million
and
$224 million
, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
|
(6)
|
See
Note 6
for information regarding the Company’s gross and net payables and receivables under repurchase agreement transactions.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
Derivatives
Subject to Credit- Contingent Provisions |
|
Derivatives
Not Subject to Credit- Contingent Provisions |
|
Total
|
|
Derivatives
Subject to
Credit-
Contingent
Provisions
|
|
Derivatives
Not Subject to Credit- Contingent Provisions |
|
Total
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Estimated Fair Value of Derivatives in a Net Liability Position (1)
|
|
$
|
1,395
|
|
|
$
|
34
|
|
|
$
|
1,429
|
|
|
$
|
1,270
|
|
|
$
|
207
|
|
|
$
|
1,477
|
|
Estimated Fair Value of Collateral Provided:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities
|
|
$
|
1,449
|
|
|
$
|
51
|
|
|
$
|
1,500
|
|
|
$
|
1,365
|
|
|
$
|
174
|
|
|
$
|
1,539
|
|
Cash
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
Estimated Fair Value of Incremental Collateral Provided Upon:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-notch downgrade in the Company’s credit or financial strength rating, as applicable
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
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
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
(1)
|
After taking into consideration the existence of netting agreements.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Net derivative gains (losses) (1)
|
|
$
|
(4,624
|
)
|
|
$
|
821
|
|
|
$
|
(5,793
|
)
|
|
$
|
794
|
|
Policyholder benefits and claims
|
|
$
|
60
|
|
|
$
|
(43
|
)
|
|
$
|
105
|
|
|
$
|
(19
|
)
|
(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
$1.1 billion
and
$1.5 billion
for the
three months
and
six months ended
June 30, 2016
, respectively, and
($100) million
and
($31) million
for the
three months
and
six months ended
June 30, 2015
, respectively.
|
|
|
June 30, 2016
|
||||||||||||||
|
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||
|
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
|
$
|
—
|
|
|
$
|
97,323
|
|
|
$
|
7,292
|
|
|
$
|
104,615
|
|
U.S. government and agency
|
|
41,028
|
|
|
28,386
|
|
|
323
|
|
|
69,737
|
|
||||
Foreign corporate
|
|
—
|
|
|
52,794
|
|
|
6,418
|
|
|
59,212
|
|
||||
Foreign government
|
|
—
|
|
|
61,885
|
|
|
376
|
|
|
62,261
|
|
||||
RMBS
|
|
4,164
|
|
|
35,172
|
|
|
5,262
|
|
|
44,598
|
|
||||
State and political subdivision
|
|
—
|
|
|
17,357
|
|
|
53
|
|
|
17,410
|
|
||||
ABS
|
|
—
|
|
|
15,712
|
|
|
806
|
|
|
16,518
|
|
||||
CMBS
|
|
—
|
|
|
12,525
|
|
|
632
|
|
|
13,157
|
|
||||
Total fixed maturity securities
|
|
45,192
|
|
|
321,154
|
|
|
21,162
|
|
|
387,508
|
|
||||
Equity securities
|
|
1,364
|
|
|
1,287
|
|
|
682
|
|
|
3,333
|
|
||||
FVO and trading securities:
|
|
|
|
|
|
|
|
|
||||||||
Actively traded securities
|
|
—
|
|
|
7
|
|
|
1
|
|
|
8
|
|
||||
FVO general account securities
|
|
509
|
|
|
31
|
|
|
100
|
|
|
640
|
|
||||
FVO contractholder-directed unit-linked investments
|
|
10,729
|
|
|
2,804
|
|
|
124
|
|
|
13,657
|
|
||||
FVO securities held by CSEs
|
|
—
|
|
|
3
|
|
|
6
|
|
|
9
|
|
||||
Total FVO and trading securities
|
|
11,238
|
|
|
2,845
|
|
|
231
|
|
|
14,314
|
|
||||
Short-term investments (1)
|
|
2,262
|
|
|
6,472
|
|
|
175
|
|
|
8,909
|
|
||||
Mortgage loans:
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans — FVO
|
|
—
|
|
|
—
|
|
|
449
|
|
|
449
|
|
||||
Commercial mortgage loans held by CSEs — FVO
|
|
—
|
|
|
159
|
|
|
—
|
|
|
159
|
|
||||
Total mortgage loans
|
|
—
|
|
|
159
|
|
|
449
|
|
|
608
|
|
||||
Other investments
|
|
91
|
|
|
58
|
|
|
—
|
|
|
149
|
|
||||
Derivative assets: (2)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
2
|
|
|
16,056
|
|
|
228
|
|
|
16,286
|
|
||||
Foreign currency exchange rate
|
|
—
|
|
|
4,936
|
|
|
43
|
|
|
4,979
|
|
||||
Credit
|
|
—
|
|
|
107
|
|
|
15
|
|
|
122
|
|
||||
Equity market
|
|
2
|
|
|
1,824
|
|
|
350
|
|
|
2,176
|
|
||||
Total derivative assets
|
|
4
|
|
|
22,923
|
|
|
636
|
|
|
23,563
|
|
||||
Net embedded derivatives within asset host contracts (3)
|
|
—
|
|
|
—
|
|
|
608
|
|
|
608
|
|
||||
Separate account assets (4)
|
|
84,717
|
|
|
223,323
|
|
|
1,632
|
|
|
309,672
|
|
||||
Total assets
|
|
$
|
144,868
|
|
|
$
|
578,221
|
|
|
$
|
25,575
|
|
|
$
|
748,664
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (2)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
$
|
12
|
|
|
$
|
3,540
|
|
|
$
|
4
|
|
|
$
|
3,556
|
|
Foreign currency exchange rate
|
|
2
|
|
|
2,907
|
|
|
63
|
|
|
2,972
|
|
||||
Credit
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||
Equity market
|
|
194
|
|
|
1,234
|
|
|
701
|
|
|
2,129
|
|
||||
Total derivative liabilities
|
|
208
|
|
|
7,728
|
|
|
768
|
|
|
8,704
|
|
||||
Net embedded derivatives within liability host contracts (3)
|
|
—
|
|
|
—
|
|
|
7,412
|
|
|
7,412
|
|
||||
Long-term debt of CSEs — FVO
|
|
—
|
|
|
35
|
|
|
12
|
|
|
47
|
|
||||
Trading liabilities (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Separate account liabilities (4)
|
|
—
|
|
|
97
|
|
|
5
|
|
|
102
|
|
||||
Total liabilities
|
|
$
|
208
|
|
|
$
|
7,860
|
|
|
$
|
8,197
|
|
|
$
|
16,265
|
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||
|
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
|
$
|
—
|
|
|
$
|
93,758
|
|
|
$
|
7,036
|
|
|
$
|
100,794
|
|
U.S. government and agency
|
|
37,660
|
|
|
23,986
|
|
|
—
|
|
|
61,646
|
|
||||
Foreign corporate
|
|
—
|
|
|
51,438
|
|
|
5,760
|
|
|
57,198
|
|
||||
Foreign government
|
|
—
|
|
|
49,643
|
|
|
856
|
|
|
50,499
|
|
||||
RMBS
|
|
—
|
|
|
34,088
|
|
|
4,709
|
|
|
38,797
|
|
||||
State and political subdivision
|
|
—
|
|
|
15,395
|
|
|
46
|
|
|
15,441
|
|
||||
ABS
|
|
—
|
|
|
12,731
|
|
|
1,663
|
|
|
14,394
|
|
||||
CMBS
|
|
—
|
|
|
11,889
|
|
|
744
|
|
|
12,633
|
|
||||
Total fixed maturity securities
|
|
37,660
|
|
|
292,928
|
|
|
20,814
|
|
|
351,402
|
|
||||
Equity securities
|
|
1,274
|
|
|
1,615
|
|
|
432
|
|
|
3,321
|
|
||||
FVO and trading securities:
|
|
|
|
|
|
|
|
|
||||||||
Actively traded securities
|
|
—
|
|
|
400
|
|
|
4
|
|
|
404
|
|
||||
FVO general account securities
|
|
506
|
|
|
32
|
|
|
89
|
|
|
627
|
|
||||
FVO contractholder-directed unit-linked investments
|
|
10,829
|
|
|
2,985
|
|
|
167
|
|
|
13,981
|
|
||||
FVO securities held by CSEs
|
|
—
|
|
|
2
|
|
|
10
|
|
|
12
|
|
||||
Total FVO and trading securities
|
|
11,335
|
|
|
3,419
|
|
|
270
|
|
|
15,024
|
|
||||
Short-term investments (1)
|
|
2,543
|
|
|
5,985
|
|
|
291
|
|
|
8,819
|
|
||||
Mortgage loans:
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans — FVO
|
|
—
|
|
|
—
|
|
|
314
|
|
|
314
|
|
||||
Commercial mortgage loans held by CSEs — FVO
|
|
—
|
|
|
172
|
|
|
—
|
|
|
172
|
|
||||
Total mortgage loans
|
|
—
|
|
|
172
|
|
|
314
|
|
|
486
|
|
||||
Other investments
|
|
109
|
|
|
53
|
|
|
—
|
|
|
162
|
|
||||
Derivative assets: (2)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
4
|
|
|
9,405
|
|
|
25
|
|
|
9,434
|
|
||||
Foreign currency exchange rate
|
|
—
|
|
|
3,003
|
|
|
16
|
|
|
3,019
|
|
||||
Credit
|
|
—
|
|
|
99
|
|
|
7
|
|
|
106
|
|
||||
Equity market
|
|
63
|
|
|
1,435
|
|
|
349
|
|
|
1,847
|
|
||||
Total derivative assets
|
|
67
|
|
|
13,942
|
|
|
397
|
|
|
14,406
|
|
||||
Net embedded derivatives within asset host contracts (3)
|
|
—
|
|
|
—
|
|
|
391
|
|
|
391
|
|
||||
Separate account assets (4)
|
|
77,080
|
|
|
222,814
|
|
|
1,704
|
|
|
301,598
|
|
||||
Total assets
|
|
$
|
130,068
|
|
|
$
|
540,928
|
|
|
$
|
24,613
|
|
|
$
|
695,609
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (2)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
$
|
7
|
|
|
$
|
2,340
|
|
|
$
|
—
|
|
|
$
|
2,347
|
|
Foreign currency exchange rate
|
|
—
|
|
|
2,754
|
|
|
148
|
|
|
2,902
|
|
||||
Credit
|
|
—
|
|
|
45
|
|
|
2
|
|
|
47
|
|
||||
Equity market
|
|
18
|
|
|
1,077
|
|
|
658
|
|
|
1,753
|
|
||||
Total derivative liabilities
|
|
25
|
|
|
6,216
|
|
|
808
|
|
|
7,049
|
|
||||
Net embedded derivatives within liability host contracts (3)
|
|
—
|
|
|
—
|
|
|
935
|
|
|
935
|
|
||||
Long-term debt of CSEs — FVO
|
|
—
|
|
|
49
|
|
|
11
|
|
|
60
|
|
||||
Trading liabilities (5)
|
|
103
|
|
|
50
|
|
|
—
|
|
|
153
|
|
||||
Separate account liabilities (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
128
|
|
|
$
|
6,315
|
|
|
$
|
1,754
|
|
|
$
|
8,197
|
|
(1)
|
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.
|
(2)
|
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.
|
(3)
|
Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and other invested assets on the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented within policyholder account balances, future policy benefits and other liabilities on the consolidated balance sheets. At
June 30, 2016
and
December 31, 2015
, debt and equity securities also included embedded derivatives of
($257) million
and
($220) million
, respectively.
|
(4)
|
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.
|
(5)
|
Trading liabilities are presented within other liabilities on the consolidated balance sheets.
|
Instrument
|
Level 2
Observable Inputs
|
Level 3
Unobservable Inputs
|
|||
Fixed Maturity Securities
|
|||||
U.S. corporate and Foreign corporate securities
|
|||||
|
Valuation Techniques: Principally the market and income approaches.
|
Valuation Techniques: Principally the market approach.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
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 securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2
|
|
|
|
•
|
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
|
•
|
independent non-binding broker quotations
|
|
|
•
|
delta spread adjustments to reflect specific credit-related issues
|
|
|
U.S. government and agency, Foreign government and State and political subdivision securities
|
|||||
|
Valuation Techniques: Principally the market approach.
|
Valuation Techniques: Principally the market approach.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
independent non-binding broker quotations
|
|
|
•
|
benchmark U.S. Treasury yield or other yields
|
•
|
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
|
|
|
•
|
the spread off the U.S. Treasury yield curve for the identical security
|
|
||
|
•
|
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.
|
Valuation Techniques: Principally the market and income approaches.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
credit spreads
|
|
|
•
|
spreads for actively traded securities; spreads off benchmark yields
|
•
|
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
|
|
|
•
|
expected prepayment speeds and volumes
|
|
||
|
•
|
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
|
|
|
(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, Long-term Debt of CSEs — FVO and Trading Liabilities” and “— Derivatives — Freestanding Derivatives.”
|
Instrument
|
|
Interest Rate
|
|
Foreign Currency
Exchange Rate
|
|
Credit
|
|
Equity Market
|
Inputs common to Level 2 and Level 3 by instrument type
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
basis curves
|
•
|
basis curves
|
•
|
credit curves
|
•
|
spot equity index levels
|
|
•
|
interest rate volatility (1)
|
•
|
currency spot rates
|
•
|
recovery rates
|
•
|
dividend yield curves
|
|
|
|
|
•
|
cross currency basis curves
|
|
|
•
|
equity volatility (1)
|
|
|
|
•
|
currency volatility (1)
|
|
|
|
|
Level 3
|
•
|
swap yield curves (2)
|
•
|
swap yield curves (2)
|
•
|
swap yield curves (2)
|
•
|
dividend yield curves (2)
|
|
•
|
basis curves (2)
|
•
|
basis curves (2)
|
•
|
credit curves (2)
|
•
|
equity volatility (1), (2)
|
|
•
|
interest rate volatility (1), (2)
|
•
|
cross currency basis curves (2)
|
•
|
credit spreads
|
•
|
correlation between model inputs (1)
|
|
•
|
repurchase rates
|
•
|
currency correlation
|
•
|
repurchase rates
|
|
|
|
|
|
•
|
currency volatility (1)
|
•
|
independent non-binding broker quotations
|
|
|
(1)
|
Option-based only.
|
(2)
|
Extrapolation beyond the observable limits of the curve(s).
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
Impact of
Increase in Input on Estimated Fair Value (2) |
||||||||
|
Valuation
Techniques |
|
Significant
Unobservable Inputs |
|
Range
|
|
Weighted
Average (1) |
|
Range
|
|
Weighted
Average (1) |
|
|||||||
Fixed maturity securities (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
U.S. corporate and foreign corporate
|
•
|
Matrix pricing
|
|
•
|
Delta spread adjustments (4)
|
|
(269)
|
-
|
545
|
|
(6)
|
|
(65)
|
-
|
240
|
|
39
|
|
Decrease
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
—
|
-
|
884
|
|
162
|
|
—
|
-
|
780
|
|
156
|
|
Increase
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
6
|
-
|
121
|
|
97
|
|
68
|
-
|
121
|
|
98
|
|
Increase
|
Foreign government
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
95
|
-
|
124
|
|
104
|
|
96
|
-
|
135
|
|
113
|
|
Increase
|
RMBS
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
16
|
-
|
128
|
|
90
|
|
19
|
-
|
292
|
|
92
|
|
Increase (6)
|
ABS
|
•
|
Market pricing
|
|
•
|
Quoted prices (5)
|
|
5
|
-
|
129
|
|
100
|
|
16
|
-
|
109
|
|
100
|
|
Increase (6)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (5)
|
|
93
|
-
|
107
|
|
100
|
|
66
|
-
|
105
|
|
99
|
|
Increase (6)
|
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (7)
|
|
147
|
-
|
254
|
|
|
|
307
|
-
|
317
|
|
|
|
Increase (8)
|
|
|
|
|
•
|
Repurchase rates (9)
|
|
(16)
|
-
|
3
|
|
|
|
|
|
|
|
|
|
Decrease (8)
|
Foreign currency exchange rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (7)
|
|
95
|
-
|
328
|
|
|
|
28
|
-
|
381
|
|
|
|
Increase (8)
|
Credit
|
•
|
Present value techniques
|
|
•
|
Credit spreads (10)
|
|
97
|
-
|
100
|
|
|
|
98
|
-
|
100
|
|
|
|
Decrease (8)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity market
|
•
|
Present value techniques or option pricing models
|
|
•
|
Volatility (12)
|
|
14%
|
-
|
35%
|
|
|
|
15%
|
-
|
36%
|
|
|
|
Increase (8)
|
|
|
|
|
•
|
Correlation (13)
|
|
70%
|
-
|
70%
|
|
|
|
70%
|
-
|
70%
|
|
|
|
|
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Direct, assumed and ceded guaranteed minimum benefits
|
•
|
Option pricing techniques
|
|
•
|
Mortality rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ages 0 - 40
|
|
0%
|
-
|
0.21%
|
|
|
|
0%
|
-
|
0.21%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Ages 41 - 60
|
|
0.01%
|
-
|
0.78%
|
|
|
|
0.01%
|
-
|
0.78%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Ages 61 - 115
|
|
0%
|
-
|
100%
|
|
|
|
0.04%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
•
|
Lapse rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Durations 1 - 10
|
|
0.25%
|
-
|
100%
|
|
|
|
0.25%
|
-
|
100%
|
|
|
|
Decrease (15)
|
|
|
|
|
|
Durations 11 - 20
|
|
2%
|
-
|
100%
|
|
|
|
2%
|
-
|
100%
|
|
|
|
Decrease (15)
|
|
|
|
|
|
Durations 21 - 116
|
|
1.25%
|
-
|
100%
|
|
|
|
1%
|
-
|
100%
|
|
|
|
Decrease (15)
|
|
|
|
|
•
|
Utilization rates
|
|
0%
|
-
|
25%
|
|
|
|
0%
|
-
|
25%
|
|
|
|
Increase (16)
|
|
|
|
|
•
|
Withdrawal rates
|
|
0%
|
-
|
20%
|
|
|
|
0%
|
-
|
20%
|
|
|
|
(17)
|
|
|
|
|
•
|
Long-term equity volatilities
|
|
9.81%
|
-
|
33%
|
|
|
|
8.79%
|
-
|
33%
|
|
|
|
Increase (18)
|
|
|
|
|
•
|
Nonperformance risk spread
|
|
(0.02)%
|
-
|
2.16%
|
|
|
|
(0.47)%
|
-
|
1.31%
|
|
|
|
Decrease (19)
|
(1)
|
The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities.
|
(2)
|
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 basis points.
|
(5)
|
Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par.
|
(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
June 30, 2016
and
December 31, 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.
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||
|
|
Fixed Maturity Securities
|
|
|
|
|
||||||||||||||||||||||
|
|
Corporate (1)
|
|
U.S.
Government
and Agency
|
|
Foreign
Government |
|
Structured Securities
|
|
State and
Political Subdivision |
|
Equity
Securities
|
|
FVO and
Trading
Securities (2)
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
12,792
|
|
|
$
|
211
|
|
|
$
|
712
|
|
|
$
|
6,652
|
|
|
$
|
36
|
|
|
$
|
669
|
|
|
$
|
249
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
(5
|
)
|
|
—
|
|
|
4
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
339
|
|
|
7
|
|
|
2
|
|
|
5
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
852
|
|
|
105
|
|
|
65
|
|
|
940
|
|
|
17
|
|
|
19
|
|
|
11
|
|
|||||||
Sales (5)
|
|
(306
|
)
|
|
—
|
|
|
(19
|
)
|
|
(478
|
)
|
|
—
|
|
|
(17
|
)
|
|
(19
|
)
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
490
|
|
|
—
|
|
|
103
|
|
|
12
|
|
|
—
|
|
|
2
|
|
|
6
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(452
|
)
|
|
—
|
|
|
(491
|
)
|
|
(461
|
)
|
|
—
|
|
|
(2
|
)
|
|
(13
|
)
|
|||||||
Balance, end of period
|
|
$
|
13,710
|
|
|
$
|
323
|
|
|
$
|
376
|
|
|
$
|
6,700
|
|
|
$
|
53
|
|
|
$
|
682
|
|
|
$
|
231
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
13,729
|
|
|
$
|
—
|
|
|
$
|
1,384
|
|
|
$
|
7,642
|
|
|
$
|
2
|
|
|
$
|
338
|
|
|
$
|
521
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
30
|
|
|
—
|
|
|
4
|
|
|
43
|
|
|
—
|
|
|
2
|
|
|
(3
|
)
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
(407
|
)
|
|
—
|
|
|
(27
|
)
|
|
13
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||||
Purchases (5)
|
|
607
|
|
|
55
|
|
|
88
|
|
|
1,218
|
|
|
55
|
|
|
42
|
|
|
74
|
|
|||||||
Sales (5)
|
|
(538
|
)
|
|
—
|
|
|
(20
|
)
|
|
(448
|
)
|
|
—
|
|
|
(20
|
)
|
|
(126
|
)
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
252
|
|
|
—
|
|
|
10
|
|
|
153
|
|
|
—
|
|
|
131
|
|
|
52
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(153
|
)
|
|
—
|
|
|
(103
|
)
|
|
(1,603
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(43
|
)
|
|||||||
Balance, end of period
|
|
$
|
13,520
|
|
|
$
|
55
|
|
|
$
|
1,336
|
|
|
$
|
7,018
|
|
|
$
|
55
|
|
|
$
|
489
|
|
|
$
|
475
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2016 (7)
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2015 (7)
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
|
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) |
|
Long-term
Debt of
CSEs — FVO |
|
Trading
Liabilities
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
170
|
|
|
$
|
392
|
|
|
$
|
(338
|
)
|
|
$
|
(1,939
|
)
|
|
$
|
1,466
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
—
|
|
|
1
|
|
|
165
|
|
|
(4,505
|
)
|
|
33
|
|
|
—
|
|
|
—
|
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
5
|
|
|
—
|
|
|
41
|
|
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
115
|
|
|
71
|
|
|
4
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|||||||
Sales (5)
|
|
(6
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
(11
|
)
|
|
2
|
|
|
(225
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(111
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance, end of period
|
|
$
|
175
|
|
|
$
|
449
|
|
|
$
|
(132
|
)
|
|
$
|
(6,804
|
)
|
|
$
|
1,627
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
1,358
|
|
|
$
|
329
|
|
|
$
|
(345
|
)
|
|
$
|
278
|
|
|
$
|
2,056
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
2
|
|
|
(2
|
)
|
|
(2
|
)
|
|
737
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
(1
|
)
|
|
—
|
|
|
(21
|
)
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
1,702
|
|
|
45
|
|
|
4
|
|
|
—
|
|
|
153
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Sales (5)
|
|
(975
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
(4
|
)
|
|
(7
|
)
|
|
(195
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(277
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance, end of period
|
|
$
|
1,809
|
|
|
$
|
345
|
|
|
$
|
(372
|
)
|
|
$
|
841
|
|
|
$
|
1,925
|
|
|
$
|
(12
|
)
|
|
$
|
(4
|
)
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2016 (7)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
163
|
|
|
$
|
(4,520
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2015 (7)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
7
|
|
|
$
|
723
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||||||
|
|
Fixed Maturity Securities
|
|
|
|
|
||||||||||||||||||||||
|
|
Corporate (1)
|
|
U.S.
Government
and Agency
|
|
Foreign
Government |
|
Structured Securities
|
|
State and
Political Subdivision |
|
Equity
Securities
|
|
FVO and
Trading
Securities (2)
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
12,796
|
|
|
$
|
—
|
|
|
$
|
856
|
|
|
$
|
7,116
|
|
|
$
|
46
|
|
|
$
|
432
|
|
|
$
|
270
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
(44
|
)
|
|
—
|
|
|
8
|
|
|
60
|
|
|
—
|
|
|
(24
|
)
|
|
5
|
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
929
|
|
|
18
|
|
|
(3
|
)
|
|
(9
|
)
|
|
—
|
|
|
41
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
1,316
|
|
|
105
|
|
|
79
|
|
|
1,546
|
|
|
17
|
|
|
23
|
|
|
26
|
|
|||||||
Sales (5)
|
|
(602
|
)
|
|
—
|
|
|
(23
|
)
|
|
(903
|
)
|
|
—
|
|
|
(62
|
)
|
|
(26
|
)
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
639
|
|
|
200
|
|
|
41
|
|
|
30
|
|
|
—
|
|
|
457
|
|
|
23
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(1,324
|
)
|
|
—
|
|
|
(582
|
)
|
|
(1,140
|
)
|
|
(10
|
)
|
|
(185
|
)
|
|
(67
|
)
|
|||||||
Balance, end of period
|
|
$
|
13,710
|
|
|
$
|
323
|
|
|
$
|
376
|
|
|
$
|
6,700
|
|
|
$
|
53
|
|
|
$
|
682
|
|
|
$
|
231
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
13,432
|
|
|
$
|
—
|
|
|
$
|
1,311
|
|
|
$
|
7,392
|
|
|
$
|
—
|
|
|
$
|
345
|
|
|
$
|
567
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
43
|
|
|
—
|
|
|
7
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
(489
|
)
|
|
—
|
|
|
(24
|
)
|
|
(28
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||||||
Purchases (5)
|
|
1,089
|
|
|
55
|
|
|
145
|
|
|
2,023
|
|
|
55
|
|
|
48
|
|
|
98
|
|
|||||||
Sales (5)
|
|
(698
|
)
|
|
—
|
|
|
(31
|
)
|
|
(883
|
)
|
|
—
|
|
|
(23
|
)
|
|
(204
|
)
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
364
|
|
|
—
|
|
|
209
|
|
|
177
|
|
|
—
|
|
|
132
|
|
|
53
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(221
|
)
|
|
—
|
|
|
(281
|
)
|
|
(1,727
|
)
|
|
—
|
|
|
(9
|
)
|
|
(13
|
)
|
|||||||
Balance, end of period
|
|
$
|
13,520
|
|
|
$
|
55
|
|
|
$
|
1,336
|
|
|
$
|
7,018
|
|
|
$
|
55
|
|
|
$
|
489
|
|
|
$
|
475
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2016 (7)
|
|
$
|
(44
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
5
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2015 (7)
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
|
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) |
|
Long-term
Debt of
CSEs — FVO |
|
Trading
Liabilities
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
291
|
|
|
$
|
314
|
|
|
$
|
(411
|
)
|
|
$
|
(544
|
)
|
|
$
|
1,704
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
—
|
|
|
11
|
|
|
228
|
|
|
(5,616
|
)
|
|
62
|
|
|
—
|
|
|
—
|
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
8
|
|
|
—
|
|
|
51
|
|
|
(210
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
126
|
|
|
149
|
|
|
12
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|||||||
Sales (5)
|
|
(247
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(234
|
)
|
|
—
|
|
|
—
|
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
(17
|
)
|
|
(9
|
)
|
|
(434
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance, end of period
|
|
$
|
175
|
|
|
$
|
449
|
|
|
$
|
(132
|
)
|
|
$
|
(6,804
|
)
|
|
$
|
1,627
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, beginning of period
|
|
$
|
336
|
|
|
$
|
308
|
|
|
$
|
(300
|
)
|
|
$
|
430
|
|
|
$
|
1,922
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
Total realized/unrealized gains (losses) included in net income (loss) (3) (4)
|
|
2
|
|
|
20
|
|
|
(68
|
)
|
|
789
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases (5)
|
|
1,822
|
|
|
104
|
|
|
4
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Sales (5)
|
|
(60
|
)
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
(201
|
)
|
|
—
|
|
|
—
|
|
|||||||
Issuances (5)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||||
Settlements (5)
|
|
—
|
|
|
(16
|
)
|
|
(3
|
)
|
|
(397
|
)
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
|||||||
Transfers into Level 3 (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers out of Level 3 (6)
|
|
(290
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance, end of period
|
|
$
|
1,809
|
|
|
$
|
345
|
|
|
$
|
(372
|
)
|
|
$
|
841
|
|
|
$
|
1,925
|
|
|
$
|
(12
|
)
|
|
$
|
(4
|
)
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2016 (7)
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
207
|
|
|
$
|
(5,634
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2015 (7)
|
|
$
|
1
|
|
|
$
|
20
|
|
|
$
|
(76
|
)
|
|
$
|
770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Comprised of U.S. and foreign corporate securities.
|
(2)
|
Comprised of actively traded securities, FVO general account securities, FVO contractholder-directed unit-linked investments and FVO securities held by CSEs.
|
(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)
|
Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.
|
(5)
|
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.
|
(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)
|
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
|
(9)
|
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
|
(10)
|
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.
|
|
|
Residential Mortgage
Loans — FVO |
|
Certain Assets
and Liabilities of CSEs — FVO (1) |
||||||||||||
|
|
June 30, 2016
|
|
December 31, 2015
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Unpaid principal balance
|
|
$
|
622
|
|
|
$
|
436
|
|
|
$
|
109
|
|
|
$
|
121
|
|
Difference between estimated fair value and unpaid principal balance
|
|
(173
|
)
|
|
(122
|
)
|
|
50
|
|
|
51
|
|
||||
Carrying value at estimated fair value
|
|
$
|
449
|
|
|
$
|
314
|
|
|
$
|
159
|
|
|
$
|
172
|
|
Loans in non-accrual status
|
|
$
|
173
|
|
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Contractual principal balance
|
|
|
|
|
|
$
|
58
|
|
|
$
|
71
|
|
||||
Difference between estimated fair value and contractual principal balance
|
|
|
|
|
|
(11
|
)
|
|
(11
|
)
|
||||||
Carrying value at estimated fair value
|
|
|
|
|
|
$
|
47
|
|
|
$
|
60
|
|
(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.
|
|
At
June 30, |
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
|
Carrying Value After Measurement
|
|
Gains (Losses)
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Mortgage loans (1)
|
$
|
26
|
|
|
$
|
97
|
|
|
$
|
(85
|
)
|
|
$
|
—
|
|
|
$
|
(143
|
)
|
|
$
|
4
|
|
Other limited partnership interests (2)
|
$
|
62
|
|
|
$
|
36
|
|
|
$
|
(16
|
)
|
|
$
|
(8
|
)
|
|
$
|
(36
|
)
|
|
$
|
(19
|
)
|
Other assets (3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
$
|
—
|
|
(1)
|
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.
|
(2)
|
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
June 30, 2016
and
2015
were not significant.
|
(3)
|
During the three months and six months ended June 30, 2016, the Company recognized an impairment of computer software in connection with the U.S. Retail Advisor Force Divestiture. See
Note 3
.
|
|
June 30, 2016
|
||||||||||||||||||
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||||
|
(In millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
$
|
68,791
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,860
|
|
|
$
|
71,860
|
|
Policy loans
|
$
|
11,240
|
|
|
$
|
—
|
|
|
$
|
1,207
|
|
|
$
|
12,646
|
|
|
$
|
13,853
|
|
Real estate joint ventures
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
105
|
|
Other limited partnership interests
|
$
|
442
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
499
|
|
|
$
|
499
|
|
Other invested assets
|
$
|
499
|
|
|
$
|
158
|
|
|
$
|
1
|
|
|
$
|
340
|
|
|
$
|
499
|
|
Premiums, reinsurance and other receivables
|
$
|
4,046
|
|
|
$
|
—
|
|
|
$
|
901
|
|
|
$
|
3,262
|
|
|
$
|
4,163
|
|
Other assets
|
$
|
248
|
|
|
$
|
—
|
|
|
$
|
208
|
|
|
$
|
77
|
|
|
$
|
285
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances
|
$
|
125,026
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132,126
|
|
|
$
|
132,126
|
|
Long-term debt
|
$
|
16,531
|
|
|
$
|
—
|
|
|
$
|
18,530
|
|
|
$
|
—
|
|
|
$
|
18,530
|
|
Collateral financing arrangements
|
$
|
4,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,771
|
|
|
$
|
3,771
|
|
Junior subordinated debt securities
|
$
|
3,168
|
|
|
$
|
—
|
|
|
$
|
3,972
|
|
|
$
|
—
|
|
|
$
|
3,972
|
|
Other liabilities
|
$
|
6,552
|
|
|
$
|
—
|
|
|
$
|
6,067
|
|
|
$
|
487
|
|
|
$
|
6,554
|
|
Separate account liabilities
|
$
|
120,611
|
|
|
$
|
—
|
|
|
$
|
120,611
|
|
|
$
|
—
|
|
|
$
|
120,611
|
|
|
December 31, 2015
|
||||||||||||||||||
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||||
|
(In millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
$
|
66,616
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68,539
|
|
|
$
|
68,539
|
|
Policy loans
|
$
|
11,258
|
|
|
$
|
—
|
|
|
$
|
1,279
|
|
|
$
|
12,072
|
|
|
$
|
13,351
|
|
Real estate joint ventures
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
$
|
104
|
|
Other limited partnership interests
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
615
|
|
|
$
|
615
|
|
Other invested assets
|
$
|
537
|
|
|
$
|
155
|
|
|
$
|
2
|
|
|
$
|
380
|
|
|
$
|
537
|
|
Premiums, reinsurance and other receivables
|
$
|
2,822
|
|
|
$
|
—
|
|
|
$
|
484
|
|
|
$
|
2,421
|
|
|
$
|
2,905
|
|
Other assets
|
$
|
235
|
|
|
$
|
—
|
|
|
$
|
207
|
|
|
$
|
60
|
|
|
$
|
267
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances
|
$
|
125,040
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130,125
|
|
|
$
|
130,125
|
|
Long-term debt
|
$
|
17,954
|
|
|
$
|
—
|
|
|
$
|
19,360
|
|
|
$
|
—
|
|
|
$
|
19,360
|
|
Collateral financing arrangements
|
$
|
4,139
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,899
|
|
|
$
|
3,899
|
|
Junior subordinated debt securities
|
$
|
3,194
|
|
|
$
|
—
|
|
|
$
|
4,029
|
|
|
$
|
—
|
|
|
$
|
4,029
|
|
Other liabilities
|
$
|
2,249
|
|
|
$
|
—
|
|
|
$
|
865
|
|
|
$
|
1,385
|
|
|
$
|
2,250
|
|
Separate account liabilities
|
$
|
112,119
|
|
|
$
|
—
|
|
|
$
|
112,119
|
|
|
$
|
—
|
|
|
$
|
112,119
|
|
Series
|
|
Shares
Authorized
|
|
Shares
Issued
|
|
Shares
Outstanding
|
|||
Floating Rate Non-Cumulative Preferred Stock, Series A
|
|
27,600,000
|
|
|
24,000,000
|
|
|
24,000,000
|
|
5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
|
|
1,500,000
|
|
|
1,500,000
|
|
|
1,500,000
|
|
Series A Junior Participating Preferred Stock
|
|
10,000,000
|
|
|
—
|
|
|
—
|
|
Not designated
|
|
160,900,000
|
|
|
—
|
|
|
—
|
|
Total
|
|
200,000,000
|
|
|
25,500,000
|
|
|
25,500,000
|
|
|
|
Three Months
Ended June 30, 2016 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
15,446
|
|
|
$
|
1,725
|
|
|
$
|
(4,282
|
)
|
|
$
|
(2,024
|
)
|
|
$
|
10,865
|
|
OCI before reclassifications
|
|
4,268
|
|
|
800
|
|
|
209
|
|
|
11
|
|
|
5,288
|
|
|||||
Deferred income tax benefit (expense)
|
|
(1,388
|
)
|
|
(269
|
)
|
|
53
|
|
|
(4
|
)
|
|
(1,608
|
)
|
|||||
AOCI before reclassifications, net of income tax
|
|
18,326
|
|
|
2,256
|
|
|
(4,020
|
)
|
|
(2,017
|
)
|
|
14,545
|
|
|||||
Amounts reclassified from AOCI
|
|
(183
|
)
|
|
243
|
|
|
—
|
|
|
51
|
|
|
111
|
|
|||||
Deferred income tax benefit (expense)
|
|
61
|
|
|
(68
|
)
|
|
—
|
|
|
(17
|
)
|
|
(24
|
)
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
(122
|
)
|
|
175
|
|
|
—
|
|
|
34
|
|
|
87
|
|
|||||
Balance, end of period
|
|
$
|
18,204
|
|
|
$
|
2,431
|
|
|
$
|
(4,020
|
)
|
|
$
|
(1,983
|
)
|
|
$
|
14,632
|
|
|
||||||||||||||||||||
|
|
Three Months
Ended June 30, 2015 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
16,206
|
|
|
$
|
1,555
|
|
|
$
|
(3,986
|
)
|
|
$
|
(2,246
|
)
|
|
$
|
11,529
|
|
OCI before reclassifications
|
|
(6,511
|
)
|
|
(395
|
)
|
|
(237
|
)
|
|
3
|
|
|
(7,140
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
2,178
|
|
|
150
|
|
|
9
|
|
|
(1
|
)
|
|
2,336
|
|
|||||
AOCI before reclassifications, net of income tax
|
|
11,873
|
|
|
1,310
|
|
|
(4,214
|
)
|
|
(2,244
|
)
|
|
6,725
|
|
|||||
Amounts reclassified from AOCI
|
|
(177
|
)
|
|
(303
|
)
|
|
—
|
|
|
57
|
|
|
(423
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
65
|
|
|
95
|
|
|
—
|
|
|
(19
|
)
|
|
141
|
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
(112
|
)
|
|
(208
|
)
|
|
—
|
|
|
38
|
|
|
(282
|
)
|
|||||
Balance, end of period
|
|
$
|
11,761
|
|
|
$
|
1,102
|
|
|
$
|
(4,214
|
)
|
|
$
|
(2,206
|
)
|
|
$
|
6,443
|
|
|
|
Six Months
Ended June 30, 2016 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
10,315
|
|
|
$
|
1,458
|
|
|
$
|
(4,950
|
)
|
|
$
|
(2,052
|
)
|
|
$
|
4,771
|
|
OCI before reclassifications
|
|
11,938
|
|
|
1,496
|
|
|
760
|
|
|
11
|
|
|
14,205
|
|
|||||
Deferred income tax benefit (expense)
|
|
(3,937
|
)
|
|
(468
|
)
|
|
170
|
|
|
(4
|
)
|
|
(4,239
|
)
|
|||||
AOCI before reclassifications, net of income tax
|
|
18,316
|
|
|
2,486
|
|
|
(4,020
|
)
|
|
(2,045
|
)
|
|
14,737
|
|
|||||
Amounts reclassified from AOCI
|
|
(166
|
)
|
|
(80
|
)
|
|
—
|
|
|
99
|
|
|
(147
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
54
|
|
|
25
|
|
|
—
|
|
|
(37
|
)
|
|
42
|
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
(112
|
)
|
|
(55
|
)
|
|
—
|
|
|
62
|
|
|
(105
|
)
|
|||||
Balance, end of period
|
|
$
|
18,204
|
|
|
$
|
2,431
|
|
|
$
|
(4,020
|
)
|
|
$
|
(1,983
|
)
|
|
$
|
14,632
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months
Ended June 30, 2015 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
15,159
|
|
|
$
|
1,076
|
|
|
$
|
(3,303
|
)
|
|
$
|
(2,283
|
)
|
|
$
|
10,649
|
|
OCI before reclassifications
|
|
(4,885
|
)
|
|
(208
|
)
|
|
(907
|
)
|
|
3
|
|
|
(5,997
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
1,677
|
|
|
84
|
|
|
(4
|
)
|
|
(1
|
)
|
|
1,756
|
|
|||||
AOCI before reclassifications, net of income tax
|
|
11,951
|
|
|
952
|
|
|
(4,214
|
)
|
|
(2,281
|
)
|
|
6,408
|
|
|||||
Amounts reclassified from AOCI
|
|
(290
|
)
|
|
251
|
|
|
—
|
|
|
114
|
|
|
75
|
|
|||||
Deferred income tax benefit (expense)
|
|
100
|
|
|
(101
|
)
|
|
—
|
|
|
(39
|
)
|
|
(40
|
)
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
(190
|
)
|
|
150
|
|
|
—
|
|
|
75
|
|
|
35
|
|
|||||
Balance, end of period
|
|
$
|
11,761
|
|
|
$
|
1,102
|
|
|
$
|
(4,214
|
)
|
|
$
|
(2,206
|
)
|
|
$
|
6,443
|
|
(1)
|
See Note
6
for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation.
|
AOCI Components
|
|
Amounts Reclassified from AOCI
|
|
Consolidated Statement of Operations and
Comprehensive Income (Loss) Locations
|
||||||||||||||
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
||||||||
|
|
(In millions)
|
|
|
||||||||||||||
Net unrealized investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized investment gains (losses)
|
|
$
|
158
|
|
|
$
|
110
|
|
|
$
|
125
|
|
|
$
|
249
|
|
|
Net investment gains (losses)
|
Net unrealized investment gains (losses)
|
|
16
|
|
|
17
|
|
|
19
|
|
|
57
|
|
|
Net investment income
|
||||
Net unrealized investment gains (losses)
|
|
9
|
|
|
50
|
|
|
22
|
|
|
(16
|
)
|
|
Net derivative gains (losses)
|
||||
Net unrealized investment gains (losses), before income tax
|
|
183
|
|
|
177
|
|
|
166
|
|
|
290
|
|
|
|
||||
Income tax (expense) benefit
|
|
(61
|
)
|
|
(65
|
)
|
|
(54
|
)
|
|
(100
|
)
|
|
|
||||
Net unrealized investment gains (losses), net of income tax
|
|
122
|
|
|
112
|
|
|
112
|
|
|
190
|
|
|
|
||||
Unrealized gains (losses) on derivatives - cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
18
|
|
|
7
|
|
|
28
|
|
|
12
|
|
|
Net derivative gains (losses)
|
||||
Interest rate swaps
|
|
4
|
|
|
3
|
|
|
7
|
|
|
6
|
|
|
Net investment income
|
||||
Interest rate forwards
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
|
4
|
|
|
Net derivative gains (losses)
|
||||
Interest rate forwards
|
|
2
|
|
|
1
|
|
|
3
|
|
|
2
|
|
|
Net investment income
|
||||
Interest rate forwards
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
Other expenses
|
||||
Foreign currency swaps
|
|
(269
|
)
|
|
290
|
|
|
37
|
|
|
(277
|
)
|
|
Net derivative gains (losses)
|
||||
Foreign currency swaps
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
Net investment income
|
||||
Foreign currency swaps
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
Other expenses
|
||||
Credit forwards
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
Net derivative gains (losses)
|
||||
Credit forwards
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
Net investment income
|
||||
Gains (losses) on cash flow hedges, before income tax
|
|
(243
|
)
|
|
303
|
|
|
80
|
|
|
(251
|
)
|
|
|
||||
Income tax (expense) benefit
|
|
68
|
|
|
(95
|
)
|
|
(25
|
)
|
|
101
|
|
|
|
||||
Gains (losses) on cash flow hedges, net of income tax
|
|
(175
|
)
|
|
208
|
|
|
55
|
|
|
(150
|
)
|
|
|
||||
Defined benefit plans adjustment: (1)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of net actuarial gains (losses)
|
|
(52
|
)
|
|
(58
|
)
|
|
(103
|
)
|
|
(116
|
)
|
|
|
||||
Amortization of prior service (costs) credit
|
|
1
|
|
|
1
|
|
|
4
|
|
|
2
|
|
|
|
||||
Amortization of defined benefit plan items, before income tax
|
|
(51
|
)
|
|
(57
|
)
|
|
(99
|
)
|
|
(114
|
)
|
|
|
||||
Income tax (expense) benefit
|
|
17
|
|
|
19
|
|
|
37
|
|
|
39
|
|
|
|
||||
Amortization of defined benefit plan items, net of income tax
|
|
(34
|
)
|
|
(38
|
)
|
|
(62
|
)
|
|
(75
|
)
|
|
|
||||
Total reclassifications, net of income tax
|
|
$
|
(87
|
)
|
|
$
|
282
|
|
|
$
|
105
|
|
|
$
|
(35
|
)
|
|
|
(1)
|
These AOCI components are included in the computation of net periodic benefit costs. See Note
11
.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Compensation
|
|
$
|
1,189
|
|
|
$
|
1,258
|
|
|
$
|
2,499
|
|
|
$
|
2,549
|
|
Pension, postretirement and postemployment benefit costs
|
|
103
|
|
|
105
|
|
|
243
|
|
|
197
|
|
||||
Commissions
|
|
1,094
|
|
|
1,122
|
|
|
2,228
|
|
|
2,279
|
|
||||
Volume-related costs
|
|
214
|
|
|
255
|
|
|
480
|
|
|
497
|
|
||||
Capitalization of DAC
|
|
(915
|
)
|
|
(927
|
)
|
|
(1,896
|
)
|
|
(1,895
|
)
|
||||
Amortization of DAC and VOBA
|
|
121
|
|
|
897
|
|
|
1,116
|
|
|
1,922
|
|
||||
Amortization of negative VOBA
|
|
(67
|
)
|
|
(92
|
)
|
|
(166
|
)
|
|
(192
|
)
|
||||
Interest expense on debt
|
|
306
|
|
|
308
|
|
|
618
|
|
|
606
|
|
||||
Premium taxes, licenses and fees
|
|
189
|
|
|
196
|
|
|
404
|
|
|
369
|
|
||||
Professional services
|
|
398
|
|
|
383
|
|
|
728
|
|
|
713
|
|
||||
Rent and related expenses, net of sublease income
|
|
98
|
|
|
84
|
|
|
195
|
|
|
167
|
|
||||
Other
|
|
516
|
|
|
483
|
|
|
989
|
|
|
920
|
|
||||
Total other expenses
|
|
$
|
3,246
|
|
|
$
|
4,072
|
|
|
$
|
7,438
|
|
|
$
|
8,132
|
|
|
|
Three Months
Ended June 30, |
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
|
(In millions)
|
||||||||||||||
Service costs
|
|
$
|
73
|
|
|
$
|
2
|
|
|
$
|
69
|
|
|
$
|
5
|
|
Interest costs
|
|
109
|
|
|
21
|
|
|
107
|
|
|
22
|
|
||||
Curtailment costs (1)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
|
|
(127
|
)
|
|
(19
|
)
|
|
(136
|
)
|
|
(20
|
)
|
||||
Amortization of net actuarial (gains) losses
|
|
50
|
|
|
2
|
|
|
47
|
|
|
11
|
|
||||
Amortization of prior service costs (credit)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net periodic benefit costs (credit)
|
|
$
|
105
|
|
|
$
|
2
|
|
|
$
|
87
|
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six Months
Ended June 30, |
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
|
(In millions)
|
||||||||||||||
Service costs
|
|
$
|
145
|
|
|
$
|
4
|
|
|
$
|
138
|
|
|
$
|
9
|
|
Interest costs
|
|
220
|
|
|
42
|
|
|
212
|
|
|
45
|
|
||||
Curtailment costs (1)
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
|
|
(254
|
)
|
|
(37
|
)
|
|
(272
|
)
|
|
(40
|
)
|
||||
Amortization of net actuarial (gains) losses
|
|
99
|
|
|
4
|
|
|
95
|
|
|
21
|
|
||||
Amortization of prior service costs (credit)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Net periodic benefit costs (credit)
|
|
$
|
210
|
|
|
$
|
36
|
|
|
$
|
173
|
|
|
$
|
33
|
|
(1)
|
The Company recognized curtailment charges on certain postretirement benefit plans in connection with the U.S Retail Advisor Force Divestiture. See Note
3
.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions, except share and per share data)
|
||||||||||||||
Weighted Average Shares:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock outstanding for basic earnings per common share
|
|
1,100,328,049
|
|
|
1,117,807,514
|
|
|
1,100,582,221
|
|
|
1,120,801,928
|
|
||||
Incremental common shares from assumed:
|
|
|
|
|
|
|
|
|
||||||||
Exercise or issuance of stock-based awards
|
|
8,800,389
|
|
|
10,584,264
|
|
|
8,292,739
|
|
|
10,320,897
|
|
||||
Weighted average common stock outstanding for diluted earnings per common share
|
|
1,109,128,438
|
|
|
1,128,391,778
|
|
|
1,108,874,960
|
|
|
1,131,122,825
|
|
||||
Net Income (Loss):
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
114
|
|
|
$
|
1,119
|
|
|
$
|
2,317
|
|
|
$
|
3,282
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
4
|
|
|
4
|
|
|
6
|
|
|
9
|
|
||||
Less: Preferred stock dividends
|
|
46
|
|
|
31
|
|
|
52
|
|
|
61
|
|
||||
Preferred stock repurchase premium
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
|
$
|
64
|
|
|
$
|
1,042
|
|
|
$
|
2,259
|
|
|
$
|
3,170
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
0.93
|
|
|
$
|
2.05
|
|
|
$
|
2.83
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
0.92
|
|
|
$
|
2.04
|
|
|
$
|
2.80
|
|
|
Page
|
(1)
|
Excludes Corporate & Other.
|
(2)
|
Stacked column chart reflects the contribution to total net income (loss) for each of the segments for the six months ended June 30, 2016, including the net loss reflected in the Retail segment.
|
(3)
|
See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for reconciliations and definitions of non-GAAP financial measures.
|
(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.
|
|
Six Months Ended June 30, 2016
|
||
|
(In millions)
|
||
General account investment return
|
$
|
5
|
|
Separate account investment return
|
(47
|
)
|
|
Net investment gains (losses)/Net derivative gains (losses)
|
1,080
|
|
|
Guaranteed minimum income benefits
|
(228
|
)
|
|
Expense
|
(5
|
)
|
|
In-force/Persistency
|
(71
|
)
|
|
Other
|
(72
|
)
|
|
Total
|
$
|
662
|
|
•
|
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 $1.3 billion, 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 current period assumption review, which is described more fully in “
—
Results of Operations
—
Consolidated Results
—
Three Months Ended June 30, 2016 Compared with the Three Months Ended June 30, 2016
—
Actuarial Assumption Review.” Mark-to-market changes on the freestanding derivatives hedging such guarantee obligations resulted in an increase in DAC and VOBA amortization of $236 million.
|
–
|
The Company’s nonperformance risk adjustment decreased the valuation of guaranteed liabilities, increased actual gross profits and increased DAC and VOBA amortization by $307 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 $364 million.
|
–
|
The remainder of the impact was a net increase of DAC and VOBA amortization by $14 million and was attributable to 2016 investment activities.
|
•
|
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 $228 million.
|
|
Changes in Balance Sheet Carrying Value At June 30, 2016
|
||||||
|
Policyholder Account Balances
|
|
DAC and VOBA
|
||||
|
(In millions)
|
||||||
100% increase in our credit spread
|
$
|
5,850
|
|
|
$
|
1,032
|
|
As reported
|
$
|
7,330
|
|
|
$
|
1,360
|
|
50% decrease in our credit spread
|
$
|
8,288
|
|
|
$
|
1,564
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
9,417
|
|
|
$
|
9,312
|
|
|
$
|
19,110
|
|
|
$
|
18,565
|
|
Universal life and investment-type product policy fees
|
2,286
|
|
|
2,434
|
|
|
4,630
|
|
|
4,828
|
|
||||
Net investment income
|
4,887
|
|
|
4,947
|
|
|
9,446
|
|
|
10,408
|
|
||||
Other revenues
|
487
|
|
|
518
|
|
|
974
|
|
|
1,013
|
|
||||
Net investment gains (losses)
|
266
|
|
|
(133
|
)
|
|
281
|
|
|
153
|
|
||||
Net derivative gains (losses)
|
(2,099
|
)
|
|
(912
|
)
|
|
(764
|
)
|
|
(91
|
)
|
||||
Total revenues
|
15,244
|
|
|
16,166
|
|
|
33,677
|
|
|
34,876
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
10,598
|
|
|
9,683
|
|
|
20,591
|
|
|
19,279
|
|
||||
Interest credited to policyholder account balances
|
1,500
|
|
|
1,298
|
|
|
2,826
|
|
|
3,293
|
|
||||
Capitalization of DAC
|
(915
|
)
|
|
(927
|
)
|
|
(1,896
|
)
|
|
(1,895
|
)
|
||||
Amortization of DAC and VOBA
|
121
|
|
|
897
|
|
|
1,116
|
|
|
1,922
|
|
||||
Amortization of negative VOBA
|
(67
|
)
|
|
(92
|
)
|
|
(166
|
)
|
|
(192
|
)
|
||||
Interest expense on debt
|
306
|
|
|
308
|
|
|
618
|
|
|
606
|
|
||||
Other expenses
|
3,801
|
|
|
3,886
|
|
|
7,766
|
|
|
7,691
|
|
||||
Total expenses
|
15,344
|
|
|
15,053
|
|
|
30,855
|
|
|
30,704
|
|
||||
Income (loss) before provision for income tax
|
(100
|
)
|
|
1,113
|
|
|
2,822
|
|
|
4,172
|
|
||||
Provision for income tax expense (benefit)
|
(214
|
)
|
|
(6
|
)
|
|
505
|
|
|
890
|
|
||||
Net income (loss)
|
114
|
|
|
1,119
|
|
|
2,317
|
|
|
3,282
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
4
|
|
|
4
|
|
|
6
|
|
|
9
|
|
||||
Net income (loss) attributable to MetLife, Inc.
|
110
|
|
|
1,115
|
|
|
2,311
|
|
|
3,273
|
|
||||
Less: Preferred stock dividends
|
46
|
|
|
31
|
|
|
52
|
|
|
61
|
|
||||
Preferred stock repurchase premium
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
$
|
64
|
|
|
$
|
1,042
|
|
|
$
|
2,259
|
|
|
$
|
3,170
|
|
|
Three Months
Ended June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Non-VA program derivatives
|
|
|
|
||||
Interest rate
|
$
|
775
|
|
|
$
|
(663
|
)
|
Foreign currency exchange rate
|
582
|
|
|
(219
|
)
|
||
Credit
|
1
|
|
|
(11
|
)
|
||
Equity
|
—
|
|
|
(42
|
)
|
||
Non-VA embedded derivatives
|
(83
|
)
|
|
50
|
|
||
Total non-VA program derivatives
|
1,275
|
|
|
(885
|
)
|
||
VA program derivatives
|
|
|
|
||||
Market risks in embedded derivatives
|
(1,346
|
)
|
|
1,038
|
|
||
Nonperformance risk adjustment on embedded derivatives
|
1,103
|
|
|
(100
|
)
|
||
Other risks in embedded derivatives
|
(4,298
|
)
|
|
(167
|
)
|
||
Total embedded derivatives
|
(4,541
|
)
|
|
771
|
|
||
Freestanding derivatives hedging embedded derivatives
|
1,167
|
|
|
(798
|
)
|
||
Total VA program derivatives
|
(3,374
|
)
|
|
(27
|
)
|
||
Net derivative gains (losses)
|
$
|
(2,099
|
)
|
|
$
|
(912
|
)
|
•
|
Updates to actuarial policyholder behavior assumptions within the valuation model. For details, see “
—
Actuarial Assumption Review.”
|
•
|
An increase in the risk margin adjustment, measuring policyholder behavior risks, which was also affected by the actuarial assumption update, along with market and interest rate changes,
|
•
|
In-force changes and the mismatch of fund performance between actual and modeled funds, and
|
•
|
The partially offsetting impact of a combination of other factors, including reserve changes influenced by benefit features and actual policyholder behavior, as well as FCTA.
|
•
|
Long-term interest rates decreased in the current period and increased in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives. For example, the 30-year U.S. swap rate decreased by 14% in the current period and increased by 23% in the prior period.
|
•
|
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 our former operating joint venture in Japan. For example, the Japanese yen strengthened against the U.S. dollar by 9% in the current period and weakened by 2% in the prior period.
|
•
|
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:
|
•
|
Changes in economic assumptions resulted in reserve increases and unfavorable DAC amortization resulting in a charge of $430 million ($279 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 $342 million ($222 million, net of income tax).
|
|
Six Months
Ended June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Non-VA program derivatives
|
|
|
|
||||
Interest rate
|
$
|
1,853
|
|
|
$
|
(217
|
)
|
Foreign currency exchange rate
|
784
|
|
|
157
|
|
||
Credit
|
16
|
|
|
3
|
|
||
Equity
|
(50
|
)
|
|
(92
|
)
|
||
Non-VA embedded derivatives
|
(136
|
)
|
|
5
|
|
||
Total non-VA program derivatives
|
2,467
|
|
|
(144
|
)
|
||
VA program derivatives
|
|
|
|
||||
Market risks in embedded derivatives
|
(2,682
|
)
|
|
1,026
|
|
||
Nonperformance risk adjustment on embedded derivatives
|
1,462
|
|
|
(31
|
)
|
||
Other risks in embedded derivatives
|
(4,437
|
)
|
|
(206
|
)
|
||
Total embedded derivatives
|
(5,657
|
)
|
|
789
|
|
||
Freestanding derivatives hedging embedded derivatives
|
2,426
|
|
|
(736
|
)
|
||
Total VA program derivatives
|
(3,231
|
)
|
|
53
|
|
||
Net derivative gains (losses)
|
$
|
(764
|
)
|
|
$
|
(91
|
)
|
•
|
Updates to actuarial policyholder behavior assumptions within the valuation model. For details, see “
—
Three Months Ended June 30, 2016 Compared with the Three Months Ended June 30, 2015
—
Actuarial Assumption Review.”
|
•
|
An increase in the risk margin adjustment, measuring policyholder behavior risks, which was also affected by the actuarial assumption update, along with market and interest rate changes,
|
•
|
In-force changes and the mismatch of fund performance between actual and modeled funds, and
|
•
|
The partially offsetting impact of a combination of other factors, including reserve changes influenced by benefit features and actual policyholder behavior, as well as FCTA.
|
•
|
Long-term interest rates decreased in the current period and increased in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives. For example, the 30-year U.S. swap rate decreased by 30% in the current period and increased by 9% in the prior period.
|
•
|
Key equity index levels mostly decreased in the current period and increased in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives. For example, the Nikkei 225 Index decreased by 18% in the current period and increased by 16% in the prior period.
|
•
|
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 U.S. dollar by 15% in the current period and weakened by 2% in the prior period.
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
(1,642
|
)
|
|
$
|
408
|
|
|
$
|
416
|
|
|
$
|
79
|
|
|
$
|
771
|
|
|
$
|
96
|
|
|
$
|
(14
|
)
|
|
$
|
114
|
|
Less: Net investment gains (losses)
|
84
|
|
|
11
|
|
|
67
|
|
|
18
|
|
|
140
|
|
|
16
|
|
|
(70
|
)
|
|
266
|
|
||||||||
Less: Net derivative gains (losses)
|
(3,643
|
)
|
|
314
|
|
|
181
|
|
|
(26
|
)
|
|
606
|
|
|
3
|
|
|
466
|
|
|
(2,099
|
)
|
||||||||
Less: Other adjustments to net income (1)
|
749
|
|
|
(44
|
)
|
|
(73
|
)
|
|
(56
|
)
|
|
(30
|
)
|
|
48
|
|
|
(116
|
)
|
|
478
|
|
||||||||
Less: Provision for income tax (expense) benefit
|
984
|
|
|
(94
|
)
|
|
(61
|
)
|
|
15
|
|
|
(204
|
)
|
|
(35
|
)
|
|
(106
|
)
|
|
499
|
|
||||||||
Operating earnings
|
$
|
184
|
|
|
$
|
221
|
|
|
$
|
302
|
|
|
$
|
128
|
|
|
$
|
259
|
|
|
$
|
64
|
|
|
(188
|
)
|
|
970
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
|
46
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(234
|
)
|
|
$
|
924
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
587
|
|
|
$
|
38
|
|
|
$
|
307
|
|
|
$
|
86
|
|
|
$
|
565
|
|
|
$
|
63
|
|
|
$
|
(527
|
)
|
|
$
|
1,119
|
|
Less: Net investment gains (losses)
|
9
|
|
|
8
|
|
|
(31
|
)
|
|
—
|
|
|
57
|
|
|
5
|
|
|
(181
|
)
|
|
(133
|
)
|
||||||||
Less: Net derivative gains (losses)
|
(95
|
)
|
|
(264
|
)
|
|
(134
|
)
|
|
(15
|
)
|
|
9
|
|
|
13
|
|
|
(426
|
)
|
|
(912
|
)
|
||||||||
Less: Other adjustments to net income (1)
|
(72
|
)
|
|
(41
|
)
|
|
13
|
|
|
(24
|
)
|
|
(37
|
)
|
|
(12
|
)
|
|
(4
|
)
|
|
(177
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
55
|
|
|
104
|
|
|
53
|
|
|
9
|
|
|
111
|
|
|
7
|
|
|
206
|
|
|
545
|
|
||||||||
Operating earnings
|
$
|
690
|
|
|
$
|
231
|
|
|
$
|
406
|
|
|
$
|
116
|
|
|
$
|
425
|
|
|
$
|
50
|
|
|
(122
|
)
|
|
1,796
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
|
31
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(153
|
)
|
|
$
|
1,765
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
(1,214
|
)
|
|
$
|
717
|
|
|
$
|
657
|
|
|
$
|
207
|
|
|
$
|
1,634
|
|
|
$
|
170
|
|
|
$
|
146
|
|
|
$
|
2,317
|
|
Less: Net investment gains (losses)
|
(33
|
)
|
|
(28
|
)
|
|
(26
|
)
|
|
(4
|
)
|
|
363
|
|
|
24
|
|
|
(15
|
)
|
|
281
|
|
||||||||
Less: Net derivative gains (losses)
|
(3,654
|
)
|
|
605
|
|
|
266
|
|
|
58
|
|
|
1,017
|
|
|
2
|
|
|
942
|
|
|
(764
|
)
|
||||||||
Less: Other adjustments to net income (1)
|
717
|
|
|
(89
|
)
|
|
(148
|
)
|
|
(106
|
)
|
|
37
|
|
|
66
|
|
|
(184
|
)
|
|
293
|
|
||||||||
Less: Provision for income tax (expense) benefit
|
1,040
|
|
|
(166
|
)
|
|
(32
|
)
|
|
(6
|
)
|
|
(347
|
)
|
|
(49
|
)
|
|
(238
|
)
|
|
202
|
|
||||||||
Operating earnings
|
$
|
716
|
|
|
$
|
395
|
|
|
$
|
597
|
|
|
$
|
265
|
|
|
$
|
564
|
|
|
$
|
127
|
|
|
(359
|
)
|
|
2,305
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
52
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(411
|
)
|
|
$
|
2,253
|
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
1,363
|
|
|
$
|
374
|
|
|
$
|
836
|
|
|
$
|
204
|
|
|
$
|
913
|
|
|
$
|
130
|
|
|
$
|
(538
|
)
|
|
$
|
3,282
|
|
Less: Net investment gains (losses)
|
77
|
|
|
11
|
|
|
174
|
|
|
(2
|
)
|
|
125
|
|
|
8
|
|
|
(240
|
)
|
|
153
|
|
||||||||
Less: Net derivative gains (losses)
|
218
|
|
|
(59
|
)
|
|
(54
|
)
|
|
(36
|
)
|
|
27
|
|
|
14
|
|
|
(201
|
)
|
|
(91
|
)
|
||||||||
Less: Other adjustments to net income (1)
|
(264
|
)
|
|
(83
|
)
|
|
(26
|
)
|
|
(19
|
)
|
|
(92
|
)
|
|
7
|
|
|
(10
|
)
|
|
(487
|
)
|
||||||||
Less: Provision for income tax (expense) benefit
|
(11
|
)
|
|
46
|
|
|
(33
|
)
|
|
14
|
|
|
101
|
|
|
(19
|
)
|
|
145
|
|
|
243
|
|
||||||||
Operating earnings
|
$
|
1,343
|
|
|
$
|
459
|
|
|
$
|
775
|
|
|
$
|
247
|
|
|
$
|
752
|
|
|
$
|
120
|
|
|
(232
|
)
|
|
3,464
|
|
||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
61
|
|
||||||||||||||
Operating earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(293
|
)
|
|
$
|
3,403
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
1,473
|
|
|
$
|
5,329
|
|
|
$
|
2,272
|
|
|
$
|
1,237
|
|
|
$
|
3,367
|
|
|
$
|
1,042
|
|
|
$
|
524
|
|
|
$
|
15,244
|
|
Less: Net investment gains (losses)
|
84
|
|
|
11
|
|
|
67
|
|
|
18
|
|
|
140
|
|
|
16
|
|
|
(70
|
)
|
|
266
|
|
||||||||
Less: Net derivative gains (losses)
|
(3,643
|
)
|
|
314
|
|
|
181
|
|
|
(26
|
)
|
|
606
|
|
|
3
|
|
|
466
|
|
|
(2,099
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
—
|
|
|
9
|
|
||||||||
Less: Other adjustments to revenues (1)
|
6
|
|
|
(44
|
)
|
|
(47
|
)
|
|
4
|
|
|
(131
|
)
|
|
306
|
|
|
19
|
|
|
113
|
|
||||||||
Total operating revenues
|
$
|
5,025
|
|
|
$
|
5,048
|
|
|
$
|
2,071
|
|
|
$
|
1,241
|
|
|
$
|
2,745
|
|
|
$
|
716
|
|
|
$
|
109
|
|
|
$
|
16,955
|
|
Total expenses
|
$
|
4,087
|
|
|
$
|
4,713
|
|
|
$
|
1,634
|
|
|
$
|
1,141
|
|
|
$
|
2,252
|
|
|
$
|
901
|
|
|
$
|
616
|
|
|
$
|
15,344
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
(1,087
|
)
|
||||||||
Less: Other adjustments to expenses (1)
|
358
|
|
|
—
|
|
|
26
|
|
|
60
|
|
|
(106
|
)
|
|
258
|
|
|
135
|
|
|
731
|
|
||||||||
Total operating expenses
|
$
|
4,829
|
|
|
$
|
4,713
|
|
|
$
|
1,608
|
|
|
$
|
1,081
|
|
|
$
|
2,346
|
|
|
$
|
642
|
|
|
$
|
481
|
|
|
$
|
15,700
|
|
|
Retail
|
|
Group,
Voluntary
& Worksite
Benefits
|
|
Corporate
Benefit
Funding
|
|
Latin
America
|
|
Asia
|
|
EMEA
|
|
Corporate
& Other
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
5,168
|
|
|
$
|
4,585
|
|
|
$
|
1,792
|
|
|
$
|
1,363
|
|
|
$
|
3,150
|
|
|
$
|
511
|
|
|
$
|
(403
|
)
|
|
$
|
16,166
|
|
Less: Net investment gains (losses)
|
9
|
|
|
8
|
|
|
(31
|
)
|
|
—
|
|
|
57
|
|
|
5
|
|
|
(181
|
)
|
|
(133
|
)
|
||||||||
Less: Net derivative gains (losses)
|
(95
|
)
|
|
(264
|
)
|
|
(134
|
)
|
|
(15
|
)
|
|
9
|
|
|
13
|
|
|
(426
|
)
|
|
(912
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Less: Other adjustments to revenues (1)
|
(10
|
)
|
|
(41
|
)
|
|
(24
|
)
|
|
4
|
|
|
164
|
|
|
(249
|
)
|
|
4
|
|
|
(152
|
)
|
||||||||
Total operating revenues
|
$
|
5,265
|
|
|
$
|
4,882
|
|
|
$
|
1,981
|
|
|
$
|
1,374
|
|
|
$
|
2,916
|
|
|
$
|
742
|
|
|
$
|
200
|
|
|
$
|
17,360
|
|
Total expenses
|
$
|
4,348
|
|
|
$
|
4,527
|
|
|
$
|
1,323
|
|
|
$
|
1,265
|
|
|
$
|
2,637
|
|
|
$
|
448
|
|
|
$
|
505
|
|
|
$
|
15,053
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(89
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
||||||||
Less: Other adjustments to expenses (1)
|
150
|
|
|
—
|
|
|
(37
|
)
|
|
28
|
|
|
210
|
|
|
(237
|
)
|
|
8
|
|
|
122
|
|
||||||||
Total operating expenses
|
$
|
4,287
|
|
|
$
|
4,527
|
|
|
$
|
1,360
|
|
|
$
|
1,237
|
|
|
$
|
2,432
|
|
|
$
|
685
|
|
|
$
|
497
|
|
|
$
|
15,025
|
|
(1)
|
See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components of such adjustments.
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
6,315
|
|
|
$
|
10,593
|
|
|
$
|
4,068
|
|
|
$
|
2,538
|
|
|
$
|
7,123
|
|
|
$
|
1,832
|
|
|
$
|
1,208
|
|
|
$
|
33,677
|
|
Less: Net investment gains (losses)
|
(33
|
)
|
|
(28
|
)
|
|
(26
|
)
|
|
(4
|
)
|
|
363
|
|
|
24
|
|
|
(15
|
)
|
|
281
|
|
||||||||
Less: Net derivative gains (losses)
|
(3,654
|
)
|
|
605
|
|
|
266
|
|
|
58
|
|
|
1,017
|
|
|
2
|
|
|
942
|
|
|
(764
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
1
|
|
|
—
|
|
|
34
|
|
||||||||
Less: Other adjustments to revenues (1)
|
(8
|
)
|
|
(89
|
)
|
|
(93
|
)
|
|
20
|
|
|
323
|
|
|
394
|
|
|
13
|
|
|
560
|
|
||||||||
Total operating revenues
|
$
|
10,009
|
|
|
$
|
10,105
|
|
|
$
|
3,921
|
|
|
$
|
2,464
|
|
|
$
|
5,388
|
|
|
$
|
1,411
|
|
|
$
|
268
|
|
|
$
|
33,566
|
|
Total expenses
|
$
|
8,354
|
|
|
$
|
9,500
|
|
|
$
|
3,062
|
|
|
$
|
2,251
|
|
|
$
|
4,907
|
|
|
$
|
1,592
|
|
|
$
|
1,189
|
|
|
$
|
30,855
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(1,134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
1
|
|
|
—
|
|
|
(1,081
|
)
|
||||||||
Less: Other adjustments to expenses (1)
|
410
|
|
|
—
|
|
|
55
|
|
|
126
|
|
|
266
|
|
|
328
|
|
|
197
|
|
|
1,382
|
|
||||||||
Total operating expenses
|
$
|
9,078
|
|
|
$
|
9,500
|
|
|
$
|
3,007
|
|
|
$
|
2,125
|
|
|
$
|
4,589
|
|
|
$
|
1,263
|
|
|
$
|
992
|
|
|
$
|
30,554
|
|
|
Retail
|
|
Group,
Voluntary & Worksite Benefits |
|
Corporate
Benefit Funding |
|
Latin
America |
|
Asia
|
|
EMEA
|
|
Corporate
& Other |
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
10,731
|
|
|
$
|
9,647
|
|
|
$
|
4,023
|
|
|
$
|
2,575
|
|
|
$
|
6,224
|
|
|
$
|
1,747
|
|
|
$
|
(71
|
)
|
|
$
|
34,876
|
|
Less: Net investment gains (losses)
|
77
|
|
|
11
|
|
|
174
|
|
|
(2
|
)
|
|
125
|
|
|
8
|
|
|
(240
|
)
|
|
153
|
|
||||||||
Less: Net derivative gains (losses)
|
218
|
|
|
(59
|
)
|
|
(54
|
)
|
|
(36
|
)
|
|
27
|
|
|
14
|
|
|
(201
|
)
|
|
(91
|
)
|
||||||||
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(2
|
)
|
|
—
|
|
|
7
|
|
||||||||
Less: Other adjustments to revenues (1)
|
(44
|
)
|
|
(83
|
)
|
|
(51
|
)
|
|
18
|
|
|
285
|
|
|
282
|
|
|
8
|
|
|
415
|
|
||||||||
Total operating revenues
|
$
|
10,481
|
|
|
$
|
9,778
|
|
|
$
|
3,954
|
|
|
$
|
2,595
|
|
|
$
|
5,777
|
|
|
$
|
1,445
|
|
|
$
|
362
|
|
|
$
|
34,392
|
|
Total expenses
|
$
|
8,800
|
|
|
$
|
9,068
|
|
|
$
|
2,743
|
|
|
$
|
2,333
|
|
|
$
|
5,205
|
|
|
$
|
1,580
|
|
|
$
|
975
|
|
|
$
|
30,704
|
|
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(2
|
)
|
|
—
|
|
|
1
|
|
||||||||
Less: Other adjustments to expenses (1)
|
223
|
|
|
—
|
|
|
(25
|
)
|
|
37
|
|
|
380
|
|
|
275
|
|
|
18
|
|
|
908
|
|
||||||||
Total operating expenses
|
$
|
8,581
|
|
|
$
|
9,068
|
|
|
$
|
2,768
|
|
|
$
|
2,296
|
|
|
$
|
4,818
|
|
|
$
|
1,307
|
|
|
$
|
957
|
|
|
$
|
29,795
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
9,417
|
|
|
$
|
9,313
|
|
|
$
|
18,684
|
|
|
$
|
18,566
|
|
Universal life and investment-type product policy fees
|
2,173
|
|
|
2,335
|
|
|
4,324
|
|
|
4,629
|
|
||||
Net investment income
|
4,881
|
|
|
5,185
|
|
|
9,587
|
|
|
10,167
|
|
||||
Other revenues
|
484
|
|
|
527
|
|
|
971
|
|
|
1,030
|
|
||||
Total operating revenues
|
16,955
|
|
|
17,360
|
|
|
33,566
|
|
|
34,392
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
10,385
|
|
|
9,503
|
|
|
19,978
|
|
|
18,950
|
|
||||
Interest credited to policyholder account balances
|
1,314
|
|
|
1,342
|
|
|
2,615
|
|
|
2,673
|
|
||||
Capitalization of DAC
|
(915
|
)
|
|
(927
|
)
|
|
(1,791
|
)
|
|
(1,895
|
)
|
||||
Amortization of DAC and VOBA
|
1,015
|
|
|
1,001
|
|
|
1,896
|
|
|
1,954
|
|
||||
Amortization of negative VOBA
|
(61
|
)
|
|
(83
|
)
|
|
(128
|
)
|
|
(173
|
)
|
||||
Interest expense on debt
|
303
|
|
|
307
|
|
|
615
|
|
|
604
|
|
||||
Other operating expenses
|
3,659
|
|
|
3,882
|
|
|
7,369
|
|
|
7,682
|
|
||||
Total operating expenses
|
15,700
|
|
|
15,025
|
|
|
30,554
|
|
|
29,795
|
|
||||
Provision for income tax expense (benefit)
|
285
|
|
|
539
|
|
|
707
|
|
|
1,133
|
|
||||
Operating earnings
|
970
|
|
|
1,796
|
|
|
2,305
|
|
|
3,464
|
|
||||
Less: Preferred stock dividends
|
46
|
|
|
31
|
|
|
52
|
|
|
61
|
|
||||
Operating earnings available to common shareholders
|
$
|
924
|
|
|
$
|
1,765
|
|
|
$
|
2,253
|
|
|
$
|
3,403
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
1,695
|
|
|
$
|
1,747
|
|
|
$
|
3,435
|
|
|
$
|
3,496
|
|
Universal life and investment-type product policy fees
|
1,156
|
|
|
1,252
|
|
|
2,305
|
|
|
2,488
|
|
||||
Net investment income
|
1,950
|
|
|
2,003
|
|
|
3,830
|
|
|
3,983
|
|
||||
Other revenues
|
224
|
|
|
263
|
|
|
439
|
|
|
514
|
|
||||
Total operating revenues
|
5,025
|
|
|
5,265
|
|
|
10,009
|
|
|
10,481
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
2,937
|
|
|
2,373
|
|
|
5,395
|
|
|
4,822
|
|
||||
Interest credited to policyholder account balances
|
525
|
|
|
551
|
|
|
1,047
|
|
|
1,093
|
|
||||
Capitalization of DAC
|
(245
|
)
|
|
(257
|
)
|
|
(500
|
)
|
|
(504
|
)
|
||||
Amortization of DAC and VOBA
|
487
|
|
|
400
|
|
|
860
|
|
|
775
|
|
||||
Interest expense on debt
|
1
|
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
||||
Other operating expenses
|
1,124
|
|
|
1,220
|
|
|
2,273
|
|
|
2,396
|
|
||||
Total operating expenses
|
4,829
|
|
|
4,287
|
|
|
9,078
|
|
|
8,581
|
|
||||
Provision for income tax expense (benefit)
|
12
|
|
|
288
|
|
|
215
|
|
|
557
|
|
||||
Operating earnings
|
$
|
184
|
|
|
$
|
690
|
|
|
$
|
716
|
|
|
$
|
1,343
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
4,276
|
|
|
$
|
4,104
|
|
|
$
|
8,570
|
|
|
$
|
8,221
|
|
Universal life and investment-type product policy fees
|
197
|
|
|
183
|
|
|
382
|
|
|
371
|
|
||||
Net investment income
|
458
|
|
|
481
|
|
|
905
|
|
|
959
|
|
||||
Other revenues
|
117
|
|
|
114
|
|
|
248
|
|
|
227
|
|
||||
Total operating revenues
|
5,048
|
|
|
4,882
|
|
|
10,105
|
|
|
9,778
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
3,990
|
|
|
3,805
|
|
|
8,024
|
|
|
7,640
|
|
||||
Interest credited to policyholder account balances
|
37
|
|
|
38
|
|
|
74
|
|
|
75
|
|
||||
Capitalization of DAC
|
(39
|
)
|
|
(36
|
)
|
|
(75
|
)
|
|
(72
|
)
|
||||
Amortization of DAC and VOBA
|
39
|
|
|
39
|
|
|
79
|
|
|
80
|
|
||||
Interest expense on debt
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other operating expenses
|
685
|
|
|
681
|
|
|
1,397
|
|
|
1,345
|
|
||||
Total operating expenses
|
4,713
|
|
|
4,527
|
|
|
9,500
|
|
|
9,068
|
|
||||
Provision for income tax expense (benefit)
|
114
|
|
|
124
|
|
|
210
|
|
|
251
|
|
||||
Operating earnings
|
$
|
221
|
|
|
$
|
231
|
|
|
$
|
395
|
|
|
$
|
459
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
517
|
|
|
$
|
319
|
|
|
$
|
875
|
|
|
$
|
737
|
|
Universal life and investment-type product policy fees
|
61
|
|
|
59
|
|
|
141
|
|
|
113
|
|
||||
Net investment income
|
1,421
|
|
|
1,526
|
|
|
2,763
|
|
|
2,956
|
|
||||
Other revenues
|
72
|
|
|
77
|
|
|
142
|
|
|
148
|
|
||||
Total operating revenues
|
2,071
|
|
|
1,981
|
|
|
3,921
|
|
|
3,954
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
1,181
|
|
|
933
|
|
|
2,143
|
|
|
1,924
|
|
||||
Interest credited to policyholder account balances
|
313
|
|
|
294
|
|
|
623
|
|
|
587
|
|
||||
Capitalization of DAC
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(10
|
)
|
||||
Amortization of DAC and VOBA
|
4
|
|
|
6
|
|
|
9
|
|
|
11
|
|
||||
Interest expense on debt
|
2
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Other operating expenses
|
109
|
|
|
130
|
|
|
229
|
|
|
254
|
|
||||
Total operating expenses
|
1,608
|
|
|
1,360
|
|
|
3,007
|
|
|
2,768
|
|
||||
Provision for income tax expense (benefit)
|
161
|
|
|
215
|
|
|
317
|
|
|
411
|
|
||||
Operating earnings
|
$
|
302
|
|
|
$
|
406
|
|
|
$
|
597
|
|
|
$
|
775
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
716
|
|
|
$
|
783
|
|
|
$
|
1,407
|
|
|
$
|
1,482
|
|
Universal life and investment-type product policy fees
|
269
|
|
|
301
|
|
|
537
|
|
|
595
|
|
||||
Net investment income
|
247
|
|
|
283
|
|
|
504
|
|
|
501
|
|
||||
Other revenues
|
9
|
|
|
7
|
|
|
16
|
|
|
17
|
|
||||
Total operating revenues
|
1,241
|
|
|
1,374
|
|
|
2,464
|
|
|
2,595
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
645
|
|
|
744
|
|
|
1,262
|
|
|
1,325
|
|
||||
Interest credited to policyholder account balances
|
84
|
|
|
89
|
|
|
164
|
|
|
175
|
|
||||
Capitalization of DAC
|
(96
|
)
|
|
(100
|
)
|
|
(193
|
)
|
|
(211
|
)
|
||||
Amortization of DAC and VOBA
|
75
|
|
|
86
|
|
|
148
|
|
|
164
|
|
||||
Amortization of negative VOBA
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Other operating expenses
|
373
|
|
|
419
|
|
|
744
|
|
|
844
|
|
||||
Total operating expenses
|
1,081
|
|
|
1,237
|
|
|
2,125
|
|
|
2,296
|
|
||||
Provision for income tax expense (benefit)
|
32
|
|
|
21
|
|
|
74
|
|
|
52
|
|
||||
Operating earnings
|
$
|
128
|
|
|
$
|
116
|
|
|
$
|
265
|
|
|
$
|
247
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
1,681
|
|
|
$
|
1,809
|
|
|
$
|
3,339
|
|
|
$
|
3,561
|
|
Universal life and investment-type product policy fees
|
370
|
|
|
400
|
|
|
720
|
|
|
797
|
|
||||
Net investment income
|
678
|
|
|
679
|
|
|
1,296
|
|
|
1,363
|
|
||||
Other revenues
|
16
|
|
|
28
|
|
|
33
|
|
|
56
|
|
||||
Total operating revenues
|
2,745
|
|
|
2,916
|
|
|
5,388
|
|
|
5,777
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
1,324
|
|
|
1,375
|
|
|
2,560
|
|
|
2,715
|
|
||||
Interest credited to policyholder account balances
|
324
|
|
|
328
|
|
|
643
|
|
|
665
|
|
||||
Capitalization of DAC
|
(426
|
)
|
|
(398
|
)
|
|
(811
|
)
|
|
(833
|
)
|
||||
Amortization of DAC and VOBA
|
304
|
|
|
336
|
|
|
590
|
|
|
662
|
|
||||
Amortization of negative VOBA
|
(57
|
)
|
|
(78
|
)
|
|
(121
|
)
|
|
(164
|
)
|
||||
Other operating expenses
|
877
|
|
|
869
|
|
|
1,728
|
|
|
1,773
|
|
||||
Total operating expenses
|
2,346
|
|
|
2,432
|
|
|
4,589
|
|
|
4,818
|
|
||||
Provision for income tax expense (benefit)
|
140
|
|
|
59
|
|
|
235
|
|
|
207
|
|
||||
Operating earnings
|
$
|
259
|
|
|
$
|
425
|
|
|
$
|
564
|
|
|
$
|
752
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
519
|
|
|
$
|
525
|
|
|
$
|
1,019
|
|
|
$
|
1,033
|
|
Universal life and investment-type product policy fees
|
95
|
|
|
114
|
|
|
190
|
|
|
216
|
|
||||
Net investment income
|
83
|
|
|
84
|
|
|
163
|
|
|
167
|
|
||||
Other revenues
|
19
|
|
|
19
|
|
|
39
|
|
|
29
|
|
||||
Total operating revenues
|
716
|
|
|
742
|
|
|
1,411
|
|
|
1,445
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
283
|
|
|
265
|
|
|
544
|
|
|
504
|
|
||||
Interest credited to policyholder account balances
|
30
|
|
|
34
|
|
|
59
|
|
|
64
|
|
||||
Capitalization of DAC
|
(106
|
)
|
|
(132
|
)
|
|
(207
|
)
|
|
(265
|
)
|
||||
Amortization of DAC and VOBA
|
103
|
|
|
133
|
|
|
205
|
|
|
261
|
|
||||
Amortization of negative VOBA
|
(4
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(8
|
)
|
||||
Other operating expenses
|
336
|
|
|
389
|
|
|
669
|
|
|
751
|
|
||||
Total operating expenses
|
642
|
|
|
685
|
|
|
1,263
|
|
|
1,307
|
|
||||
Provision for income tax expense (benefit)
|
10
|
|
|
7
|
|
|
21
|
|
|
18
|
|
||||
Operating earnings
|
$
|
64
|
|
|
$
|
50
|
|
|
$
|
127
|
|
|
$
|
120
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
13
|
|
|
$
|
26
|
|
|
$
|
39
|
|
|
$
|
36
|
|
Universal life and investment-type product policy fees
|
25
|
|
|
26
|
|
|
49
|
|
|
49
|
|
||||
Net investment income
|
44
|
|
|
129
|
|
|
126
|
|
|
238
|
|
||||
Other revenues
|
27
|
|
|
19
|
|
|
54
|
|
|
39
|
|
||||
Total operating revenues
|
109
|
|
|
200
|
|
|
268
|
|
|
362
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Policyholder benefits and claims and policyholder dividends
|
25
|
|
|
8
|
|
|
50
|
|
|
20
|
|
||||
Interest credited to policyholder account balances
|
1
|
|
|
8
|
|
|
5
|
|
|
14
|
|
||||
Capitalization of DAC
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Amortization of DAC and VOBA
|
3
|
|
|
1
|
|
|
5
|
|
|
1
|
|
||||
Interest expense on debt
|
299
|
|
|
306
|
|
|
607
|
|
|
603
|
|
||||
Other operating expenses
|
155
|
|
|
174
|
|
|
329
|
|
|
319
|
|
||||
Total operating expenses
|
481
|
|
|
497
|
|
|
992
|
|
|
957
|
|
||||
Provision for income tax expense (benefit)
|
(184
|
)
|
|
(175
|
)
|
|
(365
|
)
|
|
(363
|
)
|
||||
Operating earnings
|
(188
|
)
|
|
(122
|
)
|
|
(359
|
)
|
|
(232
|
)
|
||||
Less: Preferred stock dividends
|
46
|
|
|
31
|
|
|
52
|
|
|
61
|
|
||||
Operating earnings available to common shareholders
|
$
|
(234
|
)
|
|
$
|
(153
|
)
|
|
$
|
(411
|
)
|
|
$
|
(293
|
)
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Other business activities
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
24
|
|
Other net investment income
|
28
|
|
|
83
|
|
|
81
|
|
|
154
|
|
||||
Interest expense on debt
|
(196
|
)
|
|
(199
|
)
|
|
(396
|
)
|
|
(392
|
)
|
||||
Preferred stock dividends
|
(46
|
)
|
|
(31
|
)
|
|
(52
|
)
|
|
(61
|
)
|
||||
Corporate initiatives and projects
|
(36
|
)
|
|
(58
|
)
|
|
(64
|
)
|
|
(97
|
)
|
||||
Incremental tax benefit
|
54
|
|
|
71
|
|
|
112
|
|
|
155
|
|
||||
Other
|
(43
|
)
|
|
(31
|
)
|
|
(105
|
)
|
|
(76
|
)
|
||||
Operating earnings available to common shareholders
|
$
|
(234
|
)
|
|
$
|
(153
|
)
|
|
$
|
(411
|
)
|
|
$
|
(293
|
)
|
•
|
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. 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 other-than-temporary impairment (“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 commercial tenants and partners, capital markets volatility and the inherent interest rate movement.
|
|
At or For the Three Months Ended June 30,
|
|
At or For the Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||
Fixed maturity securities (2),(3)
|
4.40
|
|
%
|
$
|
3,539
|
|
|
4.79
|
|
%
|
$
|
3,665
|
|
|
4.41
|
|
%
|
$
|
7,167
|
|
|
4.72
|
|
%
|
$
|
7,234
|
|
Mortgage loans (3)
|
4.94
|
|
%
|
851
|
|
|
5.10
|
|
%
|
801
|
|
|
4.81
|
|
%
|
1,658
|
|
|
4.95
|
|
%
|
1,531
|
|
||||
Real estate and real estate joint ventures
|
2.84
|
|
%
|
63
|
|
|
7.40
|
|
%
|
189
|
|
|
3.11
|
|
%
|
139
|
|
|
5.23
|
|
%
|
270
|
|
||||
Policy loans
|
5.24
|
|
%
|
147
|
|
|
5.22
|
|
%
|
151
|
|
|
5.21
|
|
%
|
296
|
|
|
5.23
|
|
%
|
303
|
|
||||
Equity securities
|
4.55
|
|
%
|
33
|
|
|
4.58
|
|
%
|
35
|
|
|
4.78
|
|
%
|
70
|
|
|
4.30
|
|
%
|
66
|
|
||||
Other limited partnerships
|
6.86
|
|
%
|
120
|
|
|
12.38
|
|
%
|
250
|
|
|
4.78
|
|
%
|
166
|
|
|
11.50
|
|
%
|
465
|
|
||||
Cash and short-term investments
|
1.23
|
|
%
|
31
|
|
|
1.05
|
|
%
|
33
|
|
|
1.10
|
|
%
|
56
|
|
|
1.02
|
|
%
|
66
|
|
||||
Other invested assets
|
|
|
|
247
|
|
|
|
|
|
223
|
|
|
|
|
|
518
|
|
|
|
|
|
550
|
|
||||
Total before investment fees and expenses
|
4.61
|
|
%
|
5,031
|
|
|
5.08
|
|
%
|
5,347
|
|
|
4.58
|
|
%
|
10,070
|
|
|
4.99
|
|
%
|
10,485
|
|
||||
Investment fees and expenses
|
(0.14
|
)
|
|
(150
|
)
|
|
(0.15
|
)
|
|
(162
|
)
|
|
(0.15
|
)
|
|
(317
|
)
|
|
(0.15
|
)
|
|
(318
|
)
|
||||
Net investment income including divested businesses and lag elimination (4), (5)
|
4.47
|
|
%
|
4,881
|
|
|
4.93
|
|
%
|
5,185
|
|
|
4.43
|
|
%
|
9,753
|
|
|
4.84
|
|
%
|
10,167
|
|
||||
Less: net investment income from divested businesses and lag elimination (4), (5)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(166
|
)
|
|
|
|
—
|
|
||||||||
Net investment income (5)
|
|
|
$
|
4,881
|
|
|
|
|
$
|
5,185
|
|
|
|
|
$
|
9,587
|
|
|
|
|
$
|
10,167
|
|
(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 (5) 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 (loss) includes amounts for FVO and trading securities of
$10 million
and
$16 million
for the
three months
and
six months ended
June 30, 2016
, respectively, and
$2 million
and
$39 million
for the
three months
and
six months ended
June 30, 2015
, respectively.
|
(3)
|
Investment income from fixed maturity securities and mortgage loans includes prepayment fees.
|
(4)
|
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 (“investment hedge adjustments”). Investment hedge adjustments are a reclassification adjustment to net investment income presented in the yield table to the most directly comparable GAAP measure as presented below.
|
(5)
|
Net investment income presented in the yield table varies from the most directly comparable GAAP measure due to certain reclassifications and excludes the effects of consolidating certain VIEs under GAAP that are treated as CSEs and contractholder-directed unit-linked investments. Such reclassifications are presented in the table below.
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Net investment income — in the above yield table
|
$
|
4,881
|
|
|
$
|
5,185
|
|
|
$
|
9,587
|
|
|
$
|
10,167
|
|
Investment hedge adjustments
|
(188
|
)
|
|
(180
|
)
|
|
(409
|
)
|
|
(380
|
)
|
||||
Operating joint venture adjustments
|
—
|
|
|
(4
|
)
|
|
5
|
|
|
(3
|
)
|
||||
Divested businesses and lag elimination (1)
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
||||
Contractholder-directed unit-linked investments
|
191
|
|
|
(55
|
)
|
|
94
|
|
|
622
|
|
||||
Incremental net investment income from CSEs
|
3
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Net investment income — GAAP consolidated statements of operations
|
$
|
4,887
|
|
|
$
|
4,947
|
|
|
$
|
9,446
|
|
|
$
|
10,408
|
|
(1)
|
The amount of
$166 million
for the
six months ended
June 30, 2016
, relates to the impact of converting the Company’s Japan operations to calendar year-end reporting. See Note
2
of the Notes to the Interim Condensed Consolidated Financial Statements for further information.
|
|
June 30, 2016
|
|
December 31, 2015
|
|
||||||||
|
Estimated Fair Value
|
|
% of Total
|
|
Estimated Fair Value
|
|
% of Total
|
|
||||
|
(Dollars in millions)
|
|
||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
||||
Publicly-traded
|
$
|
335,922
|
|
|
86.7
|
%
|
$
|
302,400
|
|
|
86.1
|
%
|
Privately-placed
|
51,586
|
|
|
13.3
|
|
49,002
|
|
|
13.9
|
|
||
Total fixed maturity securities
|
$
|
387,508
|
|
|
100.0
|
%
|
$
|
351,402
|
|
|
100.0
|
%
|
Percentage of cash and invested assets
|
69.1
|
%
|
|
|
|
69.1
|
%
|
|
|
|
||
Equity securities
|
|
|
|
|
|
|
|
|
||||
Publicly-traded
|
$
|
2,108
|
|
|
63.2
|
%
|
$
|
2,184
|
|
|
65.8
|
%
|
Privately-held
|
1,225
|
|
|
36.8
|
|
1,137
|
|
|
34.2
|
|
||
Total equity securities
|
$
|
3,333
|
|
|
100.0
|
%
|
$
|
3,321
|
|
|
100.0
|
%
|
Percentage of cash and invested assets
|
0.6
|
%
|
|
|
|
0.7
|
%
|
|
|
|
||
Perpetual securities included within fixed maturity and equity securities AFS
|
$
|
586
|
|
|
|
|
$
|
819
|
|
|
|
|
Redeemable preferred stock with a stated maturity included within fixed maturity securities AFS
|
$
|
881
|
|
|
|
|
$
|
1,216
|
|
|
|
|
|
June 30, 2016
|
||||||||||||
|
Fixed Maturity
Securities
|
|
|
Equity
Securities
|
|||||||||
|
(Dollars in millions)
|
|
|||||||||||
Level 1
|
|
|
|
|
|
|
|
|
|
||||
Quoted prices in active markets for identical assets
|
$
|
45,192
|
|
|
11.7
|
%
|
|
$
|
1,364
|
|
|
40.9
|
%
|
Level 2
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing sources
|
284,748
|
|
|
73.5
|
|
|
1,141
|
|
|
34.2
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
36,406
|
|
|
9.4
|
|
|
146
|
|
|
4.4
|
|
||
Significant other observable inputs
|
321,154
|
|
|
82.9
|
|
|
1,287
|
|
|
38.6
|
|
||
Level 3
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing sources
|
6,924
|
|
|
1.8
|
|
|
529
|
|
|
15.9
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
12,958
|
|
|
3.3
|
|
|
138
|
|
|
4.1
|
|
||
Independent broker quotations
|
1,280
|
|
|
0.3
|
|
|
15
|
|
|
0.5
|
|
||
Significant unobservable inputs
|
21,162
|
|
|
5.4
|
|
|
682
|
|
|
20.5
|
|
||
Total estimated fair value
|
$
|
387,508
|
|
|
100.0
|
%
|
|
$
|
3,333
|
|
|
100.0
|
%
|
•
|
The majority of the Level 3 fixed maturity and equity securities AFS were concentrated in three sectors: U.S. 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 U.S. and foreign corporate securities); less liquid collateralized obligation asset-backed securities (“ABS”); and foreign government securities.
|
•
|
During the
three months ended
June 30, 2016
, Level 3 fixed maturity securities increased by
$759 million
, or
4%
. The increase was driven by purchases in excess of sales and an increase in estimated fair value recognized in other comprehensive income (loss), partially offset by net transfers out of Level 3.
|
•
|
During the
six months ended
June 30, 2016
, Level 3 fixed maturity securities increased by
$348 million
, or
2%
.
The increase was driven by purchases in excess of sales and an increase in estimated fair value recognized in other comprehensive income (loss), partially offset by net transfers out of Level 3.
|
|
Fixed Maturity Securities — by Sector & Credit Quality Rating
|
||||||||||||||||||||||||||
NAIC Designation
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
Total
Estimated
Fair Value
|
||||||||||||||
NRSRO Rating
|
Aaa/Aa/A
|
|
Baa
|
|
Ba
|
|
B
|
|
Caa and Lower
|
|
In or Near
Default
|
|
|||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
46,762
|
|
|
$
|
44,218
|
|
|
$
|
8,924
|
|
|
$
|
3,881
|
|
|
$
|
752
|
|
|
$
|
78
|
|
|
$
|
104,615
|
|
U.S. government and agency
|
69,225
|
|
|
512
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,737
|
|
|||||||
Foreign corporate
|
25,028
|
|
|
29,867
|
|
|
3,408
|
|
|
810
|
|
|
98
|
|
|
1
|
|
|
59,212
|
|
|||||||
Foreign government
|
54,827
|
|
|
4,319
|
|
|
2,102
|
|
|
953
|
|
|
60
|
|
|
—
|
|
|
62,261
|
|
|||||||
RMBS
|
42,934
|
|
|
757
|
|
|
427
|
|
|
219
|
|
|
225
|
|
|
36
|
|
|
44,598
|
|
|||||||
State and political subdivision
|
16,721
|
|
|
610
|
|
|
60
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
17,410
|
|
|||||||
ABS
|
15,646
|
|
|
815
|
|
|
52
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
16,518
|
|
|||||||
CMBS
|
13,121
|
|
|
22
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,157
|
|
|||||||
Total fixed maturity securities
|
$
|
284,264
|
|
|
$
|
81,120
|
|
|
$
|
14,987
|
|
|
$
|
5,865
|
|
|
$
|
1,157
|
|
|
$
|
115
|
|
|
$
|
387,508
|
|
Percentage of total
|
73.4
|
%
|
|
20.9
|
%
|
|
3.9
|
%
|
|
1.5
|
%
|
|
0.3
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
43,448
|
|
|
$
|
44,158
|
|
|
$
|
9,163
|
|
|
$
|
3,532
|
|
|
$
|
493
|
|
|
$
|
—
|
|
|
$
|
100,794
|
|
U.S. government and agency
|
61,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,646
|
|
|||||||
Foreign corporate
|
23,368
|
|
|
29,362
|
|
|
3,621
|
|
|
732
|
|
|
114
|
|
|
1
|
|
|
57,198
|
|
|||||||
Foreign government
|
43,911
|
|
|
4,098
|
|
|
1,730
|
|
|
395
|
|
|
326
|
|
|
39
|
|
|
50,499
|
|
|||||||
RMBS
|
37,394
|
|
|
560
|
|
|
579
|
|
|
177
|
|
|
78
|
|
|
9
|
|
|
38,797
|
|
|||||||
State and political subdivision
|
14,818
|
|
|
599
|
|
|
10
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
15,441
|
|
|||||||
ABS
|
13,646
|
|
|
702
|
|
|
24
|
|
|
3
|
|
|
14
|
|
|
5
|
|
|
14,394
|
|
|||||||
CMBS
|
12,572
|
|
|
44
|
|
|
15
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
12,633
|
|
|||||||
Total fixed maturity securities
|
$
|
250,803
|
|
|
$
|
79,523
|
|
|
$
|
15,142
|
|
|
$
|
4,839
|
|
|
$
|
1,041
|
|
|
$
|
54
|
|
|
$
|
351,402
|
|
Percentage of total
|
71.4
|
%
|
|
22.6
|
%
|
|
4.3
|
%
|
|
1.4
|
%
|
|
0.3
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Estimated
Fair
Value
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
U.S. and foreign (1) corporate fixed maturity securities — by industry:
|
|
|
|
|
|
|
|
||||||
Industrial
|
$
|
48,854
|
|
|
29.8
|
%
|
|
$
|
44,710
|
|
|
28.3
|
%
|
Consumer
|
37,710
|
|
|
23.0
|
|
|
37,317
|
|
|
23.6
|
|
||
Finance
|
35,313
|
|
|
21.6
|
|
|
33,050
|
|
|
20.9
|
|
||
Utility
|
25,270
|
|
|
15.4
|
|
|
27,770
|
|
|
17.6
|
|
||
Communications
|
13,638
|
|
|
8.3
|
|
|
11,559
|
|
|
7.3
|
|
||
Other
|
3,042
|
|
|
1.9
|
|
|
3,586
|
|
|
2.3
|
|
||
Total
|
$
|
163,827
|
|
|
100.0
|
%
|
|
$
|
157,992
|
|
|
100.0
|
%
|
(1)
|
Includes both U.S. dollar and foreign denominated securities.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
By security type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized mortgage obligations
|
$
|
22,613
|
|
|
50.7
|
%
|
|
$
|
784
|
|
|
$
|
20,604
|
|
|
53.1
|
%
|
|
$
|
578
|
|
Pass-through securities
|
21,985
|
|
|
49.3
|
|
|
591
|
|
|
18,193
|
|
|
46.9
|
|
|
305
|
|
||||
Total RMBS
|
$
|
44,598
|
|
|
100.0
|
%
|
|
$
|
1,375
|
|
|
$
|
38,797
|
|
|
100.0
|
%
|
|
$
|
883
|
|
By risk profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
31,122
|
|
|
69.8
|
%
|
|
$
|
1,275
|
|
|
$
|
26,214
|
|
|
67.6
|
%
|
|
$
|
763
|
|
Prime
|
2,025
|
|
|
4.5
|
|
|
50
|
|
|
1,960
|
|
|
5.1
|
|
|
41
|
|
||||
Alt-A
|
6,320
|
|
|
14.2
|
|
|
27
|
|
|
5,990
|
|
|
15.4
|
|
|
(18
|
)
|
||||
Sub-prime
|
5,131
|
|
|
11.5
|
|
|
23
|
|
|
4,633
|
|
|
11.9
|
|
|
97
|
|
||||
Total RMBS
|
$
|
44,598
|
|
|
100.0
|
%
|
|
$
|
1,375
|
|
|
$
|
38,797
|
|
|
100.0
|
%
|
|
$
|
883
|
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
31,638
|
|
|
70.9
|
%
|
|
|
|
$
|
26,809
|
|
|
69.1
|
%
|
|
|
||||
Designated NAIC 1
|
$
|
42,934
|
|
|
96.3
|
%
|
|
|
|
$
|
37,394
|
|
|
96.4
|
%
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
By collateral type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized obligations
|
$
|
8,407
|
|
|
50.9
|
%
|
|
$
|
(224
|
)
|
|
$
|
7,698
|
|
|
53.5
|
%
|
|
$
|
(144
|
)
|
Foreign residential loans
|
1,472
|
|
|
8.9
|
|
|
33
|
|
|
1,365
|
|
|
9.5
|
|
|
32
|
|
||||
Student loans
|
1,528
|
|
|
9.2
|
|
|
(35
|
)
|
|
1,284
|
|
|
8.9
|
|
|
(30
|
)
|
||||
Automobile loans
|
1,780
|
|
|
10.8
|
|
|
6
|
|
|
1,153
|
|
|
8.0
|
|
|
—
|
|
||||
Credit card loans
|
1,420
|
|
|
8.6
|
|
|
20
|
|
|
831
|
|
|
5.8
|
|
|
27
|
|
||||
Other loans
|
1,911
|
|
|
11.6
|
|
|
29
|
|
|
2,063
|
|
|
14.3
|
|
|
11
|
|
||||
Total
|
$
|
16,518
|
|
|
100.0
|
%
|
|
$
|
(171
|
)
|
|
$
|
14,394
|
|
|
100.0
|
%
|
|
$
|
(104
|
)
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
9,399
|
|
|
56.9
|
%
|
|
|
|
$
|
7,510
|
|
|
52.2
|
%
|
|
|
||||
Designated NAIC 1
|
$
|
15,646
|
|
|
94.7
|
%
|
|
|
|
$
|
13,646
|
|
|
94.8
|
%
|
|
|
|
June 30, 2016
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003 - 2005
|
$
|
151
|
|
|
$
|
167
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
251
|
|
|
$
|
270
|
|
2006
|
293
|
|
|
298
|
|
|
58
|
|
|
58
|
|
|
53
|
|
|
53
|
|
|
16
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
420
|
|
|
426
|
|
||||||||||||
2007
|
461
|
|
|
469
|
|
|
130
|
|
|
131
|
|
|
84
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
114
|
|
|
788
|
|
|
800
|
|
||||||||||||
2008 - 2010
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||||||
2011
|
482
|
|
|
519
|
|
|
23
|
|
|
24
|
|
|
62
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
567
|
|
|
609
|
|
||||||||||||
2012
|
490
|
|
|
534
|
|
|
370
|
|
|
391
|
|
|
488
|
|
|
512
|
|
|
8
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
1,356
|
|
|
1,446
|
|
||||||||||||
2013
|
1,109
|
|
|
1,182
|
|
|
790
|
|
|
847
|
|
|
621
|
|
|
617
|
|
|
11
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
2,531
|
|
|
2,655
|
|
||||||||||||
2014
|
978
|
|
|
1,031
|
|
|
957
|
|
|
991
|
|
|
268
|
|
|
261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,203
|
|
|
2,283
|
|
||||||||||||
2015
|
2,687
|
|
|
2,830
|
|
|
465
|
|
|
475
|
|
|
318
|
|
|
318
|
|
|
10
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
3,480
|
|
|
3,632
|
|
||||||||||||
2016
|
910
|
|
|
948
|
|
|
31
|
|
|
32
|
|
|
36
|
|
|
38
|
|
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
990
|
|
|
1,031
|
|
||||||||||||
Total
|
$
|
7,566
|
|
|
$
|
7,983
|
|
|
$
|
2,846
|
|
|
$
|
2,971
|
|
|
$
|
1,957
|
|
|
$
|
1,979
|
|
|
$
|
97
|
|
|
$
|
97
|
|
|
$
|
125
|
|
|
$
|
127
|
|
|
$
|
12,591
|
|
|
$
|
13,157
|
|
Ratings Distribution
|
|
|
60.7
|
%
|
|
|
|
22.6
|
%
|
|
|
|
15.0
|
%
|
|
|
|
0.7
|
%
|
|
|
|
1.0
|
%
|
|
|
|
100.0
|
%
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
December 31, 2015
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
||||||||||||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003 - 2005
|
$
|
187
|
|
|
$
|
198
|
|
|
$
|
95
|
|
|
$
|
101
|
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
47
|
|
|
$
|
48
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
372
|
|
|
$
|
392
|
|
2006
|
1,061
|
|
|
1,070
|
|
|
79
|
|
|
79
|
|
|
76
|
|
|
77
|
|
|
50
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
1,266
|
|
|
1,282
|
|
||||||||||||
2007
|
477
|
|
|
486
|
|
|
144
|
|
|
145
|
|
|
84
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
125
|
|
|
828
|
|
|
843
|
|
||||||||||||
2008 - 2010
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||||||||||
2011
|
560
|
|
|
593
|
|
|
23
|
|
|
24
|
|
|
63
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|
681
|
|
||||||||||||
2012
|
506
|
|
|
534
|
|
|
368
|
|
|
376
|
|
|
500
|
|
|
513
|
|
|
8
|
|
|
9
|
|
|
1
|
|
|
1
|
|
|
1,383
|
|
|
1,433
|
|
||||||||||||
2013
|
989
|
|
|
1,036
|
|
|
696
|
|
|
735
|
|
|
893
|
|
|
925
|
|
|
12
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
2,590
|
|
|
2,706
|
|
||||||||||||
2014
|
854
|
|
|
859
|
|
|
939
|
|
|
937
|
|
|
453
|
|
|
459
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2,247
|
|
|
2,256
|
|
||||||||||||
2015
|
2,258
|
|
|
2,227
|
|
|
445
|
|
|
436
|
|
|
325
|
|
|
327
|
|
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
3,060
|
|
|
3,022
|
|
||||||||||||
Total
|
$
|
6,897
|
|
|
$
|
7,008
|
|
|
$
|
2,789
|
|
|
$
|
2,833
|
|
|
$
|
2,440
|
|
|
$
|
2,500
|
|
|
$
|
150
|
|
|
$
|
156
|
|
|
$
|
134
|
|
|
$
|
136
|
|
|
$
|
12,410
|
|
|
$
|
12,633
|
|
Ratings Distribution
|
|
|
55.5
|
%
|
|
|
|
22.4
|
%
|
|
|
|
19.8
|
%
|
|
|
|
1.2
|
%
|
|
|
|
1.1
|
%
|
|
|
|
100.0
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
|||||||||||||||||||||||||
|
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded Investment
|
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded Investment
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||||||
Commercial
|
|
$
|
45,165
|
|
|
65.2
|
%
|
|
$
|
367
|
|
|
0.8
|
%
|
|
$
|
44,012
|
|
|
65.8
|
%
|
|
$
|
217
|
|
|
0.5
|
%
|
Agricultural
|
|
13,434
|
|
|
19.4
|
|
|
41
|
|
|
0.3
|
%
|
|
13,188
|
|
|
19.7
|
|
|
42
|
|
|
0.3
|
%
|
||||
Residential
|
|
10,659
|
|
|
15.4
|
|
|
59
|
|
|
0.6
|
%
|
|
9,734
|
|
|
14.5
|
|
|
59
|
|
|
0.6
|
%
|
||||
Total
|
|
$
|
69,258
|
|
|
100.0
|
%
|
|
$
|
467
|
|
|
0.7
|
%
|
|
$
|
66,934
|
|
|
100.0
|
%
|
|
$
|
318
|
|
|
0.5
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Region
|
|
|
|
|
|
|
|
||||||||
Pacific
|
$
|
10,183
|
|
|
22.5
|
%
|
|
$
|
9,583
|
|
|
21.8
|
%
|
||
Middle Atlantic
|
8,291
|
|
|
18.4
|
|
|
8,154
|
|
|
18.5
|
|
||||
International
|
8,114
|
|
|
18.0
|
|
|
7,889
|
|
|
17.9
|
|
||||
South Atlantic
|
5,765
|
|
|
12.8
|
|
|
6,127
|
|
|
13.9
|
|
||||
West South Central
|
4,228
|
|
|
9.4
|
|
|
4,311
|
|
|
9.8
|
|
||||
East North Central
|
2,115
|
|
|
4.7
|
|
|
2,346
|
|
|
5.3
|
|
||||
New England
|
1,423
|
|
|
3.1
|
|
|
1,367
|
|
|
3.1
|
|
||||
Mountain
|
1,549
|
|
|
3.4
|
|
|
1,117
|
|
|
2.5
|
|
||||
West North Central
|
509
|
|
|
1.1
|
|
|
520
|
|
|
1.2
|
|
||||
East South Central
|
618
|
|
|
1.4
|
|
|
512
|
|
|
1.2
|
|
||||
Multi-Region and Other
|
2,370
|
|
|
5.2
|
|
|
2,086
|
|
|
4.8
|
|
||||
Total recorded investment
|
45,165
|
|
|
100.0
|
%
|
|
44,012
|
|
|
100.0
|
%
|
||||
Less: valuation allowances
|
367
|
|
|
|
|
217
|
|
|
|
||||||
Carrying value, net of valuation allowances
|
$
|
44,798
|
|
|
|
|
$
|
43,795
|
|
|
|
||||
Property Type
|
|
|
|
|
|
|
|
||||||||
Office
|
$
|
22,055
|
|
|
48.8
|
%
|
|
$
|
21,525
|
|
|
48.9
|
%
|
||
Retail
|
11,109
|
|
|
24.6
|
|
|
10,466
|
|
|
23.8
|
|
||||
Apartment
|
5,872
|
|
|
13.0
|
|
|
5,171
|
|
|
11.7
|
|
||||
Hotel
|
4,048
|
|
|
9.0
|
|
|
4,396
|
|
|
10.0
|
|
||||
Industrial
|
2,008
|
|
|
4.4
|
|
|
2,334
|
|
|
5.3
|
|
||||
Other
|
73
|
|
|
0.2
|
|
|
120
|
|
|
0.3
|
|
||||
Total recorded investment
|
45,165
|
|
|
100.0
|
%
|
|
44,012
|
|
|
100.0
|
%
|
||||
Less: valuation allowances
|
367
|
|
|
|
|
217
|
|
|
|
||||||
Carrying value, net of valuation allowances
|
$
|
44,798
|
|
|
|
|
$
|
43,795
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
Traditional
|
$
|
8,607
|
|
|
95.0
|
%
|
|
$
|
7,859
|
|
|
93.2
|
%
|
Real estate joint ventures and funds
|
337
|
|
|
3.7
|
|
|
482
|
|
|
5.7
|
|
||
Subtotal
|
8,944
|
|
|
98.7
|
|
|
8,341
|
|
|
98.9
|
|
||
Foreclosed (commercial, agricultural and residential)
|
48
|
|
|
0.5
|
|
|
45
|
|
|
0.5
|
|
||
Real estate held-for-investment
|
8,992
|
|
|
99.2
|
|
|
8,386
|
|
|
99.4
|
|
||
Real estate held-for-sale
|
71
|
|
|
0.8
|
|
|
47
|
|
|
0.6
|
|
||
Total real estate and real estate joint ventures
|
$
|
9,063
|
|
|
100.0
|
%
|
|
$
|
8,433
|
|
|
100.0
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total |
||||||
|
(Dollars in millions)
|
||||||||||||
Freestanding derivatives with positive estimated fair values
|
$
|
23,563
|
|
|
74.0
|
%
|
|
$
|
14,406
|
|
|
64.0
|
%
|
Tax credit and renewable energy partnerships
|
3,077
|
|
|
9.7
|
|
|
3,145
|
|
|
13.9
|
|
||
Leveraged leases, net of non-recourse debt
|
1,635
|
|
|
5.1
|
|
|
1,712
|
|
|
7.6
|
|
||
Direct financing leases
|
1,160
|
|
|
3.7
|
|
|
1,076
|
|
|
4.8
|
|
||
Funds withheld
|
807
|
|
|
2.5
|
|
|
771
|
|
|
3.4
|
|
||
Operating joint ventures
|
766
|
|
|
2.4
|
|
|
605
|
|
|
2.7
|
|
||
Other
|
826
|
|
|
2.6
|
|
|
809
|
|
|
3.6
|
|
||
Total
|
$
|
31,834
|
|
|
100.0
|
%
|
|
$
|
22,524
|
|
|
100.0
|
%
|
•
|
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
June 30, 2016
and
December 31, 2015
.
|
•
|
The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or nonqualifying hedge relationships for the
three months
and
six months ended
June 30, 2016
and
2015
.
|
|
|
Three Months
Ended June 30, 2016 |
|
Six Months
Ended June 30, 2016 |
Gain (loss) recognized in net income (loss)
|
|
$165 million
|
|
$228 million
|
Percentage of gain (loss) attributable to observable inputs
|
|
81%
|
|
47%
|
Primary drivers of observable gain (loss)
|
|
Decreases in interest rates on interest rate total return swaps; increases in certain equity volatility levels; and increases in certain equity index levels.
|
|
Decreases in interest rates on interest rate total return swaps; weakening of the U.S. dollar versus foreign currencies on receive inflation-linked foreign currency, pay U.S. dollar forwards and swaps; decreases in certain equity volatility levels; and increases in certain equity index levels.
|
Percentage of gain (loss) attributable to unobservable inputs
|
|
19%
|
|
53%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
Credit Default Swaps
|
|
Gross
Notional
Amount
|
|
Estimated
Fair Value
|
|
Gross
Notional
Amount
|
|
Estimated
Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Purchased (1)
|
|
$
|
1,823
|
|
|
$
|
(21
|
)
|
|
$
|
1,870
|
|
|
$
|
(6
|
)
|
Written (2)
|
|
11,183
|
|
|
96
|
|
|
10,311
|
|
|
65
|
|
||||
Total
|
|
$
|
13,006
|
|
|
$
|
75
|
|
|
$
|
12,181
|
|
|
$
|
59
|
|
(1)
|
At
June 30, 2016
there were no purchased credit default swaps held in relation to the trading portfolio. At
December 31, 2015
purchased credit default swaps held in relation to the trading portfolio amounted to $175 million in gross notional amount and ($2) million in estimated fair value.
|
(2)
|
At
June 30, 2016
, there were no written credit default swaps held in relation to the trading portfolio. 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.
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||||||||||||
Credit Default Swaps
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
(1)
|
|
Gross
Losses
(1)
|
|
Net
Gains
(Losses)
|
||||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
Purchased (2), (4)
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
(32
|
)
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
(33
|
)
|
|
$
|
(27
|
)
|
|
$
|
12
|
|
|
$
|
(19
|
)
|
|
$
|
(7
|
)
|
Written (3), (4)
|
|
12
|
|
|
—
|
|
|
12
|
|
|
(1
|
)
|
|
(33
|
)
|
|
(34
|
)
|
|
33
|
|
|
(36
|
)
|
|
(3
|
)
|
|
18
|
|
|
(48
|
)
|
|
(30
|
)
|
||||||||||||
Total
|
|
$
|
12
|
|
|
$
|
(32
|
)
|
|
$
|
(20
|
)
|
|
$
|
2
|
|
|
$
|
(31
|
)
|
|
$
|
(29
|
)
|
|
$
|
39
|
|
|
$
|
(69
|
)
|
|
$
|
(30
|
)
|
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
(37
|
)
|
(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 $0 and ($10) million, respectively, for the
three months ended
June 30, 2016
and $4 million and ($4) million, respectively, for the
six months ended
June 30, 2016
. The gross gains and gross (losses) for purchased credit default swaps in the trading portfolio were $2 million and ($1) million, respectively, for the
three months ended
June 30, 2015
and $3 million and ($3) million, respectively, for the
six months ended
June 30, 2015
.
|
(3)
|
The gross gains and gross (losses) for written credit default swaps in the trading portfolio were $9 million and $0, respectively, for the
three months ended
June 30, 2016
and $3 million and ($3) million, respectively, for the
six months ended
June 30, 2016
. The gross gains and gross (losses) for written credit default swaps in the trading portfolio were not significant for the
three months ended
June 30, 2015
and $1 million and $0, respectively, for the
six months ended
June 30, 2015
.
|
(4)
|
Gains (losses) do not include earned income (expense) on credit default swaps.
|
|
June 30, 2016
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value (1)
|
|
Account
Value at
Guarantee (1)
|
||||
|
(In millions)
|
||||||
Life & Other
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
91
|
|
|
$
|
91
|
|
Equal to 2% but less than 4%
|
$
|
12,848
|
|
|
$
|
5,533
|
|
Equal to or greater than 4%
|
$
|
10,491
|
|
|
$
|
6,584
|
|
Annuities
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
3,572
|
|
|
$
|
2,992
|
|
Equal to 2% but less than 4%
|
$
|
30,536
|
|
|
$
|
27,244
|
|
Equal to or greater than 4%
|
$
|
2,273
|
|
|
$
|
2,233
|
|
|
June 30, 2016
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value (1)
|
|
Account
Value at
Guarantee (1)
|
||||
|
(In millions)
|
||||||
Greater than 0% but less than 2%
|
$
|
4,920
|
|
|
$
|
4,912
|
|
Equal to 2% but less than 4%
|
$
|
1,937
|
|
|
$
|
1,937
|
|
Equal to or greater than 4%
|
$
|
698
|
|
|
$
|
672
|
|
(1)
|
These amounts are not adjusted for policy loans.
|
|
June 30, 2016
|
||||||
Guaranteed Minimum Crediting Rate (1)
|
Account
Value (2)
|
|
Account
Value at
Guarantee (2)
|
||||
|
(In millions)
|
||||||
Annuities
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
20,452
|
|
|
$
|
3,147
|
|
Equal to 2% but less than 4%
|
$
|
1,089
|
|
|
$
|
431
|
|
Equal to or greater than 4%
|
$
|
1
|
|
|
$
|
1
|
|
Life & Other
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
8,239
|
|
|
$
|
7,862
|
|
Equal to 2% but less than 4%
|
$
|
19,607
|
|
|
$
|
9,025
|
|
Equal to or greater than 4%
|
$
|
269
|
|
|
$
|
269
|
|
(1)
|
Excludes negative VOBA liabilities of $1.1 billion at
June 30, 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 American Life and Delaware American Life Insurance Company (collectively, “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.
|
|
Future Policy
Benefits
|
|
Policyholder
Account Balances
|
||||||||||||
|
June 30, 2016
|
|
December 31, 2015
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
Americas
|
|
|
|
|
|
|
|
||||||||
GMDB
|
$
|
1,151
|
|
|
$
|
937
|
|
|
$
|
—
|
|
|
$
|
—
|
|
GMIB
|
2,694
|
|
|
2,410
|
|
|
3,958
|
|
|
(507
|
)
|
||||
GMAB
|
—
|
|
|
—
|
|
|
26
|
|
|
9
|
|
||||
GMWB
|
154
|
|
|
127
|
|
|
1,225
|
|
|
338
|
|
||||
Asia
|
|
|
|
|
|
|
|
||||||||
GMDB
|
26
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
57
|
|
|
37
|
|
||||
GMWB
|
94
|
|
|
89
|
|
|
292
|
|
|
151
|
|
||||
EMEA
|
|
|
|
|
|
|
|
||||||||
GMDB
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
23
|
|
|
16
|
|
||||
GMWB
|
8
|
|
|
8
|
|
|
1
|
|
|
(63
|
)
|
||||
Corporate & Other
|
|
|
|
|
|
|
|
||||||||
GMDB
|
4
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
46
|
|
|
13
|
|
||||
GMWB
|
170
|
|
|
104
|
|
|
1,702
|
|
|
951
|
|
||||
Total
|
$
|
4,303
|
|
|
$
|
3,715
|
|
|
$
|
7,330
|
|
|
$
|
945
|
|
|
Total Account Value (1)
|
||||||||||
|
Americas
|
|
Asia & EMEA
|
|
Corporate &
Other
|
||||||
|
(In millions)
|
||||||||||
Return of premium or five to seven year step-up
|
$
|
100,549
|
|
|
$
|
9,111
|
|
|
$
|
10,829
|
|
Annual step-up
|
27,139
|
|
|
—
|
|
|
—
|
|
|||
Roll-up and step-up combination
|
36,665
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
164,353
|
|
|
$
|
9,111
|
|
|
$
|
10,829
|
|
(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.
|
|
Total Account Value (1)
|
||||||||||
|
Americas
|
|
Asia & EMEA
|
|
Corporate &
Other
|
||||||
|
(In millions)
|
||||||||||
GMIB
|
$
|
89,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
GMWB - non-life contingent (2)
|
5,442
|
|
|
2,607
|
|
|
2,275
|
|
|||
GMWB - life-contingent
|
22,927
|
|
|
4,114
|
|
|
7,625
|
|
|||
GMAB
|
701
|
|
|
1,317
|
|
|
929
|
|
|||
|
$
|
119,004
|
|
|
$
|
8,038
|
|
|
$
|
10,829
|
|
(1)
|
Total account value excludes $47.5 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 $1,108 million with a guarantee at annuitization.
|
|
Total Account Value
|
||
|
(In millions)
|
||
7-year setback, 2.5% interest rate
|
$
|
31,906
|
|
7-year setback, 1.5% interest rate
|
5,264
|
|
|
10-year setback, 1.5% interest rate
|
17,963
|
|
|
10-year mortality projection, 10-year setback, 1.0% interest rate
|
30,532
|
|
|
10-year mortality projection, 10-year setback, 0.5% interest rate
|
4,269
|
|
|
|
$
|
89,934
|
|
|
In-the-
Moneyness
|
|
Total
Account Value
|
|
% of Total
|
|
||
|
(Dollars in millions)
|
|||||||
In-the-money
|
30% +
|
|
$
|
3,955
|
|
|
4
|
%
|
|
20% to 30%
|
|
2,993
|
|
|
3
|
%
|
|
|
10% to 20%
|
|
4,893
|
|
|
5
|
%
|
|
|
0% to 10%
|
|
8,680
|
|
|
10
|
%
|
|
|
|
|
20,521
|
|
|
|
||
Out-of-the-money
|
-10% to 0%
|
|
13,480
|
|
|
15
|
%
|
|
|
-20% to -10%
|
|
5,918
|
|
|
7
|
%
|
|
|
-20% +
|
|
50,015
|
|
|
56
|
%
|
|
|
|
|
69,413
|
|
|
|
||
Total GMIBs
|
|
|
$
|
89,934
|
|
|
|
|
|
Instrument Type
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Primary Underlying
Risk Exposure
|
|
Gross Notional
Amount
|
|
Estimated Fair Value
|
|
Gross Notional
Amount
|
|
Estimated Fair Value
|
||||||||||||||||||
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||||||||||
Interest rate
|
|
Interest rate swaps
|
|
$
|
28,844
|
|
|
$
|
4,388
|
|
|
$
|
1,688
|
|
|
$
|
23,430
|
|
|
$
|
2,056
|
|
|
$
|
966
|
|
|
|
Interest rate futures
|
|
5,756
|
|
|
1
|
|
|
11
|
|
|
3,915
|
|
|
4
|
|
|
5
|
|
||||||
|
|
Interest rate options
|
|
20,635
|
|
|
2,063
|
|
|
—
|
|
|
24,923
|
|
|
994
|
|
|
7
|
|
||||||
Foreign currency exchange rate
|
|
Foreign currency forwards
|
|
2,903
|
|
|
213
|
|
|
21
|
|
|
2,305
|
|
|
29
|
|
|
7
|
|
||||||
|
|
Foreign currency futures
|
|
121
|
|
|
—
|
|
|
2
|
|
|
135
|
|
|
—
|
|
|
—
|
|
||||||
Equity market
|
|
Equity futures
|
|
12,500
|
|
|
3
|
|
|
194
|
|
|
7,104
|
|
|
61
|
|
|
18
|
|
||||||
|
|
Equity options
|
|
52,683
|
|
|
1,895
|
|
|
1,214
|
|
|
54,113
|
|
|
1,541
|
|
|
1,041
|
|
||||||
|
|
Variance swaps
|
|
23,608
|
|
|
209
|
|
|
682
|
|
|
23,437
|
|
|
195
|
|
|
636
|
|
||||||
|
|
Total rate of return swaps
|
|
4,001
|
|
|
59
|
|
|
35
|
|
|
3,803
|
|
|
47
|
|
|
58
|
|
||||||
|
|
Total
|
|
$
|
151,051
|
|
|
$
|
8,831
|
|
|
$
|
3,847
|
|
|
$
|
143,165
|
|
|
$
|
4,927
|
|
|
$
|
2,738
|
|
|
Six Months
Ended June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Sources:
|
|
|
|
||||
Operating activities, net
|
$
|
6,255
|
|
|
$
|
6,888
|
|
Changes in policyholder account balances, net
|
1,455
|
|
|
—
|
|
||
Changes in payables for collateral under securities loaned and other transactions, net
|
8,594
|
|
|
205
|
|
||
Short-term debt issued, net
|
3
|
|
|
—
|
|
||
Long-term debt issued
|
—
|
|
|
1,492
|
|
||
Preferred stock issued, net of issuance costs
|
—
|
|
|
1,485
|
|
||
Other, net
|
—
|
|
|
52
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
352
|
|
|
—
|
|
||
Total sources
|
16,659
|
|
|
10,122
|
|
||
Uses:
|
|
|
|
||||
Investing activities, net
|
9,908
|
|
|
6,760
|
|
||
Changes in policyholder account balances, net
|
—
|
|
|
1,939
|
|
||
Long-term debt repaid
|
1,264
|
|
|
1,020
|
|
||
Collateral financing arrangements repaid
|
26
|
|
|
32
|
|
||
Treasury stock acquired in connection with share repurchases
|
70
|
|
|
1,000
|
|
||
Repurchase of preferred stock
|
—
|
|
|
905
|
|
||
Preferred stock repurchase premium
|
—
|
|
|
27
|
|
||
Dividends on preferred stock
|
52
|
|
|
61
|
|
||
Dividends on common stock
|
854
|
|
|
814
|
|
||
Other, net
|
170
|
|
|
—
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
298
|
|
||
Total uses
|
12,344
|
|
|
12,856
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
4,315
|
|
|
$
|
(2,734
|
)
|
|
June 30, 2016
|
|
December 31, 2015 (1)
|
||||
|
(In millions)
|
||||||
Short-term debt
|
$
|
103
|
|
|
$
|
100
|
|
Long-term debt (2), (3)
|
$
|
16,539
|
|
|
$
|
17,889
|
|
Collateral financing arrangements
|
$
|
4,113
|
|
|
$
|
4,139
|
|
Junior subordinated debt securities
|
$
|
3,168
|
|
|
$
|
3,168
|
|
(1)
|
Net of $100 million of debt issuance costs, which were reported in other assets at December 31, 2015.
|
(2)
|
Excludes $47 million and $60 million at
June 30, 2016
and
December 31, 2015
, respectively, of long-term debt relating to CSEs — FVO (see Note
6
of the Notes to the Interim Condensed Consolidated Financial Statements). For more information regarding long-term debt, s
ee Note 12 of the Notes to the Consolidated Financial Statements included in the
2015
Annual Report.
|
(3)
|
Includes $403 million of non-recourse debt at both
June 30, 2016
and
December 31, 2015
, for which creditors have no access, subject to customary exceptions, to the general assets of the Company other than recourse to certain investment subsidiaries.
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Preferred Stock Dividend
|
|
|
|
|
||||||||||||||||||
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)
|
|
|
|
|
||||||||||||||||||
May 16, 2016
|
|
May 31, 2016
|
|
June 15, 2016
|
|
$
|
0.256
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26.250
|
|
|
$
|
39
|
|
March 7, 2016
|
|
February 29, 2016
|
|
March 15, 2016
|
|
$
|
0.253
|
|
|
6
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
$
|
13
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
39
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
May 15, 2015
|
|
May 31, 2015
|
|
June 15, 2015
|
|
$
|
0.256
|
|
|
$
|
7
|
|
|
$
|
0.406
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
March 5, 2015
|
|
February 28, 2015
|
|
March 16, 2015
|
|
$
|
0.250
|
|
|
6
|
|
|
$
|
0.406
|
|
|
24
|
|
|
$
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
$
|
13
|
|
|
|
|
$
|
48
|
|
|
|
|
$
|
—
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Common Stock Dividend
|
||||||
Per Share
|
|
Aggregate
|
||||||||||
|
|
|
|
|
|
(In millions, except per share data)
|
||||||
April 26, 2016
|
|
May 9, 2016
|
|
June 13, 2016
|
|
$
|
0.400
|
|
|
$
|
441
|
|
January 6, 2016
|
|
February 5, 2016
|
|
March 14, 2016
|
|
$
|
0.375
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
$
|
854
|
|
||
|
|
|
|
|
|
|
|
|
||||
April 28, 2015
|
|
May 11, 2015
|
|
June 12, 2015
|
|
$
|
0.375
|
|
|
$
|
420
|
|
January 6, 2015
|
|
February 6, 2015
|
|
March 13, 2015
|
|
$
|
0.350
|
|
|
394
|
|
|
|
|
|
|
|
|
|
|
$
|
814
|
|
|
|
2016
|
|
|||||||
Company
|
|
Paid
|
|
Permitted w/o
Approval (1)
|
|
|||||
|
|
(In millions)
|
|
|||||||
Metropolitan Life Insurance Company
|
|
$
|
2,500
|
|
|
$
|
3,753
|
|
|
|
American Life Insurance Company
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
MetLife Insurance Company USA
|
|
$
|
—
|
|
|
$
|
586
|
|
|
|
Metropolitan Property and Casualty Insurance Company
|
|
$
|
—
|
|
|
$
|
233
|
|
(2
|
)
|
Metropolitan Tower Life Insurance Company
|
|
$
|
—
|
|
|
$
|
70
|
|
|
(1)
|
Reflects dividend amounts that may be paid during
2016
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 2016, some or all of such dividends may require regulatory approval.
|
(2)
|
Reflects revised interpretation of statutory dividend limits from amount reported in the 2015 Annual Report.
|
|
June 30, 2016
|
|
December 31, 2015 (1)
|
||||
|
(In millions)
|
||||||
Long-term debt — unaffiliated
|
$
|
15,577
|
|
|
$
|
16,927
|
|
Long-term debt — affiliated
|
$
|
3,100
|
|
|
$
|
3,314
|
|
Collateral financing arrangements
|
$
|
2,797
|
|
|
$
|
2,797
|
|
Junior subordinated debt securities
|
$
|
1,734
|
|
|
$
|
1,733
|
|
(1)
|
Net of $82 million of debt issuance costs, which were reported in other assets at
December 31, 2015
.
|
Non-GAAP financial measures:
|
Comparable GAAP financial measures:
|
||
(i)
|
operating revenues
|
(i)
|
revenues
|
(ii)
|
operating expenses
|
(ii)
|
expenses
|
(iii)
|
operating earnings
|
(iii)
|
net income (loss)
|
(iv)
|
operating earnings available to common shareholders
|
(iv)
|
net income (loss) available to MetLife, Inc.’s common shareholders
|
(v)
|
free cash flow of all holding companies
|
(v)
|
MetLife, Inc.’s net cash provided by operating activities
|
•
|
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.
|
•
|
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 (also known as asymmetrical and non-economic accounting for insurance contracts), (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.
|
•
|
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.
|
•
|
Operating ROE - operating earnings available to common shareholders, divided by average GAAP common stockholders’ equity.
|
•
|
Operating ROE, excluding AOCI other than FCTA - operating earnings available to common shareholders divided by average GAAP common stockholders’ equity, excluding AOCI other than FCTA.
|
•
|
Allocated equity - 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 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 discretionary 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, and net contributions from debt to be at or below target leverage ratios. This measure of free cash flow is prior to discretionary capital deployment, including 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.
|
Period
|
|
(a) Total Number
of Shares Purchased (1)
|
|
(b) Average Price Paid per Share
|
|
(c) Total Number
of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs
|
|
(d) Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under the
Plans or Programs (2)
|
||||||
April 1 — April 30, 2016
|
|
620
|
|
|
$
|
44.05
|
|
|
—
|
|
|
$
|
—
|
|
May 1 — May 31, 2016
|
|
40
|
|
|
$
|
42.91
|
|
|
—
|
|
|
$
|
—
|
|
June 1 — June 30, 2016
|
|
839
|
|
|
$
|
42.13
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
During the periods April 1 through April 30, 2016, May 1 through May 31, 2016 and June 1 through
June 30, 2016
, separate account index funds purchased
620
shares,
40
shares and
839
shares, respectively, of common stock on the open market in nondiscretionary transactions. Except for the foregoing, there were no shares of common stock which were repurchased by MetLife, Inc.
|
(2)
|
At
June 30, 2016
, MetLife, Inc. had no remaining authorizations approved by its Board of Directors to purchase shares of common stock. Common stock repurchases, if and when authorized by the Board of Directors, 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 “Risk Factors — Capital-Related Risks — 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” included in the 2015 Annual Report, as well as Note 16 of the Notes to the Consolidated Financial Statements included in the
2015
Annual Report.
|
Exhibit
No.
|
|
Description
|
4.1
|
|
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.
|
10.1
|
|
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.*
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
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.
|
METLIFE, INC.
|
||
|
|
|
By:
|
|
/s/ Peter M. Carlson
|
|
|
Name: Peter M. Carlson
Title: Executive Vice President
and Chief Accounting Officer
(Authorized Signatory and Principal
Accounting Officer)
|
Exhibit
No. |
|
Description
|
4.1
|
|
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.
|
10.1
|
|
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.*
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
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.
|
1.
|
Duty of Loyalty
: I understand and agree that during the course of my employment with MetLife, I owe a duty of loyalty to the Company
,
which prohibits me from engaging in any act or omission that is adverse to the interests of the Company
,
except as permitted by law or required by legal process
.
This prohibition includes but is not limited to interfering with MetLife’s business or trying to disrupt MetLife’s business or operations, including such conduct as engaging in any activity that interferes with the performance of my duties during my employment, interferes with the duties of other MetLife employees, statutory employees or independent contractors
,
diverts any business
,
customers or employees away from MetLife, is reasonably deemed by MetLife to be harmful to the business, reputation or goodwill of MetLife, is in violation of this Agreement, is otherwise contrary to the interests of MetLife
,
and/or is recognized by any applicable statute, regulation or common law as constituting a breach of the duty of loyalty to my employer
.
|
2.
|
Confidential Information and Proprietary Property
: “Confidential Information” means
,
without limitation, all information and data provided or made available to me by MetLife, or used by me in the course of performing my duties as an employee of MetLife, that is non-public and/or proprietary
,
including without limitation all information related to (a) MetLife’s employees, customers
,
and third-party contractors; and (b) MetLife’s operations
,
business plans, pricing, financial information
,
methods, processes, code, data, lists (including customer lists)
,
inventions, improvements
,
know-how
,
business methods, processes, techniques
,
apparatus
,
statistics, programs, research
,
development, information technology
,
network designs, passwords, sign-on codes, and usage data. Notwithstanding the foregoing, Confidential Information excludes information that is generally known or disclosed to the industry through no breach of this Agreement by me or other wrongful act or omission by me or any other person
.
“Proprietary Property” means, without limitation, property (whether tangible or intangible) owned by or licensed to MetLife, including all MetLife Intellectual Property (as defined below), all premises, proprietary equipment
,
supplies and other material provided or made available to me by MetLife, or used by me in the course of performing my duties as an employee of MetLife. All Confidential Information and Proprietary Property shall be and remain the sole and exclusive information and/or property of MetLife, as applicable.
|
3.
|
Proprietary Rights
: I agree that any invention
,
modification, discovery
,
design, development, improvement
,
process, program, work of authorship, document, formula, data, technique
,
know- how
,
trade secret or intellectual property right whatsoever or any interest therein (whether or not protectable under patent
,
copyright
,
trademark or similar statutes) made
,
invented or conceived by me (alone or jointly with others) during my employment with MetLife and for six (6) months
|
|
1
|
4.
|
Protection and Non
-
Assignment of MetLife Property
: I will maintain adequate and current records of all Confidential Information and Proprietary Property (including MetLife Intellectual Property) created by me or provided to me
.
I further agree that during my employment and after the termination of my employment, I will not disclose to any third party Confidential Information or Proprietary Property
,
except as authorized by MetLife, and I will comply with MetLife’s policies regarding record keeping, non-disclosure
,
safe
-
keeping and retention of Confidential Information and/or Proprietary Property (including MetLife Intellectual Property). I represent and warrant that I am not a party to any contract relating to the granting or assignment to any party (other than MetLife) of any interest in MetLife Intellectual Property
,
Confidential Information and/or Proprietary Property except insofar as copies of such contracts, if any
,
have been supplied to and accepted by MetLife
.
I further represent and warrant that the Confidential Information and Proprietary Property created by me and MetLife’s use of such Confidential Information and Proprietary Property
,
does not and will not violate, infringe or misappropriate any intellectual property and/or confidential information rights of any third party or the laws or regulations of any governmental or judicial authority
.
|
5.
|
Non
-
Interference
: For 18 months following the termination of my employment with MetLife for any reason
,
I will not, directly or indirectly divert business away from MetLife or seek to have any MetLife customer
,
person or organization reduce
,
lapse or terminate any financial products or services obtained from or through MetLife
,
in such circumstances where I serviced
,
contacted, solicited or sold to such customer
,
person or organization, or supervised any MetLife employee in connection with such customer, person or organization during the course of my employment with MetLife, or for whom I possess or have possessed any Confidential Information MetLife Proprietary Property regarding MetLife’s services to such customer
,
person or organization
.
|
6.
|
Non
-
Solicitation
: For 18 months following the termination of my employment with MetLife for any reason
,
I will not, directly or indirectly induce, divert
,
recruit, encourage or attempt to influence anyone in the employ of MetLife (hereinafter “Employee”)
,
or who is a party to a Senior Partner Contract (055 Contract)
,
any New England Financial Agent Contract or Retired Agent Contract
|
|
2
|
7.
|
Non
-
Disparagement
: I will not make statements that damage
,
disparage or otherwise diminish the reputation and business practices of MetLife and its affiliated entities, and its and their current and/or former officers, agents
,
directors and employees. This includes statements made verbally
,
in writing or electronically
.
The only exception is if I am compelled by a court of law or I am otherwise permitted or authorized to do this pursuant to legal or administrative process.
|
8.
|
Agreement is Reasonable and Necessary to Protect MetLife’s Legitimate Business Interests
:
I acknowledge and agree that: (1) the restrictions set forth in this Agreement are reasonable and necessary for the protection of MetLife’s legitimate business interests in the intensely competitive insurance, securities, advisory services, retail banking and financial services industries, including without limitation MetLife’s longstanding relationships with customers
,
and are reasonable and necessary to protect MetLife’s Intellectual Property, Confidential Information and Proprietary Property (including MetLife Intellectual Property), in which MetLife has invested significant time and money; and (2) but for my employment by MetLife, I would not have access to such Confidential Information and/or Proprietary Property
.
|
9.
|
Presentation of Agreement to Subsequent Employers
: For a period of 18 months following the termination of my employment with MetLife for any reason
,
I will present a copy of this agreement to each of my subsequent employers or affiliations, and I will inform MetLife promptly of the identity of any such employers or affiliations. I hereby authorize MetLife to present a copy of this Agreement to such employers or affiliations
.
|
10.
|
Return of Property
: Upon the termination of my employment with MetLife for any reason or at any other time requested by MetLife, I shall immediately deliver to MetLife or its designee all MetLife Confidential Information and/or MetLife Proprietary Property (including MetLife Intellectual Property)
,
and all copies thereof in whatever format stored
,
in my possession
,
custody or control including
,
but not limited to any computing device provided to or used by me during the course of my employment with MetLife, including
,
desk top or laptop computers
,
mobile devices, USBs, disks
,
drives, memory devices, telephones, personal digital assistants
,
or other electronic media. I understand that MetLife will return any computing devices purchased by me or a third party on my behalf after wiping the computing devices clean of all MetLife software and information
.
|
11.
|
Geographic Scope
: I acknowledge that the business of MetLife is conducted in all states and in certain foreign countries and that the employees of MetLife and its affiliated entities are working to further the interests of MetLife in those states and foreign countries. I also acknowledge that the Confidential Information or Proprietary Property (including MetLife Intellectual Property) I obtain in the course of my employment involves and affects MetLife’s activities in all states and in those foreign countries in which it conducts its business. Therefore, it is not appropriate or feasible for MetLife to establish geographic limitations on the restrictions to which I am now agreeing
.
Accordingly
,
I agree to abide by these restrictions in all states and in those foreign countries in which MetLife is conducting business at the time that my employment terminates
,
or in any state or foreign countries where MetLife is planning to conduct business and I was or am in possession of any MetLife Intellectual Property
,
Confidential Information and/or Proprietary
|
|
3
|
12.
|
Injunctive Relief and Attorney’s Fees
:
I acknowledge that if I violate any provision of this Agreement, MetLife will suffer irreparable harm
.
Therefore
,
in addition to any other rights or remedies of MetLife
,
MetLife will have the right to obtain an injunction without posting a bond enjoining any such violation. If MetLife succeeds in any lawsuit or proceeding against me brought to enforce this Agreement, or to establish damages sustained by MetLife as a result of my
|
13.
|
Tolling Provision
:
In the event that I violate any of the post
-
employment restrictions of this Agreement, the eighteen (18) month time period of the post-employment restrictions set forth in Sections 5, 6
,
and/or 9 above shall be extended for a period of time equal to the time between the start of the eighteen (18) month period and the date of the last violation. Such extension does not in any way operate to limit the types of remedies available to MetLife to address any violation of this Agreement
.
|
14.
|
Entire Agreement, Severability and No Waiver
:
This document is the entire agreement between me and MetLife with respect to the contents contained herein
.
No previous promises or agreements, oral or written
,
including any prior Agreements to Protect Corporate Property with MetLife
,
will remain in effect. I further agree that my signature on any subsequent agreement with MetLife shall not impair the enforcement of these provisions, unless such subsequent agreement is in writing and expressly identifies this Agreement
.
If any provision of this Agreement is invalidated in any jurisdiction either by statute or by a court
,
it is the parties’ intention that such provision will be deemed modified to comply with the law or deemed stricken from this Agreement, if that is necessary to comply with the law
.
If any provision is stricken for this reason
,
however, the remainder of this Agreement remains in effect
.
This Agreement cannot be waived by MetLife unless agreed to in writing by an officer of MetLife at least at the level of a Senior Vice President
.
Failure to strictly enforce any provision of this Agreement shall not operate as a waiver of such provision or release either party from its obligation to perform strictly in accordance with such provision
.
|
Signature:
|
|
|
Print Name:
|
|
|
Employee ID #:
|
|
|
Dept:
|
|
|
Date:
|
|
|
|
4
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Steven A. Kandarian
|
Steven A. Kandarian
Chairman of the Board, President and
Chief Executive Officer
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John C. R. Hele
|
John C. R. Hele
Executive Vice President and
Chief Financial Officer
|
/s/ Steven A. Kandarian
|
Steven A. Kandarian
Chairman of the Board, President and
Chief Executive Officer
|
/s/ John C. R. Hele
|
John C. R. Hele
Executive Vice President and
Chief Financial Officer
|